Iran loses $4B per month over delaying oil contracts

Business Materials 12 July 2016 08:21 (UTC +04:00)

Baku, Azerbaijan, July 12

By Emil Ilgar – Trend:

Iran’s monthly lucrum cessans (an actual loss) because of delaying the implementation of new oil and gas contracts, called Iran Petroleum contract, reached $4 billion, Mehdi Hosseini, head of Iranian Ministry of Petroleum’s Oil Contracts Revision Committee said July 10, Shana reported.

He said that the country's proved oil reserves stand at 500-600 billion barrels, but the oil recovery index is around 25 percent.

It means Iran in natural conditions can extract only 25 percent of reserves and for further extraction it needs to enhance the recovery rate.

According to the OPEC's annual report, Iran possesses 158 billion recoverable proved oil reserves, a figure that indicate the current recovery rate in Iran stands at around 25 percent.

Iran would sign the first new model oil contract in 3-4 months, Amir Hossein Zamaninia, deputy petroleum minister for international and commerce affairs, said July 10.

"Iran's priority is to develop the joint fields, as well as enhance the recovery index", Shaha quoted Zamaninia as saying during a press conference in Tehran.

In 2015, the Iranian Oil Ministry unveiled its new oil contracts called Iran Petroleum Contracts (IPCs), aimed at luring foreign fund and technology.

He added that for the next five years, developing up/mid/downstream projects, worth $185 billion have been projected, while it is expected to attract $40-$50 billion (foreign) investment for developing these projects.

Currently, Iran produces 735 million cubic meters per day (mcm/d) of raw gas as well as 3.5 million barrels per day (mb/d) of crude oil.

Iran has planned to increase these figures to 1.1 mcm/d and 5 mb/d by 2021.