Iran H1 2006 oil exports down 111,000bpd, rebound in July: report

Aug 28, 2006, 13:40 GMT

Nicosia - Iranian crude oil exports were down an average 111,000 barrels per day (bpd) at 2,352 million in the first half of 2006 compared with 2,463 million in the same period last year due to tight market conditions, the Middle East Economic Survey reported Monday.

Despite the drop in exports, Iran's crude production was marginally up at 4,121 million bpd in June, just above the 4.11- million quota set by members of the Organization of Petroleum Exporting Countries (OPEC) in July 2005.

The Cyprus-based weekly publication said that most of the decline in exports was seen from the offshore fields, while onshore heavy oil exports also fell, in part erased by an increase in light crude exports.

However, exports rebounded in July to reach their highest level for months at 2.75 million bpd, which - with the additional 1.5 million bpd in deliveries to refineries - brought the month's production total to 4.25 million bpd.

Crude exports have been impacted in recent months by the National Iranian Oil Company's (NIOC) policy of storing the difficult-to- market Soroush and Nowruz crudes offshore rather than selling at a discount, and by increasing use of Iranian crude in domestic refineries.

Of late, NIOC has begun to mix the two crudes with South Pars condensate in order to run it through the Bandar Abbas refinery, and has also secured a 60,000bpd contract to supply India's Reliance so that volumes stored offshore are now being reduced.

At the same time Iran has been upgrading and relieving capacity at its nine refineries and now claims a total crude throughput capacity of 1.6 million bpd.

NIOC aims to increase refining capacity to 2.54 million bpd in a bid to keep pace with rising domestic petrol demands.

On a monthly basis, exports from onshore fields ranged from 1.679 million bpd in January to 2.079 million bpd in June.

Offshore exports fluctuated during the first six months of 2006, hitting a high of 632,000bpd in March and a low of 375,000bpd in April, while averaging 542,000bpd in June.

In order to counter natural reservoir declines estimated at 300,000 to 400,000bpd a year and increase output, Iran is undertaking a number of development projects expected to increase capacity to 4.5-5.0 million bpd by the year 2010.