Iran’s Oil Ministry has planned to increase output in joint oilfields that contain more than 153 billion barrels of extractable oil.
Oil Ministry Javad Owji made the statement during a visit to the oil-rich Khuzestan Province on Friday, the Oil Ministry’s news agency Shana reported.
The Oil Ministry is ready to tap the potentials of domestic and foreign investors in oil and gas projects, such that joint oil and gas fields have priority, he added.
Owji said some of the joint fields are in Khuzestan and shared with Iraq, such that oilfields in the southwestern province account for 74% of the country’s oil production.
The minister further said several ongoing programs aim to enhance the country’s refining capacity.
“We have two plans in this regard: the first one is to boost the capacity of its refineries [both those fed by crude oil and those fed by gas condensate] in terms of quality and quantity of products, and the second plan is to build new refineries,” he added.
Pointing to the strong market for petroleum products and fewer problems for exporting them while the country is still facing unfair US sanctions, Owji said, “According to the demand of neighboring countries and the region, investment in the field will be profitable, create jobs and prevent crude sales.”
Refining Capacity Set for 3.5 mbd
According to the oil minister, contracts have been signed with eight investors in the field for refining about 1.6 million barrels per day.
“Currently, the refining capacity in Iran is 2.2 mbd. With the planned programs, we expect the capacity to increase by over 1.5 times and reach 3.5 mbd in four years,” he said.
“More than 153 billion barrels of crude oil and 33 trillion cubic meters of gas reserves can be extracted from the reservoirs."
Owji noted that any increase in refining capacity is accompanied by an increase in oil production.
“As production capacity increases in the upstream sector, refining capacity also increases in the downstream sector. At the same time, we will have the power to export more oil,” he added.
As talks to end US sanctions on Iran's energy industry have stalled, the National Iranian Oil Company is producing 2.2 million barrels of crude oil per day. The figure is well below the 3.8 million bpd of output recorded before the illegal US sanctions were imposed.
However, buyers prepare for a potential easing of sanctions, if Tehran and world powers agree to revive a 2015 nuclear deal that had been abandoned by the former US government in 2018.
Development Despite Sanctions, Pandemic
Despite the threat of US sanctions looming over buyers of Iranian oil, China's independent refineries have maintained some level of Iranian crude imports in the past few years, according to market sources.
According to data from S&P Global Platts, shipments of Iranian oil fell to as low as 200,000 bpd after the sanctions took effect while before that, in early 2018, Iran was exporting 2.5 million bpd.
Nevertheless, Tehran has been trying to evade the sanctions and sell oil by whatever means possible.
In spite of constraints imposed by sanctions, Iran has continued to develop its massive oil and gas sector. Expansion activities have continued despite dismal global demand and falling prices due to the spread of the coronavirus and universal lockdown measures to fight the deadly disease.
Authorities say higher production would meet growing domestic demand while it would ensure a quick return to international markets when US pressure tactics end.
Gas Diplomacy, Petrochem Revenues
Speaking about gas industry issues, the oil minister said, “Possessing the largest gas reserves in the world, Russia imports, swaps and transits gas along with exports. Therefore, since Iran has the world's second largest gas reserves, one of our plans on the agenda is to discuss strong energy diplomacy, especially in the gas sector, given the favorable capacities in the markets of regional countries, including Qatar and Turkmenistan.”
Referring to the development of petrochemical industry, Owji said, “We can build chemical parks in most areas, even low-income areas. We have more than 65 petrochemical complexes in the country which, according to their optimal capacity, can produce 40 million tons of petrochemical products. We predict that Iran’s petrochemical export revenues will exceed $4.8 billion this year [March 2021-22].”
