EghtesadOnline: Contracts worth $1.7 billion have been signed between Iranian oil and services companies to increase production from existing fields, the oil minister said Wednesday.
Referring to the previous agreements worth $830 million, Bijan Namdar Zanganeh said: “The US sanctions notwithstanding, no foreign company wants to cooperate with us. But progress has been made in a variety of oil sectors and good capacities have been created,” the Oil Ministry news agency Shana quoted him as saying. He did not elaborate.
The US imposed news economic sanctions in August 2018, targeting key industrial sectors, oil, banking and insurance. In the May of that year Donald Trump tore up the landmark 2015 nuclear deal Iran had signed with the six world powers. In November 2018, Washington imposed a failed policy of “maximum pressure” targeting everything that could be hit.
Iran’s oil exports have plunged to record lows. It shipped over 2.5 million barrels per day of crude oil in April 2018. Unofficial reports show the figure has now decreased to about 200,000 bpd to 500,000 bpd.
However, Iran has not stopped oil exploration, development and capacity building under the tough sanctions climate and has also strived to expand energy expansion activities.
“If we think the sanctions are permanent, we should not do anything and be complacent,” the minister noted, adding that the US hostility and embargos will be over one day but Iran’s oil industry will survive and the county should prepare for the post-sanctions era.
“We definitely need to work on capacity building. A country has power in the oil market when its production capacity is high.”
Power and influence in the global oil market is not based on reserves of a country but its production capacity, he was quoted as saying.
“We should be ready for the time when the sanctions are lifted to reach maximum production of 4 million bpd within a short period -- maximum in three months”.
Referring to the Progress of the oil industry in Iran, Zanganeh said: "There is no going back. The oil industry, in terms of management, services and equipment, is not comparable to 20 years ago. At that time we could lay one meter of offshore pipe. Now we can lay a one kilometer pipe under the sea in one day. Today we can construct some of the most complex oil rigs inside the country.”
Regarding productivity and development of joint oil fields, Zanganeh said: "Our most important joint oil fields are in the west of Karoun River. Our daily production capacity from these fields in 2013 was 70,000 barrels, which now has increase to 400,000 barrels”.
In the global oil industry there is a consensus that the main pillar of technical upstream activities is to increase recovery of oil fields in accordance with ground realities and conditions of each reservoir.
He expressed hope that with the ongoing projects, daily oil production in the West Karoun fields cluster would exceed one million barrels in the near future.
“Recovery factor is very important because in this region due to special geology and fluidity, current recovery factor is low. The Petroleum Institute of the University of Tehran is doing research on the ways to increase the recovery factor,” he added.
Referring to the future oil market, which has been hammered by the coronavirus pandemic, but is slowly in recovery mode, Zanganeh said: "The situation in the oil market has not recovered yet, but with the Organization of the Petroleum Exporting Countries and allies action to cut production, Brent crude has risen from about $16 per barrel in May to around $45 a barrel -- a price not in the danger zone.”