Iranian Oil Minister Bijan Namdar Zanganeh said on Tuesday that $200 billion investment is required to develop the country's oil industry. "Internal resources are not enough to meet such need, therefore we should attract foreign investment", Zanganeh said in a press conference.
IPC (the Integrated Petroleum Contract), the new model of Iran's oil contracts, has been drawn up to materialize this objective, the minister noted.
In November 2015, Iran introduced IPC, which will replace buy-back contracts. It is expected to offer more flexible terms on oil price fluctuations and investment risks to make the sector more financially attractive.
The new contracts, which include those in the upstream exploration and development sectors, are expected to attract more than $40 billion in foreign investment.
According to Zanganeh, of the $200 billion investment needed for oil industry, $130 billion is needed in the upstream sector and $70 billion in the downstream sector, including petrochemical industries.
Iran, once OPEC's second-largest producer after Saudi Arabia, is seeking to clear space for its gradual return to the market following the lifting of sanctions.
Western sanctions had cut Iran's oil output to 2.7 million barrels per day (bpd) from 3.9 million bpd and the country's oil exports to around 1.1 million bpd from 2.5 million bpd.
Zanganeh has vowed to reclaim the country's share of global crude oil exports as sanctions are being lifted.
The July 2015 nuclear deal, which removes sanctions against Iran, went into effect on January 16.
'All South Pars phases to be inaugurated by summer 2017'
Elsewhere in his remarks, Zanganeh said all phases of the South Pars gas field, except for half of the phase 14, are planned to be inaugurated by the end of the term of the sitting government in summer of 2017.
South Pars gas field, which Iran shares with Qatar in the Persian Gulf, is estimated to contain colossal amounts of natural gas, accounting for nearly eight percent of the world's gas reserves and approximately 18 billion barrels of gas condensates.
Zanganeh said Iran needs $30 billion to put all phases of the gas field into operation.
Also, in a ceremony inaugurating South Pars' phases 15 and 16 on January 11, the minister said by putting all phases of the field into operation, the country's gas output will reach nearly 700 million cubic meters per day.
Completing all phases of the South Pars will bring an annual income of $100 billion for the country, Zanganeh stated.
'West Karoun oilfields' output to reach 300,000 bpd by summer 2017'
Zanganeh also announced that oil production from the West Karoun oilfields are planned to reach 300,000 bpd by the end of the term of the current government.
Iran shares five oilfields with Iraq at the western part Karoun in Khuzestan province.
Development of these oilfields is one of the priorities of the Oil Ministry.
Iran plans to attract foreign investment and technology for development of its oil and gas fields.
'Foreign companies with better technology are prioritized'
For development of its oil and gas fields, Iran attaches priority to those foreign companies that enjoy better technology and also operational experiences, Zanganeh told the Tehran Times.
Source: Global Oil and Gas
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