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Iran's Oil Ministry drowning in debts

Business Materials 22 November 2016 16:38 (UTC +04:00)

Baku, Azerbaijan, Nov. 22

By Dalga Khatinoglu – Trend:

When President Hassan Rouhani took over the presidency in Iran from Mahmoud Ahmadinejad, the oil ministry in the country had $50 billion worth of debts.

According to an official oil ministry document obtained by Trend, the ministry’s total issued bones, bank credits and debts to contractors was about $50 billion in mid-2013, when Rouhani took office.

The report says that paying back the debts with low oil prices around $40 per barrel is very hard and the debts can reach $70 billion due to fines on overdue payments.

The report says that during Ahmadinejad’s presidency the oil revenues ($578 billion) succeeded the total oil exports during last century (since 1910s).

The report says the country’s crude oil exports decreased from 2.2 million barrels per day (mb/d) in 2011 to below 1 mb/d during the sanctions era (2012-early 2016), but the volume has since reached the level close to that of the pre-sanctions era.

Oil price has declined from about $115 in mid-2014 to below $30 in early 2016, then rose to $45 in mid-November.

Iran produces about 4 mb/d of crude oil, of which a half is exported, the document said.

The report says Iran should double its share in global oil markets to 5 percent by increasing the production level to 5.7 mb/d by 2021.

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