Correction: The word “Losing” in this post’s original title was misspelled and is now corrected. Our apologies to our readers for the mistake.
South Pars/North Dome natural gas field is the world’s largest, located in the Persian Gulf and shared between Iran and Qatar. The huge field covers nearly 4,000 square kilometers inside Iranian territorial waters, known as South Pars. Qatari field covers 6,000 square kilometers and is known as North Dome. The field’s reserves are estimated at some 1,800 trillion cubic feet (tcf), making it the world’s biggest hydrocarbon accumulation (for comparison, the field’s volume of natural gas reserves is 360 billion barrels of oil equivalent).
The Qatari government so far has invested more than $400 billion in developing North Dome, including the construction of the world’s most modern liquid gas plant and terminal. Iran has invested only $40 billion on South Pars and associated investments in Assaluyeh. As a result, Qatar’s natural gas production from the field surpasses Iran’s by an order of magnitude.
Iranian efforts in developing the South Pars had been hampered by construction delays, which is led by Khatam-ol Anbia, the construction arm of IRGC. Only seven out of the planned 28 phases of construction has been finished so far. ILNA reports that Iranian experts do not expect completion of any additional phases in the next two years [ILNA, 1 March 2010]. Meanwhile Qataris are racing to further develop the North Dome.
As much as IRGC is regarded as the country’s most competent fighting force, their foray into business ventures, such as South Pars, is resulting in major problems for the country’s development projects.
The Iranian government’s economic policies have also greatly contributed to the problems in South Pars. In the first four years of Ahmadinejad’s administration, Iran was selling its crude oil at record prices, reaching $140/bbl. But the government allocated only a small portion of its fortune to develop country’s gas and oil fields. ILNA reports that last year, only 13% of oil revenues were earmarked for oil and gas field maintenance and investment projects [ILNA, 1 MARCH 2010].
It seems a combination of government’s resolve to invest in country’s future and IRGC incompetence in leading civilian development projects are the factors behind Iran’s loosing its race to Qatar in developing its natural gas resources.