Iran cenbank to provide $3bn-loan to NIOC for rapid increase in oil production
The Central Bank of Iran (CBI) will issue a $3 billion loan to fund a plan by the country’s state oil company the NIOC to increase oil production by 250,000 barrels per day (bpd) in the near future.
Head of Iran’s Plan and Budget Organization (PBO) said in a Sunday letter addressed to the country's Oil Ministry that the CBI will issue the line of credit to the National Iranian Oil Company until September 21.
Hamid Pourmohammadi said the CBI will provide the loan through mechanisms it deems appropriate and via various operating banks.
Pourmohammadi added that the NIOC will be required to use the loan to raise its oil production from a baseline of 1.939 million bpd to 2.189 million bpd.
The letter comes more than a month after Iran’s Supreme Economic Council approved a request by the Oil Ministry to increase oil production by 250,000 bpd.
The Ministry had submitted a rapid action plan to the Council to increase oil output in 34 oilfields in Iran.
It was agreed at the time that the plan would be implemented based on an arrangement between the NIOC, the CBI and the PBO.
Reports have suggested that Iran has found new destinations for its crude oil exports despite a continued regime of US sanctions that impose heavy penalties on buyers.
Those destinations include Bangladesh, Oman and ports in northern China, according to a report by the Reuters news agency in early August which cited information from tanker tracking services.
Iran has been supplying a bulk of its oil shipments to private buyers in eastern China in the past years.
The rapid action plan by Iran’s Oil Ministry to increase the country's oil output can push up exports to more than 1.7 million bpd in the coming months.
Data by the Organization of the Petroleum Exporting Countries (OPEC) published last week showed that Iran’s total oil production had averaged 3.277 million bpd in August, up just 4,000 bpd from July.
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