In a major leap for its energy ambitions, Iran has announced a significant discovery within the Pazan (or Paznan) onshore field in southern Iran, revealing both natural gas and crude oil deposits that could reshape its production profile.
What’s been Discovered?
Exploration teams have identified:
- Around 10 trillion cubic feet (Tcf) of natural gas reserves in the Pazan formation, with an estimated recoverable portion of roughly 7 Tcf, assuming a 70 % recovery factor.
- At least 200 million barrels of crude oil tied to the same field, adding a valuable hydrocarbon dimension to the find.
- Two distinct reservoir layers — one dominated by gas, the other enriched with oil — were confirmed during recent drilling in the area.
- Officials contextualize the scale by noting the gas volume equates to thousands of days of production from a typical South Pars gas phase, suggesting long-term supply potential for domestic consumption and exports.
Why It Matters
This isn’t just another exploration win — it comes after years in which Iran’s upstream development has been constrained by sanctions, limited investment, and infrastructure challenges. The Pazan discovery could:
- Alleviate gas supply stress during peak demand, particularly in winter months when shortages and bottlenecks are common.
- Provide feedstock for petrochemicals and power generation, aiding industrial growth and energy security.
- Offer export potential if infrastructure and geopolitical conditions allow.
- Strengthen Iran’s positioning in regional energy dynamics, leveraging a dual oil-gas find to diversify revenue streams.
Challenges & What Comes Next
- Development timeline: Officials project a lead time of about 40 months before production begins. That timeline depends on securing capital, technology, regulatory permits, and engineering work.
- Infrastructure scaling: New pipelines, processing plants, and downstream facilities will be required. Integrating with existing networks (if possible) will be critical for cost efficiency.
- Recovery uncertainty: The 70 % recovery assumption is optimistic; real-world factors—reservoir heterogeneity, pressure management, and technical risk—could reduce yields.
- Regulation and sanctions: Given Iran’s geopolitical position, attracting foreign investment, equipment and financing could be constrained by sanction regimes or international barriers.
- Environmental and social oversight: As development accelerates, issues around resource management, emissions, water usage, and community impacts will draw scrutiny.
The Bigger Picture
Iran already ranks among the world’s richest in natural gas reserves, but much of its production is consumed domestically or otherwise limited by infrastructure. If the Pazan find is fully realized, it could inject new life into exploration efforts, upstream investment, and energy diplomacy.
For the global oil & gas sector, this discovery serves as a reminder: untapped potential still exists in mature regions, especially when exploration is reactivated after hiatuses. Countries that maintain subsurface knowledge, willing regulatory frameworks, and capable service sectors are often the first to reap rewards.