Oil and gas production in Iran is preparing for a domestic boom by next year (2024), including boosting the petrochemical sector as well, despite the continued US sanctions.
The CEO of the National Iranian Oil Company “NEOC”, Mohsen Khojashmehr, said that increasing production requires a large amount of investments to complete the projects that have already been launched, in addition to developing joint fields, according to statements he was quoted by the Iranian oil news agency “SHANA”.
It seems that the ambition to increase oil and gas production in Iran received support from the Russian deal signed last year (2022) with Gazprom, with investments amounting to $40 billion, according to what the specialized energy platform has followed.
Plans to increase production
The CEO of the National Iranian Oil Company “NEOC” Mohsen Khojashmehr confirmed the development of several projects at the present time, in preparation for increasing oil and gas production in Iran by next year (2024).
He revealed that plans to increase hydrocarbon production capacity by about 50% require investments amounting to $160 billion to support Tehran’s ambition to increase oil production to 5.7 million barrels per day, in addition to 1.5 billion cubic meters per day of gas.
The plans to increase production coincide with Tehran’s tendency to sign agreements and conclude deals that would support the development of the industry, as the past year (2022) witnessed strong steps in the framework of cooperation between Iran and Russia (represented by Gazprom) at a value of $40 billion.
Among these investments, $4.5 billion has been allocated for the development of 7 oil fields, while the two parties are studying the possibility of developing other fields in order to increase oil and gas production in Iran.
Projects under development
The goal of increasing oil and gas production in Iran by 50% was supported by the signing of a memorandum of understanding with 6 banks and 6 companies involved in exploration and production, with a value of up to $7 billion.
The memorandum of understanding aims to accelerate the pace of oil fields in the north and south of the city of Azadegan, raising the pace of production from 200 thousand barrels at present to 570 thousand barrels.
South Azadegan alone is set to raise production from 83,000 barrels to 115,000 barrels, according to the specialist energy platform.
The chart below – prepared by the specialized energy platform – shows the development of Iranian oil production from 2019 to 2023, according to OPEC data:
Mohsen Khojashmehr explained that the Azadegan oil field – shared with Iraq, and one of the 10 largest global fields – is gaining special development priority in Tehran.
Plans to increase oil and gas production in Iran also included a parallel development of the petrochemical sector, as Khojashmehr confirmed the signing of contracts worth $1.1 billion with companies with the aim of collecting flared and separated gas at the Bidboland refinery to distribute raw materials to petrochemical complexes.
Support packages
The National Oil Company “NEOC” pays attention to the completion of oil and gas projects in Iran, whose stages of development have witnessed completion and are nearing completion, and the development of joint oil and gas fields has come second to Tehran’s priorities.
Mohsen Khojashmehr revealed that the administration of the current president is focusing on developing oil and gas in Iran, as it has accelerated the pace of 32 projects that were suspended by previous administrations.
Tehran has started 7 projects aimed at enhanced oil extraction and production maintenance, in addition to a package of other projects preparing for operation, according to the specialized energy platform.
The chart below – prepared by the Specialized Energy Platform – reveals the evolution of the rate of natural gas production in Iran from 1970 to 2021:
Projects to increase oil and gas production in Iran included a project called “NGL 3200”, which focuses on capturing associated gas from the western Karun oil fields, to feed refineries and petrochemical complexes.
The current Tehran administration supported the process of developing oil and gas production in Iran by adding more drilling equipment by up to 70%, compared to previous levels.
Mohsen Khojashmehr revealed the support of the country’s Economic Council for development plans, pointing out that the Council agreed to allocate $500 million for the low-production well development project.
In addition, the council approved a support package of $3.6 billion in favor of developing gas production, through several projects that raise production in 13 fields.
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