Iran's Oil Industry Seeking $145 Billion Investment for Coming Decade

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Iran's oil industry will need an investment of around $145 billion during the next decade, according to Hamdollah Mohammadnejad, the country's Deputy Oil Minister. The Minister was speaking at the opening ceremony of the National Stakeholder System Development Congress in the Oil Industry conference in Teheran. An estimated $14 billion is required annually for the next ten years to position Iran as the leading petrochemical producer in the region. This will also spearhead Iran's becoming the second-largest gas producer of the OPEC countries and the third largest gas producer globally. Mohammadnejad has invited greater participation from the private sector in boosting the domestic oil industry, while also calling for an investment of around $7 billion annually to implement planned projects.

Turkey's Energy Minister Hilmi Guler, on a recent visit to Iran, announced that his country will be investing about $12 billion in Iran based on a memorandum of understanding signed between the nations. Investment from Turkey would be channeled into developing offshore gas fields present in southern Iran. In addition to this, a 1,150-mile gas pipeline will also be established between Assalouyeh, a gas field in southern Iran, and the Turkish border.

Iran has the second-largest reserves of oil and gas in the world, but depends heavily on other developed countries for financing projects. Iran is facing stiff U.S. sanctions for pursuing its nuclear program, which in turn has slowed down the influx of international funds into the country. Most countries have avoided signing major deals but continue to maintain a presence by executing smaller projects.

Iran is reported to have around 138 billion barrels of oil reserves and produces about 4.2 million barrel per day. A number of projects are currently under way. Iranian firms are developing the country's largest onshore oil field at Azadegan with reserves of 42 million barrels of crude oil. Russia's state-run gas company Gazprom (OTC:OGZPY) (Moscow, Russia) has a significant presence in Iran after the two countries signed agreements for developing the latter's oil and gas fields. Gazprom is also likely to be involved in other ongoing and proposed projects such as construction of refineries and the $12 billion MedStream offshore pipeline project.

Recently, two major deals have been signed. The state-owned National Iranian Gas Export Company (NIGEC) (Teheran) and Switzerland's Elektrizitaetsgesellschaft Laufenburg AG (Laufenburg) have signed a 25-year contract to pump about 5.5 billion cubic meters of gas every year. In yet another deal, Germany's SPG Steiner-Prematechnik-Gastec GmbH (Siegen, Germany) has signed a $147 million contract to supply equipment for three gas conversion plants in Iran.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.