Seventh Development Plan; Iran’s ambitious oil and gas roadmap

According to Energy Press, the Seventh Five-Year Progress Plan has set an ambitious and quantitative roadmap for the 14th government and executive agencies. This plan, which is referred to as the National Pact, was developed with a strategic perspective and with the aim of strengthening the economy and increasing Iran’s role in global energy markets, and has defined heavy and precise missions for all sectors of this industry, from upstream to downstream and from production to export.
More than a year has passed since the announcement of this five-year plan, and the performance of various agencies is being evaluated by the representatives of the Islamic Consultative Assembly, but what goals have been defined for the oil industry in this plan and in which direction exactly are the activists of this industry supposed to move? What follows is an overview of the most key tasks, the achievement of which will further consolidate the role of the oil industry as the driving force of Iran’s economy during these five years.
At the heart of the overall policies of the Seventh Development Plan, three strategic priorities have been set for the Ministry of Petroleum. According to paragraph eight of these policies, achieving “maximum production increase from joint fields” along with “increasing the recovery factor in independent fields” are two complementary strategies for protecting resources and maximizing the extraction of the country’s underground reserves. Along with these upstream goals, the plan places special emphasis on “completing the value chain.” This means that the output of the oil and gas industry should not be limited to the sale of raw materials alone, but should also be used to multiply the profits from each barrel of oil and each cubic meter of gas within the country by developing downstream and petrochemical industries. This triad outlines the Ministry of Petroleum’s grand strategy for these five years.
Considering an average economic growth of 9 percent for the oil sector
Based on the main framework of the Seventh Development Plan, the Ministry of Petroleum is tasked with implementing a major economic transformation. This five-year plan has three key goals for the oil industry, including achieving “12 percent annual growth in oil exports,” “9 percent annual growth in the oil sector,” and “8 percent annual growth in the gas sector,” while the country’s economic growth at the end of the plan is set at 8 percent.
Achieving these figures means continuing and even emphasizing the role of the oil industry as the main driving force of Iran’s economy during the implementation of this plan. However, achieving these ambitious goals requires extensive investment and accelerating major projects throughout the industry’s value chain.
An overview of the quantitative goals of the Seventh Plan/ How much should oil and gas production be?
According to Article 42 of the Seventh Development Plan, the Ministry of Oil is required to increase the capacity of crude oil production to 4.8 million barrels per day and the capacity of crude oil production to 4.58 million barrels per day in the final year of the plan (1407). In this regard, one of the key priorities is to increase production from joint oil and gas fields, which should produce the equivalent of 1.8 million barrels of crude oil per day.
In the gas sector, major goals have also been defined; achieving a daily production of 1.34 billion cubic meters of raw gas and collecting 16 billion cubic meters of flare gas per year, which, in addition to protecting resources, will also bring important environmental achievements.
In the refining and consumption optimization sector, major goals have also been outlined; accordingly, by 1407, daily gasoline production should reach 129 million liters, daily oil and gas production should reach 130 million liters, and daily fuel oil production should reach 49 million liters. According to this program, the quality of produced fuels will also be improved, so that 75 percent of gasoline and oil and gas produced should meet the Euro 4 standard or higher.
At the same time, two major technological indicators are also being pursued in the oil industry; Increasing the crude oil recovery rate by one percent and increasing the share of heavy refined products to 20 percent of total production.