* Tehran, Baghad both target 4 million barrels a day
* Iran says expects others to make way for production
* Wednesday meeting to keep OPEC output cap at 30 mln bpd
By Alex Lawler and Peg Mackey
VIENNA, Dec 3 Iran and Iraq on Tuesday put OPEC
on notice of substantial oil output increases to come, saying
others in the producer cartel will need to give way to make room
Speaking ahead of an OPEC meeting, oil ministers for the two
countries -- rivals as the group's second and third biggest
producers after Saudi Arabia -- said they were targeting 4
million barrels a day, growth of about one million bpd apiece.
Neither country can expect to reach those goals any time
soon, but both are keen to prepare the ground for special
treatment should the Organization of the Petroleum Exporting
Countries need next year to negotiate a deal to curb supplies to
keep oil prices above its favoured $100 a barrel.
Neither can raise output quickly enough to make waves at
Wednesday's OPEC meeting - ministers confidently predict no
change in the group's production cap of 30 million bpd.
"This looks like jockeying for position ahead of a potential
need for a need for a structured output agreement in 2014," said
Bill Farren-Price of consultancy Petroleum Policy Intelligence.
A senior Gulf delegate said next June's meeting might
require OPEC to consider supply cuts. More oil from Iran and
Iraq, a recovery in output from fellow OPEC member Libya and
fast-rising U.S. shale oil could tip the balance.
"Maybe we'll talk about cuts in six months from now," he
Iranian Oil Minister Bijan Zanganeh said Iran will take six
months after sanctions are lifted to return to full oil output
capacity of 4 million bpd.
Zanganeh was reappointed by Iran's new reformist President
Hassan Rouhani and will be responsible for rebuilding Iran's oil
industry should Washington and Brussels lift sanctions in six
months as part of a deal on Iran's nuclear programme.
"In Zanganeh's favour, he's the one oil minister in Iran's
post-revolutionary period to have a positive impact on
increasing production capacity and took it above 4 million for a
period of time. He has form," said Farren-Price.
Iranian oilfields had not suffered technically as a result
of the sanctions which have seen Iranian oil output fall by a
million barrels per day to less than three million bpd, Zanganeh
Asked whether he expected others in OPEC to make room for
Iran's return he said: "This is the tradition. When a member
country after some difficulties returns to the market, other
members accept to make room for them."
"The member countries who produced more during the past
years. I think they will understand they should make room for
Both Saudi Arabia and Iraq have raised output in the past
two years since sanctions were imposed on Tehran but Baghdad
will argue that it should be a special case given many years
lost to sanctions and war under former President Saddam Hussein.
CAUTIOUS IRAN BUDGET
Zanganeh said he hoped Iran would lift exports in 2014 from
current levels of around 1.2 million bpd.
But Tehran is not betting on making much headway next year.
Rouhani's first draft budget for 2014 estimates oil exports
at 1.1 million bpd, Iranian oil ministry website Shana said,
indicating Tehran sees no major recovery in sales next year.
Rouhani is scheduled to present the draft budget for the
next Iranian year - beginning March 21 - to parliament on
Iraq reckons it can hit 4 million bpd next year in what
would be the country's biggest annual oil supply increase since
the fall of Saddam a decade ago.
Iraqi Oil Minister Abdul Kareem Luaibi said Baghdad planned
to lift exports to 3.4 million barrels daily, including 400,000
bpd from the semi-autonomous Kurdistan regional government KRG).
With domestic consumption running at about 700,000 bpd that
would take total Iraqi supply above 4 million bpd, up from just
below 3 million bpd now.
That scale of such a production increase would raise the
pressure on others in OPEC, chiefly Saudi Arabia, to curb supply
to prevent oil prices falling.
But industry experts and oil company executives working on
Iraqi oilfield development say a 4 million bpd output target
looks very optimistic for next year because of infrastructure
constraints and security issues.
"Those Iraqi estimates are over optimistic. I don't think
their production can hit that," said Cuneyt Kazokoglu of energy
consultancy FGE. "Neither can KRG exports hit 400,000 bpd. If
they really push it perhaps they could do 300,000 bpd."
"Iraq has serially failed to meet its expansion targets in
recent years and this latest pronouncement stretches
credibility," said Farren-Price.
(additional reporting by Amena Bakr and Georgina Prodhan,
editing Richard Mably and William Hardy)