Int'l Firms Willing to Invest in Energy Projects

Int'l Firms Willing to Invest in Energy ProjectsInt'l Firms Willing to Invest in Energy Projects

Major international oil companies are awaiting the lifting of sanctions against Iran to commence cooperation in oil and gas sector, Oil Minister Bijan Namdar Zanganeh was quoted by ISNA as saying Friday.

Iran is home to some of the world's largest oil and gas reserves but US energy firms have been barred by Washington from undertaking projects in Iran for nearly two decades. Nevertheless, western companies are keen to go back into Iran's lucrative energy sector once sanctions are lifted, according to Iranian officials.

Development of several phases of South Pars gas field is accelerating, according to Zanganeh. Development of Phases 15 and 16 is at final stages, while Phase 17 has partly gone into operation. "For development of all phases we require further assistance of the parliament and the government," he added.

South Pars is the world's largest gas field, shared between Iran and Qatar, covering an area of 3,700 square kilometers of Iran's territorial waters in the Persian Gulf.  It has a capacity of producing 820 million cubic meters (mcm) and 1 mcm of gas and gas condensates per day respectively.

Next year's budget is based on an oil price of $72 per barrel, however a final decision needs to be made by the parliament, Zanganeh stated.

Global oil prices have tumbled almost 60 percent since June, hitting near six-year lows as growing production and tepid global demand has caused a supply glut and prompted oil producers to assume a much lower oil price to prevent likely budget deficits.

The Iranian government had assumed $100 a barrel in the budget for the current Iranian year (ends March 20). Benchmark Brent crude prices have kept within a band of $45-$50 a barrel since hitting a six-year low on Jan. 13, but analysts have not ruled out further declines as global inventories continue to rise.

The US imposed an array of sanctions on Iran to curb the country's nuclear program, but Iran insists that its program is not aimed at developing weapons. Sanctions on the energy sector have prevented western energy companies from dealing with Tehran, and slashed oil exports from 2.5 million barrels per day (bpd) to around 1 million bpd.

Iran and P5+1 (five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany) are negotiating to reach a comprehensive agreement.