Iran Signs Major Contracts to Boost Oil Production

In a bid to counter Western sanctions, Iran seals multi-billion dollar agreements with domestic firms to enhance oil output.

March 18, 2024, 02:54 am IST – Tehran

Iran has inked deals worth $13 billion with local companies to bolster its oil production, as announced in a televised ceremony aired on state TV. The contracts, termed as Iran’s “biggest oil contracts in the past decade” by Shana, the official news agency for the oil industry, aim to add 350,000 barrels per day to the country’s daily production across six major fields.

Iranian Oil Minister Javad Owji had previously pledged to ramp up oil production to 3.6 million barrels per day by the end of the Persian year on March 19. Under the new Persian calendar year, Owji anticipates production to further increase to four million barrels per day.

Iran’s oil sector faced setbacks in 2018 due to re-imposed Western sanctions, which prompted foreign companies to exit the country following the US withdrawal from a nuclear deal aimed at curtailing Tehran’s nuclear program.

The country now plans to rely on domestic expertise to bolster production in its western and southwestern fields, including the Azadegan field in Khuzestan province bordering Iraq. Contracts for the development of Masjed Soleyman, Iran’s oldest oil field located in Khuzestan, were also signed during the ceremony.

The signing of these contracts coincides with the 73rd anniversary of the nationalization of the Iranian oil industry, previously controlled by the British-run Anglo-Iranian Oil Company.

Last week, Iran disclosed awarding $20 billion in contracts to local firms for increasing production from the offshore South Pars gas field, shared with Qatar. According to the United States Energy Information Administration (EIA), Iran ranked as the seventh-largest crude oil producer globally in 2022. Additionally, it holds the world’s third-largest proven oil reserves, trailing behind Venezuela and Saudi Arabia, as per EIA data.