The National Iranian Oil Company plans to increase oil and gas production in the next decade, the managing director of NIOC said.
“In case all the requirements of the plans are provided, in the next 10 years, daily gas output will reach 1.5 billion cubic meters and crude oil production capacity will reach 5 million barrels per day,” Mohsen Khojastehmehr was also quoted as saying by the Oil Ministry’s news agency Shana.
“The output has been planned in view of the country’s high potential regarding oil and gas reserves,” he added, noting that Iran holds about 1,200 billion barrels of oil equivalent underground, which include reserves of crude oil, natural gas and gas condensate.
In terms of gas reserves, Iran is second in the world after Russia, having about 34 trillion cubic meters of gas reserves.
“We will be able to produce crude oil and natural gas for the next hundred years with the proven reserves. We have not yet explored all the exploration capacities in offshore and onshore sectors, which can add to Iran's oil and gas reserves when explored,” he said.
According to the plan, about $90 billion should be invested in the oil sector and $70 billion in the development of gas fields over the next 10 years
The NIOC chief noted that there are about 24 gas refineries, more than 130 processing and exploitation units and about 140 onshore and offshore drilling rigs in the country, stressing that Iran has a very good maritime capacity.
“In addition to having a fleet of vessels for carrying crude oil, petroleum products and gas condensate with high logistical capacity, we have an acceptable level of seafaring services,” he said.
“According to the plan made to achieve this goal, about $90 billion should be invested in the oil sector and about $70 billion for the development of gas fields during the next 10 years.”
NIOC is currently producing over 2.5 million barrels of crude oil per day, which figure is still below the 3.8 million bpd of output recorded before the illegal US sanctions were imposed.
The National Iranian Gas Company produces upwards of 980 million cubic meters of natural gas per day.
According to Khojastehmehr, the development plan of Phase 11 of South Pars Gas Field will be completed next year for maximizing gas production from the giant field shared with Qatar.
"We have started negotiations with some foreign companies. NIOC will welcome foreign investment. However, if for any reason, foreign companies do not invest in the oil and gas sectors of the country, different scenarios are on the table and we will not wait for them,” he said.
“The professional, executive and financial capacities of Iranian companies have reached such a level that investment and development of certain oil and gas projects in the upstream sector are entrusted to domestic companies.”
The development plans seek to raise gas output by 50% and double the crude oil production.
Crude Exports
Speaking about crude oil exports, Khojastehmehr said Iran is ready to increase crude oil export by 1.5 times from the pre-sanctions figure.
After the US withdrawal from the Joint Comprehensive Plan of Action in May 2018, Iran lost over 2 billion barrels of oil exports.
Oil exports, Iran’s main revenue source, have plunged under US sanctions. Tehran does not disclose export data, but assessments based on shipping and other sources suggest a fall from about 2.8 million barrels per day in 2018 to as low as 200,000 bpd.
As talks to end US sanctions on Iran's energy industry continue, Iran is pumping more oil to the markets, as buyers prepare for a potential easing of sanctions if Tehran and world powers agree to revive a 2015 nuclear deal that had been abandoned by the former US government in 2018.
Indigenization of Equipment
In related news, the chairman of the board of directors of the Association of Oil Industry Equipment Manufacturers said currently, 85% of oil, gas and petrochemical equipment are produced inside the country.
“The manufacture of 10 items required by the oil industry is underway but the problems caused by hard currency fluctuations have increased the costs,” Shana also quoted Majid Mohammadpour as saying.
“Today, with the problems caused by the coronavirus and sanctions, higher costs have been imposed on the manufacturers of oil industry equipment. However, we are not disappointed and we stand our ground,” he added.
According to Mohammadpour, less than 1% of the association's capacity is allocated to exports as noncompliance with API standards has prevented exports.
API is the worldwide leading standards setting body for the oil and natural gas industry. Accredited by the American National Standards Institute, API has issued nearly 700 consensus standards governing all segments of the oil and gas industry. These include standards, guidelines and recommended practices regarding safety, equipment, operations, effective water management, spill prevention and environmental protection.
