Iran hopes to ramp up production quickly
Iran hopes to return its crude oil exports to pre-sanctions levels within three months once a deal with regarding the country’s nuclear program is reached and sanctions are lifted, said Iran’s Deputy Oil Minister Rokneddin Javadi.
“We hope we can come back to the export levels that we had before the sanctions,” Javadi, who is also the managing director of the National Iranian Oil Company, told Reuters. He said Iran thinks it is possible to reach these levels in three to six months.
Iran trying to attract foreign investment
Iran will need substantial investment in order to revitalize an energy sector that was cut off from investment by sanctions. Javadi said Iran plans to hold a conference in London in September to attract investors for its exploration and production sector.
“From the government’s standpoint, there is no limitation for oil investment by the Americans in Iran,” Iran’s Deputy Minister of Petroleum Amir Hossein Zamaninia said, Iranian Press TV reported.
Zamaninia indicated that there has been strong interest from both European and American companies. “Over the past couple of months, not one or two companies, but several American entities have announced readiness to invest and participate in Iran’s oil industry projects if sanctions are annulled.”
Managing Director of Iran’s Pars Oil Company Hossein Vafaee said indirect talks have already begun with Royal Dutch Shell (ticker: RDSA). Mehdi Hosseini, head of a team set up by the Ministry of Petroleum (MoP) to revise the current format of Iran’s oil contracts, also said companies from Russia and China were showing interest.
The new format of Iran’s oil contracts – named Iran Petroleum Contracts (IPC) – will be a modification of the traditional buy-back risk service contracts and has been specifically designed to increase the attractiveness of Iranian oil projects for foreign investors, according to Press TV.
American companies will have to compete with Iranian private sector
“The pattern for partnership and investment of American companies in Iran’s oil and gas industry has to be based on the trade package which has been earmarked to the Iranian private sector,” said Zamaninia. For any venture in Iran, U.S. firms have to compete with Iranian companies in the private sector, he added.
An influx of foreign companies could make things difficult for Iranian companies, Vafaee said. “If sanctions are removed, many rivals will enter the Iranian market and this will make tough conditions for us,” he said.
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