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Iran's NIOC says return to 6mn b/d capacity possible

11 Oct 2017, 9.12 am GMT

Iran's NIOC says return to 6mn b/d capacity possible

Dubai, 11 October (Argus) — Iran's state-owned NIOC has opened the possibility of the country raising its crude production capacity to 6mn b/d, up from close to 4mn b/d today.

"Although many are reluctant to return to this production… with the approach we have already begun adopting over the past two years regarding increases in the recovery factors at out fields… ramping up to this capacity is possible," NIOC managing director Ali Kardor said.

Iran says its crude production capacity was as high as 6mn b/d before the Islamic Revolution in 1979. Since the lifting of all nuclear-related US and EU sanctions on Iran in January 2016, the country has raised production by around 1mn b/d to near full-capacity. Argus pegged Iran's crude output at 3.83mn b/d in September, level with August.

Kardor said Iran expects to raise its crude capacity to "between 4.5mn and 5mn b/d" by the end of the current five-year development plan in March 2022, and to as high as 6mn b/d "in the second year" of the following development plan.

"Reaching this capacity will be possible using optimal management methods, foreign capital and modern-day technologies," Kardor said.

Iran has said it aims to attract around $200bn in investment to its oil and gas sector over the coming five years. Oil minister Bijan Namdar Zanganeh has said between 70-80pc of this will need to come from foreign sources. Iran has managed to secure $4.88bn so far. A Total-led consortium will develop phase 11 of the supergiant South Pars gas field.

But given the lower per barrel cost of production in the Middle East and Iran in particular, Kardor remains confident Iran will be able to attract the needed funds. These circumstances "make Iran one of the best countries in the world for investment," he said.

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