Having conditions, Iran can boost oil export in short time, expert says

Oil&Gas Materials 16 April 2015 14:15 (UTC +04:00)

Tehran, Iran, April 15

By Mehdi Sepahvand - Trend:

Iran says it is preparing for post-sanctions era to increase oil production/export significantly, but Fatih Birol, chief economist and future head of International Energy Agency (IEA) said that the chance for a significant oil export increase by Iran is very low, and that it will take at least 3 to 5 years.

But there seem to be problems to that. Iran has cut oil production in some fields since 2012. Ignoring the glut in global oil markets and other real obstacles, it doesn't seem easy for the country to resume its pre-2011 oil export figures.

Also, about 80 percent of Iran's active oil fields are in their second half life and lose 8% to 13% of their productivity annually. Iran hasn't commenced any new oil field since 2007.

Despite all this, Narsi Ghorban, Iranian economy of energy scholar and critic says that there is no contradiction between what Iran oil ministry says and what Birol has said.

Iran indicates that after the sanctions are removed, the oil export from Iran can go back to what it was before the sanctions in 2012, Ghorban told Trend April 15.

"Additional oil production (that has been shut down due to the lack of buyers) is possible in a short time if the markets are ready to take Iranian crude at the price offered. Consequently the ministry is right about its assessment given the right market conditions," he noted.

The expert believes what Mr. Birol is indicating is that the increase of Iran's oil production after the sanctions are removed in excess of Iran's production capacity will take between 3-5 years.

"This will require huge investment, involvement of international companies and new technologies and development of new oil reservoirs," Ghorban observed.

"In this case Mr. Birol is also right in suggesting that negotiations with oil companies after the sanctions are removed, finalization of agreements, investment in development of new fields and other associated tasks required will take 3-5 years."