(Jeff Read, Oil Pro) Iranian Oil Minister Bijan Zangeneh’s top adviser, Mehdi Hosseini, said the country will need at least $150 billion to enact a comprehensive modernization of its oil sector within the next five years.
He said the needed funds will be invested on a broad range of activities, including boosting Iran’s oil production, developing LNG projects, as well as other downstream plans.
Mehdi Hosseini, adviser to Iran’s Oil Minister Bijan Namdar Zanganeh
What Iran Says It Offers Investors
Hosseini said the Islamic Republic offers potential investors easy access to free waterways, lower production costs, expert local workforce and modern infrastructure, the IRNA reported.
The news agency reported him as saying, “I believe Iran has many [oil and gas] projects that have low production costs and are highly profitable…This can help offset many of the investors’ problems that include decreasing oil prices, high project costs, low financial resources and a waning interest of banks in giving loans to companies for oil projects.”
He also reiterated comments made by several oil and government officials since the July nuclear accord was signed between the P5+1 and Iran that Iran’s return to the global oil market will not further drive down oil prices.
“New supplies from Iran may in the first place cause the prices to decrease…However, it appears that US shale production will at the same time decrease by at least 500,000 barrels per day (bpd) in 2016 as a result of high production costs and a lack of funds. It will be then that the production from Iran will fill the gap thus created,” the IRNA quoted Hosseini as saying.
Iran Plans To Boost Oil Output In 3 Phases
Hosseini was also reported as saying that Iran intends to boost its oil output in three phases:
- Phase One: A rise of 500,000 bpd after the removal of sanctions (early next year).
- Phase Two: Increasing production to 4.2 M/bpd (approximately the pre-sanctions level)
- Phase Three: Boosting production by a further 2 M/bpd to reach above 6 M/bpd