News ID: 167871
Published: 0637 GMT August 30, 2016

Iran closer to its OPEC position

Iran closer to its OPEC position

Economic Desk

Removal of anti-Iran sanctions is a great opportunity for Iran – once the second-biggest producer in OPEC – to regain its share in the market and its position in the biggest oil organization in the world.

Iran has increased its oil production to 3.8 million barrels per day from 2.7 million barrels per day in the sanctions era.

Iran’s Oil Minister Bijan Namdar Zanganeh said on Monday oil exports have risen to 2.1 million barrels per day (mbd), bringing the country closer to its former position as the second biggest OPEC producer.

“Our crude oil and condensate exports have now reached 2.5 million barrels per day and crude oil (exports) have solely hit 2.1 mbd,” Zanganeh told the state television.

“To get back to our place as the second OPEC producer, we need time. Currently, we are even behind Iraq in terms of crude production but with the planning which has been made, we will achieve the position in the future.”

Zanganeh said sanctions cut Iran’s oil production by 1 mbd to about 2.7 million, which also saw the country’s oil and gas sectors languish through years of a major investment drought.

“Unfortunately over the past few years, no investment has been made in the country and in the oil and gas sectors,” he said through a video link from Iran’s oil-rich Khuzestan.

“We need to substantially invest in the oil industry because we have all the investment potentials in this sector.”

Iran exported about 2.2 mbd and its production was below 4 mbd in late 2011 before the sanctions were imposed.

The Oil Ministry is currently awaiting the Parliament’s approval of a new oil contract model which the country has been working on for the past two years.

Managing Director of the National Iranian Oil Company Ali Kardor said Iran will invite international oil companies to submit bids in October under the long-awaited new contract model, known as Iran Petroleum Contract (IPC), for energy investors.

The government will invite companies to bid to develop the South Azadegan field on Iran’s southwestern border with Iraq during the week of Oct. 14-20, Kardor said, according to IRNA.

The company expects to sign three contracts worth a total of $10 billion by March 2017, he said.

“We are calling for technical documents for a tender offer under the framework of the new oil contract model,” Kardor said. “We will begin sending letters to international oil companies to inform them of the relevant issues next week.”

Iran’s cabinet approved the new oil and natural gas contract model on Aug. 3, hoping to attract as much as $50 billion a year in foreign investment. Big oil companies from Europe and Asia, including France’s Total SA and Eni SpA of Italy, have expressed interest in developing Iran’s under-utilized reserves since sanctions were eased in January.

The oil minister has said priority will be given to investment in jointly-owned oil and gas fields.

Zanganeh mentioned oil and gas fields shared with Iraq, including Yaran, Azadegan and Yadavaran.

He said crude production from those fields has risen to 215,000 bpd from 70,000 bpd in 2013, holding hope that the figure will touch 300,000 bpd by the end of the current Iranian year in March 2017.

“At the moment, we are on par with Iraq in terms of oil production from joint fields but we are trying to raise this figure to 700,000 barrels per day in the next two or three years,” Zanganeh added.



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