Majlis Report Underpins Upswing in Oil Industry

EghtesadOnline: Iran has come a long way in regaining the lost ground in the global oil market and expanding its gas production after last year's lifting of sanctions, a parliamentary report shows.

News ID: ۷۴۳۷۴۲

11 September 2017

"Oil production averaged 3.86 million barrels per day in the first few months of the current fiscal year [started March 21]," Eghtesad Online said, citing a report by Majlis Research Center.

That is almost level with the latest OPEC report on Iranian supplies. Iran pumped 3.824 million barrels of oil a day in July, up nearly 7,000 barrels per day from the previous month, OPEC said in its monthly report in August, citing secondary sources.

Crude exports have increased by 80% from 2012 to over 2 million bpd, the Majlis report added, excluding the shipments of gas condensates that are reportedly at 600,000-700,000 barrels per day, according to Financial Tribune.

The petroleum industry has arguably made the biggest leap among all sectors since international sanctions were revoked in January 2016, and the latest Majlis report is a testament to that.

But the oil sector is far from the bellwether of Iran's economy, as the country continues to face impediments in reintegrating into the global financial network while some major western banks are still wary of doing business with Tehran.

--- Pressure of Sanctions

The US and the EU intensified sanctions on Iran in 2011 and 2012 over the dispute on Tehran's nuclear activities. The restrictions directly targeted Iran's energy and economic sectors, and stifled the production and export of crude oil, the lifeblood of Iranian economy.

Under the sanctions, Iran lost more than one-third of its oil production capacity, as output declined to 2.5 million barrels per day from 4 million barrels.

Exports settled at just above 1 million barrels per day, as only a handful of countries, including China and India, were allowed to purchase crude oil from Iran under temporary permissions.

But Iran surprised the markets and rival producers by ramping up production sooner than most analysts had expected.

Oil Minister Bijan Namdar Zanganeh said last month that crude and condensate production is over 3.8 million barrels per day, with exports over 2.6 million barrels. Iran used to sell around 800,000 bpd to European buyers before the tightening of international economic curbs in 2011-12.

The report added that natural gas production reached 627 million cubic meters per day by the end of the previous fiscal. The number most likely excludes the additional production capacity of five South Pars Gas Field phases that were officially launched in April.

Iran's gas production from the joint South Pars field with Qatar, the world's largest gas field in the Persian Gulf, has more than doubled to 575 million cubic meters a day from 240 mcm/d in four years, President Hassan Rouhani said in April.

--- Production Target

Iran will reach an oil production rate of 4.5 million barrels per day within five years, Ali Kardor, the managing director of the National Iranian Oil Company, said on Sunday.

"Iranian gas production will also reach 1.3 billion cubic meters per day and production of gas condensate will reach 864,000 bpd in the next five years," Kardor was quoted as saying by Reuters.

The boost in oil production will come from an increase of 420,000 bpd from West Karoun Oilfield and an additional 280,000 bps from oilfields in central and southern Iran as well as the Iranian Offshore Oil Company, Kardor told Shana.

Kardor noted that oil exports are expected to reach up to 2.5 million bpd within five years.