Iran Oil Minister Positive About Contracts With Oil Majors

Tehran hopes to sign groundbreaking deals with oil majors such as Total and Lukoil this year as the reelection this month of Hassan Rouhani to the presidency should boost investments.

Veteran oil minister, Bijan Namdar Zanganeh, told Reuters in an interview he saw the country adding around a quarter to its production capacity in the next five years thanks to new projects with international companies.

The development of new fields as well as improved oil recovery from mature reservoirs should allow Iran, OPEC's No. 3 oil producer, to have the capacity to pump 5 million barrels per day, or 5% of global crude, versus 4 million bpd now.

Gas condensate output capacity should increase to 1 million bpd from about 600,000 bpd now.

"One important step was the election, because in this election Iranian people said 'yes' to positive interaction with the world," Zanganeh said in Vienna after a ministerial meeting of the Organization of Petroleum Exporting Countries.

"I hope this message will be understood positively ... especially by the superpower," he said in a clear reference to the United States, which has imposed sanctions against Iran since the 1979 Islamic Revolution.

"It is not the time to trigger actions against Iran," he said. US President Donald Trump has threatened to impose new sanctions against Iran.

"It (the election) is a very clear message to the world. More than 60-65% of Iran's young people, middle-class, university students, sent this message. I hope the world receives it positively."

--- Good Cooperation

Zanganeh said he hoped Iran would sign oil deals this year with France's Total, Russia's Lukoil as well as Danish Maersk and maybe Indonesia's Pertamina.

Talks are focusing on the development of fields such as South Azadegan, Yadavaran, West Karoun, Mansouri, Abteymour and the oil layer of the giant South Pars Gas Field.

He said the rise in Iran's production capacity should not derail cooperation with OPEC, which on Thursday asked its members to curb output for another nine months to fight a global oil glut.

"All OPEC decisions are short-term decisions. Production capacity is part of our long-term plans," Zanganeh said.

Zanganeh, who clashed with Iran's arch-rival Saudi Arabia at many previous OPEC meetings, said he was positively surprised by good cooperation within the organization, its partnership with non-OPEC Russia as well as solid OPEC and non-OPEC compliance with output cuts.

"After more than two years, I think it's the first time we had a smooth meeting without any issue. I have been in OPEC close to 20 years, it's the first time that I witness 100 percent compliance from OPEC and close to 100 percent from non-OPEC".

--- Russia Ties

Moscow and Tehran have signed a deal, under which Iran will sell crude to Russia in exchange for products, according a statement by Zanganeh in Vienna.

"The deal has been concluded. We are just waiting for the implementation from the Russian side. We have no difficulties; we signed the contract, everything is coordinated between the parties. We are waiting for Russian oil companies to send tankers,” Zanganeh was quoted as saying by Russian news agencies RIA and TASS.

The outlines of the agreement were reached in 2014 when Iran was under international sanctions over its nuclear program. Russian traders were to participate in marketing Iranian oil. In exchange, Iran wanted essential goods and technology from Russia.

Zanganeh also reportedly said on Thursday that if India backs out of the Farzad-B natural gas block deal, Russian companies could step in, according to Oil Price.

It originally looked as if the field in the Persian Gulf would be offered to India after the country offered a $3 billion investment plan, but Tehran has been on the lookout for better bids since negotiations with the Asian country have made little progress.