The National Iranian Oil Company has boosted its crude oil refining capacity to 3.8 million barrels per day, returning to levels not seen before the US withdrawal from the nuclear deal and reimposition of sanctions on Iran's crude sales in 2018, managing director of the state-run firm said.
"The plan to raise oil production capacity was implemented in less than six months at an estimated cost of $500 million," Mohsen Khojastehmehr was also quoted as saying by IRNA.
The money was mainly spent on digging new wells and installing electric submersible pumps in marginal and abandoned wells whose output level had decreased substantially, he added.
According to the official, the current capacity cannot grow unless knowledge-based firms join hands with NIOC.
“Not only can they indigenize much-needed equipment, including turbines, compressors and pipes, but they can also help improve the recovery and revival of oilfields and clean up abandoned oil wells,” he said.
Referring to contracts with domestic companies, Khojastehmehr noted that agreements worth $270 million were concluded with the Academic Center for Education, Culture and Research, a subsidiary of the non-government Supreme Council of Cultural Revolution, based on which the research center was tasked to provide NIOC with high-tech equipment and materials.
Helium Reserves
Tapping into the huge helium reserves in the giant South Pars Gas Field off the Persian Gulf is on the Oil Ministry’s agenda and operations will start in the near future with the help of the center.
The NIOC chief said as per a contract signed last year, the center was assigned to build skid-mounted processing units and mobile oil treaters compliant with international standards.
As soon as the project is completed, helium extraction from SP will start.
The NIOC chief noted that Iran has massive helium resources and need not import the odorless and non-toxic gas from Qatar, the UAE, China and Turkey.
“The gas field is estimated to hold 40% of the world’s helium reserves and NIOC will sign an agreement with a knowledge-based firm that has cutting-edge technology to separate helium from methane,” he said, without elaborating further.
According to Gasworld.com, 75% of global helium consumed globally are largely limited to two locations, one of which is the South Pars Gas Field shared between Iran and Qatar. The other location is in the US.
Khojastehmehr said there are close to 750 abandoned oil wells in Iran, noting that upon their revival, NIOC’s crude refining capacity can surpass 5 million bpd.
“NIOC has received 50 proposals from knowledge-based firms to recover marginal wells and they are being assessed.”
Condensate Exports
Oil and condensate exports have increased in recent months, he said, without giving details.
"We welcome foreign investment regardless of the sanctions and without any preconditions," he said, adding that Iran has already started talks to develop oil and gas fields with foreign companies.
Iran is discussing ventures with Chinese companies, including Sinopec and CNPC that had already been involved in the development of Iran's oilfields shared with Iraq.
China is Iran's largest oil customer and Khojastehmehr said Iran is seeking new buyers.
"We intend to identify new markets that should be stable and secure to continue our oil sales. We should be able to attract strategic customers. We are ready to sign even long-term contracts for the sale of crude oil, gas condensates, gas and oil products," he said.
Khojastehmehr said South America is one of NIOC's markets.
"We seek to attract strategic customers ... Venezuela is one of these countries," he added.
He noted that Iran has decided to remodel the Iran Petroleum Contract, which is a 2016 pact devised by the previous Iranian government.
"Our plan is to improve IPC to make it more attractive and remove its deficiencies," he said.
The NIOC chief said crude oil exports have increased by 40% since the new administration took office, despite a US campaign to seize Iranian oil tankers.
“We have exported more to some of the target countries than during the implementation of the nuclear deal between Iran and world powers, known as the Joint Comprehensive Plan of Action,” he said, suggesting that US sanctions have done little to curb the success of Iran’s oil industry.
“Compared to 2019, exports of gas condensate have increased by two and a half times,” he added.
According to a report by Reuters last month, Iran’s oil exports have exceeded 1 million bpd for the first time in nearly three years despite US sanctions.
Alongside harsh sanctions, the US also led a campaign to seize Iranian oil tankers traveling through international waters to prevent an increase in the country’s exports.
Despite this, Oil Minister Javad Owji said in an interview with local news agencies that Iran has sent “oil to places the Americans cannot even think of”, stressing that revenues from oil, gas condensate, petrochemicals, oil products and gas exports have more than doubled.
