TEHRAN (Dispatches) -- Iranian energy companies have agreed deals worth $1.2 billion to raise the nation’s crude output, state-run National Iranian Oil Co. said Sunday.
The signings were initially meant to take place on Monday in Tehran in the presence of Minister of Petroleum Bijan Zanganeh, but have been delayed, NIOC said in a statement. The company didn’t disclose the reason for or length of the delay.
Zanganeh said in mid-December that Iran planned to roughly double oil production in the next year to 4.5 million barrels daily, as the country anticipates a loosening of U.S. sanctions after Joe Biden becomes president.
National Iranian South Oil Co. and Iranian Offshore Oil Co. will sign deals with domestic contractors covering onshore fields in Bushehr, Fars, Khuzestan, and Kohgiluyeh and Boyer-Ahmad provinces, NIOC said. The offshore Reshadat deposit in the Persian Gulf is also part of the agreements.
The two NIOC subsidiaries agreed $1.8 billion of similar domestic contracts in August to boost production at more than a dozen onshore and offshore crude deposits.
The Organization of Petroleum Exporting Countries, including Iran, is to meet Monday to assess production. While the 13-nation group has slashed output since May to buoy prices in the face of the coronavirus pandemic, Iran is exempt from a quota due to the sanctions.
India: No ‘Immediate Plans’ to Resume Iran Imports
India has "no immediate plans” to resume oil purchases from Iran as American sanctions remain in place, and it will take time for the incoming Joe Biden administration to return to the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), Indian online newspaper ThePrint reported Sunday.
Sources said India believes the Biden administration will not have an easy time resuming talks with Iran under the JCPOA, the report said.
The sources said the sanctions imposed by the outgoing Donald Trump administration will thus remain in place for some time, and so, India is taking a "cautious approach”.
The expectation is that with the U.S. returning to the JCPOA, a lot of "tough negotiations will take place” before other countries are able to do business with Iran, the paper added.
As soon as the U.S. begins discussing the JCPOA, it said, Iran’s
first demand will be to lift the sanctions.
"Only after all this is done will other avenues open up and world businesses will start engaging with Iran again,” a source who refused to be identified reportedly told ThePrint.
Iran was among the top three countries from where India used to import oil. From the Iranian perspective, India was its second biggest oil customer after China. However, under pressure from the U.S., India brought its oil purchase from Iran down to zero in May 2019.
Last month, Oil Minister Dharmendra Pradhan had stated that India hopes to resume crude oil imports from Iran after Biden takes charge January 20.
India also cites the economic sanctions imposed by the U.S. for its plans to expand the Chabahar Port, which entailed building of a rail and road network, but the U.S. government has exempted the project from the sanctions.
Last September, Indian Defense Minister Rajnath Singh and External Affairs Minister S. Jaishankar made separate trips to Iran at a time when Beijing and Tehran were preparing to sign a whopping $400 billion economic and strategic deal.
In December, India, Iran and Uzbekistan held a trilateral working group meeting on the joint use of Chabahar Port as a transit port.
Another fallout of India not resuming crude oil purchases from Iran has been that it is rapidly losing its share in the west Asian country’s basmati rice market, which is being taken over by Pakistan.
"The core of our future relations revolves around the energy sector because of the huge reserves they have. They were once our biggest suppliers, so clearly, we want to restore the energy ties,” India’s former foreign secretary Kanwal Sibal told ThePrint.
"It will not be easy for the U.S. to come back to the JCPOA without Joe Biden facing some new issues. For him, it also won’t be easy to convince America domestically why JCPOA is needed,” Sibal explained.
"Biden has a lot of hurdles to cross, so it’s better we wait before suddenly resuming oil purchases from Iran. We have found alternatives to Iran and crude prices have also crashed. So, it’s best to wait and let things unfold, else the geopolitical cost will be huge,” he added.