Oil deals reformed to boost output in Iran

Iran’s Oil Minister Bijan Namdar Zanganeh said the structure of oil contracts is being reformed in order to boost recovery from oil reservoirs. “Structural changes to oil contracts are aimed at increasing recovery rate of the existing reservoirs,” Zanganeh said, according to the oil ministry's website, Shana. The minister also said that Iran is facing shortages in gas production, adding that the country has to make up for gas shortages with liquid fuel. “To make up for this shortage, we cannot increase production and imports and we have no option but to compensate it with liquid fuel,” said Zanganeh. “Under long-term plans, we hope to increase production in the coming years and replace gas with liquid fuels.” OPEC Head Job Zanganeh said the process of picking a new secretary-general for the Organization of the Petroleum Exporting Countries (OPEC) has reached impasse. “A committee has been established in the organization to pick a secretary-general, but we are not very optimistic and it is unlikely that another country could become secretary-general of OPEC,” the minister said. “OPEC secretary-general is a secondary issue for us. The secretary-general is not so influential on OPEC, but it does not mean that they could ignore right,” he added. Zanganeh voiced Iran’s readiness for cooperation with all OPEC member states as well as the Gas Exporting Countries Forum (GEFC). “Our position in the OPEC has been weakened and the only way to boost it will be to increase production capacity, actual production level,” he said. The Iranian minister said the current oil prices are reasonable and could resolve the country’s problems in the short-term. “But anytime global oil prices increase our production falls and others benefit from the high prices,” said Zanganeh. Private Sector Zanganeh highlighted the role of the private sector at a time Iran is facing tough international sanctions. “Ministry of Petroleum is ready to fully support the private sector to make it strong and expand its activities,” he said. Zanganeh added that the private sector can invest in the upstream sector and focus on domestic market. “The private sector must not expect all its products to be bought by oil companies. The private sector has to resolve the issue of selling its products through joint ventures,” the minister stated. “The private sector will withhold no aid to the private sector which is currently conducting drilling and other services abroad. The private sector has great potentials for presence in oil activities and we will support the private sector to make it more active.” Gas to Turkmenistan Zanganeh also said that he travelled to Turkmenistan to reach deals with Turkmen officials for higher gas imports from the Central Asian state in exchange for commodities and services. “It will serve the country’s interests,” said the minister.