Iran hopes to reach Qatar’s gas out­put level by 2017

Kuwait Times - - BUSINESS -

TEHRAN: Iran hopes by early next year to boost its nat­u­ral gas pro­duc­tion to Qatar’s level, Ira­nian oil min­is­ter Bi­jan Zan­ganeh told an en­ergy con­fer­ence yes­ter­day. He said Iran’s pri­or­ity was de­vel­op­ing the gi­ant South Pars gas field which it shares with Qatar, as well as shared oil fields.

Iran plans to in­crease its crude oil pro­duc­tion to 4 mil­lion bar­rels per day in 2019 and 4.28 mil­lion bpd in 2020, while boost­ing con­den­sate out­put to 1 mil­lion bpd as early as 2018, Zan­ganeh told the con­fer­ence. Crude out­put is cur­rently 3.8 mil­lion bpd and con­den­sate out­put 688,000 bpd, he said.

The min­is­ter also said new oil and gas con­tracts for in­ter­na­tional and do­mes­tic com­pa­nies would fo­cus on en­hanc­ing rates of oil re­cov­ery. Ear­lier in the day, the man­ag­ing di­rec­tor of the Na­tional Ira­nian Oil Com­pany, Ali Kar­dor, said Iran ex­pected to ten­der the new con­tracts by the end of Novem­ber. He gave a marginally dif­fer­ent fig­ure for cur­rent oil pro­duc­tion, of 3.9 mil­lion bpd.

Iran will launch next month its first new style ten­der to de­velop oil and gas fields since the lift­ing of in­ter­na­tional sanc­tions, a lead­ing oil of­fi­cial said yes­ter­day, after months of in­ter­nal dis­cus­sions over the terms, in­tended to be more al­lur­ing to for­eign com­pa­nies.

OPEC’s third largest oil pro­ducer hopes to re­vive its en­ergy sec­tor fol­low­ing the lift­ing of the sanc­tions in Jan­uary after years of un­der in­vest­ment and to achieve pro­duc­tion lev­els last seen in 2012.

Other US sanc­tions that re­main in place, par­tic­u­larly on the bank­ing sec­tor, have damp­ened hopes for a rapid re­sump­tion of in­vest­ment. Iran ex­pects to ten­der new oil and gas con­tracts, known as IPCs, in Novem­ber, Ali Kar­dor, the man­ag­ing di­rec­tor of the Na­tional Ira­nian Oil Com­pany (NIOC) said on the side­lines of an oil con­fer­ence in Tehran. Oil com­pa­nies will be able to bid for a con­tract to de­velop the South Azade­gan oil field as early as Novem­ber 19, and NIOC will award the con­tract by early 2017, he said. After South Azade­gan, NIOC will start ten­der­ing one field month by month, Kar­dor said. There are to­tal 11 oil and gas fields• avail­able for ten­der­ing, he said.

The launch of the Iran’s new oil and gas con­tracts was post­poned sev­eral times as hard line ri­vals of prag­ma­tist Pres­i­dent Has­san Rouhani re­sisted any deal that could end the so-called buy-back sys­tem, un­der which for­eign firms were banned from own­ing stakes in Ira­nian com­pa­nies. NIOC signed the first oil out­put con­tract un­der IPC ear­lier this month with a com­pany iden­ti­fied by the United States as part of a con­glom­er­ate con­trolled by Iran’s supreme leader. NIOC be­gan tak­ing ap­pli­ca­tions yes­ter­day for its up­stream oil and gas projects as Iran hopes to sign ex­plo­ration and pro­duc­tion con­tracts early next year. The oil com­pa­nies will up­load on to NIOC’s web­site the pre-qual­i­fi­ca­tion doc­u­ments. NIOC will then eval­u­ate the com­pa­nies within two weeks and will se­lect some for the first ten­der in Novem­ber.

Some an­a­lysts said Iran’s IPCs do not seem to be at­trac­tive enough to raise bil­lions of dol­lars in for­eign di­rect in­vest­ment at a time of low oil prices, es­pe­cially when com­pared with neigh­bor­ing Iraq’s new oil con­tracts that en­abled it to boost its out­put. How­ever Vice Pres­i­dent Eshaq Ja­hangiri said yes­ter­day that Iran’s se­cu­rity and busi­ness cli­mate is bet­ter than other neigh­bor­ing coun­tries.

“Some coun­tries are run by tribes, Iran is dif­fer­ent than that,” Ja­hangiri told the pe­tro­leum con­fer­ence, ad­dress­ing rep­re­sen­ta­tives of oil ma­jors such as To­tal and BP. “Even if Iran’s con­tracts are not as at­trac­tive as oth­ers signed in neigh­bor­ing coun­tries, Iran has its own ad­van­tages.”

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