Iran's petroleum minister believes most OPEC members would endorse an extension of the group's current initiative on production cuts, and Iran would support an extension if unanimously supported by other members, oil ministry news agency Shana quoted the minister as saying Sunday.
"OPEC and non-OPEC crude oil producers have displayed a historic esprit de corps in implementation of the organization's output cut plan, which has proved a success, and producers have shown more cooperation month after month," Shana quoted Bijan Zanganeh as saying.
Noting that international benchmark crude prices returned last week to around $55/b following a slump, Zanganeh said the recent market reaction showed investors were recognizing that OPEC was living up to its November 2016 decision to cut output by a total of 1.2 million b/d in H1 2017, and that the ensuing decision by other major international producers to join OPEC by contributing additional cuts had been taken in earnest.
Iran had honored the initiative and, providing all other OPEC members followed suit, would stick to the plan to cut output, Zanganeh said ahead of the inauguration of several major gas and petrochemicals projects in Iran's southern Assalouyeh region.
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In the December 2016 agreement, 24 international producers -- including OPEC's 13 members, Russia and Oman -- pledged to deliver nearly 1.8 million b/d of total H1 cuts.
EXEMPTED FROM CUTS
Due to the toll that years of international nuclear sanctions had already taken on its oil output, Iran was exempted from making further cuts and was instead permitted under the agreement to raise production by up to 90,000 b/d to match the country's pre-sanctions output of around 4 million b/d, Shana reported.
Other sources, including S&P Global Platts, have put Iran's quota under the OPEC deal at 3.797 million b/d.
Nigeria and Libya also were exempted from contributing to OPEC cuts due to internal conflicts that had already depressed their crude production.
OPEC ministers must decide at their next scheduled meeting, on May 25, whether and for how long to extend their existing agreement on production cuts after it expires at the end of June. Reports have recently emerged that the group is leaning toward an extension of at least three months.
A joint committee of the wider international producers' group also has agreed to review an extension of the cuts.
At a media briefing in Muscat earlier this month, Oman's oil and gas undersecretary, Salim al Aufi, said Oman favored continuing the currently agreed cuts for the rest of this year and would join OPEC and other international producers on any extension initiative.
Oman is the biggest Arab oil producer from outside OPEC and was an early, vocal critic of the group's previous policy of keeping output high to defend market share instead of cutting production to bolster oil prices and market stability.
Iran, however, may resist pledging anything more than keeping its output at or below the pre-sanctions level. In March, the country produced 3.79 million b/d, secondary sources reported.
IRAN STARTS SOUTH PARS CRUDE PRODUCTION
On Sunday, Iran inaugurated a project to produce crude from the oil
layer above its vast South Pars offshore gas field, with current output at 35,000 b/d, Shana reported.
The field holds an estimated 1.5 billion to 4 billion barrels of crude and is Iran's side of a large Persian Gulf oil field shared with Qatar, which the Arab state calls Shaheen.
Shana on Monday reported that Iran had inaugurated four petrochemical projects in Assalouyeh, including Phase 2 of the Kavian Petrochemical Plant, the Takht Jamshid Pars Petrochemical Plant, the Entekhab Group Polystyrene Unit and a monoethylene glycol (MEG) unit at the Morvarid Petrochemical Plant.
Between them, the new projects would add 2 million mt/year of petrochemicals production capacity, Shana estimated.
It described Kavian Phase 2 as the Middle East's biggest supplier of ethylene, designed to deliver feedstock to an ethylene pipeline delivering feedstock to 12 petrochemicals plants in western Iran.
Takht Jamshid Pars can produce up to 55,000 mt/year of polystyrene and the Entekhab project has 250,000 mt/year of polystyrene, while the Morvarid MEG unit, due to come on stream next week, would be able to supply up to 550,000 mt/year in total of MEG and triethylene glycol (TEG), Shana said.
--Tamsin Carlisle, firstname.lastname@example.org
--Edited by Annie Siebert, email@example.com