Financial Tribune - The Iranian Offshore Oil Company (IOOC) is taking measures to increase production from oilfields in the Persian Gulf whose output took a hit when international sanctions were in place, Hamid Bovard, the company's chief executive officer, said.

Domestic oil producers, including the IOOC, were forced to scale back crude oil output as the country faced restrictions in exports as well as limited and dwindling storage capacity in the sea.

But the IOOC, a subsidiary of the state-owned National Iranian Oil Company, says it is determined to regain lost ground.

"A comprehensive plan has been developed to accelerate extraction from offshore oilfields which are behind their production schedule," Bovard was cited as saying by Mehr News Agency on Sunday.

"Plans are going well for Forouzan Oilfield (shared with Saudi Arabia). During the sanctions years, we had to reduce the field's output because of insufficient storage capacity in tankers," said the official.

IOOC is in charge of developing crude oil reservoirs in the Persian Gulf region, including Abouzar, Hendijan, Bahregansar, Reshadat, Soroush, Norouz and Doroud fields as well as collecting associated petroleum gases in Kharg Island and Bahregan oil region in the Persian Gulf.

Sanctions curtailed crude production to around 1 million bpd as exports to Europe dropped to zero. Under the sanctions regime, a handful of countries, mainly Iran's backbone oil clients such as India, China and South Korea, were allowed to conduct crude transactions with Iran.

Once the second-biggest producer of the Organization of Petroleum Exporting Countries, Iran slipped to fifth place under the international sanctions regime. It is now third behind Saudi Arabia and Iraq which produce around 10 million bpd and 4.5 million bpd respectively.

Bovard added that the National Iranian South Oil Company, another major state corporation, slashed output by 1 million barrels per day under the sanctions due to restrictions in marketing the huge crude inventory.

"But it (NISOC) made up for the lost capacity after the economic restrictions were eased last year under a thorough production plan," Bovard added.

"We are in negotiations with a major international company to boost production from Soroush and Doroud fields in the Persian Gulf. Production of the two fields fell by 200,000 barrels per day under the sanctions," Bovard noted.

He acknowledged that Iran needs cutting-edge technology for drilling new wells or extracting crude from so-called 'dead wells' which have remained idle for so long.

Lifting production to levels before the sanctions is a difficult task, he concurred.

Iran was deprived of much-needed knowhow and advanced equipment to expand upstream oil exploration/production after the financial and trade curbs were tightened in 2011 and 2012.

Some 50,000 barrels will be added to Doroud and Soroush fields' daily output by the end of the present fiscal (in March 2018), and the 200,000 bpd target will be fulfilled in three years.

The initiative is also capital-intensive. According to Bovard, production recovery from oilfields under the IOOC administration "require no less than $1 billion" based on preliminary estimates.

According to Bovard, IOOC has implemented $3 billion worth of projects under engineering, procurement, construction and financing (EPCF) contracts in the past few years in collaboration with domestic and foreign firms.

"Aging offshore facilities should be reconditioned," the official said, noting that $3.2 billion in investment is required for the rehabilitation plan, which would translate into higher oil revenues.