TEHRAN, Iran, March. 19
Trend:
İnternational Energy Agency published a report on Iran`s status on the global oil market, which may change if the sanctions against the Islamic Republic are lifted.
If Iran is free from sanctions, production could ramp up gradually by around 1.7 mb/d to 3.8 mb/d, Trend reports citing İnternational Energy Agency official website.
“Before US sanctions were imposed in 2018, Iran was expected to rank as one of the world’s leading sources of supply growth, but its expansion plans have been set back. The impact of the sanctions has been to cut its effective capacity to roughly 2.1 mb/d,” İnternational Energy Agency said in the report.
The report says that Iran’s production of crude oil fell during 2020 to an average 2 mb/d, the lowest annual rate since 1986. Exports of crude and condensate slowed to a trickle from 2.8 mb/d in 2018.
"Lower wellhead production most likely led the National Iranian Oil Co (NIOC) to shut in more wells, especially at its high-cost offshore fields, and complete maintenance at its mature oil fields. Shutting in output can be helpful for ageing oil fields as it will allow pressure to rebuild and make it easier for operations to restart," said the agency.
Referring to the obstacles posed by the collapse of exports and the lack of foreign investment due to sanctions, İnternational Energy Agency says that Iran’s capacity building has largely stalled. The previous round of international sanctions had already left the oil sector in urgent need of foreign cash and technology, particularly in enhanced oil recovery methods to sustain and raise output at older oil fields.
İnternational Energy Agency went on to emphasize that “The virtual absence of foreign investors has left Iran striving to move forward with projects already under development by local companies, especially the West Karun oil fields of Azadegan,Yadavaran and Yaran. These fields, which straddle the border with Iraq, will help to sustain capacity and drive future growth beyond the medium term. Target output for West Karun is 1 mb/d versus current flows of 300 kb/d.”
“Petropars, a subsidiary of NIOC, has secured a contract to more than double output at the South Azadegan field that borders Iraq, to 320 kb/d. Additionally, Persia Oil & Gas Industry Development Co has signed a contract to develop the 30 kb/d Yaran field. NIOC has also approved a new tranche of projects in a multi-billion-dollar programme to boost production by 355 kb/d at 33 oil fields. The latest eight projects, reportedly worth $1.2 billion, could raise output by 95 kb/d,” the report said.
a İnternational Energy Agency admitted that the US sanctions have also frustrated Iran’s plans for the giant South Pars gas field, which is being developed to meet rising domestic demand. Whereas the earlier round of international sanctions in 2012-2015 allowed Iran to export condensate, unilateral US sanctions since 2018 ban shipments that had been running at 300 kb/d.
Petropars is moving forward with the South Pars Phase 11 project after the withdrawal of Total and China National Petroleum Corp due to US sanctions. The first well is expected to start producing in 2021.