Dec. 3 (Bloomberg) -- Iran wants other OPEC members to make room for its eventual return to oil markets after the Persian Gulf nation reached an interim deal with world powers over its nuclear program.
The Islamic republic reached a preliminary agreement with the so-called P5+1 nations -- the U.S., U.K., China, Russia, France and Germany -- last month in Geneva that eased some trade sanctions while reining in its nuclear program. That accord didn’t relax sanctions that prevent U.S. and European nations from importing Iran’s oil and compels Iran’s other customers to restrict purchases.
“I hope we gradually increase our exports based on the agreement,” Bijan Namdar Zanganeh, Iran’s minister of petroleum told reporters in Vienna today before officials from the Organization of Petroleum Exporting Countries meet tomorrow to decide on production policy. “At this stage, we have no change in our export officially.” Iran will also hold talks with international companies this week in the Austrian capital on developing its oil industry, he said.
Once OPEC’s second-largest producer, Iran has been knocked back to sixth place among the 12-nation organization, with output averaging 2.6 million barrels a day last month, compared with 3.6 million at the end of 2011, according to data compiled by Bloomberg. Exports fell as well.
“We believe it is our right to try to increase our exports,” Zanganeh said. “I hope that all OPEC countries show wisdom, and when member countries, after limitation, return to the market, they understand they should open the doors for him, and not fight with him.”
Iran could boost production to 4 million barrels a day next year if sanctions are lifted, the minister said. The nation is currently exporting about 1.2 million barrels a day and has earmarked 1.5 million barrels of daily sales in its budget, which includes 300,000 barrels of condensates.
Output of condensate, a lighter type of oil, will increase to 1 million barrels a day from 300,000 currently over the next 2 1/2 years, Zanganeh said.
Discussions with international oil companies on exploration terms and conditions will also take place in Tehran and London in early 2014, he said, without specifying which may be involved. For now, laws forbid U.S. and European companies from striking energy deals with Iran and other nations risk being excluded from the U.S. banking system if they violate sanctions.
“Iran is preparing for a complete return to the market,” Zanganeh said.
U.S. officials have said that Iran will not be allowed to increase its crude exports unless there were a comprehensive, verifiable agreement over its nuclear program that satisfies the international community that the Islamic republic is not seeking nuclear weapons. Iran says its nuclear research is for civilian use only.
In return for Iran’s curtailing its most sensitive nuclear activities, the six-month interim agreement reached in Geneva on Nov. 24 pledges to ease a limited number of sanctions on Iran, including U.S. penalties on trade with Iran in gold, petrochemicals and autos and a European Union ban on insuring Iranian oil cargoes.
U.S. and EU oil sanctions remain in place, though the six countries that still import Iranian oil - China, India, Japan, South Korea, Turkey and Taiwan - will be permitted to maintain their Iranian crude imports at current levels, rather than making further “significant reductions” over the next six months, as required by U.S. law.
Other nations that stopped buying Iranian oil after oil sanctions took effect in July 2012 will not be allowed to start importing again during this period, according to the deal. While there’s no ban on companies having conversations with Iran about possible future cooperation, any energy investments are still sanctioned under U.S. law and the EU embargo. Several major oil companies including Royal Dutch Shell Plc, BP Plc and Total SA, had partnerships in Iranian energy projects in former years.
Shell complies with all applicable international sanctions against Iran, Sarah Bradley, a London-based spokeswoman for the company, said in an e-mail. Shell stopped upstream commercial activities in Iran in 2010 and halted trading with the country last year, she said.
“As this is likely to be a very complicated political processes we need to take our time and watch the situation carefully,” Toby Odone, a London-based spokesman for BP, said in an e-mailed statement. “Iran clearly has huge resources” and “a lot of potential,” he said.
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