EghtesadOnline: Crude oil output will reach 4 million barrels per day in April, head of the National Iranian Oil Company said on Saturday.
“Oil production was expected to reach 4 million barrels a day by the end of the present fiscal year (on March 20), but it will take one more month to get there,” Ali Kardor told a drilling technology conference in Tehran, ISNA reported.
According to government data, Tehran is now producing 3.9 million bpd of crude oil and gas condensates, a type of ultra light crude. The OPEC member hopes to lift production by more than 15% of current output level by 2022, the end of its sixth five-year economic development plan that has been delayed by a year.
“As stipulated in the sixth plan, crude oil production should reach 4.7 million bpd. We have sought that target for seven, eight years, but have not come close,” Kardor concurred.
According to Financial Tribune, he added that production peaked at 4.2 million bpd for a short spell before the international sanctions were tightened against Tehran in 2011 and 2012.
Iran used to be the second-largest producer of the Organization of Petroleum Exporting Countries, but trade and financial restrictions imposed over its nuclear program stifled production to around 2.5 million bpd as exports whittled down to just above 1 million barrels a day.
It is now the third-largest OPEC producer behind Saudi Arabia and Iraq, which pump around 10 million bpd and 4.5 million bpd respectively.
Kardor added that natural gas production is planned to reach 1.3 billion cubic meters per day in four years.
“To reach our oil and gas production target by 2021, we need to drill a total of 500 wells” with the costlier offshore wells making up 60% of drilling costs, said the NIOC chief.
Iran’s gas production is around 800 million cubic meters per day, nearly two-thirds of which come from South Pars, the giant gas field shared by Iran and Qatar in the Persian Gulf.
Upon the launch of new South Pars phases, Iran hopes to match or exceed Qatar’s gas production this year. The small Arab country reportedly draws 650-700 mcm/d from the joint field.
Similar to many national oil companies (NOCs), NIOC too is facing a severe cash crunch and accumulated arrears.
The company’s debt has ballooned to $50 billion, but it is not all down to the plummeting international crude prices for the past three years, according to Kardor, who blamed ill-considered financial and investment models during the past four decades for the present state of affairs.
“As the employer, NIOC has continued to provide funds for oil and gas projects without taking into consideration the progress of operations,” he noted.
According to one report, around 80% of the debt is related to loans the Oil Ministry has taken from the Central Bank of Iran over the years to develop oil and gas development projects, including two dozen phases of the mega South Pars gas project.
A large part of the loans have not been repaid as many energy projects have been hit by repeated delays due to funding constraints, mismanagement and cost overruns.