London (Platts)--12Nov2012/752 am EST/1252 GMT

The International Energy Agency sees OPEC oil production growing significantly in the long term, boosted by the large reserves held by its member countries.

In its latest annual World Oil Outlook, released Monday, the IEA said it saw OPEC output rising by more than 10 million b/d from current levels until 2035.

"Oil production in OPEC countries as a group is poised to grow significantly over the longer term reflecting their large resource base and relatively low finding and development costs, though short-term market management policies will probably continue to constrain the rate of expansion of supply," the IEA said.

"The bulk of the increases in OPEC production comes from the Middle East, predominantly Iraq, though all OPEC countries in this region see an increase in output over the projection period," it said.

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The IEA sees total OPEC output rising to 37.3 million b/d in 2015 from 35.7 million b/d last year and to 38.5 million b/d in 2020.

By 2025 OPEC production is set to reach 40.4 million b/d before rising to 43 million b/d in 2030 and 46.5 million b/d in 2035.

IRANIAN OUTPUT

Output from one of OPEC's key members, Iran, is set to tumble in the short term because of the impact of international sanctions against the Islamic Republic, the IEA said.

"The prospects for production in Iran remain clouded by uncertainty over the impact of international sanctions and the country's upstream investment policies," the IEA said.

From a base level of 4.2 million b/d in 2011, the IEA now sees OPEC output falling by 1 million b/d in 2015 to 3.2 million b/d.

It then sees it recovering to 3.3 million b/d in 2020, 3.6 million b/d in 2025, 4 million b/d in 2030 and 4.5 million b/d in 2035.

"The country has the resources to support a big increase in production, but a lack of capital and technical expertise have held back investment and led to stagnating output," the IEA said.

"The loss of revenue and even more constrained access to technology and capital is expected to quickly turn this reduced production into a reduced capacity as well. The country's production will take several years to recover," it said.

The IEA also expects slow production growth in another OPEC member state, Kuwait.

"The outlook for oil production in Kuwait remains uncertain, given continuing political opposition to allowing foreign companies with the requisite expertise to develop the country's heavy oil resources," the IEA said.

"The country aims to boost overall crude production capacity to 4 million b/d by 2020 from 2.7 million b/d currently, but achieving that will be difficult without the expensive involvement of international companies," it said.

It sees Kuwaiti output staying steady at 2.7 million-2.8 million b/d by 2030 and only then rising in 2035 to 3.1 million b/d.

--Margaret McQuaile, margaret_mcquaile@platts.com
--Edited by Jonathan Dart, jonathan_dart@platts.com

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