BUDAPEST: Budapest is keen on increasing oil purchases from Tehran in the future. Hungary’s Minister of National Economy Mihaly Varga made the statement on the sidelines of a meeting with Oil Minister Bijan Namdar Zanganeh in Tehran on Monday, Shana, the official news agency of the Oil Ministry, reported.
“Hungary’s largest oil and gas company MOL has bought 1 million barrels of crude from the National Iranian Oil Company since the nuclear deal, officially known as the Joint Comprehensive Plan of Action, was signed between Iran and the world powers in 2015,” Varga said, noting that plans call for raising oil imports from Iran.
According to Shana, MOL had called for importing 40,000 barrels of light oil per day from Iran last year, but the country was low on light crude and most of its shipments are made up of Iran Heavy, one of its main oil grades. The Hungarian major is assessing the quality of Iranian crude and should it comply with their needs, further talks will be held for long-term deals.
The Hungarian company operates refineries in Hungary, Slovakia and Croatia and has exploration and production assets in the North Sea and in countries, including Pakistan, Iraq and Russia.
“MOL resumed talks with NIOC shortly after sanctions against Iran were lifted,” he said, noting that the Budapest-based firm is active in 33 countries with a workforce of over 26,000 people and a track record of more than 70 years in the upstream and downstream industries.
Pointing to the importance of banking relationship, the official expressed hope that financial ties between the two countries’ banks and credit institutions can be strengthened so that investors encounter fewer challenges.
According to Varga, constructive talks have been held between high-ranking officials and the two sides are doing their best to gradually restore banking links.
The official pointed to age-old relations between Iran and Hungary and said, “We did not broke off our relations with Tehran during international sanctions and this is an indication that we are willing to expand our ties in different sectors, energy in particular.”
Amirhossein Zamaninia, deputy oil minister for international affairs, said Hungary’s MOL is willing to help raise the rate of recovery from Iran’s onshore and offshore oilfields with the help of the enhanced oil recovery techniques.
Referring to recent talks with the Hungarian energy delegation, the official noted that the two sides also discussed other issues of mutual interest, namely LPG trade and projects related to refineries, LNG and natural gas liquids.
The average rate of recovery from Iran’s oilfields is around 25%, but it should reach 40%, officials say.
Iran’s in-place oil reserves are estimated at 800 billion barrels. Raising the recovery rate by merely 1% will add 8 billion barrels to production, which would generate $400 billion at the current crude prices.
Iran has increasingly expanded its footprint in the European oil market since last year’s lifting of sanctions, with ports and terminals in Europe taking in nearly 40% of Iranian crude exports.
Following the easing of curbs on Iran’s energy sector in January 2016, a growing number of European companies joined the ranks of Iran’s crude oil customers.
The third biggest producer of the Organization of Petroleum Exporting Countries is now competing over a market of about 4 million barrels a day, which constitute Europe’s seaborne crude imports via tankers.