Rouhani inaugurates production at new oil fields

Officially inaugurating production at three new oil fields, Iran’s president announced that the country is seeking to attract foreign investors to increase its oil output and benefit from the lifting of international sanctions.

al-monitor Iran President Hassan Rouhani during a news conference in Rome, Jan. 27, 2016.  Photo by REUTERS/Alessandro Bianchi.

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sanctions on iran, oil and gas, jcpoa, hassan rouhani, energy, contract

Nov 14, 2016

On Nov. 14, the official opening of three new oil fields in the oil-rich southwestern Khuzestan province received mixed coverage in Iranian media. While Reformists hailed the boost in oil production in the post-sanctions era, conservatives focused on President Hassan Rouhani’s speech regarding youth unemployment.

On Nov. 13, Rouhani officially inaugurated the first phases of the Yadavaran and North Azadegan fields as well as the North Yaran field, which are shared with Iraq. These oil fields provide a total production of more than 220,000 barrels per day.

The move came after the Nov. 8 preliminary $4.8 billion agreement between the National Iranian Oil Company and a consortium led by France's Total to further develop phase 11 of Iran’s giant South Pars natural gas field. Total is the first Western energy company to sign a major deal with Tehran since the lifting of nuclear-related sanctions in January.

At a ceremony to formally open the new fields, Rouhani stressed that the inauguration is a result of the July 14, 2015, Joint Comprehensive Plan of Action (JCPOA). “The JCPOA means a new space, a new air. This means that trapdoors have been opened and fresh air has entered,” Rouhani said. “Now people will benefit from the new opportunities. The oil industry has used these opportunities in the best way it could.”

Rouhani added, “After the nuclear agreement, some said it would take ages to reach the goal of 2 million barrels of daily exports. They also said we cannot return to the pre-sanctions situation. But [the progress of] our oil industry in just a few months has surprised the world.”

The Reformist Etemad daily wrote that Rouhani’s speech shows he is confident that “Donald Trump’s victory in the US [presidential elections] cannot change the future of the nuclear agreement.” Etemad also asserted that Rouhani’s speech had a message for the 171st Meeting of the Organization of the Petroleum Exporting Countries (OPEC) conference, due to be held Nov. 30.

Etemad wrote, “Iran wants to be exempt from production cuts because of its lost share of the market during the years of international sanctions. Those who have doubts about Iran’s stances on this issue can reread what the Iranian president said [on Nov. 13].”

The newspaper Iran reported that the country would need a $200 billion investment in the oil and gas industries in the next five years, which is “unachievable without foreign investment.”

“Domestic and foreign investors are widely interested in the energy industry of Iran, and this is an opportunity that must be taken into consideration,” the daily said. “Any delay in developing our joint oil and gas fields [with neighboring countries] will just benefit our enemies.”

While Reformist newspapers hailed the inauguration of three oil fields, Conservatives focused on a different part of Rouhani’s speech and magnified his comments about youth unemployment. Resalat covered the oil fields' development under the headline, “President: Youth Employment Is Our Biggest Issue.”

Resalat quoted Rouhani as saying, “We should use the oil industry to resolve the issue of youth unemployment. The residents of oil-rich regions should profit from this industry by creating employment opportunities and developing education and the health care system.”

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