Iran delegates oil projects to local companies amid US sanctions
Press TV, Tehran
In a rare move, Iran’s Oil Ministry has delegated a large oil project to local companies, in an effort to boost crude oil production, while US sanctions continue to cast their shadow over the country’s oil sector.
Worth 1.3 billion dollars, the development project aims to increase the production of the Azadegan oil field to 320,000 barrels per day, against the existing 140,000 bpd.
The Azadegan oil field is located in southwestern Iran and is close to the Iraqi-Iranian border.
Its existing oil capacity is estimated at around 33 billion barrels, but at the current rate, only 1.5 billion barrels are recoverable.
In 2009, Chinese oil giant CNPC won a $ 2.5 billion deal with Iran’s petroleum ministry to speed up the recovery rate in the oil field, but in 2014 Iran revoked the deal due to China’s difficulty in carrying out the project.
Domestic companies claim that the decision to manage such a megaproject at the national level is unprecedented in the history of the oil industry in Iran.
In 2018, Iran was the third largest oil producer in the Organization of the Petroleum Exporting Countries.
Following the unilateral withdrawal of the United States from the nuclear deal and the reimposition of sanctions in 2018, Iran’s oil production almost halved to 1.9 million barrels per day.
As a result, Iranian exports have fallen to less than one million barrels per day, from 2.5 million before the United States withdrew from the nuclear deal.
Now the signing of these contracts is in line with plans to double oil production to 4.5 million barrels per day next year.
While US oil embargoes still haunt Iranian crude, Tehran now relies on domestic companies to keep the strategic sector operational.
Considering the vast oil reserves waiting to be exploited in the Azadegan oil field, experts say the development of the key reservoir means a significant increase in Iranian oil production and a comeback in the global market.