Page 44 - IRANRptFeb22

China reports Iranian oil imports despite still applicable US sanctions
Azadegan and Yadavaran oilfields, as well as the South Azadegan and Yaran.” He added that the 1mn bpd expansion was one of NIOC’s top priorities.
The West Karoun cluster in Khuzestan Province includes several large oilfields that straddle the Iran-Iraq border, namely Azadegan, Yaran, Yadavaran and Darkhoein, with the first three divided into north and south projects. The block holds an estimated 67bn barrels of oil in place (OIP). Oil production from the fields currently runs at around 420,000 bpd.
Meanwhile, as Iran kicks off cash-intensive efforts to raise gas production to 1.5bn cubic metres per day during the same period, it appears unlikely that either target will be met unless a new deal is reached for the removal of sanctions.
Ian Simm, principal advisor at consultancy IGM Energy, told NewsBase that Iranian estimates peg the cost to develop the oil sector at $145bn over the next eight years, with the maintenance and expansion of gas production levels coming in at another $80bn. “Iran is certainly being ambitious with these targets. While it has noted plans to raise funds from domestic and international investors and courted Chinese investment, it appears unlikely that it will be able to provide the capex required to achieve both its oil and gas goals.”
Simm added that Tehran faces a tough decision on whether to prioritise one or the other amid rampant gas consumption and the economy struggling to replace revenues from crude oil sales.
Late last year, the Ministry of Petroleum said that work was underway to increase oil capacity to 3.952mn bpd by March 2022, representing an increase of 144,000 bpd on the figure reported for December.
China has reported its first imports of Iranian crude oil in a year despite still applicable US sanctions aimed at parties entering into oil transactions with Iran.
Data on the imports was included in a January 20 release put out by the General Administration of Chinese Customs. It stated that 260,312 tonnes of Iranian crude oil were delivered to China in December. The last Iranian oil inflows recorded by China’s customs authority were registered in December 2020 at 520,000 tonnes, Reuters said.
Iran’s oil business with China is usually conducted on the grey market to avoid sanctions. Some analysts’ estimates have assessed China's imports of Iranian oil at more than 500,000 barrels per day (bpd) on average in latter months of last year. Buyers are tempted by crude offered at a big discount, even if it means riding the risk of taking a hit from US sanctions.
Various reports have described how Iranian crude has been exported to China marked as oil from countries including Oman, the United Arab Emirates and Malaysia.
Reuters reported on January 20 that China has offloaded nearly four million barrels of Iranian crude oil into state reserve tanks in the southern port city of Zhanjiang over the past few weeks. It attributed the information to a trade source and ship tracking specialist Vortexa Analytics.
"There were reports of importing Iranian crude earlier - but hush hush somewhat. Now I think the Chinese are testing openly to see US response," Tilak Doshi, managing director of Doshi Consulting in Singapore, was cited as saying.
Theoretically, by importing Iranian oil despite the threat of US sanctions, China can indicate to the global market that international oil supplies are moving higher and can thus cool the rising oil price, which some analysts forecast will hit more than $100 per barrel this year.
Iran has the world's fourth-largest oil reserves.
44 IRAN Country Report February 2022 www.intellinews.com