Page 7 - DMEA Week 06 2021

DMEA COMMENTARY DMEA

December using Mapna Drilling Co.’s MD-1 Trump in the US improving confidence about
drilling rig, which was installed at the SPD11B Washington’s potential return to the negotiating
location in early November. The 2,200-tonne table, Iranian oil exports have been rising.
unit is carrying out a programme of drilling 12 While the increases have been modest, with
appraisal and development wells as Petropars Bloomberg quoting various industry sources as
seeks to achieve a daily production capacity of saying that the gains are around 30,000-50,000
1bn cubic feet (28 mcm) per day of sour gas from barrels per day (bpd), they represent greater
the project. confidence on behalf of buyers, though covert
The SPD11B wells will be drilled in two practices continue to be employed to maintain
stages. The first phase will comprise the drilling a lack of clarity about sales.
and completion of five appraisal or development Given China’s history of working around
wells and installation of the SPD11B platform, the sanctions to continue buying Iranian oil, it
targeting an initial production level of 500mn would be unsurprising if sales had expanded,
cubic feet (14 mcm) per day. while Bloomberg quoted a trader as saying that
Thereafter, a further seven development wells Iranian flows had ticked upwards.
will be drilled and completed to increase gas Last week, the chairman of state-run Hindu-
recovery from the platform to 28 mcm per day. stan Petroleum Corp. Ltd (HPCL) said Indian
Tehran intends to expand total South Pars refiners would resume imports of Iranian oil if
production to 1 bcm per day as soon as possible. the US eased sanctions against Tehran.
Onshore, Meshkinfam said that the first train “Iranian crude had been in the [import] bas-
of the phase 14 refinery would come into opera- ket of Indian refineries ... we will be happy to take
tion soon after March 20, with new trains inau- that crude as and when the situation warrants
gurated every quarter until the facility reaches and the crude is available,” MK Surana told a
full operational capacity by March 2022. news conference.
India was second only to China as an
Oil exports importer of Iranian crude prior to a tightening
While gas production has been on an upward of US sanctions by the Trump administration in
trajectory throughout the past decade, feeding mid-2019.
increasing domestic demand, oil output has been Surana reportedly added that Iran was previ-
far more susceptible to political interference ously offering favourable terms for payment and
from abroad. freight discounts among others, which made its
However, as MEOG have covered extensively oil “preferential” compared to other grades.
in recent months, Iranian oil production has After stopping purchases from Iran, Indian
increased following major efforts by local firms refiners diversified their crude imports. “There
to achieve the ambitious targets set when Tehran are alternatives in the picture after that [intro-
anticipated swathes of foreign investment in its duction of sanctions]. Now US crude is coming
hydrocarbon sectors in 2015-17. to India,” Surana added. India is the world’s third
With the end of the presidency of Donald biggest oil importer and consumer. ™

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