Iran has planned to increase crude oil production capacity to 5.7 million barrels per day in the next eight years, managing director of the National Iranian Oil Company said.
“The rise in capacity means that the country will also be able to increase exports. Therefore, we must develop our oil terminals so that we can add to our exports when needed,” Mohsen Khojastehmehr was also quoted as saying by the Oil Ministry’s news agency Shana.
The country has increased the level of its oil production capacity to around 3.8 million barrels of oil per day now.
According to latest reports, the country’s oil exports jumped by 30% from last year to 870,000 barrels per day in the first quarter of 2022. This has happened as the main Iranian crude buyer, China, is cutting back on Russian oil imports.
The jump in Iran’s oil exports in Q1 was the fastest among all producers in the Middle East, while the volume of exports is estimated to be the highest since the US withdrew from the so-called Iranian nuclear deal in 2018.
The opportunity to sell more oil comes at an especially opportune time for Iran. It had been preparing to increase oil output in anticipation of a nuclear deal with the US that would have included an end to the embargo on Iranian oil.
Speaking about Kharg Oil Terminal that he visited at the weekend, Khojastehmehr said, “If market conditions allow, the export capacity of crude oil from Kharg Terminal can be doubled.”
Iran’s largest oil loading and export facility, Kharg Oil Terminal has a crude oil loading capacity of about 8 million barrels per day.
The oil terminal is located on Kharg Island in the Persian Gulf, 25 kilometers off the coast of Iran. According to officials, more than 90% of Iran’s crude exports are shipped from the key island.
Eight very large crude carriers, with a storage capacity of 360,000 tons, can berth at loading docks simultaneously without restrictions or technical hurdles.
Development Projects
Despite the US sanctions, Iran has continued development projects in oil, gas and petrochemical industries.
In order to successfully complete all the planned development projects, about $90 billion should be invested in the oil sector.
The higher output has been planned in view of the country’s potential regarding oil reserves, as Iran holds about 1,200 billion barrels of oil equivalent underground, which include reserves of crude oil, natural gas and gas condensate.
Operations are underway to develop several oilfields to increase the crude output capacity in the country.
The fields include South Azadegan and Nargesi oilfields in Khuzestan Province, Naft-Shahr Oilfield in Kermanshah Province and Azar Oilfield in Ilam Province.
Upon the completion of the development project at Azadegan, its crude oil production capacity will reach 320,000 barrels per day from the current 140,000 bpd.
Located 100 km west of Ahvaz, South Azadegan is estimated to hold 27 billion barrels of oil in place, of which 1.7 billion barrels are extractable. It is part of the West Karoun oil block in Khuzestan.
West Karoun, Iran's top priority for raising crude production to restore the market share it lost to international sanctions, includes Mansouri, Yaran and Yadavaran, as well as North and South Azadegan joint fields. The block holds an estimated 67 billion barrels of oil in place.
The development project at the Nargesi Oilfield seeks to increase production by 8,000 barrels of oil per day.
Nargesi Oilfield is located 70 km northeast of Bushehr Port at the southeastern tip of Dezful in Khuzestan Province and adjacent to Roudak, Solabdar and Golkhari fields. Its current output stands at 15,000 bpd.
Naft-Shahr Oilfield is located 72 km south of Qasr-e Shirin County. It is a joint field between Iran and Iraq, and provides a portion of Kermanshah's refinery feed.
According to the statistics, the field holds a total of 692 million barrels of crude oil reserves as well as natural gas.
Stretching over 400 square kilometers, Azar Oilfield is shared with Iraq, where it is known as Badra. It is located 20 kilometers from the city of Mehran in Ilam Province in the Anaran exploration block.
Azar holds 2.5 billion barrels of in-place oil, of which 400 million barrels can be extracted.
Its development plan aims to raise the field’s output that currently stands at 65,000 barrels per day.
In recent months, Iran launched testing drills to restart onshore wells that were idle for years because of the sanctions.
The aim was to substantially increase production to be able to export an additional 1 million barrels of oil a day as soon as the deal became effective, the officials said.
