Page 53 - IRANRptSep22

Iran makes new find, reiterates output expansion plans
to have boosted oil exports despite US sanctions still in place that Washington under former US president Donald Trump introduced saying the intention was to drive down Iranian crude exports to zero. The fact that China has remained a crucial market to Tehran for below-the-radar oil sales is well documented. Iran mainly exports gas to Turkey and Iraq. Sales to Iraq have been hampered by frequent rows over unpaid bills but ahead of the summer this year, Baghdad recommitted to paying off the debts and said it would switch to monthly payments to ensure more regular remuneration.
Iran is sometimes short of gas to export. Though it sits on the world’s second largest gas reserves, sanctions over the years have hindered the technological investments that would be required in Iranian gas fields to secure sufficient flows for domestic consumption demands and export ambitions.
Officials dealing with rising discontent and protests in Iranian society over economic hardship—annual inflation lately passed the 50% mark while the Iranian rial very much remains on the ropes—may hope some of the extra energy income will translate into rising prosperity among the population at large.
Iran reiterated plans to significantly increase its production capacities for oil and gas by the end of the decade. While the expansion plans are not new, the level of investment mentioned is, with the Russian commitment accounting for around a quarter of projected spending.
According to the official Islamic Republic News Agency (IRNA), the National Iranian Oil Co. (NIOC) has a seven-year investment plan that will allow oil production to rise to 5.7mn barrels per day, with that of gas rising to 1.5bn cubic metres per day, up from 3.8mn bpd and 1 bcm per day respectively by 2029.
The outlet noted, though, that oil output is running at just under 2.6mn bpd owing to sanctions hampering exports.
To achieve this, the country will require a combined $160bn of domestic and foreign direct investment (FDI), with the IRNA report suggesting that $50bn has already been secured, including last week’s $40bn memorandum of understanding (MoU) with Russian gas monopoly Gazprom.
According to the Ministry of Petroleum’s (MoP) Shana news agency, that agreement covers the development of the Kish and North Pars gas fields, pressure enhancement at the supergiant South Pars offshore gas field and the development of six undisclosed oilfields. The parties will also engage on gas and product swaps, while Gazprom will work to complete LNG projects abandoned when sanctions were imposed on Iran in 2012 and construct gas export pipelines. The deal also covers scientific and technological co-operation.
Early this month, NIOC signed a $7bn investment deal with local companies, banks and the National Development Fund of Iran (NDFI) to raise output at Azadegan, Iran’s largest oilfield, to 570,000 bpd from the current combined 215,000 bpd across the north and south development projects.
Meanwhile, in March NIOC signed a $530mn, 20-year agreement with a foreign company to apply enhanced oil recovery (EOR) techniques at the South Pars Oil Layer (SPOL)
Located 130 km off Iran’s southern coast in 67 metres of water, the oil layer has an estimated 7bn barrels of oil in place (OIP), 900mn barrels of which are seen as recoverable, with first phase production reaching 25,000 bpd and the second phase seen raising this to 55,000-60,000 bpd.
The deal with Gazprom is clearly the most encouraging for Tehran, though it largely follows a 2018 agreement that failed to bear fruit. Further detail was provided by NIOC CEO Mohsen Khojastehmehr, who told Shana that the oil
53 IRAN Country Report September 2022 www.intellinews.com