Iran’s spare oil production capacity limited - expert

Baku, Azerbaijan June 14

By Elena Kosolapova - Trend:

Iran's spare oil production capacity is quite limited, Kamran Dadkhah, an associate professor in the Department of Economics at the US Northeastern University, expert on Iran believes.

"Prior to the Islamic revolution [in 1978-79] Iran produced 6 million barrels per day. On that basis Iran has close to two million barrels of unused capacity. But this is misleading," Dadkhah told Trend by email on June 14.

The expert noted that over the past 38 years Iran's oil fields have been deprived of required investment and maintenance.

"Therefore, Iran needs to attract substantial foreign investment and modern technology to be able to use its spare capacity," he said.

Dadkhah expects Iran will continue its efforts to increase its oil production and exports, but this would not be an easy task.

The expert noted that one problem in the way of attracting foreign investment was the so called buyback contracts, but the Iranian oil ministry has already abandoned those contracts in favor of joint investment.

What Iran needs to do now is to settle its problems with the United States and Saudi Arabia, he said.

Dadkhah noted that many companies and investors are wary that investment in Iran may involve sanctioned individuals and institutions due to their connections to terrorists or money laundering groups. On the other hand, many oil companies do not want to antagonize another big oil producer, he said.

"If Iran could settle these issues and provide a safe environment for investment, many oil companies would rush to invest in Iran," Dadkhah said.

The expert believes Iran oil reserves both inland and in the Persian Gulf are quite attractive to oil companies, but Iran should settle for known companies with access to the latest technology such as Royal Dutch Shell and Exxon Mobil.

Dadkhah does not expect that current low oil prices will hinder foreign companies from investing in Iranian oil fields.

"Oil production from conventional fields is still quite profitable. Moreover, it is expected that oil prices will stabilize and then increase in the future. Therefore, if other conditions are met, there will be investment in Iranian oil fields," he said.

Earlier, Iran announced that it had achieved the pre-sanctions level of oil production. According to OPEC, oil production in Iran in May grew by more than 89,000 barrels per day - up to 3.562 million barrels per day. According to BP, Iran ranked fourth in the world in terms of the proven oil reserves, which amounted to 21.7 billion tons at the beginning of 2016.

