(REUTERS) As oil prices jumped again, even after the last meeting of OPEC in Vienna and the 800,000 bpd production increase agreement, adding almost another dollar a barrel to a runaway market as fears mounted of winter supply shortages in the West, especially the U.S., additional attention is focusing on developments in the united OPEC front. OPEC president, Ali Rodriguez of Venezuela, shook international dealers’ confidence with the statement that he blamed high taxation among consumer nations and refinery bottlenecks for soaring prices.

“There is no problem with crude supply. Prices do not depend exclusively on OPEC”, he stated. Taking up the Venezuelan theme, OPEC number two producer Iran said that it believed oil market fundamentals were sound and played down the outcry over high prices. “Prices are good and so far within the target range. In the second and third quarter there was a build up of stocks of 2.2 million barrels per day and 1.6 million barrels per day”, Hossein Kazempour Ardebilli, told Reuters.

Iran’s position is however under additional influence. Its OPEC policy should be related to its domestic programs and developments. The country is rushing to invest billions of dollars in surplus oil revenue to revive the stagnant economy and address chronic unemployment, officials said. All over however, economists refer to the fact that not a big cash infusion but structural reform is necessary to revive the domestic economic and social framework.

President Khatami’s government has sought parliament’s approval to start at once using an estimated $6 billion in extra revenue Iran has earned from oil exports in recent months. Iran’s budget forecasts earnings of $15.7 from export of each barrel of crude, but Iranian crude has been selling at an average of $25 per barrel. The country already earned about $4.6 billion from crude exports in the first quarter of the year, which began on March 20. To ease reliance on oil, Khatami plans to limit crude revenue spending to $56.6 billion over the next five years.

Additionally, Iran E&P plans are becoming on stream. In the first week of September, Irna reported that Iran would soon sign or finalize buy-back oil and gas deals worth more than $8 billion. The latter projects seek to add about 1 million barrels to Iran’s daily crude output, 50 percent to natural gas production and 300,000 bpd of liquefied natural gas (LNG).

Among the prospective deals is a $1.4 billion project to boost daily production capacity at the Salman oil field, an extension of Abu Dhabi’s ABK field, to 130,000 bpd, from 90,000 bpd at present. The above mentioned project will be awarded to an Iranian company, Petro Iran, also, allowing Salman, which does not currently produce natural gas, to turn out 500 million cbf (14 million cubic meters) a day. ENI is in the running to sign a $1 billion deal to extract 160,000 bpd of oil from the Darkhovin field.

Several other projects, such as the $4.13 billion deal to double output capacity at the Bangestan field or to boost the output at Cheshme-Khosh, worth $500 million are still to be awarded. As already stated, Iran is trying to boost production to 5 million bpd of crude oil and 9 billion cft. The new exploration find of the Homa field, a sweet gas field with recoverable reserves of 133,100 million cubic meters and 58 million barrels, is 1/3 of Iran’s biggest sweet gas field Tabnak.

NIOC subsidiary Oil Engineering & Development Company will be responsible for Homa. Even that Homa is relatively small, the fact that it contains sweet gas, requiring no treatment before use, makes it very interesting and important for Iran’s future. The Homa discovery raises total reserves of sweet gas announced in 2000 to 576,000 million cubic meters.

“Japan is very keen to have ‘Japanese flag oil’ and after the deal with Saudi Arabia collapsed, Iran is the next target’, Kazuo Takahashi, associate professor of international studies at Hoso University stated. The Japanese government is pinning its hopes on Mohammed Khatami, visible in the increased number of official visits between the two countries in the last period.

“We sincerely hope that the energy dialogue in Teheran will further enhance the mutual understanding of the two countries and lead to expansion of business activities”, says Morihiko Tashiro, president of Tomen Japan.

Not only is Iran playing the Asian card, it has also directed its eyes on Africa. Media releases were received that Iran is looking to increase its oil supply to South Africa by up to 40,000 bpd, Kamal Kharazzi, the Iranian Foreign Minister stated last Wednesday. Iran has already a long-term contract to supply South African refineries with 135,000 bpd, representing 40% of the country’s needs.

“It depends on terms and conditions which have not been decided yet,” he said at a news conference at the end of a visit by an Iranian delegation to the country.

Not only the upstream sectors are promoted and targeted. Deputy Minister of Oil for Refining and Distribution of Oil Derivatives Mohammed Aqaei stated last week that Iran exported $2.5 billion of three oil derivatives last year.

Additionally, Iran imported 8,200 bpd crude oil in 1999 from Central Asia through Caspian Sea terminals and piping them to the Teheran and Tabriz refineries. The predicted domestic growth of 1.5 per cent per year will substantiate an increased interest in investments potential.

In addition, at the beginning of September, Iraqi-Russian cooperation grew. A Russian-Belarusian oil company, Slavneft, signed an agreement with Iraq to develop a billion-barrel oil field. The contract will take effect after the lifting of the UNSC sanctions. Slavneft’s main goal is to study the oilfield and get a jump on other companies if sanctions are lifted, a Slavneft official said. He stated that Iraq has asked to keep the name of the oilfield secret.