MNA – NIOC MD estimated that volume of Iran’s crude production will climb to four million barrels per day (bpd) early into the new Iranian calendar year (to begin March 21).

Addressing the 4th International Iranian Drilling Congress & Exhibition 2017, Managing Director of National Iranian Oil Company (NIOC) Ali Kardor said his company was in charge of policy making as regards drilling process; “in previous years, buyback contracts were used though they have been partially replaced by ‘Engineering, Procurement, and Construction’ (EPC) ones.”

Deputy oil minister said the country’s oil industry suffered great costs due to buyback contracts which led to grave concerns. He further asserted that NIOC’s principal policy was to strengthen exploration and mining companies at the country’s oil and gas industry.

The official recalled that the sixth National Development Plan has envisaged a total oil output capacity of about 4.7 million barrels per day stating “accordingly, Iran’s crude production capacity is required to hit four million barrels per day by the end of the current year, an objective which will become realized by mid-April due to a one-month delay.”

Nearly 500 wells need to be drilled in the upstream sector of Iran’s oil industry in order to achieve the goal of producing 1.3 billion cubic meters of gas and 4.7 million barrels of crude, said Kardor adding “drilling enjoys 40 and 60 per cent of shares in onshore and offshore investment costs, respectively.”

He further emphasized that approximately 143 drliing platforms are currently active in Iran though they will go out of order unless financial resources are supplied.

Ali Kardor went on to note that old finance models have brought about 50 million dollars of debts to NIOC maintaining “frequent delays in development of South Pars phases have made the company indebted since contractors were in charge of financing issues.”

NIOC managing director recalled that still old buyback contracts are being exploited despite preparation of a new model of contracts for the upstream oil sector; “EPDF contracts require contractors to finance at least 80 per cent of the total project cost.”

“Also in turn for the provided funds, the contractor is awarded financing expenses during the construction period with full refund taking place after full completion of the project in the repayment period.”

He stressed that the possibility existed for repayment after one or more wells are accomplished as well as that the employer was required to pay delay expenses in case the repayment process is lingered.