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News // Oil and gas worldwide

Iran readies oil deals with Russia and China

24 August 2016 , 12:10Neftegaz.RU702

As much as 150,000 barrels per day (bpd) could be swapped under an exchange deal said to be close to readiness between Iran and Russia, benefiting customers in the Persian Gulf and further cementing the Islamic republic's comeback on the international stage, according to report on August 23, 2016, of Iran's Mehr News Agency.


The news comes amidst reports that Iran is also finalizing a deal that will see China developing two major oil fields in the southwestern province of  Khouzestan.

Speaking at a live IRIB program, Bijan Zanganeh, oil minister for Iran, said domestic and foreign companies are talking with the National Iranian Oil Company (NIOC) about oil swaps among Caspian littoral states, and he added that the Russian side has also voiced willingness for swapping a portion of its oil production through Iran's route and relevant negotiations are underway.

In stating that capacity exists for a maximum daily swap of 150,000 barrels, Zanganeh stressed that the amount would boost Iran's market share since the replacement is delivered to customers in the Persian Gulf.

He also noted that it might also be possible to overcome current transportation restrictions and boost daily deployment of gas oil from 14 million to 20 million litres.


Meanwhile, Gholam-Reza Manouchehri, deputy director for engineering and development affairs for NIOC, told media that China's CNPC will develop the second phase of the North Azadegan project and Sinopec will oversee the second phase of Yadavaran project, both in Khouzestan.

A delegation from China will arrive in Tehran in the next few weeks to finalize negotiations over the remaining aspects of the projects; the deal is said to be in line with Tehran's strategy to promote economic relations with Beijing.


Overall, Iran's crude oil exports in the first 5 months of 2016 have risen from1.2 to 2.6 million bpd; in the meantime, oil production has also soared from 2.7 to about 3.85 million barrels per day, according to Zanganeh.


Further boosting Iran's recovery on the international stage are 5 new South Pars phases that will come to stream by the end of the current Iranian year, with capacity expected to reach 500 million cubic meters per day; and oil production at the West Karun joint oil field is soon expected to climb from the current 220,000 bpd to over 280,000 bpd.


Iran and Saudi Arabia pumping record volumes at a time of weakening demand is causing considerable worry that the global glut will take a lot longer to clear than initially thought; plus, Mark Routt, chief economist for the Americas at KBC Advanced Technology, earlier this month pointed out that  unless and until inventories drop, we will not see a sustainable increase in crude prices.


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