TEHRAN: In order to increase its oil output in the face of Western sanctions, Iran signed billion-dollar contracts with local businesses on Sunday.
The oil ministry and Iranian companies inked agreements totaling $13 billion to boost daily oil production in six key fields during a ceremony that was televised on state TV.
The agreements, according to Shana, the official news agency for the oil sector, are the largest oil contracts Iran has signed in the last ten years, with the goal of increasing daily production by 350,000 barrels.
Iranian Oil Minister Javad Owji declared in October that the nation would produce 3.6 million barrels of oil per day by March 19, the end of the Persian year.
“Production will reach four million barrels per day” in the Persian new year, he continued.
2018 saw a shock to Iran’s oil industry as Western sanctions were reinstated, forcing international businesses to exit the nation following the US withdrawal from a historic agreement meant to rein in Tehran’s nuclear program.
The oil ministry reports that in order to increase output in its western and southwestern fields—including Azadegan in Khuzestan province, which is bordering Iraq—Iran would be depending on its own indigenous competence.
Contracts for development were also inked for Khuzestan’s Masjed Soleyman oil field, which is Iran’s oldest oil field. The oldest well in the Middle East is No. 1 at Masjed Soleyman, which was first drilled in 1908.
Two days prior to the 73rd anniversary of the Iranian oil industry’s nationalization—which was at the time overseen by the British-controlled Anglo-Iranian Oil Company—the oil ministry signed the contracts.
Iran announced last week that it has awarded $20 billion in contracts to domestic companies to increase output from the joint offshore South Pars gas field in the Gulf.
The United States Energy Information Administration (EIA) states that as of 2022, Iran ranked sixth globally in terms of crude oil production. According to the EIA, it also possesses the third-largest proven oil reserves in the world, trailing only Saudi Arabia and Venezuela.
