Higher Oil, Gas Production Forecast for 2016

Higher Oil, Gas Production Forecast for 2016Higher Oil, Gas Production Forecast for 2016

The US-led oil embargo notwithstanding, Iran's crude oil production capacity stands at four million barrels a day, said deputy oil minister on Tuesday.

Currently the country produces 660 million cubic meters of gas per day, but the number is expected to reach one billion cubic meters by the end of the Fifth Five-Year Economic Development Plan (2011-2016), Rokneddin Javadi was quoted by Shana news agency as saying.

Addressing the Second National Drilling Industry Congress, the official said that oil production capacity is projected at 4.7 billion barrels per day (bpd) by 2016. Currently 140 to 150 offshore and onshore oil and gas rigs are operating in the country, he noted. In order to compensate the reduction in oil production and reach the targeted 4.7 billion bpd, some 400-500 oil wells should be drilled each year.

From the oil and gas industry's $15 billion annual expenditures, $4 billion, or 25-30 percent, pertains to drilling sector. "Thus, drilling sector must be given a prominent position in our development plans."

Despite holding the world’s largest natural gas reserves, and the fourth-largest proven crude oil reserves, Iran currently exports around 1.3 million barrels per day (bpd) of oil due to the sanctions.

Before the latest oil-related sanctions were imposed in 2012, Tehran sold about 2.2 million bpd of crude mainly to Asia, Europe and Africa. Sanctions by the United States and Europe, aimed at pressuring Tehran over its nuclear energy program, have already more than halved Iran's shipments – costing the country billions of dollars in revenue losses since the start of 2012.

Iran and the P5+1 group (five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany) have been holding marathon talks over the past year to thrash out a mutually acceptable comprehensive deal.