Iran Targets Milestone in Oil, Gas Production

Crude oil production will reach more than 4 million barrels per day and natural gas output is slated to exceed 1 billion cubic meters a day in the present fiscal that ends in March 2018.

"Oil production will reach 4.05 million bpd this year and total gas output will reach 1.1 bcm/d," Ali Kardor, the chief executive of National Iranian Oil Company was quoted as saying by ISNA on Friday.

According to government data, oil production now is 3.9 million bpd. In an agreement with the Organization of Petroleum Exporting Countries to cut oil output and ease a global oversupply, Iran was allowed to produce an average of 3.8 million bpd in the first half of this year.

Kardor did not say whether the planned increase would hurt the rare oil accord, which also has the backing of 11 non-OPEC countries, including Russia, Mexico and Azerbaijan.

"Crude oil production will hit the 4 million bpd mark in the next few days. Based on current upstream development projects, we do not have the capacity in the present year to increase total oil output by more than 50,000 bpd, which will be coming from the South Azadegan Oilfield," Kardor noted.

OPEC's secondary sources data showed Iran pumped 3.790 million barrels daily last month, down from 3.819 million bpd in February. The group released its latest monthly report on April 12. Tehran did not submit its own production data for March.

Iran's oil production and export took a blow when the US and the European Union tightened the economic sanctions against Tehran to curb its nuclear program. But Tehran surprised global markets by boosting production at faster pace than most analysts had forecast after sanctions were lifted last year.

Kardor acknowledged that NIOC is facing a difficult task keeping up production at operational fields.

"Each year, we lose roughly 300,000 bpd in daily production capacity," the official said. The regression takes place largely due to the decline in the recovery rate of aging oilfields and a lack of technology and machinery to boost extraction."

"Oil output will increase by 350,000 bpd this year, which will offset the 300,000 bpd loss in production," Kardor added.

Average rate of recovery from Iranian oilfields is reportedly around 25% but should reach 40%. Officials say some oilfields are past their peak production period and the country needs to implement enhanced oil recovery techniques to draw the most from crude reservoirs before their permanent decline.

Iran is the third largest OPEC producer after Saudi Arabia and Iraq who pumped 9.99 million bpd and 4.4 million barrels a day in March, according to OPEC's secondary sources.

Oil shipments from Iran reached a daily average of 2.6 million barrels in fiscal 2016-17, Bijan Namdar Zanganeh, the oil minister, said on Wednesday.

--- Gas Production

The NIOC chief said gas production will reach a record high of 1.1 bcm/d this year on the back of bigger supplies from South Pars, the world's largest gas field shared with Qatar in the Persian Gulf.

In fiscal 2016-17, gas production from South Pars increased to 520 mcm/d, up more than 150 mcm/d compared with the previous year. Iran's total gas output is at 885 mcm/d, according to Shana, the Oil Ministry news portal.

President Hassan Rouhani is slated to inaugurate $20 billion worth of projects in the South Pars region in the next few days, including five gas production phases, several petrochemical plants in the city of Asalouyeh in the southern Khuzestan Province and a long-awaited plan to draw light crude from the giant gas field.

Iran has been second-best to Qatar in gas production from South Pars since it began production in the early 2000s, approximately one decade after its Persian Gulf rival commenced production at the joint field.

The small Persian Gulf Arab country is reportedly producing around 600 million cubic meters a day from the joint field.

South Pars is estimated to hold 51 trillion cubic meters of gas and huge deposits of gas condensate, a type of ultra light crude. The field is known as the North Dome in Qatar.

Kardor anticipated that in fiscal 2018-19, between 25 mcm/d and 30 mcm/d will be added to gas production. Iran holds the world's second largest crude oil reserves and the fourth-biggest gas reserves.