Iranian Forces Take Over Iraq Oil Well

Game on.

Iran decided some time ago to go its own nuclear way despite UN and international community wishes. Their nuclear program has not stopped.

Now:

NASIRIYAH, Iraq (AFP) – Iranian forces took control of a southern Iraqi oil well on a disputed section of the border on Friday, US and Iraqi officials told AFP.

An official of the state-owned South Oil Co in the southeastern city of Amara, and west of the field, said: "An Iranian force arrived at the field early this morning (Friday).

"It took control of Well 4 and raised the Iranian flag even though the well lies in Iraqi territory," the official added.

"An oil ministry delegation is to travel to the area on Saturday to assess the situation."

Some interesting notes I'd care to add:

• Iran is the 3rd largest oil producer on the globe;
• Iran is OPEC's 2nd largest oil producer;
• Iran has been a US adversary for roughly 30 years;
• Iran possesses about 1/10th of the global oil reserves;
• Iran has more than 1/10th of the planet's reserves of natural gas;

However, it is noteworthy that, after the 1979 revolution (and other factors), Iran has been unable to match its highest (6 million barrels/day) 1974 production rates. Further, Iran's mature oil fields have declined. A 2007 National Academy of Sciences study specifically awakened Iran's oil ministers.

The report indicates that, if decline rates are allowed to continue, Iran’s exports (which in 2007 averaged 2.4 million barrels/day) could decrease to zero by 2015. To offset natural decline rates, Iran’s oil fields require structural upgrades including enhanced oil recovery (EOR) efforts such as natural gas injection.

Additionally, Iran can produce oil but lacks major refinery capacity. They cannot even keep pace with domestic demand. Iran would like to hammer out agreements with China, Indonesia, Malaysia and Singapore to expand refining capabilities.

Strategically, one must be cognizant of a major point: if an attack on Iran's nuclear sites occurred, Iran could decide to attack shipping in the Strait of Hormuz -- a bottleneck through which 1/5th of the world’s total daily oil demand is carried.

Iran has pushed the Western World's envelope for some time with its nuclear programs and various alliances.

Now, it pushes in another direction.

BZ