Investment in oil projects - Iran’s first priority despite falling prices
Tehran, Iran, Jan. 6
By Milad Fashtami - Trend:
Iranian MP Ali-Mohammad Ahmadi said that despite falling prices of crude oil in global markets, investment in oil projects is still the country's first priority.
Ahmadi, a member of the Planning and Budget Commission of Iranian Parliament, said that the falling prices can be considered as a good warning, Iran's IRNA News Agency reported on Jan. 6.
"We need to shift from producing crude oil to producing oil products," he said. "In comparison to vial countries, we are not investing enough money in the oil and gas projects."
The lawmaker went on to note that Iran needs to increase its production capacity in the southern and western joint fields.
Falling global oil prices forced Iran's government to decrease the oil price figure in the proposed budget bill for the next Iranian calendar year to $72 per barrel from the current figure of $100.
Iran is expected to face severe budget deficit in the current Iranian calendar year (to end March 20, 2015).
The country decided to sell its crude oil to Asia in November at the biggest discount in almost six years. The decision was made after Saudi Arabia cut prices for all grades and to all regions for November. Qatar and Iraq decreased their prices as well.
Based on Iran's budget law, the country is supposed to export 1.4 million barrels of oil (including gas condensate) per day.
Reports suggest that if the current tendency continues, the total budget deficit may soar above $2.5 billion.
The Iranian President Hassan Rouhani also predicted that Iran's total oil revenues will be 30 percent less than expected.
Experts believe that due to the continuing fall of oil prices in global markets, a budget deficit in the next calendar year is also inevitable.