Iran plans to boost oil output capacity to pre-sanctions levels by March 2022

Iran is set to boost its crude oil capacity to 4 million b/d by March 2022, returning to levels not seen since before the US withdrew from the nuclear deal and re-imposed sanctions on the country's crude sales in 2018, the oil ministry's news service Shana reported Nov. 28.

"Our plan is to raise the oil production capacity to what it was before the sanctions by the end of the current [Iranian] year," Mohsen Khojastehmehr, managing director of the state-owned National Iranian Oil Co., said, according to Shana. The Iranian year ends on March 20, 2022. He didn't give the current oil capacity but said it could grow to 5 million b/d within 10 years.

Natural gas is also part of the expansion, with one train in the phase 14 of South Pars offshore gas field set to go on stream within two months, he said. Phase 11 of the shared field with Qatar will become operational in the next Iranian year (2022-2023). Khojastehmehr put the gas production capacity at around 1 billion cu m/day and said capacity could reach 1.5 billion cu m/day within 10 years.

Oil and condensate exports have increased in recent months, he said, without giving details.

A $160 billion investment is needed for the dual expansion -- with $90 billion for oil and $70 billion for gas -- and it will be provided through foreign and domestic funds, he said, adding that "we don't have any problem" raising the money after some funds have already been raised from private companies, he said.

Refining capacity

"Once this investment is made, we will be ready to increase the refining and exports capacity to 1.5 times higher than the pre-sanctions time," he said.

The announcement came just as the next round of Iran nuclear talks, which could swing global oil supply by 1.5 million b/d next year, is set for Nov. 29 in Vienna after a five-month pause. Iran wants all sanctions imposed by the Trump administration to be removed while it scales back its nuclear activities.

"We welcome foreign investment regardless of the sanctions and without any conditions," he said, adding that Iran has already started talks to develop oil and gas fields with foreign companies. For example, Iran is discussing further ventures with Chinese companies which had already been involved in development of Iran's southwest and oil fields shared with Iraq. The companies include Sinopec and CNPC, he said. China is Iran's largest oil customer and Khojastehmehr said Iran is seeking new buyers.

"We seek to pin down new markets that should be stable and secure to continue our oil sales. We should be able to attract strategic customers. We are ready to sign even longterm contracts for sales of crude oil, gas condensates, gas and oil products," he said. South America is one of NIOC's markets, he added.

"We seek to attract strategic customers... Venezuela is one of these countries," he said.

He also noted that Iran has decided to remodel the Iran Petroleum Contract, which is a 2016 refurbished formula by the previous Iranian government. "Our plan is to improve the IPC to make it more attractive and remove their faults," he said.

Iran will "soon" announce packages for investment by the downstream sector in the upstream, he added.

"If our private refineries and petrochemical plants need feedstock, they should certainly spend a part of their profit to provide their own feedstock," he said.