Iran hopes to see oil output hit 5.7m/bpd

Iranian officials have expressed hope the country would be able to increase its crude production capacity to as high as 5.7 million barrels per day (m/bpd) in the future.

Mehdi Hosseini, a top adviser to Iran’s Oil Minister Bijan Zangeneh, has emphasized that Iran’s oil production will double in the short term.

This, he said, will be materialized once 45 new oil projects that Iran has recently defined and plans to introduce to investors come on stream. 

“The cost for production of each barrel of oil in Iran is $8-10,” the official has been quoted as saying in an interview with Bloomberg.

“Therefore, our projects will be attractive to the investors,” he added.

Hosseini added that the new projects that he said will include exploration targets will be presented at a conference in London in December.

He emphasized that Iran’s oil production will exceed 4 m/bpd once sanctions against the country are lifted..

The Persian Gulf nation’s output was 2.85 million barrels a day in July, according to estimates compiled by Bloomberg.

Iran plans to also introduce a new model of contracts for its energy projects in the December conference in London.

The new model – Iran Petroleum Contract (IPC) – will be a modification of the traditional buy-back risk service contracts and has been specifically designed to increase the attractiveness of Iranian oil projects for foreign investors.

The IPC offers different stages of exploration, development and production to the contractors as an integrated package.

Also, Iran will set up joint ventures with the contractors to extract reserves at the fields. The contractors will be accordingly reimbursed through a share of production from the fields. 

“We have discussed with almost all major and medium-sized companies over the terms of the IPC as well as the new projects,” said Hosseini, who chairs an expert committee at the Ministry of Petroleum which has been in charge of devising the IPC. 

“They have all given us positive feedback,” he has been quoted as saying in the interview that has been covered by the Persian-language newspaper Forsat-e Emrooz.

Iran’s oil production stood at as high as 6 m/bpd in the 70s. However, its production later subsided as a result of US sanctions against the country’s oil industry as well as the Iraqi-imposed war (1980-88).

Iran’s oil production rose to above 3.5 m/bpd in mid-90s and even reached above 4 m/bpd in early 2000s before it was almost halved as a result of US-engineered sanctions over the past few years.  

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