by about 120,000 b/d by March 2015, with 40,000-80,000
possibly coming online by late-summer 2014.
Increasing production of crude oil much beyond 3. 5 million b/d would require foreign investment and technology,
in Fesharaki’s view.
“It may take more than 3 years to be able to increase
crude production capacity when and if the sanctions are totally lifted,” he said.
He emphasized that nuclear issues don’t constitute the
only point of conflict between Iran and the West—mainly
the US—and that the recent easing of sanctions is partial.
Iran has paused enrichment of nuclear material, begun open
discussions with western powers, and received a substantial
boost in revenue through unfrozen assets and a partial relaxation of export limits.
But current agreements don’t provide for increased Iranian access to outside investment or technology.
“We do not believe the sanctions on foreign investments
as well as oil exports will be lifted anytime soon,” Fesharaki
said. But partial, short-term relaxation is possible.
“We do believe Iran can be exporting 1.3-1.5 million b/d,
as compared to 2.2 million b/d before sanctions, in the best-case scenario by the end of the year,” he said.
Eagle Ford crude
prompts upgrades at
Valero’s Texas refineries
Downstream Technology Editor
Valero Energy Corp., the largest US independent refiner-marketer, plans to invest $730 million in upgrading two
of its Texas refineries to process increased volumes of light
crude sourced from the Eagle Ford shale.
The company will spend $390 million at its 160,000-b/d
Houston refinery and $340 million at its 325,000-b/d Corpus Christi, Tex., refinery to add crude topping units designed to boost crude oil processing capacities at each of the
plants, Valero spokesman Bill Day told OGJ.
While the addition of these units will not add to the refineries’ overall output capacities, they will allow the plants to
reduce their purchases of higher-priced intermediate feed-stocks from third-party suppliers in lieu of more favorably
priced Eagle Ford crude, from which the refineries can produce and then process their own intermediates, Day said.
The projects, which Valero expects to have completed by
yearend 2015, will expand light sweet crude processing capacities at the Houston and Corpus Christi refineries by an
consistent with recent historical levels.
PwC pointed out there were eight megadeals in fourth-quarter 2013 valued at a total of $26.4 billion, compared
with three megadeals worth $6.4 billion in third-quarter
Also, foreign buyers announced four deals in the fourth
quarter, contributing $541 million, compared with 10 deals
valued at $3.4 billion during the same period in 2012.
Quick hike seen in
Iranian oil output
if sanctions lifted
Iran can push production of crude oil back to 3-3. 5 million
b/d “relatively quickly” in the absence of international sanctions, says a veteran observer of the Islamic Republic.
And with increased output of condensates, a category
that often confounds analysis, total production can reach the
4 million-b/d rate heralded by Iranian officials, according to
Fereidun Fesharaki, chairman of Facts Global Energy, London (OGJ Online, Dec. 19, 2013).
Before international sanctions were toughened to pressure the government into slowing nuclear development, the
country’s production capacity fell by about 400,000 b/d/year
from natural decline, Fesharaki wrote in a recent report.
With discoveries, infill drilling, and secondary recovery,
the state-owned industry added about 300,000 b/d/year. It
made up the deficit with condensate stripped from natural
gas, mainly from giant offshore South Pars field.
Production of condensate, which is exempt from quotas
imposed by the Organization of Petroleum Exporting Countries but often included in reports of Iranian oil production,
is about 400,000 b/d.
At first, the US treated Iranian condensates and LPG as
natural gas and exempted them from sanctions. Although it
has added condensate to exportable totals, it doesn’t enforce
the limits as vigorously as it does those on crude, Fesharaki
Capacity decline slows
Because sanctions have cut crude oil production by 1-1.2
million b/d, the capacity decline rate has fallen to perhaps
200,000 b/d. Additions have been minor.
According to Fesharaki, Iranian fields are well-maintained and, contrary to some reports, largely undamaged. In
anticipation of an easing of sanctions, the Iranian industry
has worked to prepare fields to increase output. Fesharaki
said his group believes capacity can return to 3-3. 5 million
b/d in about 180 days once sanctions are lifted.
South Pars condensate production, meanwhile, can rise