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Iranian Oil Minister Bijan Zanganeh has complained to parliament that “the current situation in the oil industry is catastrophic,” on account of severe sanctions-induced cash shortages, made worse by the 50%-plus drop in oil prices since mid-2014.
This cash crunch could halt the development of some of Iran’s key fields and projects, the minister warns, including its fields west of the Karun River in Khuzestan province, which the government has repeatedly highlighted as the main driver behind its push to boost oil output to beyond pre-sanctions levels of around 3.8mn b/d (MEES, 13 February). Once fully online, these fields are expected to add between 600,000 b/d and 750,000 b/d to Iranian oil production capacity, which currently stands at around 3.6mn b/d according to the International Energy Agency (IEA) – though production has averaged around 2.7-2.8mn b/d since 2013. The IEA, meanwhile, is seemingly unmoved by the prospects of the new fields providing a capacity boost – it forecasts Iran’s crude capacity as 3.6mn b/d out to 2020 (see p14), though it predicts that Iran will add 280,000 b/d to its condensate and NGLs capacity over the same period taking total oil output capacity to just over 4.5mn b/d by the latter date.
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