News ID: 190825
Published: 0638 GMT April 14, 2017

Iran returns to permitted level of oil output

Iran returns to permitted level of oil output

Iran's oil output increased to 3.819 million barrels per day (mbd) in February, but in March the amount went down to 3.79 mbd — an output level permitted under the OPEC deal.

OPEC's monthly report released on Wednesday shows that Iran reduced crude oil production by 28,700 bpd in March against the figure for February, Trend news agency reported.

According to OPEC's oil cut deal, achieved Nov. 30, 2016, OPEC members should reduce oil output by 1.2 mbd in the first half of 2017.

Nigeria and Libya are exempt from the deal and Iran was allowed to raise output by only 90,000 bpd to 3.797 mbd.

The report says OPEC's total oil output decreased by 152,700 bpd in March to 31.928 mbd, month-to-month. The volume in 2016 was 32.492 mbd.

Iran's heavy oil price fell by 5.4 percent in March as compared the figure for February, to $50.27 per barrel, while the country's oil price in the first quarter of 2017 increased by $23.3 to $51.71 per barrel.

Iran's oil output in 2016 and 2015 was 3.505 mbd and 2.836 mbd, respectively.

According to the OPEC report, the demand for OPEC crude in 2016 stood at 31.7 mbd, which is 1.9 mbd higher than the 2015 level.

In 2017, demand for OPEC crude is projected at 32.2 mbd, around 0.6 mbd higher than the 2016 level.

OPEC members are preparing to launch a new round of negotiations next month to extend the oil cut deal in the second half of 2017 to push oil price high.

The 12 non-OPEC producers, plus Russia, also have promised to cut output by 558,000 bpd in the first half of this year. Their compliance was estimated at around 60 percent compared to OPEC's up to 90 percent compliance.

Iran's Oil Minister Bijan Namdar Zanganeh announced on Wednesday that the country plans to increase oil output to 4 mbd by March 20, 2018.

Iran has signed a flurry of deals with Western companies over the past year since the easing of international sanctions on Tehran after an accord was reached over its nuclear program.

Iran needs foreign investment for repairs and upgrading of its oil and gas fields. It also seeks the transfer of technology to its oil industry after a decade of sanctions.

In November 2016, France's Total became the first oil major to sign a big deal with Tehran since the lifting of sanctions and agreed to help it develop the world's largest gas field, South Pars.

Shell signed a provisional deal in December to develop Iranian oil and gas fields South Azadegan, Yadavaran and Kish in December 2016.

Iran has named 29 companies from more than a dozen countries as being eligible for bidding in oil and gas projects using the new, less restrictive contract model.

The firms include Shell, France's Total, Italy's Eni, Malaysia's Petronas and Russia's Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Russia's Zarubezhneft signed an MoU for a feasibility study on two joint fields in the west of the country.

Norway's International Aker Solutions Company signed an MoU to modernize Iran's oil industry.

Last May, Austria's OMV signed an MoU for projects located in the Zagros area in western Iran and the Fars field in the south.

South Korean Daewoo Engineering and Construction (Daewoo E&C) signed an MoU to construct an oil refinery in Bandar Jask, on the southern coast of Iran.

Italy's Saipem signed MoUs to cooperate on pipeline projects, upgrading of refineries and development of Tous gas field in the northeastern province of Khorasan Razavi.

Norwegian oil and gas company DNO said it was the second Western energy company after Total to sign a deal with Iran under which it agreed to study the development of the Changuleh oilfield in western Iran.

Lukoil, Russia's second biggest oil producer, hopes to reach a decision on developing two new oilfields in Iran.

Germany's Siemens AG signed an MoU in May to overhaul equipment and facilities at Iran's oil operations and refineries.

BASF's Wintershall oil and gas exploration subsidiary signed an MoU with National Iranian Oil Company in April 2016.

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