Iran is stepping up production at an oil field it shares with Saudi Arabia

The Iranian Offshore Oil Company will increase production at the Foroozan oil field, which Iran shares with Saudi Arabia, by 12,000 barrels daily, the company's executive director told Iranian media, adding that it will install two platforms at the field soon.Iran has 11 percent of the field'which Saudi Arabia calls Marjan'whose reserves are estimated at 2.3 billion barrels. Besides it, Iran and Saudi Arabia also share another two fields in the Persian Gulf, Lulu and Dorra, respectively Esfandiyar and Arash on the Iranian side.The ramp-up is part of Iran's efforts to boost its crude oil and natural gas production as soon as possible, challenging the market shares of other OPEC producers in the region, most notably Saudi Arabia. Still, the country is cutting exports after it cleared out what was in storage before economic sanctions were removed and the market share challenge may subside.Iran's crude oil exports in May are expected to come in at 1.66 million bpd, and nearly 100,000 bpd will be put back into storage on tankers. For April, Iran is seen exporting 1.8 million bpd of crude oil and around 370,000 bpd of condensate. This compares to exports of crude and condensate combined of almost 2.9 million bpd in February, which marked a six-year high, Reuters data show.At the same time, Tehran has indicated that it is on board with an extension of the production cut agreement OPEC struck at the end of last year, which exempted Iran from the cuts provided it didn't produce more than 3.8 million barrels of oil daily.The country's production capacity currently stands at 4 million barrels, according to Oil Minister Bijan Zanganeh's deputy, Rokneddin Javadi, but plans are to expand this to 5.7 million bpd with the help of foreign oil companies. The first contracts with such companies, under the new International Petroleum Contract template, are expected to be signed by the end of May.SEE ALSO:Crack spreads can tell you a lot about oil pricesJoin the conversation about this storyNOW WATCH: Here's what popular dog breeds looked like before and after 100 years of breeding
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