Iran increases oil output amidst OPEC production cut talks

Iran has increased its oil output at three western fields faster than it previously expected even in the midst of production cut talks between Organization of the Petroleum Exporting Countries (OPEC) members and non-OPEC countries.

From just 65,000 barrels in 2013,output at the fields west of the Karoun River, near Iran’s border with Iraq, rose to about 250,000 barrels per day (bpd), according to the Oil Ministry’s news service Shana, citing President Hassan Rouhani at a ceremony to formally open the project.

That output target was expected to be reached by the end of the year, said Mohsen Ghamsari, director for international affairs at the National Iranian Oil Co., in September.

Saudi Arabia’s Energy Minister Khalid Al-Falih said OPEC must agree to implement a proposed cut in crude production for OPEC countries to help rebalance the market, according to a report by the Saudi Press Agency.

On November 30, OPEC members will meet to discuss a plan to limit the group’s output to a range of 32.5 million to 33 million bpd, compared with 33.64 million in October. But as several members boosted their outputs, that target has become harder to reach.

OPEC recently reported that Iran raised its monthly output by the most since international sanctions were lifted in January. The Islamic Republic negotiated an exemption from the necessary production cuts at a meeting in Algiers in September, to compensate for the production capacity it lost when international sanctions targeted its oil industry.

Iran has almost recovered that capacity, and plans to further increase output with the help of foreign investment.

The oil output target for the fields west of Karoun – North Azadegan, Yadavaran and Yaran fields – is one million bpd, according to Rouhani. “This is a realistic goal, and we need investment and technology,” he added.

A new oil contract model has been approved to attract foreign investors into the country, although the details have not been made public.

France’s Total SA has reached an initial agreement to develop a natural gas field in Iran, becoming the first international oil company to sign a deal under the new energy contracts.