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2016-12-28 18:35:00

OPEC: IMPORTANT DECISION

OPEC: IMPORTANT DECISION

SHANA - Minister of Petroleum Bijan Zangeneh said on Tuesday that the OPEC members consider their profit in recent historical accord of the Organization, so the major and influential states normally fulfill the agreement.

Speaking in a televised interviews Tuesday morning, Zangeneh said recent OPEC accord is an achievement for the Organization's members.

"The OPEC decisions have so far been usually enforced one percent more or less than expected; considerations and arguments in the decision making process are because all feel committed to observe the agreement."

He said, "Though there is no guarantee that OPEC decisions will be enforced, the reality is countries do not take their interests being in conformity with the agreement and the major and leading countries usually enforce the agreement."

Asked to comment on the international media titles upon his appointment as Iranian Minister of Petroleum that he held authoritative position in the OPEC, Zangeneh said, "That's not my authority; rather, it is the authority of Iran and of the Islamic Republic."

He said authority of a country in OPEC and anywhere else depends on the tools, facilities and the potentialities that is availed to the minister or the official. "Authority in OPEC is also subordinate to the production capacity and to put it more clearly, let's say it is the capacity for oversupply."

He underlined that having a country with production capacity, it can have a say in the OPEC. "True, OPEC is a cooperative body; this means that any of the members has a vote in proportion to its share but eventually those are the bodies enjoying power that would make the decision. For instance, the UN is a cooperative body; the UN issues only one resolution but the binding decisions are made by the UN Security Council which has five members. We should have power so that our words are working; reason and logic are not important only; at the OPEC everybody knows what they want to do and what they are for."

"This time, we were successful thanks to the power we had in production and crude production capacity; that's the result of successful implementation of the JCPOA and lifting of sanctions; with more than one million barrels of production capacity and production power, we did show that we can act on our promises."

"Let's remember when the JCPOA was implemented and sanctions were lifted. All in the world predicted and believed that it would take several years for Iran to bring its production level back to the former status; they referred to such instances as problems with Iranian wells and fields and removal of its production capacity as evidence for their claim. Before the JCPOA implementation, I raised two words: Firstly, immediately after the JCPOA, 500,000 barrels per day will be added to Iran's crude production capacity and secondly, within the next three to four months, 500,000 barrels more will be added to the current figure; this was fulfilled successfully. So, others came to realize that our words and deeds correspond with each other."

He underlined that such conditions provided the country with authority and the troubles others and Iranian Petroleum Ministry colleagues took in the oil sector, granted Iran the authority and it belongs hence to the Islamic Republic of Iran.

"We were thinking of production enhancement much earlier," said Zangeneh, adding, "Two or three months before implementation of the JCPOA, we tested wells; we managed to meet the target, though could hardly believe so. However, we reached the conclusion that we can instantly hit the target for production capacity of close to four million barrels of crude oil; after then we started focusing on marketing."

Noting that the percentage of recovery coefficient of Iranian oil fields is low, Zangeneh said Iran is now having more than 700 billion barrels of in-situ oil but what it can extract is about 200 billion barrels, which is on average about 30 percent of the figure. "This means that 500 billion barrels are hidden beneath fields and the wealth is lost in the country and the problem stems from weak technology."

The Minister cited, "Now in Azadegan and Yadavaran fields, where 67 billion barrels of oil have been discovered, we can only extract six percent of the oil using current technology."

He added, "We have the potential for well drilling, pipelining, and pumping oil to the exploitation units; however, we can only extract six to seven percent of the oil in the fields and 93 percent of the oil is lost for good or for long period of time; even if willing to extract, it will be impossible or possible at high cost."

The most important challenge facing Iran and all the Iranian technical and professional elite is high recovery of coefficient, he said, adding that raising the recovery coefficient by one percent will result in 700 billion barrels or let's say seven billion barrels; seven billion barrels with an oil sold for 50 dollars per barrel means 350 billion dollars more wealth for the country."

The minister added, "Nobody is entitled to say let's forget about the 350 billion dollars because it will be illogical. So, we do need the technology for upgrading the recovery coefficient."

"We should use all our national and local capacity to upgrade technology in the oil industry upstream sector; this should be done in our universities; this has been done now and our universities have entered the work."

According to the minister, each of the universities has been entrusted with the task to consider the project for enhancing the coefficient recovery of several oil fields and the responsibility to enhance the recovery coefficient rests with them.

The universities have been told to recruit the best foreign companies to achieve the goal but the best foreign companies and technology owners should be invited as the project proceeds, said the minister, adding that this is not just because of their capital, though it is also important, rather more important is management and technology.

Elsewhere in his remarks, the minister said, "Our petrochemical industry is not in a bad condition; the value of our petrochemical products was one billion dollars in 1997 but our capacity has reached more than 20 billion dollars and is growing more speedily."

He specified that more efforts need to be employed for management, better exploitation and better productivity of the invested capacities. "Absolutely, they should be considered and we should not consider ourselves needless of cooperation with foreign companies; today's world, is the world of engagement, give and take and competition; and we can grow in such an atmosphere."

Again referring to the historical OPEC accord, Zangeneh said success in OPEC is the matter of engagement alongside competition. "We were at political odds with certain countries as they are still in effect; we do compete with all the members; the OPEC members are all rivals to each other; right, they have put together for a big cause; but what's of importance is rationality: While competing, we do have engagement. We do notice that through engagement and commonalities, we can reach successful results in many occasions."

"Today's world is not the world of zero and one: Many other things can be done in the meantime; we can have engagement with the world; however, we should deal cautiously and under equal and parallel conditions," concluded Zangeneh.

-----

Earlier:

OPEC: 

OPEC CUTS OIL 

OPEC OIL RECORD: 33.86 MBD 

OPEC - RUSSIA DEAL 

OPEC PRODUCTION TARGET 32.5 MBD 

OPEC WILL CUT 1.2 MBD

 

IRAN: 

IRAN'S OIL DOWN 8% 

IRAN'S OIL BENEFITS: 3.9 MBD 

IRAN - SAUDI COMPETITION 

IRAN WANTS $200 BLN 

IRAN & RUSSIA: AREN'T RIVALS

 

 

Tags: OPEC, IRAN, OIL, PRODUCTION

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