Pointing to the decline in the investment in the development of oil and gas fields due to the drop in crude oil prices, Chairman of the Oil Contracts Restructuring Committee Seyed Mehdi Hosseini said that, “by decreasing oil prices, development and productions of oil in certain fields will have not economic justification.”
Noting that currently oil production from unconventional resources is not feasible or profitable, Hosseini asserted that, “moreover, the extraction of oil in the deep waters of Brazil, the North Sea, the Gulf of Mexico, West Africa, and parts of Australia is not economically justified considering current oil prices."
The official said that by the continuous drop in crude oil prices, new investments in the development of oil and gas fields will stop, underlining that, “however, Iran is still one of the target countries for foreign investors in the oil and gas industry worldwide.”
On the consequences of the arrival of one million barrels of Iran’s oil to the world market, Hosseini explained that, “for several occasions, countries like Kuwait, Iraq, and Libya had been removed from the oil market; nevertheless, they all managed to return to the market with the support of OPEC members.”
Reminding that without the cooperation of other countries, Iran’s return to the market will cause even further decline in prices, he asserted that, “Iran plans to enter the market by exploiting energy diplomacy in a more efficient way.”
The official further stated that Iran is following the implementation of two scenarios in order to rejoin the world oil market continuing that, “in the first scenario we deal with big oil and gas companies so that they will invest in Iran’s industry.”
Noting that the increase in Iran’s oil production by partnership with major oil companies will lead to increased security in the demand for the country’s crude oil over the long term, this energy economist added that, “in the second step, negotiations with and increasing the amount of sales to old customers must be among the priorities of the Iran’s oil industry.”
Referring to the start of talks between the National Iranian Oil Company and traditional customers of Iran’s oil, he asserted that, “part of the increase in production and exports of crude oil will be sent to these customers.”
Hosseini also emphasized the need for more interaction between Iran and OPEC, stating that, “Iran possesses friends among OPEC countries and they can support Iran in its return to the oil market in the post-sanction era.”
“The third scenario would be sharing similar views with majority of OPEC member and being in harmony with them; forming a majority with OPEC countries will pave the way for Iran’s return to the oil market during the Post-sanction era,” Hosseini concluded.
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