Baku, Azerbaijan, May 4
By Dalga Khatinoglu – Trend:
If the newly designed oil contract model, called the Iran Petroleum Contract (IPC), is commenced, it will attract some $80 billion of investment in oil and gas sector in two years, Iran’s Petroleum Minister Bijan Namdar Zanganeh said.
Speaking to IRIB TV May 4, he added that $50 billion of the attracted investment would be spent for purchasing domestic-made equipment and paying salary to the Iranian workforce.
Zanganeh said a new generation of industrial companies and contractors would emerge after commencing the IPC.
Iran presented the IPC in November 2015, offering 49 upstream oil and gas projects for foreigners, but the contract model faced strong criticism of hardliners and was revised several times. Now, it is being discussed at the Supreme National Security Council to be approved.
Zanganeh added that $80 billion investment in oil and gas projects would create 100,000 jobs. He didn’t mention what amount of the planned investment would be foreign funds, but he had previously said that about $20-$30 billion worth of foreign investments are expected to be attracted based on the IPC.
Zanganeh also said that some $40 billion investment is needed for petrochemical projects by 2021.
Homayoun Falakshahi, a senior Iran analyst at Wood Mackenzie, told Trend Apr. 28, “We estimate that National Iranian Oil Company (NIOC) would need $115 billion over 20 years to develop the 50 oil and gas fields it has shortlisted for investment under the IPC.”
“Despite much interest from international oil companies, it is unlikely that all of these projects will be awarded, so the actual level of investment will be a lot less. Because of ongoing US sanctions, international banks continue to be extremely cautious. This will make it difficult for Iran to attract the required capital, at least for now,” he said.
Wood Mackenzie estimated that Iran’s crude output would increase from the current 3.899 million barrels per day (mb/d) to 4.29 mb/d in 2022.
Iran’s own projection is production of 4.7 mb/d of crude oil by 2022.