Iran’s oil minister sees no imminent change in OPEC’s output strategy even as he urged fellow members of the group to cut their collective production to buoy crude to a range of $70 to $80 a barrel.
Iran is preparing to ramp up its own output once world powers remove sanctions on its economy, regardless of any decisions by the Organization of Petroleum Exporting Countries, Oil Minister Bijan Namdar Zanganeh told reporters Monday at an industry conference in Tehran.
“No one is happy” with prices at current levels, he said.
“OPEC should decide to manage the market by reducing the level of production,” Zanganeh said. “It seems that the atmosphere is not well for making a change in the market.”
OPEC has exceeded its official production target for 16 consecutive months as the group seeks to defend sales amid a global supply glut. Brent crude, a global benchmark, has slumped 43 percent in the last 12 months and was at $48.99 a barrel in London on Monday at 5:07 p.m. local time. OPEC, supplier of about 40 percent of the world’s oil, plans to assess output when ministers from its 12 members meet on Dec. 4 in Vienna.
Iran is pushing to regain the global oil sales it lost after the U.S. and other world powers imposed sanctions over its nuclear program. The country agreed in July to accept limits on its nuclear work in return for access to oil and financial markets.
The Islamic Republic is seeking $100 billion in investment by March 2021 to increase output of oil and natural gas, Zanganeh said. The country hopes to stimulate interest by announcing a new contract for oil investors in November. Iran has the world’s fourth-largest reserves of oil and second-largest deposits of gas, according to the U.S. Energy Information Administration.
“We won’t seek permission from anyone for our production,” Zanganeh said. “We will bring our production back to the market, and the market will absorb it. All of those OPEC members whom I speak with welcome this.”
The comparatively low cost of producing oil in Iran enhances its appeal, OMV AG Chief Executive Officer Rainer Seele said at the conference. OMV is interested in developing two areas — the Mehr block and the Cheshmeh Khosh field — if investment contract terms are flexible, he said.
“You can find very low-cost fields here, and therefore I think it’s very competitive production that’s coming on stream here in Iran,” Seele said.
OPEC members that boosted sales to Iran’s customers after sanctions hobbled its exports must make room for the planned increase in Iranian supply, Amir Hossein Zamaninia, deputy minister for commerce and international affairs, said in an interview at the Tehran event. Saudi Arabia, “more than anybody else,” should take the lead in trimming output, he said. “Hopefully something will be done and allow for Iranian extra supply.”
Iran can boost oil exports by 500,000 barrels a day within a week after the removal of sanctions, Roknoddin Javadi, managing director of state-run National Iranian Oil Co., told reporters. The Persian Gulf nation can raise exports by 1 million barrels a day within six months once the curbs are lifted, he said.
It targets crude production of 4.7 million barrels a day by March 2021 and plans to produce 1 million barrels a day of crude condensates by the same date, Javadi said. The country pumped 2.8 million barrels a day of oil in September, according to data compiled by Bloomberg.
Iran also expects to complete its first terminal for exporting liquefied natural gas, known as LNG, within three years after sanctions are lifted, NIOC’s Javadi said. Gas producers can supply LNG by ship to customers beyond the reach of pipelines