Raisi to keep Rohani’s stress on shared oilfields

November 19, 2021

The National Iranian Oil Company (NIOC) says it will continue the Rohani Administration focus on developing oilfields near the Iraqi border, and intends to boost crude output regardless of foreign sanctions affecting exports—though it didn’t say what it will do with unsold crude, of which it is already awash, or where it would get the cash to develop those oilfields.

The new managing director of the NIOC, Mohsen Khojasteh-Mehr said October 24 that Iran will need some $11 billion to develop four oilfields located to the west of the Karun River near the southwestern border with Iraq.

Khojasteh-Mehr said that full development of the four oilfields will add some 1 million barrels per day to Iran’s total crude output, which was around 3.8 million barrels a day before President Donald Trump re-imposed sanctions.  “This issue is being regarded as one of NIOC’s high-priority projects,” he said in an address to the NIOC staff.

Iran’s development projects in the West Karun Oilfields hit a snag in 2018 when sanctions imposed by the US caused some Chinese contractors to withdraw from the projects.

However, a series of massive infrastructure projects for supplying electricity and other utilities to the fields were launched earlier this year, suggesting the Rohani Administration was intent on developing the fields shared with neighboring Iraq.

That comes as Iraq has signed major contracts with Western oil companies to develop the parts of those oilfields on the Iraqi side of the border.  The Islamic Republic has long been fearful of the Iraqis sucking out crude that lies within Iran by developing the shared fields faster than Iran.

Khojasteh-Mehr said the NIOC plans to fully develop the huge South Azadegan oilfield within the next year 12 months.

In comments covered by the Oil Ministry’s news service, Shana, he said that work on the three other fields—North Azadegan, Yadavaran and Yaran—will also go ahead as planned by the previous administration.

Khojasteh-Mehr did not blame the Rohani Administration for the slow progress on the fields. Rather, he said, delays and shortcomings had been due to defects in the contracts with the Iranian companies hired as developers.  He did not say how he would fix that.