I-Introduction

All forecast of future global oil demand point to an increasing trend for the years to come. The forecast by OPEC’s World Energy Model suggests a world oil demand of about 84 million barrels per day in 2005, around 91 mb/d by 2010, close to 97 mb/d by 2015 and about 103 mb/d by 2020. OPEC members would have to come up with a crude oil and NGL production of about 36 mb/d in 2005, 41 mb/d in 2010, 47.8 mb/d in 2015 and 54.6 mb/d in 2020.

The security of energy supply to Asia/Pacific is becoming a big issue. By 2010, Asian/Pacific demand for oil would reach 33.5 million b/d if consumption growth averages 5% per annum. China alone could be consuming 7.2 mb/d by 2010 and 10.7 mb/d by 2020. Oil production in Asia/Pacific might decline from its current level of 6.3 mb/d. The Middle East would not be able to meet Asian /Pacific demand by then. The Caspian oil supply is important from that perspective.

In recent years, Iran has been holding a share in OPEC production in the range of 13 to 14 per cent. In order to maintain this share, Iran would need to produce at least 4.7 mb/d in 2005, increasing it thereafter by approximately 160000 b/d per year, reaching 7.1 mb/d by the year 2020. As a result Iran needs to develop adequate volumes to not only counter the natural decline in the present production but also to meet the required additional production capacities. It goes without saying that with proven oil reserves of over 90 billion barrels, Iran has more than enough potential but, with a present capacity of over 4mb/d much work needs to be done and this means a very intense level of activities specially in attraction of foreign investments, new technologies, exploring new fields and extensive EOR operations in many of Iran’s giant older fields.

In the conditions of growing uncertainty at the world oil market, related with Iraqi conflict the situation with Caspian oil continues to remain indefinite as well.

Last weeks were saturated with the information, to some extent reflecting the political and economic facets of the problem: Russian company "Lukoil" left the project "Azeri-chirag-Guneshli", a scandal in "Tengizchevroil", a possibility that the American company "Kerr McGee" will leave Kazakhstan, an active opposition of Russian company "Transneft" to the "quality bank" at the Caspian Pipeline Consortium pipeline and other.