The National Iranian Oil Company (NIOC) awarded some $500 million worth of contracts to domestic companies to revive low-production oil wells in the country.
CEO of the NIOC Mohsen Khojasteh-Mehr said that around 750 low-production oil wells across Iran will be revived under the contracts signed with dozens of small Iranian companies earlier in the day, Press TV reported.
Khojasteh-Mehr said reviving the low-production oil wells will help the NIOC to boost its output by nearly 230,000 barrels per day (bpd) or around 83 million barrels per year.
He said each company will be assigned to restoration works on a maximum of five low-production oil wells as part of the contracts signed on Tuesday.
The announcement comes two months after the NIOC denied rumors that it will use the services of Russian and Chinese companies to revive low-production or inactive oil wells in Iran.
Authorities said at the time that Iran’s PetroPark, an Oil Ministry company responsible for innovation and technology projects, will supervise and coordinate works by domestic startups and small companies on low-production oil wells.
Oil Ministry figures show reviving a low-production oil well costs around $1 million, around 90% cheaper than developing a new oil well.
The project is part of NIOC’s efforts to boost its daily output and exports of crude oil despite US sanctions that have targeted both Iran’s oil sales and its investment in development of new oilfields.
Khojasteh-Mehr said Iran seeks to reach a daily oil output target of 5.7 million bpd by 2028. That comes as NIOC’s current output figure is at around 2.6 million bpd, down from more than 3.8 million bpd reported by the company before the US imposed its sanctions on Iran in 2018.