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Mon 5 Jul 2010 03:28 PM

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Iran announces gas field discovery in Gulf

Forouz field discovered about 30km southeast of the island of Kish - oil minister.

Iran announces gas field discovery in Gulf
NEW FIELD: The Forouz field has reserves of more than 700 billion cubic metres. (Getty Images)

Iran has discovered a natural gas field in the Gulf with reserves of more than 700 billion cubic metres, Oil Minister Massoud Mirkazemi said on Monday.

The Forouz field was discovered about 30km southeast of the island of Kish, he said, adding it had the capacity to produce 70 million cubic metres of gas per day. He did not give further details.

Iran, a major crude exporter, has the world's second-largest natural gas reserves after Russia. Iran says it needs around $25 billion a year in oil and gas industry investment.

But sanctions over Iran's nuclear programme have deterred international energy companies from investing in the Islamic republic, slowing Iran's development as a major exporter.

Iranian authorities have played down the impact of international sanctions, saying they have helped Iran to become self-sufficient. Mirkazemi said sanctions on an "energy-rich" country like Iran would be useless.

"I am firmly announcing that Iran's energy sector will face no problems because of the sanctions," said Mirkazemi.

The United States and its European allies fear Iran's nuclear programme could be a cover to build weapons. Tehran insists its nuclear work is for the generation of electricity to meet booming domestic demand.

In a move to pressure Iran into curbing its nuclear activities, the UN Security Council has imposed sanctions on the Islamic state since 2006.

US President Barack Obama signed into law on Thursday far- reaching new sanctions on Iran that aim to squeeze the Islamic Republic's fuel imports and deepen its international isolation.

The European Union has also decided to implement additional measures.

The world's fifth-largest oil producer, Iran lacks sufficient refining capacity and imports up to 40 percent of its petrol, making the Islamic state potentially vulnerable to sanctions.

"We will surely become a fuel exporter in the future. Then, people like Mr Obama can not threaten us by ... limiting gasoline imports to Iran," said Mirkazemi.

The Islamic state has increasingly turned to Asian companies, less susceptible to Western political pressure, however these companies often lack the technology to implement oil and gas projects.

"We see absolutely no problem to import our needed gasoline. There are many countries that can provide gasoline to Iran," said Mirkazemi.

Iran has been trying to reduce domestic consumption of gasoline by phasing-out energy subsidies, a policy that will be intensified in September.

To trim Iran's reliance on gasoline imports, the Islamic state also plans to increase domestic refinery output, currently around 44.5 million litres per day.

"We have projects to increase our domestic production capacity to 74.4 million litres per day by March 2013," said the minister.

Royal Dutch Shell, BP, France's Total, Reliance Industries and independent Swiss trader Glencore are among suppliers that have already either stopped fuel sales to Iran or decided not to enter into new trading agreements with it. (Reuters)

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Pat MaGooly 10 years ago

"Iranian authorities have played down the impact of international sanctions, saying they have helped Iran to become self-sufficient. Mirkazemi said sanctions on an "energy-rich" country like Iran would be useless." Gas is USELESS unless you can get it out the ground and sell it, keep it for yourself buddy, we'll find some more. We're not stupid. "We will surely become a fuel exporter in the future." LOL, right, not with your attitude toward the rest of the world