$180b Investment in Energy Sector by 2022

$180b Investment in Energy Sector by 2022$180b Investment in Energy Sector by 2022

Iran's oil production should at least reach its pre-sanctions level of four million barrels per day, oil minister Bijan Namdar Zanganeh said at the Munich Energy Security Conference in Berlin.

Iran would require 7-8 months to raise oil production to reach the pre-sanctions level, and 3 years to reach 5.7 million barrels per day. A total of $180 billion will be invested to restore Iran's energy infrastructure by 2022, he added.

"It is not acceptable for Iran, which has the world's fourth biggest oil reserves, to produce as much oil as [medium-sized producer] Azerbaijan," he was quoted by IRNA as saying.

Iran's oil export has decreased by 60 percent since international sanctions against the country were imposed in mid-2012, Zanganeh said, adding that oil producers should make room for Iranian oil export resumption once sanctions are removed. "All sanctions on Iran's oil and financial sectors must be lifted," he reiterated.

The US and its allies 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. Following eight days of marathon talks on Tehran's nuclear program in the Swiss city of Lausanne, Iran and the P5+1 (five permanent members of UN Security Council, namely Britain, China, France, Russia, the US plus Germany) reached a framework agreement on April 2 that calls for lifting all trade sanctions against Iran. The details of the agreement are to be finalized by a June 30 deadline.

"Iran has always been a reliable energy supplier," the minister said, expressing hope that Iran can gain access to new Asian and European oil and gas markets.

As nuclear negotiators inch closer to an agreement that would terminate sanctions against the oil industry, Iran is looking for new channels to profit from new windows of opportunity. Europe is seeking to diversify its energy suppliers beyond Russia due to the conflict over Ukraine and past gas delivery disputes.

Construction of required infrastructure to transfer Iran's gas to Europe is not economically viable given gas prices in Europe. "I do not rule out the possibility of pipe-laying, but that is not Iran's first option," Zanganeh said, adding that export of gas to Europe in the form of liquefied natural gas (LNG) is a priority for Iran.

The country can cover LNG infrastructure costs and has $10 billion earmarked to boost oil production at its western Karun fields by 700,000 barrels a day, he added. West Karun, located in south-west Iran, includes Yaran and Mansouri fields as well as Yadavaran and North and South Azadegan joint fields with Iraq.

However, he poured cold water on expectations that Tehran would help diversify natural gas supplies to Europe any time soon. 'Jumpstarting exports to Asia, not Europe, is a priority," he said, adding: “We didn’t come to discuss oil and gas sales," he said.

Meeting With Vice-Chancellor

Zanganeh held a private meeting with German Vice-Chancellor and Energy Minister Sigmar Gabriel on Thursday in Berlin. Discussions between the two officials included the sale and purchase of petrochemicals and investments in Iranian oil and gas projects, through the transfer of technology and engineering contracts, Wall Street Journal quoted him as saying.

Iran’s ambassador in Berlin, Ali Majedi, said potential sales of aircraft spare parts were also discussed with German officials. deputy oil minister for international affairs, Amirhossein Zamaninia, said the talks were "good, frank and constructive."

The private meeting between Bijan Zanganeh of Iran and German Energy Minister Sigmar Gabriel on Thursday in Berlin represented a rare encounter for senior officials from Iran and a Western government outside of talks negotiating on the Persian Gulf country's nuclear program.

"We are trying to prepare the basis for better cooperation when sanctions are lifted," Zanganeh said in an interview ahead of a speech at an energy conference here.

"Some political reasons are behind the recent plunge in global oil prices," the minister said, without further elaboration. “Nobody is satisfied with current prices, instabilities and fluctuations,” he said Wednesday at a press conference in Tehran.

Iran has the world's fourth largest proven oil reserves and the second biggest gas deposits. It holds 17 percent of the world's proved natural gas reserves and more than one-third of OPEC's reserves. Nevertheless, it is a relatively minor and strictly regional exporter of natural gas via pipelines to three neighboring countries – Turkey, Armenia, and Azerbaijan