TEHRAN – Iran’s minister of petroleum said Monday the country can increase its crude production rapidly.
“The next Iranian government should make it a top priority to raise oil production to 6.5 million barrels a day,” Bijan Zanganeh told reporters here. Higher output will “improve the country’s security and political might.”
Iran is preparing to ramp up crude production and boost exports in anticipation of an agreement. Most oil analysts expect it would be able to increase output by 500,000 to 1 million barrels a day by the end of the year, Bloomberg said.
Zanganeh said Iran would have little difficulty finding buyers for any barrels it adds to the market. The country has already increased its exports this year. China has been the main buyer, while Indian refiners have said they will import Iranian crude once sanctions are removed.
Iran holds presidential elections on June 18. President Hassan Rouhani is stepping down after serving two terms, though he will stay in office until around August. Zanganeh has said he will retire from government and won’t accept any offer from the new president to be a minister.
Iran’s main state energy company on Monday signed preliminary agreements with local firms to study the giant Azadegan oil field shared with Iraq.
National Iranian Oil Co. said the deals may boost Azadegan’s production capacity, without specifying by how much. The field can currently pump around 215,000 barrels a day.
Iran is increasingly reliant on local firms to develop its oil sector, with the sanctions having forced out foreign investors.
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Development Co. will study the northern section of Azadegan, while Petropars Ltd. and Petroiran Development Co. will work on the central section, NIOC said. Pasargad Energy Development Co. and Dana Energy will explore the southern stretch.
Azadegan has an estimated 32 billion barrels of oil reserves. Foreign companies may eventually be able to partner with local firms on the projects, according to Zanganeh.
Iran started its first transfer of crude oil via its strategic Goreh-Jask pipeline, allowing the country to bypass the Strait of Hormuz, the Islamic Republic News Agency reported Sunday.
The oil passed through the pipeline’s second pump house and reached a facility near the port of Jask, IRNA said, without giving any details on the size or volume of the transfer.
Earlier this month the state-run National Iranian Oil Co. said it had started injecting crude into the pipeline and that oil shipments from the Jask region on the Gulf of Oman coast will start next month, adding that the 1,000-kilometer (620-mile) conduit will be officially opened by President Hassan Rouhani in the near future.
Most of Iran’s energy exports currently pass through the Strait of Hormuz, a narrow shipping channel on the Persian Gulf.
Oil markets are closely watching talks between Iran and other countries to revive that accord and remove a raft of U.S. sanctions from the Islamic Republic’s energy sector and wider economy, helping it reinstate millions of barrels of exports.
Earlier this month Rouhani said negotiators had already accepted that sanctions on Iran’s oil, shipping, insurance and banking industries will be lifted, triggering a drop in oil prices.