Iran to maintain oil sales at 1 MMbpd into July

Iran anticipates maintaining crude exports at about 1 MMbpd until at least July when a deal with global powers over its nuclear program will be renewed or expire, the nation’s deputy oil minister said.

Iran is producing about 2.7 MMbpd, Ali Majedi said today in Dubai. Output may rise to as much as 3.7 MMbpd within six months of sanctions being lifted, he said, adding the move would also open the nation’s energy industry to investment.

The nation plans to outline a new oil development contract at a conference in London by November, offering overseas partners incentives. “We will introduce the new contract, plus some of the oil and gas fields for development,” Majedi said at the Middle East Petroleum and Gas Conference.

Iran, the fourth-largest oil producer in the Organization of Petroleum Exporting Countries, is discussing limits to its nuclear program in exchange for the removal of sanctions on its financial and energy industries. The U.S. and allies say Iran is seeking to develop atomic-weapons technology, a claim Iran denies. An interim deal between the parties expires on July 20.

The revised oil contract terms will allow for flexible payments to international companies based on crude prices and development risk, the minister said.

The country is also seeking international buyers for its gas next year when the expansion of offshore fields will boost production levels to more than domestic demand, Majedi said.

“Iran plans to increase gas exports once domestic demand is saturated,” he said. “Pipeline export is preferred to liquefied natural gas shipments” for sales to markets including Europe, Majedi said.

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