Iran sees 25,000 bpd output from oil field by Jan

TEHRAN (Reuters) - Iran expects to produce 25,000 barrels per day (bpd) from its huge Azadegan oil field by around mid-January, contributing to gradually rising output capacity in the OPEC state, the oil minister said on Sunday.

Gholamhossein Nozari, the caretaker minister who will take on the role permanently if he wins parliament's backing this month, also said U.S. and other sanctions on Iran were not hurting the energy industry in the No. 2 OPEC crude producer.

Iran previously said it expected the first six wells to produce 20,000 bpd in the Azadegan field on Iran's border with Iraq. The field was to have been developed by a Japanese firm until talks collapsed in 2006.

"It seems, God willing, we can produce the first 25,000 (bpd) in the (Iranian) month of Day" which ends on Jan. 20, Nozari told a news conference to mark the signing of a gas deal.

Azadegan, located in the southwestern province of Khuzestan, is Iran's biggest oilfield. In-place reserves have been put at 26 billion barrels.

Japan's INPEX Holdings Inc. had been due to develop the field but talks collapsed in 2006, with the Japanese firm citing spiralling investment costs. INPEX retains a 10 percent stake.

India's Essar Group, which has invested in a steel plant in the United States, said in March it was in talks with Iran about developing the field.

But a U.S. governor said on Wednesday he had received a letter in October from the Indian firm saying it would not make any investment in the energy sector in Iran to avoid violating U.S. sanctions that penalise firms who make such investments.

As well as U.S. measures, the U.N. Security Council has slapped limited sanctions on Iran because of Tehran's refusal to halt sensitive nuclear work. But Iranian officials insist sanctions are not hurting the country.