Iran hopes to raise its crude output to 5 million barrels per day (bpd) by 2015 from 3.5 million bpd currently, Deputy Oil Minister Ahmad Qalebani said on Monday, even as a tightening web of international sanctions squeezes its energy sector.
The sanctions, the result of Iran's disputed nuclear programme, are placing a burden on foreign oil companies, which are wary of incurring hefty fines for violating the complex regulations.
"Currently, we are producing 3.5 million bpd, while our capacity stands at 4.2 million bpd. We are hoping to raise this to 5.1 million bpd by 2015," Qalebani said on the sidelines of the World Petroleum Congress in Doha. "Some of this new oil will come from new fields and some from existing ones."
Qalebani said in April the Islamic state faced an output decline of 25,000 bpd over the last year since its reservoirs were in the second half of their lives. Concerns over the Opec producer's nuclear programme have increased since a group of hardline students stormed the British embassy in Tehran last week. Britain closed its embassy and expelled all Iranian diplomats from London.
The fallout spread when several other countries recalled their envoys, including France, Germany, Italy, Spain and the Netherlands. The European Union is considering a ban - already in place in the United States - on imports of Iranian oil, although diplomats and trader say awareness is growing in the EU that such a bad could damage the bloc's economy without doing much to undercut Iran.
Oil prices rose on Monday, with Brent crude over $111, extending last week's gains as political tension between Iran and the West increased the risk of disruption to its crude shipments. Iran warned on Sunday that any move to block its oil exports would more than double crude prices.
"Our sales to the EU are not such a big part of the total (oil exports). It is less than 500,000 bpd and is very easy for us to seek alternatives," said Abdolmohammad Delparish, the head of integrated planning for state oil company NIOC. The West suspects Iran's nuclear programme might be aimed at making atomic bombs, while Tehran denies this and says its nuclear development is entirely for peaceful ends. Many foreign companies with capital and modern technology have been forced to pull out from the country's lucrative energy sector because of the international sanctions. "We import some of the technology needed (to develop our fields) from abroad," said Qalebani, who is also head of NIOC, without naming the countries.
Iranian officials downplay the impact of sanctions, rejecting the idea that foreign investment is needed to develop the vital oil and gas industries. "We already have the technology needed for these oil investments. Our institutions have been working for years to develop these technologies," said Delparish. But analysts and private sector companies disagree. "So far, we have managed it, but I think sanctions will start to have an affect on Iran from now," an Iran-based private energy company employee told Reuters on condition of anonymity. "I know ... NIOC is having difficulties in terms of getting their machinery, equipment and technology."
The United States, Britain and Canada announced new measures against Iran's energy and financial sectors last month, and France proposed new sanctions including freezing the assets of its central bank and suspending purchases of its oil.
The sanctions follow a report by the U.N. nuclear watchdog in November linking Tehran to the development of a nuclear weapon. Iran denies this, insisting its nuclear programme is aimed at generating electricity. Iran, the world's fifth-largest oil producer, has estimated its reserves at 150 billion barrels of oil and 33 trillion cubic meters of gas.
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