Iran to Overtake Qatar Gas Output in 2 Years

Iran to Overtake Qatar Gas Output in 2 YearsIran to Overtake Qatar Gas Output in 2 Years

Iran's gas output will exceed the 1-billion-cubic-meter-per-day mark in the next Iranian year [starting March 20, 2016], in line with plans to overtake Qatar's production from the giant South Pars Gas Field in the Persian Gulf, Oil Minister Bijan Namdar Zanganeh said on Tuesday.

"Plans have been made to produce 1.1 billion cubic meters of natural gas per day [in 2017-18], of which 750 million cubic meters will come from South Pars," he was quoted as saying by Shana.

Zanganeh made the statements in a panel discussion on the sixth five-year development plan and Resistance Economy.

"The implementation of such a mega project will help Iran extract more gas than Qatar whose extraction rate from the field is 1.6 times faster," he added.

Pointing to lack of technology and investment that has hampered development of oil and gas fields, Zanganeh said the Persian Gulf Arab neighbor is drawing the lion's share of the underground reserves.

The oil minister stressed that raising production tops the Oil Ministry's agenda and that gas condensates output will increase by 1 million bpd in the said period.

He also said 75% of Iran's oil output are extracted from nine aging oilfields whose production efficiency is declining drastically.

"As long as the much-needed annual investment worth $40 billion is not attracted, the ambition of producing 4.6 million barrels per day between 2016 and 2021 cannot be fulfilled," he said.

Resistance Economy is a set of guidelines advocated by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei to reduce the country’s reliance on oil exports and boost production.

Stating that since a long time, nothing has been done to improve oilfields' total recovery, Zanganeh noted that lack of investment in these fields is a betrayal of the country and only helps states whose excessive production has caused oil prices to decline drastically.

------- Bashing Critics

Criticizing those who are against attracting foreign investment to undertake development plans, the oil minister said Resistance Economy should not be interpreted as reducing oil output, as the guidelines definitely mean getting help from the National Development Fund to guarantee economic prosperity in the coming years.

"We need $200 billion in investment to increase extraction from joint oilfields and reach sustainable development," he said.

Zanganeh broke down the substantial figure into $134 billion for upstream sector and $66 billion for the downstream petrochemical sector, including for the renovation of aging refineries and building new processing and production units.

To raise this huge amount of money, "a new model for oil contracts was devised", the minister said, referring to Iran's new contractual framework for oil and gas projects, which is officially known as Iran Petroleum Contract.

"Domestic financial resources can barely drive oil industry forward … Despite receiving $15-20 billion from the National Development Fund of Iran, we need still foreign investment and, more importantly, technology."

The oil minister noted that power plants' liquid feedstock, including mazut and diesel, has declined from 42% in 2013 to 10% in 2016, stressing that this helps develop the national economy.

Iran's gas export will reach 200 mcm per day during the sixth five-year development plan (2016-21) and Iraq, Oman and Pakistan will be among major target destinations.

Stressing on petrochemical industry as a driver of economic growth, he added that completing the value-added production chain is high on the priority list as Iran's petrochemical export will reach $41 billion, provided annual investment worth $12 billion is realized.

"Such an investment will create lots of job for skilled workers," he said.  

Zanganeh believes that until 2021, Iran will be able to process 1 million barrels of gas condensates besides 3.3 million barrels of crude per day in domestic refineries.

In other words, 64% of Iran's output will be processed domestically by 2021.