Zanganeh: Crude Output Crosses 3.8 Million bpd

Zanganeh: Crude Output Crosses 3.8 Million bpdZanganeh: Crude Output Crosses 3.8 Million bpd

Iran is producing more than 3.8 million barrels of crude oil per day as exports have doubled since President Hassan Rouhani became president in 2013, Oil Minister Bijan Namdar Zanganeh said.

Addressing the newly-installed parliament on Tuesday, Zanganeh added that Iran pumped an average of 2.7 million barrels a day before Rouhani took office three years ago, Shana reported.

The new data suggest that Iran is within a hair's breadth of reaching its pre-sanctions output level of around 4 million barrels a day.

Oil exports have also exceeded 2 million bpd following the lifting of western sanctions in January. Iran used to export 970 million bpd in 2013, excluding gas condensate—a type of light, sweet crude extracted from the country's gas fields in the Persian Gulf.

Zanganeh's account of Iran's crude exports is in tandem with international reports that say the nation is consistently closing in on its pre-sanctions export data.

In a report on Tuesday, Reuters cited an industry source as saying Iran's oil exports are on track to hit the highest in almost 4 1/2 years in June, as shipments to Europe recover to near pre-sanctions level.

June loadings of crude and condensate are up by about 100,000 bpd from last month to 2.31 million bpd in June, the source said.

Exports to Europe in June recovered to about 580,000 bpd, up from 530,000 bpd in May and nearly six times greater than the pre-sanctions level, the source said.

Before sanctions were enforced in mid-2012, Iran was exporting about 2.2 million bpd of crude, with Europe taking about 600,000 bpd, according to the International Energy Agency.

------- $200b Investment

Zanganeh said Iran needs to invest $200 billion in its oil industry, including $130 billion in the upstream sector.

"The majority of the finance should come from foreign sources," he said.

In an effort to raise crude production and catch-up with rival producers, Iran has come up with more enticing contractual terms to attract foreign investment and technology in dozens of its oil projects.

Zanganeh stressed that sanctions sidelined Iran in the global crude market and Saudi Arabia exploited the vacuum to ramp up its oil output from 9.3 million bpd in 2011 to more than 10 million barrels at present.

"Iran also faces stiff competition from the US and Iraq that have added to a global glut by raising production in recent years," he said.

But the minister was bullish about the crude market following the recent gains in prices. "The market indicates that we are moving past the crisis," he said.

According to Zanganeh, global crude output stands at 95 million bpd, with OPEC production accounting for 23 million barrels.

Oil traded above $115 per barrel in mid-2014, but it fell to $27, the lowest in 12 years, before recovering to $50 in June. The crude rally has been supported by unexpected outages in Nigeria and Canada as well as rising demand in the world's fast-developing economies India and China.