Iran welcomes foreign investment in energy industry
October 8, 2009
Iran, holder of the world’s second- largest gas reserves, is open to foreign companies investing in its energy sector, the country’s deputy oil minister said.“Many companies that belong to the government now will become private very soon,” Azizollah Ramezani, deputy Iranian oil minister, said on Tuesday in an interview in Buenos Aires. “I think the Iranian energy sector in very interesting for foreign companies, including American companies.”
Iran is executing a plan to sell 80 percent of its major state-owned companies to boost the economy and stock values, following a 2006 order by Supreme Leader Ayatollah Ali Khamenei. At least three- quarters of the Iranian economy is controlled by the state.
The National Iranian Gas Company is also open to potential ventures with private groups, said Ramezani, who’s also managing director of the state-owned gas producer.
“We are ready to negotiate partnerships,” he said. Iran plans to invest $50 billion during the next 10 years on liquefied natural gas projects. The country plans to export as much as 8 million tons of the fuel, known as LNG, by 2012, Ramezani said.
Iran is seeking to develop its mineral assets amid United Nations sanctions and the threat of military action over what Western nations say are its efforts to develop nuclear weapons.
Global gas demand will probably rise between 2 percent and 3 percent a year for the next 20 to 25 years, with India and China the main markets for Iran’s gas exports, Ramezani said.
“All of our liquefied natural gas will be exported,” Ramezani said. “We will invest in the development of the projects and infrastructure, like plants.”
Liquefied natural gas is gas that’s cooled to a liquid to allow transport on tankers. Russia is holder of the world’s largest gas reserves.
The country also aims to increase natural gas exports by fivefold to 60 billion cubic meters a year by 2014, from 12 billion in 2009, he said.
“The world market for natural gas is not mature yet,” Ramezani said. “The demand will grow faster than for oil and for coal.”
---------$15 billion a year
Iran is investing $15 billion a year to expand its annual gas output capacity to 300 billion cubic meters in five years, from 170 billion, the deputy oil minister said.
Economic growth in Brazil, Russia, India and China, known as the BRIC nations, is prompting rising gas demand for use in power generation and industry. Demand in many so-called emerging economies is rising, while the economic crisis has curbed gas use in the U.S. and Western Europe, Repsol YPF SA Chief Executive Officer Antonio Brufau also said Wednesday.
“Brazil is too far and Russia has its own gas reserves,” Ramezani said. “China and India should be the main destinations for our natural gas exports.”
Still, the Iranian government has sought to increase ties with Latin American countries in talks with Venezuelan President Hugo Chavez and Brazil’s Luiz Inacio Lula da Silva. Relations with Brazil have “no limits,” Iranian President Mahmoud Ahmadinejad told reporters in New York Sept. 24.
Iran can help Brazil in the development and the exploration of the South American country’s new oil reserves and in the construction of refineries, Ramezani said. “Brazil is a good potential partner,” he said.
Oil prices will probably remain at around $70 a barrel for the next year and rise “gradually” in 2011, according to Ramezani. “I believe $70 is a bottom level for oil prices,” he said.