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Iran brings its crude output to pre-sanctions level

13 May 2016 [14:27] - TODAY.AZ

/By Azernews/

By Fatma Babayeva

Iran has strived to increase its oil production and oil export to pre-sanctions level as soon as the nuclear related sanctions imposed on the Islamic Republic were lifted in January 2016.

In April, Iranian crude production reached the pre sanction volume, Bloomberg reported on May 12 by referring to the International Energy Agency.

The oil production of Iran soared to 3.56 million barrels per day in April which is the maximum volume reached by Iran since November 2011, according to the information provided by IEA,.

The surge which was observed in Iran’s oil output in April pushed OPEC’s production to the highest in almost eight years.

In the meantime, the oil exports of the country amounted to 2 million barrels per day for the same period.

The largest importer of Iranian oil was China by acquiring 800,000 barrels per day in April. In addition, Europe bought 500,000 barrels per day during the given timeframe.

Worth noting, Iranian energy officials previously uttered that the oil exports of the country will be reached to the pre-sanction level (about 4 million barrels per day) by the end of this summer.

Foreign investments in Iranian oil industry

Once sanctions cleared, the foreign energy companies started rushing to get a foothold in Iran’s oil and gas industry. Iranian Petroleum Ministry earlier announced that the country needs investments worth around $400-$500 billion in order to develop its oil industry.

Recently, China Petroleum and Chemical Industry Federation expressed determination to invest in the oil sector of Iran.

China plans to make investments in the projects on the downstream sector of the Iranian oil industry, IRNA news agency reported by quoting acting Deputy Petroleum Minister Masoud Hashemian.

Hashemian made the statement following the meeting between Li Shousheng, vice chairmen of the CPCIF and Amir Hossein Zamaninia, Iranian Deputy Petroleum Minister for International Affairs in Tehran on May 9.

India’s interest to expand ties with the Islamic Republic has also increased, especially to invest in joint oil and gas ventures of Iran.

Last month, Sushma Swaraj, Indian External Affairs Minister and her Iranian counterpart Mohammad Javad Zarif held a meeting to discuss expanding co-operation between their countries in various field including energy.

In addition, Iran inked contracts with several European oil companies earlier in April, and the implementation of those contracts is expected to take place in near future.

Meanwhile, there are already operating contracts for exporting Iranian hydrocarbons to Europe with the Greek company Hellenic Petroleum, Russia's Lukoil and Spanish Cepsa, in addition to the agreement with Total.

Shell may also resume oil imports from Iran after it pays all debt for previously delivered oil. In March, the company repaid most of its debt -$ 1.9 billion out of $ 2.1 billion blocked Iranian assets for the sale of oil.

However, some challenges remain for foreign investors who are keen to make investments in Iran. Although most of the sanctions have been cleared in January 2016, Iran still has problems with banking system. The U.S. sanction which bans to conduct transactions in U.S. dollar with Iran is still in place, and the export of U.S. technologies to the Islamic Republic is also prohibited which creates obstacles for Iran to find investment and cooperate with international companies.

The new oil investment framework known as Iran Petroleum Contract will be unveiled by July 2016, According to the Iranian officials.

BP’s statistical review of world energy 2015 reports that Iran holds 9.3 percent of the world’s total proven oil reserves.

URL: http://www.today.az/news/regions/150654.html

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