Raising the Bar for Oil Output After Sanctions

Raising the Bar for Oil Output After SanctionsRaising the Bar for Oil Output After Sanctions

Iran can raise oil production by 500,000 barrels a day within a week after the lifting of sanctions, managing director of the National Iranian Oil Company said on Monday.

"We can boost exports by 1 million bpd within six months once the sanctions are lifted," Rokneddin Javadi was quoted as saying by Shana during the Iranian Petroleum and Energy Club Congress and Exhibition in Tehran.

He stressed that low costs of oil and natural gas production in Iran pose an attractive opportunity for global companies to make investment in the Persian Gulf country's energy sector.

The three-day convention which will conclude on Wednesday has brought together representatives from major European and Asian companies in the oil, gas, petrochemical and electricity sectors, including French oil and gas major Total, OMV of Austria, Italian oil and gas giant Eni, Germany's Siemens and Linde Group as well as Japanese heavyweights Mitsubishi Hitachi Power Systems and Mitsui Oil Exploration Company.

Iran is planning to raise crude output to 4.7 million bpd and produce 1 million bpd of condensate by March 2021, Javadi said. He predicted oil prices to swing at $70-80 through 2016.

Meanwhile, Oil Minister Bijan Namdar Zanganeh outlined the Islamic Republic's priorities after the removal of oil and trade embargoes.

"Regaining lost ground in the global crude market is the first thing we will do," he said. "We have been negotiating with many potential buyers (of Iranian crude) and our traditional customers are ready to sign new deals."

He added that the oil sector's development is bound to advanced technology, financial resources and export destinations."

  $100b Market

Iran is seeking $100 billion in investment by March 2021 to increase output of oil and natural gas, Zanganeh said. Iran has the world’s fourth-largest reserves of oil and second-largest deposits of gas, according to the US Energy Information Administration.

Referring to a long-anticipated conference in Tehran for unveiling the country's revised oil contracts, known as the Iran Petroleum Contract, he said the transfer of technology to boost extraction from Iran's rich hydrocarbon resources is the convention's priority.

Up to 50 projects valued at $40 billion are to be offered in Tehran next month before a full-fledged unveiling in London on February 22-24.

The senior oil official also called for investment in Iran's gas sector, including investments for building refineries, liquefied natural gas production units and petrochemical complexes.

Zanganeh welcomed the contribution of private and public sectors in the Iran's emerging energy projects and pinned special importance to implementing new technologies in the energy sector, especially in the renewable energy sector.

"Neglecting renewables would be an irrevocable mistake," he said.

Speaking on sanctions, the minister pointed to the so-called Adoption Day and said the oil and trade embargoes against the Islamic Republic would be lifted in two months.

Iran and six world powers reached a historic deal on July 14 in Vienna on curbing Tehran's nuclear ambitions in exchange for sanctions relief.

The Adoption Day marked the day the US and the European Union started making arrangements and preparations to fulfill their own end of the bargain 90 days after the UN passed a resolution on July 20 to endorse it.

The sanctions cut off Iran from the global financial system, but also brought about development in many industrial sectors, according to Zanganeh.

"There is a stark difference between the pre- and post-sanctions Iran and we have made huge headways in the meantime," he noted.

  Anti-Corruption Campaign

The senior oil official pledged that Iran will conduct oil deals with "full transparency" in the post-sanctions period and foreign firms seeking investment in the country's oil industry should steer clear of "middlemen and the corrupt".

"I will make myself and other oil officials more available (to foreign firms) to fend off illegal middlemen," he added.

He committed to waging a "relentless campaign" against corruption. "Foreign firms want to put their trust in us and bring their long-term investments into the foray."

He added that Iran "will not seek permission from anyone" for pouring extra oil into the already oversupplied crude market.

"We will bring our production back to the market, and the market will absorb it. All of those OPEC members whom I speak with welcome this.”