Iranian deputy oil minister denies bankruptcy of state gas company

Oil&Gas Materials 19 November 2013 19:08 (UTC +04:00)

Baku, Azerbaijan, Nov. 19

By Fatih Karimov - Trend: The Iranian deputy oil minister Hamidreza Araqi has denied media reports about the bankruptcy of the National Iranian Gas Company (NIGC), the ISNA reported on November 19.

Araqi, who is also the managing director of the NIGC, said that the company needs over $6 billion in the next Iranian calendar year, which starts on March 21, 2014, to complete underway development plans.

Although the company may face problems at some periods of time, but bankruptcy is not an issue of concern, he added. He put the company's annual turnover at 300 trillion rials (about $12 billion based on the US official exchange rate of 24,900 rials).

The Mehr News Agency reported on November 16 that the National Iranian Gas Company has gone bankrupt.

The NIGC has over 100 trillion rials (about $4 billion based on the U.S. official exchange rate of 24,900 rials) in debt, the report added.

The NIGC managing director affirmed the company's bankruptcy, saying that the improper implementation of the subsidy reform plan has grappled energy-related organizations of the country with many problems.

Iran's next year budget bill has envisioned new mechanisms for resolving financial problems of the company. The next Iranian solar year will start on March 21, 2014.

Araqi has said that the country's gas industry is facing with severe budget deficit.

On September 6, Araqi was appointed to the post of managing director of the National Iranian Gas Company. Araqi replaced Javad Oji.

Iran, which sits on the world's second largest natural gas reserves after Russia, has been trying to enhance its gas production by increasing foreign and domestic investment, especially in its South Pars gas field.

According to Iran's Oil Ministry, the country's proved natural gas reserves are about 1,045.7 trillion cubic feet (29.61 trillion cubic meters) or about 15.8 percent of world's total reserves.