Reuters: Iran has cut oil production by 200,000 barrels per day (bpd) from 4.04 million bpd, in line with an OPEC agreement to find ways to support declining crude prices, a director of the state oil company said on Friday.
By Chua Baizhen
BEIJING (Reuters) – Iran has cut oil production by 200,000 barrels per day (bpd) from 4.04 million bpd, in line with an OPEC agreement to find ways to support declining crude prices, a director of the state oil company said on Friday.
"We are obeying the OPEC quota. We have cut by 200,000 bpd," Mohammad Ali Emadi, director of National Iranian Oil Co (NIOC), told Reuters in Beijing, where he is attending a forum of national oil companies.
The Organization of the Petroleum Exporting Countries agreed at an emergency meeting on Oct. 24 to lower its output ceiling by 1.5 million bpd, or around 5 percent.
It had already said the month before that it would take away around 500,000 bpd pumped above its agreed target.
Asked about the excess crude from the cuts, Emadi said: "Some will be sent to storage and sometimes we use this opportunity for overhaul and maintenance."
He said Iran, the world's fourth-largest oil producer, was targeting 5.0 million bpd of oil production capacity by the end of 2010, up from capacity of 4.2 million bpd now.
"We have some major plans (to raise total output), including the upgrading of surface facilities for more water cut separation," he said. "We are also planning more gas injections and water flooding in offshore areas. On top of the brownfield projects we are also developing many greenfields."
Iran's oil and gas sector is turning to energy-hungry Asia for funds, expertise and technology to elude U.S. sanctions and pressure over the Islamic Republic's nuclear programme.
"BROWN AND GREENFIELDS"
China's Sinopec Group, parent of Sinopec Corp., signed a deal last December to develop Iran's huge Yadavaran oilfield, among the state-owned Asian energy giants desperate to lock in long-term future supplies.
"Output of these brown and greenfields will provide this figure (of 5 million bpd)," he said.
But Japan's INPEX Holdings saw its 75 percent stake in Iran's Azadegan oilfield reduced to 10 percent in 2006 when talks fell through on a development plan.
"Many of these investments are Iranian investments. Frankly, we are not missing a huge amount of opportunity. We use internal budgets," he said, when asked if the tight credit climate was having an impact on investments.
He said China's refining capacity was projected to double to 3.2 million bpd in five or six years, from 1.6 million bpd now. The additional refining capacity will include newbuilds and upgrades, he added.
Asked if more Iranian crude would go to Europe or to Asia, he replied: "Regarding the demand of the market especially from China and India, a little bit more (is seen) this way (Asia)."
Iran has the world's second-largest oil reserves after Saudi Arabia and the second-largest gas reserves behind Russia.
The rate of recovery from producing oilfields is 20-25 percent below the industry average of around 35 percent and it has been slow to expand gas exports because of sanctions and has no LNG plants.
But Emadi said Iran was continuing to talk to potential buyers in the Middle East and South Asia for its gas: with Bahrain for 1 billion cubic feet per day (cfpd), the United Arab Emirates for the same volume, Kuwait for 0.5 billion cfpd, and India and Pakistan each for 60 million cu metres per day.
"For these new agreements, some we are finalising the points, some we are in the discussion stage," he added.