Iran has recently announced that its oil industry is ready to welcome US oil investors and companies to do business there. According to an interview with the Petroleum Minister in Iran, Bijan Zangeneh, “We welcome the presence of American oil companies in Iran. We will definitely prepare the grounds for the presence of American oil companies in Iran.”
However, this is not yet going to happen unless the US government lifts its sanctions that prevent companies from investing to Iran oil industry. The sanction was imposed in 1979 barred US trades with Iran, including investment with Iran’s oil industry.
Trade Embargo Coming to a Close
Experts believe that the sanctions are soon coming to an end, potentially opening up new investment opportunities for both American oil companies and that of Iran. Iran is feeling positive about the coming back of foreign oil investors and is now circulating a draft of the contract with regards to investing in oil. Companies that have seen the draft are happy with the agreement, citing that this is a better version than what they have seen in the 1990s and 2000s.
Iran’s Oil and Gas Investment Potential
Iran has attractive oil and gas potentials which were reduced because of the 1979 sanction. Iran ranks number four in the world in terms of oil reserves and second in terms of gas reserves. Ten years ago, Iran was pumping 4 million barrels oil per day but because of the sanctions, it is now only pumping around 2.8 million barrels. It holds a record of pumping around 6 million barrels of oil per day in 1974.
Iran undoubtedly has more to offer. Oil Minister Zanganeh emphasized that he wanted a win-win agreement to attract more foreign investors, particularly Americans and Europeans. Zanganeh has been busy meeting with major American oil companies like Shell, Exxon, ConocoPhilips, and Eni.
Interest in Iran’s Oil Investment Opportunities
Iran’s Deputy Oil Minister Amir Hossein Zamaninia said that several foreign oil companies have already expressed interest in investing in Iran’s oil industry when the sanctions have finally been removed.
Penetrating Iran’s oil industry presents a lot of benefits, including making the oil business landscape even more competitive as well as introducing new and advanced technologies for oil drilling operations. According to Zanganeh, this new agreement would help establish continuity from oil explorations to developments.
American oil companies also view this as a good way to invest in oil internationally. The CEO of ConocoPhilips said that they will certainly consider the opportunity when the issues on the US sanctions towards Iran have been removed and the conditions are right. The agreement details that some sanctions would have to be removed by June 30, including those sanctions that involves the oil industry of Iran.
When this happens and foreign oil companies can finally set foot to Iran to engage in oil business, Iran’s Oil Minister Zanganeh is optimistic of raising the oil production for the first two months by 500,000 barrels of oil and within six months by 1 million barrels of oil per day.