With an investment plan worth $200 billion, Iran’s oil industry is the most attractive market for international investors, a senior energy official said on Tuesday.
Hopes of a final agreement in nuclear talks with Iran are raising international companies’ interest in the country for a business bonanza.
Mehdi Hosseini, in charge of revising Iran’s oil investment contracts, outlined the relative advantage of oil recovery in Iran, saying it is highly profitable even at times of price slumps.
“The cost of a barrel of oil production is close to $40-50 in some countries but this rate is very, very low in Iran,” the Mehr news agency quoted him as saying.
Hosseini said extracting oil and gas from specific geologic formations such as shale gas, shale oil, oil sands and heavy oils costs more exorbitantly, making recovery not economically viable unless prices rise above $80.
“Investment in Iran’s oil and gas projects even during further price declines has very high economic viability.”
The official said Iran had made investments more attractive by modifying its energy contract formulas and increasing profitability.
“Iran is after signing win-win contracts with international companies in case the sanctions are voided,” he said.
“According to our estimates, investment opportunities in Iran’s oil and gas industries are worth about $200 billion,” Hosseini added.
He said the London conference on oil investments in Iran will be held soon in which the mechanisms of drilling, development and enhancing recovery of fields as well as renovation of oil facilities will be outlined to foreign companies.
“In the new oil contracts, Iran is not merely after financial resources and foreign investments. Transfer of technology and management is the most important objective,” Hosseini said.
Iran plans to raise recovery by 500,000 barrels per day (bpd) within two months and 1 million bpd after six months once the sanctions are lifted.
Iran formerly signed buy-back deals with international firms under which the companies would recoup their spending and fees from the production when a field became operational.
Officials say new contracts would allow companies to enter into partnership with local firms which would provide services, build pipelines and drill fields.