By: Maryam Azish

Iran eying unprecedented boom in oil industry

News ID: 4086008 -
TEHRAN, Sep. 15 (MNA) – According to Iranian Minister of Petroleum Bijan Zangeneh, Iran will need 200 billion dollars for financing oil and gas projects under the 6th development plan of the country.

Luring $100 billion in foreign investment to increase Iran's oil industry is among the oil minister's major tasks.

Attracting foreign investment and technology is a priority for the Islamic Iran in the oil industry, whether in shared fields or for increasing the production of oil at fields that are already operational.

According to Iranian Minister of Petroleum Bijan Zangeneh, Iran will need 200 billion dollars for financing oil and gas projects under the 6th development plan of the country.

Zangeneh said $130 billion dollars will be invested in upstream projects and the rest will be allotted to developing downstream projects in the industry.

He said over 70% of the amount can be supplied by tapping foreign resources, adding, "We need foreign investments in order to reach the envisaged 6 million barrels per day of crude oil and condensate output under the 6th development plan of the country."

The official also said that arrangements for holding a tender for developing Azadegan Oilfield.

Meanwhile, Iranian Parliament Speaker Ali Larijani also has announced the Ministry of Petroleum is seeking new investments in oil industry in a push to enhance recovery of oil from reserves.

Larijani underlined the significance of the sector in the country's economy, adding any development in the industry affects other industries in Iran.

He said development of oil and gas sector is a priority for Iran, adding enhancing oil recovery from reserves is high on agenda in the industry. 

Unprecedented Boom

Amir Hossein Zamaninia, deputy petroleum minister for international affairs and trading said Iran's oil industry must expect an unprecedented boom given the eagerness of foreign companies to develop projects in the Middle Eastern oil-rich country and ongoing talks with them.

"My estimation is that within the next two years, the industry will witness an unprecedented boom," he said.

The official said Iran is in a good state given the political conditions and ongoing negotiations with foreign companies to develop oil/gas projects.

"Although the industry is over a century old in Iran, production is not commensurate with the size of our reserves which highlights the significance of new investments in the industry," Zamaninia added.

He said attraction of finances is a serious competition in the world because available resources are limited while demands are high.

"Iran's oil industry is currently in its best possible state for attraction of finances; major companies are keen on investing in Iran and good negotiations are under way with them. I keep my fingers crossed that these talks will reach fruition."

"Talks are under way with foreign companies to ensure their return to Iran and many of the companies have submitted to NIOC their master development plans (MDP) for developing projects in Iran,"

Provided that the talks do progress in all sectors as intended by NIOC, their financial dimensions will not take too long given the fact that the company has already signed a deal with a consortium of Total, CNPCI and Petropars for developing phase 11 of the supergiant South Pars Gas Field, he added.

"I cannot say which company will be next to Total and CNPCI for signing deals with NIOC," he added, saying, however, that talks with Russian companies are going on well and will hopefully conclude within the next 2 or 3 months, Shana wrote.

New Oil, Gas Contracts

After no developments last year, Zanganeh said Iran is concluding the financial aspects of a handful of deals with foreign oil and gas companies.

 Zanganeh said the government was in serious talks with both domestic and international companies on signing off on as many as 10 oil and natural gas deals by next March, UPI reported.

German energy company Wintershall is among those considering developments for as many as three projects in Iran. "This is while last year this time we had not made such progress in the talks," Zanganeh said.

The German company said in response to emailed questions that it was closely following developments in the region.

In January, the Iranian Oil Ministry published a list of 29 foreign oil and gas companies eligible to take part in any upcoming tenders for exploration and production.

Royal Dutch Shell was among the first to buy oil from Iran after verification of a multilateral nuclear deal. Later, French company Total, China National Petroleum Corp. and Petropars Ltd., a subsidiary of the state-run National Iranian Oil Company, signed a 20-year contract to develop parts of the giant South Pars natural gas field in the Persian Gulf.

"In order to prepare for possible further activities in the region, Wintershall signed a memorandum of understanding last year with National Iranian Oil Company about a potential future cooperation," it said. "Details of the memorandum are subject to confidentiality."

Russia is also in negotiations to buy around 100,000 barrels of oil per day from Iran. Deputy oil minister for international affairs in Iran said the contract with Russia will enter into force as early as September.

Foreign Investment

Recently, Zamani-Nia said a number of foreign companies have voiced their willingness to help Iran implement its oil project.

Zamani-Nia said that given the enthusiasm shown by foreign companies to be involved in Iran's oil sector, the industry will experience a great boom within the next two years.

Pointing to the ongoing negotiations with directors of foreign oil companies, he added, "There is intense competition across the world to attract foreign investment, but the assets are limited while competition for absorbing them is high."

In relevant remarks in late October, Iranian Petrochemical Commercial Company (IPCC) Executive Director Mehdi Sharifi Niknafs said Iranian petrochemical facilities are ready to present their products to Germany, Britain and Europe.

According to a directive by the Headquarters of Economy of Resistance, Iran National Oil Company should settle 10 contracts by mid-March 2018.

Noting that the first agreement with Total, CNPCI and Petropars has been signed to develop the Phase 11 of South Pars Joint Gas Field, Zamani-Nia said that if technical talks are conducted properly, negotiations on other sections will not take long.

Earlier this month, Zanganeh was confirmed for a second term in office as the oil minister for a country that has the third largest oil reserves in the Organization of Petroleum Exporting Countries.

Iran has seen some economic doors open in response to a multilateral agreement that brought sanctions relief in exchange for modification on its nuclear program.

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