A comprehensive overhaul of the oil industry, including renovation of decades-old infrastructures, and investments are needed to develop oilfields and increase crude output.
However, Mohammad Reza Moqaddam, a former director for research and technology at the Oil Ministry, is of the opinion that such a move is hampered by a score of reasons, the biggest of which is the sector's huge debts, Mehr News Agency reported.
Facing an enormous debt of $30 billion, the state-owned National Iranian Oil Company is experiencing difficulties in embarking on measures such as renovation of its dilapidated equipment and facilities, he added.
According to the ex- official of Oil Ministry, comprehensive planning and major funds are imperative to rebuild the infrastructure.
Following the lifting of nuclear sanctions in 2016, measures have been taken to enhance productivity in the sector.
The National Iranian Tanker Company, the biggest NIOC subsidiary, has taken on a mission to reduce the average age of its tanker fleet.
Referring to the key role of oil industry, as the country's prime source of income, Moqaddam noted that the aged facilities have already had a negative impact in several parts.
"For instance, up to 30% of the feedstock injected into the refineries turn into eco-hostile mazut due to the dilapidation of their machinery and equipment … This has put many refineries on the verge of bankruptcy," he said.
Previous reports suggested that the government was taking measures to recondition some of the country's decades-old oil refineries that produce high volumes of fuel products with little or no value added, but further developments have not been reported.
Moqaddam noted that the problem is not limited to the downstream sector, as a majority of oil and gas extraction and production facilities are more than half a century old, which rings alarm bells over future safety.
Experts believe that in an economy held captive to the price of oil and largely dependent on crude export, much more attention should be paid to keep the wheels of the industry running smoothly to revive its ailing economy on the back of years of sanctions and underinvestment. Iran has extracted and sold crude oil for over a century, but it has been oblivious to the fact that creating efficient infrastructure and acquiring technical expertise are crucial.
The country is pumping around 3.8 million bpd of crude oil and condensates, a type of ultra light crude. The government expects to raise output capacity to 5.5 million bpd, or about 1 million bpd above the current production level of its oil- and gas- rich neighbor Iraq.
