Iran will have no difficulty finding customers for its oil.
Oil Minister Bijan Namdar Zanganeh made the statement on Monday in Tehran in a ceremony to sign an agreement with five domestic exploration-production companies to raise oil recovery rates at Azadegan Oilfield in Khuzestan Province, the Oil Ministry’s news portal reported.
Zanganeh said the National Iranian Oil Company has the capability to increase its oil output capacity to 6.5 million barrels per day and is not worried about selling them.
The statement comes at a time when the US and Europe have entered the final stages of negotiations to revive a 2015 nuclear accord with Iran.
“The next Iranian government should make it a priority to boost oil production to 6.5 million barrels per day,” he said.
Higher output will “improve the country’s security and political power”, he added.
Iran’s daily oil production hovers around 2.4 million barrels and it has not hit 6 million bpd since the 1970s.
If the nuclear deal is revived, the US would probably ease sanctions on Tehran’s oil, banking and shipping sectors, though it is unclear to what extent or how quickly that would happen.
“Iran has already increased its exports this year, he said” without providing any details.
China has been the main buyer, while Indian refiners have said they will import Iranian crude once sanctions are lifted.
Iran will hold presidential elections on June 18 and Tehran is keen to conclude the nuclear talks, which are being held in Vienna, Austria. Iran’s President Hassan Rouhani is stepping down after serving two terms, though he will stay in office until August.
Zanganeh has said he will not remain in office under the new administration.
"I cannot accept that there is no market for oil," he said, noting that Iraq never pumped more than 3 million bpd but it is now producing more and finding buyers for it.
Iranian crude and condensate exports were averaging 2.90 million bpd in early May 2018, when the former US president, Donald Trump, withdrew from the Iran nuclear deal
Long-Term Goals
According to the minister, Iran has long-term goals of using more crude output domestically for refining products, which in turn can be exported at higher margins.
"After oil production, we can process it in refineries. Increasing the output doesn't mean selling oil as crude," he said.
As pressure builds to curb environmental damage from oil and gas, he said, "It wouldn't take long before conventions come to restrict oil production and not allow countries and government to produce oil. Therefore, until that time, we should raise oil production capacity because international restrictions will become problematic for us. We should speed up our production as fast as we can."
President Hassan Rouhani has said that a core agreement on the nuclear deal has been reached, with the US broadly committing to lifting its sanctions targeting Iran's oil, petrochemical, shipping, insurance and banking sectors.
While Iran's oil production of 2.43 million bpd in April is the highest since May 2019, according to the latest S&P Global Platts survey, sanctions on Tehran's energy industry have severely limited oil production.
In 2017, Iran's output averaged 3.79 million bpd, according to the Platts survey.
Recovery Rates
At the ceremony, NIOC signed an agreement with five local companies to boost oil recovery rates at Azadegan Oilfield, which require $4.5 billion, Zanganeh said.
The oilfield straddles the border with Iraq's Majnoun Oilfield and has an estimated 32 billion barrels of oil in place.
The domestic companies involved are Persia Oil and Gas Development Company which will study North Azadegan, Petropars and Petro Iran which will work in Azadegan and Pasargad Energy Development Company and Dana Energy signed the agreement for South Azadegan.
North Azadegan was developed by China National Petroleum Corporation and became operational with a production capacity of 75,000 bpd in November 2016.
State-run Petroleum Engineering and Development Company has been developing South Azadegan with domestic contractors since 2014 after China's CNPC was expelled from the field due to procrastination.
Reza Dehqan, the deputy head of NIOC for development and engineering, put South Azadegan's production at 140,000 bpd, IRNA reported.
"A joint committee has been set up to pursue the integrated development of Azadegan," he said.
"With the approval of this committee, a development contract can be signed with Iranian companies."
Dehqan also invited foreign companies to join the project.
