Iran needs to invest at least $145 billion in its oil industry within the next 10 years, the country’s Deputy Oil Minister Hamdullah Muhammad Nejad said during an oil conference in Tehran, according to Iran’s Fars News Agency.
Muhammad Nejad assessed that an annual investment of $14 billion in the next decade would turn the country into the "region’s first choice for value-added petrochemicals, OPEC’s second producer and the world’s third gas producer."
The deputy oil minister, who spoke at the first oil industry’s National Stakeholder System Development Congress, invited the domestic private sector to increase its share as much as $7 billion a year to reach the goals set.
Meanwhile, Turkey’s Energy Minister Hilmi Guler, who is currently conducting a visit to Tehran, said his country might make a $12-billion investment in Iran on the basis of an agreement signed between the two countries.
The money would be spent on developing Iran’s offshore gas fields in southern Iran and construction of a 1,120-mile gas pipeline from Assalouyeh, a gas field in southern Iran, to the Turkish border.
It is estimated that Iran is sitting on the world’s second largest reserves of both oil and gas.
Iran has frequently insisted that the American sanctions against it were inefficient, saying it could rely on finding Asian partners instead.
Last July, only a few days after French oil giant Total withdrew from its planned multi-billion dollar gas investment project in Iran, Russia’s Gasprom stepped in.
Gasprom’s chief executive, Alexei Miller, met with Iranian President Mahmoud Ahmadi Nejad and went on to sign an agreement for developing Iranian oil and gas fields.
Iran, according to the agreement, has offered Gasprom an extended package for the development of oil and gas fields; construction of refineries; transferof oil from the Caspian Sea to the Sea of Oman; development of Iran’s NorthAzadegan oil field; exchange of technology and experience and the possible participation of Gasprom in the planned pipeline between Iran, India and Pakistan.
The accord also included the future formation of a joint company between the two countries for cooperation in oil and gas.
Azadegan is Iran’s biggest onshore oil field with an estimated 42 billion barrels of crude oil in place. Iranian firms began working at the field last February after Japan’s Inpex quit the project.
"After Total’s announcement that because of political risk they do not want to commit themselves to the South Pars multi-billion dollar project, it was natural that Iran would continue and expedite its current negotiations to use other companies," Dr. Manuchehr Takin of the U.K.-based Center for Global Energy Studies, told The Media Line.
The South Pars field in the Gulf has around 500 trillion cubic feet of gas, which accounts for about eight percent of the world’s gas reserves.
Takin was, however, skeptical regarding whether or not it was the American pressure on European companies that made Total withdraw from the project.
"I think it is more within Total’s shareholders and board of directors, who have looked at every aspect, and decided not to take too much political risk in their portfolio,” Takin said.
"However, I do agree that one cannot help think of the pressure from the U.S. Department of Treasury, which had been directly talking to managements of banks and big companies, twisting their arms not to get involved with Iran."
Some European countries have recently voiced interest in investment in Iran’s energy sector after a gas deal was signed between Iran and Switzerland, regardless of U.S. sanctions.
The National Iranian Gas Export Company and Switzerland’s Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March for the delivery of 5.5 billion cubic meters of gas per year, Fars News Agency reported.
Earlier this month, Germany’s Steiner Prematechnik Gastec, signed a $147m deal to build equipment for three gas conversion plants in Iran.