$21b of Capex to Be Spent on Iran’s Oil Projects by 2021

An analysis of crude oil production in Iran shows that approximately $21 billion in capital expenditure (capex) will be spent by Iran on oil projects between 2018 and 2021, to ensure that production grows to around 4.9 million barrels per day in 2021, GlobalData, a leading data and analytics company, announced.

The region will have 66 fields producing liquid hydrocarbons by 2021, of which 38 are conventional and nine are heavy oilfields, while 19 are gas fields producing condensate, World Oil reported. Iran is expected to spend $13.1 billion as capex on conventional oil and $7.9 billion on heavy oil projects during 2018 to 2021, with spending peaking in 2019 at $5.7 billion.

 Average full-cycle capex per barrel of oil equivalent for Iran’s oil projects is $3.6.

Onshore projects have an average full-cycle capex of $3 per barrel of oil equivalent, while shallow-water projects have an average of $5.3/boe in full-cycle capex.

The average development breakeven price for oil projects in Iran is about $27.6 barrel of oil equivalent.

Shallow water projects require an oil price of $35.4/bbl to break even, while onshore projects have a development breakeven oil price of $25.5/bbl.

Iran's Oil Minister Bijan Namdar Zanganeh said last month the country's oil output has increased by 165,000 barrels per day in the last 10 months compared with the corresponding period of last year.

Iran is currently pumping around 3.8 million bpd of crude oil and condensates, a type of ultra-light crude.

According to the oil minister, the country shipped around 777 million barrels of crude oil and 180 million barrels of condensate last year, averaging 2.62 million bpd.

Zanganeh noted that since the termination of anti-Iran economic sanctions in January 2016, not only has the country's crude production surged by 1million per day, but its exports have also surged by 1.5 mbpd.

During the international sanctions regime, Iran's oil output and exports stood at 2.5 and 1 million per day respectively.