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Iran’s oil ministry warns contractors about budget deficit

Business Materials 28 September 2013 14:07 (UTC +04:00)

Azerbaijan, Baku, Sep.28/ Trend F.Karimov/

The Iranian oil ministry has warned all the domestic contractors about budget deficit, saying the contractors should secure necessary funds not relying on the ministry's resources, the Mehr News Agency reported.

At present, the contractors are heavily dependent on the ministry's financial help, Oil Minister Bijan Namdar Zanganeh has said.

Those companies, which are interested in implementing oil and gas projects, should first provide sufficient capital and then embark on signing deals with the ministry, he explained.

The ministry will just provide money for prioritized plans, including for five phases of the South Pars gas field, he noted.

Iran needs $250-300 million to complete the development of five phases of the South Pars gas field, ISNA quoted deputy director of Iranian Offshore Engineering and Construction Company Amir Saei Najafi as saying.

Producing 180 million cubic meters of gas from the five phases requires $250-300 million investment, he said.

This is while that no investment has been made for the past two years in the phases 15 and 16, and no investment has been made in the phases 17 and 18 for the past 11 months, he added.

Zanganeh has issued orders for the development of the South Pars gas field on the first day of his work. He said the priority will be put on completing the development of the phases 12, 15, 16, 17, and 18.

In March 2009, Ex-president Mahmoud Ahmadinejad inaugurated the incomplete Phases 9 and 10.

So far, $46 billion has been invested in phases 11-24 of the gas field, but no single phase has come on stream yet. This is while that the total investment in Phases 11 to 24 of South Pars, a giant joint gas field with Qatar which holds around half of Iran's total gas reserves, had been estimated to be less than $40 billion.

The five phases, which have been prioritized by the Iranian oil minister, have been developed more than other phases.

Development plan of the Phase 12 started 61 months ago and has progressed by 92 percent. Development plan of the phases 15 and 16 started 73 months ago and has progressed by 92 percent. Development plan of the phases 17 and 18 started 73 months ago and has progressed by 82 percent.

Development plans of other phases started 38 months ago and have progressed by 50-64 percent.

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