Iran's oil industry: sky is the limit

Business Materials 24 January 2017 11:27 (UTC +04:00)

By Fereydoun Barkeshli for Trend

After the successful resolution of outstanding issues between Iran and the six major powers in January 2016, very few could believe that the country's oil industry could embark upon ambitious plans to bring the country's oil and gas industry back on track.

NIOC (National Iranian Oil Company) was quick to react towards regaining its lost market share in international oil trade and move towards 4 million barrels a day of crude oil production in six months. However, the next giant phase began to materialize with the final ratification and approval of Iran's "IPC" model.

This giant steps indicated that oil, gas and petrochemical remains the country's engine of growth and leading industry igniting the first ever huge foreign and domestic investment in Iran.

It is needless to remind that Iran is the last remaining frontier for international trade and business.

Iran is eligible and capable to absorb some $370-380 billions within the next decade. For the country's oil industry, all the infrastructure is already in place. In a decade of less, Iran would be able to join the "Trillion dollar club" (unofficial classification of the world's major economies with a gross domestic product (nominal GDP) of more than USD 2 trillion per year.)

Having said that, Iran's NIOC needs to internationalize its approach and policies and upon the successful implementation of contracts both domestic and foreign, begins to move to international markets in quest for establishing its rightful place in global oil industry.

The US imposed its first sanctions basically on Iran's oil industry just three months after the Islamic Revolution. This has remained in place for the last 37 years. In fact Iran is not the only country which is a victim of the U.S.oil embargo.

The imposed sanctions were felt in other countries as well - Venezuela, Russia, Libya, Iraq and Nigeria. For years the US administrations, one after another, used sanctions as a tool for managing the oil supply.

No doubt the policy of international engagement in the oil industry is one way to shield the country from outside pressures.

Based on a study undertaken by Vienna Energy Research Group, a Vienna-based energy and OPEC research group, western countries lost over $280 billions in lost business opportunities in Iran. The European Union is therefore currently working hard to compensate its economic and business losses in Iran.

When it comes to business, sky is the limit. Iran's economy and international partnership posses a huge and vast potentials.

Fereydoun Barkeshli is president of Vienna Energy Research Group in Austria and the National Iranian Oil Company’s former general manager for OPEC and international affairs.