Baku, Azerbaijan, Sept. 10
By Umid Niayesh - Trend:
US Energy Information Administration (EIA) announced that Iran's crude oil output (excluding condensates) stood at 2.8 million barrels per day (mbpd) in first half of 2014.
The figure indicates an increase by 120,000 bpd compared to the same period of 2013, making Iran third crude producer among the Organization of Petroleum Exporting Countries (OPEC), EIA said in its Short-Term Energy Outlook (STEO) report published Sept. 9.
Iran's average crude oil production remained unchanged in the second quarter of 2014, standing at 2.8 mbpd.
Saudi Arabia, by producing 9.65 mbpd of oil in the second quarter of 2014, ranked first among OPEC member countries in terms of crude production, followed by Iraq with 3.26 mbpd.
The total output of OPEC in the second quarter of 2014 amounted to 29.46 mbpd, indicating a decline of 270,000 bpd compared with the preceding quarter.
The EIA forecasts that it is likely to take many years for Iran to return oil production to the levels achieved in the 1970s.
Iran's liquid fuels production including crude oil, condensates and natural gas plant liquids (NGPL) which reached a peak of 6.1 mbpd in 1974, has been well below that level since 1979.
After averaging an estimated 4.0 mbpd from 2001 to 2010, Iran's production has continued declining, to an estimated 3.2 mbpd in 2013, according to the EIA's International Energy Outlook 2014 report, published on Sept. 9.
A series of international sanctions targeting Iran's oil sector have led foreign companies to cancel a number of new projects and upgrades of existing projects.
Iran also faces continued depletion of its production capacity, as its fields have relatively high natural decline rates (between 8 percent and 13 percent per year), according to the report. Additional factors hampering investment include unfavorable foreign investment requirements, underinvestment, and gaps in professional expertise and technology for certain projects.
The U.S. sanctions on financial institutions that handle payments made for oil exports from Iran, coupled with actions by the European Union to cease imports from Iran and prevent it from accessing insurance from European Union companies for its oil shipments, led to a further reduction in Iran's oil exports in 2012.
In November 2013, the P5+1 countries (China, France, Russia, the United Kingdom, and the United States, plus Germany) agreed to a temporary suspension of a number of the EU and U.S. sanctions in exchange for Iran agreeing to limit certain aspects of its nuclear activities. Oil-related sanctions remain in place, but petrochemical exports are allowed as part of the interim deal.
However successful negotiation of a long-term agreement between the parties remains highly uncertain.
Iran, with 157 billion barrels, holds the world's fourth-largest proved crude oil reserves and the world's second-largest natural gas reserves (33.78 trillion cubic meters).
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