Edited by SI

Follow the author on Twitter: @E_Kosolapova

Subscribe to Trend in Google News! Subscribe
EU prioritizes digital sector development in Azerbaijan
EU prioritizes digital sector development in Azerbaijan
Russian company to implement micro-mobile transport project in Baku
Russian company to implement micro-mobile transport project in Baku
Azerbaijan Investment Holding, Kazakhstan National Welfare Fund sign memorandum of co-op
Azerbaijan Investment Holding, Kazakhstan National Welfare Fund sign memorandum of co-op
Loading Bars
Latest
Putin makes statement on Karabakh
Uzbek Central Bank: Food prices have risen by 14.4%
Georgian Parliament Speaker to meet Moldovan counterpart in Greece
Brussels' utopian green energy fantasies spark energy crisis in Europe — Hungarian PM
EU prioritizes digital sector development in Azerbaijan
Russia planning several new business visits to Azerbaijan by year-end - official
Russian company to implement micro-mobile transport project in Baku
First Vice-President Mehriban Aliyeva makes Instagram post on visit to Zangilan (VIDEO)
Azerbaijan Investment Holding, Kazakhstan National Welfare Fund sign memorandum of co-op
SOFAZ’s revenues from profitable oil and gas sale up
Executive Power of Azerbaijan’s Tovuz district opens tender for road repairs
Kazakhstan, Russia discuss gas supply issues
Russian company may set up 'smart' bus stops in Azerbaijan's liberated lands
Azerbaijan publishes updated list of servicemen martyred during second Karabakh war
IBF VP talks growing interest of investors in Azerbaijan's liberated lands (VIDEO)
SOFAZ sees increase in budget revenues
Uzbekistan's GDP growth in 9M2021 sparks promising forecast
Azerbaijan developing preliminary conceptual design of railway route to liberated Kalbajar (PHOTO)
Goldman Sachs, Freshfields working on possible Porsche IPO
Kazakhstan to liquidate emergency wells in several regions
Large-amount loans issued in Iran's services sector
Azerbaijan, Russia talk cooperation opportunities in insurance sector
Azerbaijan records surplus in state budget
Azerbaijan's Sumgayit Technologies Park, Alat FEZ sign MoU on strategic co-op
Azerbaijan shares data on number of vaccinated citizens
Head of EU delegation talks financial aid to Azerbaijan, following end of Karabakh war
U.S. weekly jobless claims drop to 19-month low
Uzbek Central Bank publishes data on country's gold, currency reserves
Trade turnover between Turkmenistan, Uzbekistan grows sharply
FIMI buys Ashot Ashkelon stake from Elbit Systems for $88m
Azerbaijan confirms 2,005 more COVID-19 cases, 1,011 recoveries
Uzbek Central Bank reveals data on total liabilities of banks
Iran sees decrease in load/unload operations in Astara port
Kremlin hopes for EU certification of Russia's vaccine
Bahar Azadi gold coin price begins to rise in Iran
India enters 100-crore vaccine club to fight Covid, PM Modi says nation scripts history
Hungarian University Forum and alumni meeting in Baku
Central Bank of Iran shares data on loans issued for trade sector
Turkmenistan doubles greenhouse tomato exports to Russia
Turkey's position on opening Zangezur corridor - unchanged – President Erdogan
Iran reveals COVID-19 data for October 21
Georgia shares data on its top goods exported to Russia
Iran sees increase of cargo loading/unloading at its Charak port
Turkish President to attend opening of Azerbaijan’s Fuzuli International Airport
India offered humanitarian assistance to Afghans, Taliban say after 2nd meeting
'Turkic World' project aims to meet information demand - Turkish official
South Pars field revenues account for over half of Iran's state budget
Turkmenistan looks to launch new project jointly with UNDP, WB
Central Bank of Iran announces amount of loans issued in housing, construction sector
Turkmenistan interested in political stability, security in Afghanistan – Deputy FM
Iran’s CBI reveals amount of loans issued for industrial and mining sectors
India achieves the major milestone of ‘one billion’ vaccinations
Volume of loaded/unloaded cargo in Iran’s Fereidoonkenar port down
Ruling parties of Azerbaijan, Turkey to hold meeting
Iran records increase in exports to Uzbekistan
Iranian president to visit Ardabil Province on border with Azerbaijan
Uzbekistan reveals total assets for banks with/without state share
Every martyr will live forever in hearts of Azerbaijani people - President Ilham Aliyev
SOCAR discloses oil transportation volume via Baku-Supsa
Our people did not bow down during occupation, did not forget about their native lands - Azerbaijani president
Georgia-Russia trade turnover increases in 9M2021
Azerbaijan's military units in Kalbajar, Lachin undergo inspection amid coming winter (PHOTO/VIDEO)
Georgia shares data on COVID-19 cases for October 21
SOCAR’s capital investment plan fulfilled by over 63%
SOCAR reveals volume of electricity production, consumption
Iranian currency rates for October 21
Tesla's German plant hits snag as public consultation repeated
Iranian startup companies receive more loans from local banks
Activities in Iran’s Genaveh port increase
Egypt economy forecast to grow 5.1% in year to June, 5.5% in 2022/23
Pfizer vaccine very effective against Delta variant in adolescents in Israel
Iranians detained in Azerbaijan due to falsified of customs documents sent back to Iran
Exports of Iran to Tajikistan soar
Iran begins new round of power plant overhaul operations
Zangilan will become transport and logistical center of our country - President Aliyev
SOCAR fulfills oil refining plan by over 103%
Gas could lose market share to coal this winter
Russia sees record high of 36,339 daily COVID-19 cases, crisis center says
Does Europe have enough gas stocks to get through winter?
Azerbaijan considering proposals for building new modern gas-turbine power plant
Azerbaijan announces time of commissioning floating solar power plant
Azerbaijan to develop atlas of renewable energy potential
Kazakhstan eyes attracting investments in processing industry
Turkey shares data on number of cars transshipped via local ports in 9M2021
Iran to use alternative fuel for power plants
Iran shares data on grain imports from Russia
Azerbaijan updates on renewable energy projects with ACWA Power, Masdar
Iran looking to expand export to neighboring countries - President Raisi
Amount of loans issued by Iranian banks continue to grow
Iran provides several loans in agricultural sector
Oil mixed, but solid U.S. demand underpins sentiment
1 dead, 33 injured in restaurant explosion in northeast China
Iran, Kazakhstan urged to set out a new framework for bilateral ties
Number of beneficiaries receiving subsistence allowance increases in Georgia
ADB to prioritize Uzbekistan’s transformation to market-based economy through reforms (Exclusive)
COVID-19: New cases slightly up in Kazakhstan
India for including TRIPS waiver proposal in WTO’s response package
U.S. FDA clears Moderna, J&J COVID-19 boosters, backs use of different vaccine for boost
India plans to send 50,000 MT of wheat, medical aid to Afghanistan: Report
17 killed in car crash in Egypt
All news