Iran's oil sector needs $40b annually by 2021: minister

February 25, 2016 - 0:0

TEHRAN – Iranian Oil Minister Bijan Namdar Zanganeh said on Tuesday that oil industry requires an annual amount of $40 billion investment by 2021 which marks the end of the sixth five-year national development plan.

According to Zanganeh, of the total $200 billion investment needed for oil industry during the five-year period, $134 billion would be assigned to the upstream sector and the rest to the downstream sector, the IRNA news agency reported.

During the next five years, he said, oil production ought to reach 4.6 million barrels per day (bpd).

Zanganeh further referred to the nine major oil fields which provide 75 percent of Iran’s oil output, saying the fields require investment because they are out of date and their production is declining.

The oil minister said gas output is also projected to increase by one million bpd in the course of next five years, adding that in the Iranian calendar year 1396 (March 2017 – March 2018) gas production would rise to more than 1.1 billion cubic meters (bcm).

According to Zanganeh, The country also aims to raise the gas exports to 200 million cubic meters (mcm) per day, provided that no political issues stand in its way.

Iraq, Pakistan and Oman are the main targets of Iran for exporting gas.

Petrochemical output, he said, is slated to reach $41 billion by the end of 2021, a goal which demands massive foreign investment.

To this end, Zanganeh added, it is imperative to attract $50 billion foreign investment to develop petrochemical industry.

Iran, once OPEC’s second-largest producer after Saudi Arabia, is seeking to clear space for its gradual return to the market following the lifting of sanctions.     

Western sanctions had cut Iran’s oil output to 2.7 million bpd from 3.9 million bpd and the country’s oil exports to around 1.1 million bpd from 2.5 million bpd.  

Zanganeh has vowed to reclaim the country’s share of global crude oil exports as sanctions are being lifted.    

The July 2015 nuclear deal, which removes sanctions against Iran, went into effect on January 16.