Iran had come back “much faster and stronger than anyone had expected” on the back of production increases and the export of floating storage, said Helima Croft, global head of commodity strategy, RBC Capital Markets, at the Platts Global Crude Oil Summit in London, noting that in April Iran had produced 700,000 bpd more than in January
Iranian oil fields pumped 3.56 mn bpd in April, according to the IEA – a level last reached in November 2011 before sanctions were tightened. However Croft questioned whether the current level was sustainable, given the current state of Iran’s fields, and suggested that the country’s newfound willingness to participate with OPEC in a production freeze could stem from the fact that it was reaching maximum capacity.
Iran is aiming to tender around 15 projects under its new Iran Petroleum Contract (IPC) this summer after much delay, although the final details of the new contract terms, while understood to be an improvement on the former buyback deals, are yet to be announced. Croft highlighted the need for a “new wave of investment” which will be contingent on decent contract terms, also noting that many companies are holding off investment decisions until after the US elections, the outcome of which is “critical” given that US extraterritorial energy sanctions have been wavered rather than removed.
Nevertheless the interest from international companies remains strong, with companies such as Total, OMV, Lukoil, Wintershall and Saipem already knocking on Iran’s door, BP reportedly looking to open up an office in Tehran, and around 2,000 international companies recently exhibiting at the Iran International Oil, Gas, Refining and Petrochemicals Exhibition in Tehran.
Iran continues to develop its energy relations with its Asian neighbours. On 15 May Iran and China signed a five-year co-operation deal. Amir Hossein Zamaninia, Iran’s deputy petroleum minister for international affairs, said the deal concerns the sale of crude oil and gas condensates, exploration and development of oil and gas fields, enhanced recovery of oil and gas, construction of oil and gas parts and equipment and investment in various oil, gas, refining and petrochemical projects in Iran.
Ira
