Iran Oil Minister Briefs the Press on Key Oil Issues

EghtesadOnline: Oil Minister Bijan Namdar Zanganeh on Tuesday made a rather positive review of the government's projected oil revenues in the proposed budget for the next fiscal that begins in March.

News ID: ۷۴۶۶۵۳

06 February 2019

As per the March 2019-20 budget bill, a barrel of crude oil is expected to fetch $54 in the international market.

Addressing reporters, Zanganeh reflected on plans to sell oil to private buyers through the Iran Energy Exchange. "We will continue offering crude oil through IRENEX and welcome suggestions for enhancing the energy exchange."

There are only two conditions for purchasing oil via IRENEX, Zanganeh said. "Buyers must settle the payments and find new markets for selling oil."

Joint Fields

According to Financial Tribune, he took stock of the existing conditions related to Iran's joint oil and gas fields with neighboring countries.

"Our gas output from the South Pars Gas Field is now higher than Qatar's…crude output from the Karoun Oilfield [near Iran-Iraq border] will reach 350,000 barrels per day by March."

Development of joint oil and gas fields has been a declared priority of the Oil Ministry after international nuclear sanctions were eased in 2016.

"Iraqis have shown no interest in our proposals due to the (new US) sanctions," he said referring to his recent trip to the neighboring Arab country.

Iraq owes $2 billion to Iran for the import of natural gas, the oil minister said. It has often been reported in the local media that Baghdad owes another $1 billion in unpaid electricity bills.

South Pars Projects

According to Zanganeh, President Hassan Rouhani will officially inaugurate phases 13, 22, 23, 24 of South Pars in early March. He put the total cost of the projects at $10 billion.

The Chinese oil giant CNPC has not yet clarified its stance on the contract for developing South Pars Phase 11, following Total's departure from the project.

Total, which had a 50.1% stake in the project, had partnered with CNPC (30%) and Iran's Petropars (19.9%).

The three companies signed a $4.8-billion deal last July and Total was the first major western energy company to invest in Iran’s oil sector after the economic sanctions were eased following the signing of the historic nuclear deal by Tehran and the six world powers.

On the home front,  Zanganeh referred to the regular reports about higher gasoline prices and possible rationing in the next fiscal.

He did not confirm the reported higher prices at the pumps nor the rationing rumors. "Prices should not increase when the public does not support such a move.”

Zanganeh also criticized Greece and Italy for not buying Iran's crude oil in spite of the fact that they have been granted US waivers.

The United States granted the two countries exemptions along with six others - Turkey, China, India, Japan, South Korea and Taiwan - allowing them to temporarily continue buying Iranian oil as Washington reimposed sanctions on Iran’s banking and energy sectors, Reuters reported

“Except Turkey, other European countries are not buying oil from us,” Zanganeh was quoted as saying by the news agency.

Japanese and South Korean private companies have started loading Iranian crude, he noted.

“Greece and Italy have been granted exemptions by the US administration, but they are not willing to buy Iranian oil,” he said.

The minister noted that the new US sanctions on Iran were more difficult than the Iran-Iraq war in the 1980s, but said Tehran will not allow the United States to reduce its oil exports to zero.