OPINION: It is no secret that US sanctions have delivered what they meant to do when US President Donald Trump tore up the 2015 landmark nuclear deal two years ago — bringing Iran’s crude exports almost to a complete halt.

But Iran's energy sector is by no means on its knees.

Upstream activity has escaped the most draconian punishment imposed on any country. Gas production is at record levels, trailing only that of Russia and the US.

The focus is turning to oil capacity expansion, with Iran determined to ensure a higher output quota within Opec once the sanctions are removed.

Expansion is all the more remarkable given that threats of US reprisals sent international oil companies scurrying from the Islamic Republic following Trump’s move.

France’s Total ditched a multi-billion-dollar contract to develop a key phase of the giant South Pars gas field, while supermajor Shell — along with Chinese companies — quit oilfield development plans.

Priority is being given to tackling shared reservoirs, as Iran musters domestic resources to close the gap with Iraq, which has moved quickly in the past decade, with the help of Shell and other supermajors, to develop oilfields straddling the border, including the giant Majnoon field.

National Iranian Oil Company (NIOC) has dished out an estimated $1.6 billion in local contracts in the past fortnight to develop the North Yaran and South Azadegan fields, part of the West Karun cluster, with estimated reserves of at least 15 billion barrels.

Similar contracts are in the pipeline, aiming to add between 1 million barrels per day and 1.5 million bpd to capacity from West Karun in the next decade.

Oil Minister Bijan Zanganeh — sounding triumphant after awarding a $1.3 billion contract to local player Petropars to more than double capacity from South Azadegan — said the sanctions will not impede Iran’s march.

"Expanding production from fields shared with our neighbours is a top priority. Output capacity from the West Karun fields has surged to 400,000 bpd from 70,000 bpd in the past seven years," he said.

The sanctions, which have reduced Iran’s crude exports to a trickle from 2.6 million bpd in April 2018, would not alter the expansion course, Zanganeh insisted.

Petropars is committed to raising capacity from South Azadegan to 320,000 bpd from the current 140,000 bpd within 30 months.

The state-owned contractor will also build and install a central processing unit to handle rising output from the field.

Petropars has an established track record in delivering multi-billion-dollar projects, having done the bulk of the work to produce a combined 18 billion cubic feet per day of gas from the giant South Pars gas field — shared with Qatar — in the past two decades.

The sanctions have failed to stop Iran from accessing key components such as turbines since Tehran has built a network of trading and finance houses around the globe to purchase what it needs.

Vital equipment is often rerouted to neighbouring countries such as Afghanistan and Iraq before ending up in Iran.

Against all odds, Iran has almost matched the performance of supermajors such as ExxonMobil, Shell and Total in neighbouring Qatar where they have invested to produce 18 billion cubic feet per day of feed gas for liquefied natural gas plants from shared reservoirs.

A resilient Iran is also likely to succeed with the ambitious development of shared oil fields.

(This is an Upstream opinion article.)