17 August 2020 - 17:46
  • News Code: 306190
Zangeneh Stresses Capacity Building in Oil Industry

TEHRAN (Shana) – Iranian Minister of Petroleum Bijan Zangeneh said power in the oil market is not based on the reserves of a country but production capacity, stressing the need for building oil production capacity under the sanctions.

Addressing the signing ceremony of 13 contracts to maintain and enhance oil production on Monday, August 17, he said: “In the global oil industry there is a consensus that the main pillar of all technical upstream activities is to increase the recovery or extraction coefficient of oil fields in accordance with the nature and conditions of each reservoir.”

He added: "Maximizing oil recovery coefficient from a reservoir is the most important mission of engineers in the upstream sector of oil industry, which improves over time and is a gradual, continuous and dynamic matter that requires systematic technological work at the highest technical levels."

The Minister of Petroleum pointed out that enhancing oil recovery, if not more important than the issue of joint fields, is significant, adding that with a one-percent increase in the recovery rate, more than 7 billion barrels of oil will be added to the country’s production capacity without new exploration which is $300 billion in wealth for the country.

Signing new research contracts with universities, soon

He announced the signing of new contracts with universities to continue research in on Iran’s new oil fields in the coming weeks, and said: "Of course, this is not enough and oil service companies and domestic exploration and production (E&P) companies should be strengthened."

The Minister of Petroleum stated: "If we did not have these plans, work in the field of maintenance and enhancement of production in the exploited fields would almost stop by now, but despite this proposal and having the approval of the Economic Council, we can continue our work and our rigs are active."

According to him, about 130 to 140 wells will be drilled in these projects, and another 60 to 70 wells would be repaired, which means operation of dozens of rigs, with 300 to 400 people working on each one.

He said Iran must have a surplus production capacity of one to two million barrels per day.

Zangeneh said that the signing of 13 contracts to maintain and increase production in the current situation is the continuation of the activity and survival of the oil industry in the face of sanctions, adding: “Sanctions and their custodians are to go, but Iran and the Iranian nation will remain. We definitely need to work on capacity building. A country has power in the oil market when its production capacity is high.”

"Production capacity is the national power of a country in the oil sector, and if we want to have a say, it is with our production capacity, not with our reservoirs," he said. "We may not be able to produce at some point, but it will be short. Our nation has gone through even worse conditions and has remained alive and mighty, so the first thing is for us to increase our production capacity in the face of the sanctions.”

Zangeneh reminded that if one day the sanctions are lifted, “and then we start repairing our wells, it will take two to three years and all our shares would be lost over those years. After the previous lifting of sanctions, within a short period of time (a maximum of three months), we reached maximum production and were able to return to the oil market.”

"I believe that Iran should have one to two million barrels of excess oil production capacity for special conditions other than what it always produces," he said. “Capacity is different from production.”

He further reiterated his previous stance on working with foreign companies, saying he would welcome cooperation, investment and partnership from any country and company, excluding those in the Zionist regime, in Iran. “However, we would never be kept waiting for foreigners.”

He also said that Iran’s production was more than its neighbors in all the country’s joint oil and gas fields.

News Code 306190

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