Min.: Oil Industry Upstream Sector Needs $130bn Investment

Zanganeh made the remark in an address to the Seminar to Examine Mandates and Challenges Ahead of Partnership Contracts and Financial Mechanisms of Investment in the Oil Industry on Sunday.

He said that undoubtedly, investment and development of the country are the driving force. 

He added, “In the Sixth Plan, oil industry will need 200 billion dollars investment and the upstream sector has a share of 130 billion dollars out of the sum.”

The minister went on to say that there is no sector in national economy to require so volume of investment.

He said earning of income is a main topic in investment and based on it, the original and peripheral investment should be paid back.

“Iranian oil industry has the capacity to pay off the investment in five to six years and generate income.”

The minister said investment in oil industry should be taken seriously. “Efforts should be made to link investment in the industry with national economy.”

He then dealt with new model of oil contract, saying it is the best opportunity to promote domestic capacity. “Though the Sixth Plan envisions 130 billion dollar investment in the upstream sector, more investment is needed to protect the reserves.”

In reaction to certain claims on crude sale, he said as long as no crude has been produced, it cannot be used in other sectors including refineries. “So, first of all oil should be produced to use it for production of the downstream products and sectors.”

The minister then said the chain of oil production in Iran should be completed and the country’s program targets such an issue rightly.

He announced that Iran enjoys 160 billion barrels of crude reserves and 34 trillion natural gas reserves. “Each one percent coefficient of recovery of oil reserves will result in about eight billion barrels of crude output and will add 400 billion dollars to the country’s income at current oil prices.”

He then referred to rural gas supply project and said such projects released huge volume of liquid fuel and now there are 20 million liters of gasoil surplus in the country a day.