Iran to boost oil output via $1.2 billion deal with local companies

Iran plans to roughly double oil production in the next year to 4.5 million barrels daily, as the country anticipates a loosening of US sanctions

Iranian energy companies have agreed deals worth $1.2 billion to raise the nation’s crude output, state-run National Iranian Oil said.

The signings were initially meant to take place on Monday in Tehran in the presence of Oil Minister Bijan Namdar Zanganeh, but have been delayed, NIOC said in a statement. The company didn’t disclose the reason for or length of the delay.

Zanganeh said in mid-December that Iran planned to roughly double oil production in the next year to 4.5 million barrels daily, as the country anticipates a loosening of US sanctions after Joe Biden becomes president.

National Iranian South Oil Co. and Iranian Offshore Oil will sign deals with domestic contractors covering onshore fields in Bushehr, Fars, Khuzestan, and Kohgiluyeh and Boyer-Ahmad provinces, NIOC said. The offshore Reshadat deposit in the Persian Gulf is also part of the agreements.

The two NIOC subsidiaries agreed $1.8 billion of similar domestic contracts in August to boost production at more than a dozen onshore and offshore crude deposits.

The Organization of Petroleum Exporting Countries, including Iran, is to meet Monday to assess production. While the 13-nation group has slashed output since May to buoy prices in the face of the coronavirus pandemic, Iran is exempt from a quota due to the sanctions.