Deputy Minister: Oil Payments Eased Partially

The lifting of sanctions in Jan. has allowed Iran to gradually win back its lost oil market share.
The lifting of sanctions in Jan. has allowed Iran to gradually win back its lost oil market share.

A deputy oil minister said on Tuesday that much of the hassle associated with cashing in on crude oil revenues has been eliminated, as Iran continues its quest to recapture the market share it lost under international sanctions.

"We now sell more than 2 million barrels of oil per day, the revenue of which is received through the banking system," said Amirhossein Zamaninia, deputy oil minister for international and financial affairs, IRNA reported.

"We don't have serious problems in payments for oil exports. Transactions are not fully back to normal, but we're not locked out like before," he said. Iran used to sell more than 2.5 million bpd of crude but the tightening of international sanctions in 2011 and 2012 over the dispute on Tehran's nuclear program put a dent in production and exports, and largely shut Iran out of the global financial and banking system.

Exports shrank to around 1 million barrels per day following the sanctions, as only a handful of countries were allowed to purchase Iranian crude while other customers veered off for fear of penalties by the US Treasury Department and the European Union. But the lifting of nuclear-related sanctions in January following a historic deal between Iran and the six world powers last year allowed Iran to resume shipments and gradually win back the lost ground.

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Over the past nine months, Tehran has received billions of dollars from the likes of Shell, Greece's Hellenic Petroleum, Italy's Saras and Indian refiners in exchange for crude oil it sold under the spell of sanctions.

Zamaninia also hoped for improvement in banking ties with the world following Tehran's plans to hold international tenders for several oil and gas development projects this year.

Some financial institutions have reentered the Iranian market, but major European banks are still cautious as they want clear guidelines by the US Treasury on doing business with Iranian banks to avoid the remaining US sanctions on the country.

"The new contracts are not finalized yet. We hope to have no problem in attracting financing and attracting investment under the new contracts," Zamaninia said, referring to the new Iran Petroleum Contract used to develop dozens of Iran's oil and gas fields in cooperation with foreign companies.

Iran looks to bring back foreign technology and investment to its sanctions-hit energy sector, as it aims to raise crude output to its peak pre-sanctions highs of around 4 million bpd and ramp up natural gas production to 1 billion cubic meters per day by the end of next year.

According to Oil Minister Bijan Namdar Zanganeh, Iran's oil industry needs $200 billion in investments in five years, including $130 billion in the upstream sector, $50 billion in petrochemical industry and $15 billion in downstream refinery projects.

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