5-Year Plan to Increase Oil Output to 4.7m bpd

5-Year Plan to Increase Oil Output to 4.7m bpd5-Year Plan to Increase Oil Output to 4.7m bpd

Iran wants to raise oil production capacity to 4.7 million barrels a day under a five-year plan, head of the National Iranian Oil Company was quoted as saying by Shana.

The statement on Saturday by Rokneddin Javadi comes days after the country's Oil Minister Bijan Namdar Zanganeh unequivocally said the Islamic Republic will not support a Russian and Saudi-led move to freeze crude output at January levels.

"We want to produce 4.7 million bpd of oil in the sixth five-year development plan (2016-21)," Javadi said. "To do so, we must raise daily output by 700,000 barrels."

He added that oil export capacity will rise by 1 million bpd if the country ramps up production by 2-2.2 million barrels over the next 12 months.

"The 1-million-barrel rise [in exports] will bring in $37 million annually by considering $50-a-barrel oil," he said.

Javadi noted that Iran is committed to winning back the market share it ceded to rival producers in the 13-member Organization of Petroleum Exporting Countries.

Referring to a Saudi-led plan in Dec. 2011 to raise OPEC's output ceiling to 30 million bpd and abandoning individual country quotas, he said, "Iran lost part of its export markets due to the elimination of quotas, similarities between Iran and Iraq's blends of crude and Iraq's flexibility in the market."

Russia and Saudi Arabia, world's top exporters and producers, announced an agreement in Doha on Tuesday to freeze oil production to help boost persistently low oil prices but said the plan would take effect only if Iran agrees to join.

Zanganeh, who had earlier taken a tough stance on cutting production, sounded a more positive tone after meeting with his counterparts from Iraq, Qatar and Venezuela in Tehran on Wednesday.

He said Iran would support "any measure to improve prices" but stopped short of offering an actual plan on freezing or slowing down the country's crude output.

------- 1.5 Million bpd Milestone

Iran's oil production capacity will reach 1.5 million bpd in March as the Persian Gulf country is expanding its reach to European markets, Seyyed Mohsen Qamsari, deputy for international affairs at NIOC said in a radio interview on Saturday.

"Within a month after the lifting of sanctions, Iran's crude oil exports have reached 1.4 million barrels a day," he said. "Exports are planned to reach 1.5 million to 1.56 million barrels a day in March."

Qamsari also said Iran has already fulfilled its short-term plan to prop up output by 500,000 bpd after sanctions against it were lifted last month and is now planning to boost production by the same amount through 2016.

Once OPEC's second-biggest producer and now its fifth-biggest, Iran pumped an average of 3.6 million barrels a day in 2011. Production fell to around 2.6 million bpd after the US and the EU introduced tougher sanctions against the country.

Exports also tapered off to little more than 1 million bpd from around 2.6 bpd.

The official highlighted Eastern Europe as the "most important market" for Iran's crude oil in the post-sanctions period, adding that shipments to European refiners is now underway.

Earlier this month NIOC announced signing deals to export 300,000 bpd of crude to European clients.

The first shipment to Europe was made in mid-February, as three international vessels loaded 4 million barrels of oil destined for Spain, France and Russia from Iran's southern terminals.

Vitol Group, the world's largest independent oil trader headquartered in Geneva, was the first company to confirm this month it had effectively resumed buying oil from Iran after the end of economic sanctions.

According to data by the Iranian Oil Terminals Company, 25-30% of oil export hike is going to Iran's traditional buyers–Japan, China, South Korea, Turkey and India—and the rest are destined for new markets.