Page 4 - MEOG Week 41 2021

MEOG COMMENTARY MEOG

Iran plans major

investments in oil, gas

Amid buoyant energy market sentiment, the Islamic Republic is seeking
novel ways to increase financing to develop its oil and gas fields.

IRAN WHILE both the US and Iran have said that production capabilities at major oil and gas
talks will soon resume in Vienna as parties work projects.
towards a new nuclear pact, Tehran maintains its “There are many construction projects in the
WHAT: customary bullishness about expanding its role country which have been left unfinished for sev-
Iran is seeking to improve in the global energy sector. Long constrained eral years and we would try to secure funds for
the attractiveness of by a lack of foreign direct investment (FDI), the the projects through bartering oil and conden-
investing in the country’s government has used domestic companies to sates,” Owji was quoted as saying by state media.
oil sector, offering barter carry out projects it had hoped would be devel- Noting that demand will “increase day by
as a means of payment oped by IOC partners. day”, he said: “Given the world’s need for energy
as US sanctions continue However, despite encouraging progress, mas- and using the power and capacity of the foreign
to hold up international sive investments will be required to maintain and policy apparatus, the sale of oil under bartering
involvement. expand output over the coming decade and Iran contracts is on our agenda. Any investor who
is working on ways to sidestep sanctions. wants to invest in the downstream and upstream
WHY: Even if a deal is signed, most IOCs will be sectors of oil, in return for the measures taken,
Tehran estimates that it hesitant about returning to the country, with can receive oil and gas condensate in return.”
requires $145bn to build many having burnt their fingers when the Joint Much of any such investment is likely to be
out its oil sector, with Comprehensive Plan of Action (JCPOA) briefly diverted towards the West Karoun cluster in
another $22bn needed to provided a path towards collaboration on some Khuzestan Province, which includes several
maintain gas production of the world’s most intriguing fields, until the US large oilfields that straddle the Iran-Iraq border,
levels. withdrew from the deal. namely Azadegan, Yaran, Yadavaran and Dark-
hoein, with the first three divided into north and
WHAT NEXT: Oil south projects. The block holds an estimated
Despite its best efforts, Perhaps cognisant of the challenges relating 67bn barrels of oil in place (OIP).
attracting investment will to a long-term financial arrangement with the Last month, the minister said that Iran
depend on the success Islamic Republic, Iran’s Ministry of Petroleum needed to raise $145bn from domestic and inter-
of talks in Vienna and (MoP) this week said that it intends to offer oil national investors to carry out planned work to
without a new ‘nuclear and condensates in a barter arrangement with expand the oil sector over the next four to eight
deal’ Iran will be left with would-be investors in the country’s energy years. At the time, Owji noted the importance
few options. sector. of Chinese investment and met with representa-
Oil Minister Javad Owji told a meeting of the tives of Sinopec in Tehran.
Industries and Mines Committee of the Islamic In March, the two countries signed a 25-year
Consultative Assembly that efforts would be strategic accord covering bilateral trade, energy,
made to use barter as a means of attracting infrastructure and military co-operation. Oil
investment into projects to develop and expand and gas will play a major role in the deal, which

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