Omid Shokri KALEHSAR

23.01.2016

The P5 + 1 nuclear agreement with Iran and the lifting sanctions on the Iranian energy sector has provided a great opportunity for Iran to recover its oil, natural gas, LNG and production capabilities as well  great opportunity for foreign companies to invest in Iran energy sector. Furthermore, in the near future this will be positive for the Iranian economy as a whole and the oil and gas industry in particular. Bijan Namdar Zangeneh, the Oil Minister who greeted a press conference in April 2015, expressed that Iran was ready for a rapid increase in oil exports after the lifting of sanctions and emphasized that maintaining the share of Iran’s oil sales at OPEC and said the rate would be likely to return to the state it enjoyed before sanctions.

According to the OPEC statics , Iran has oil reserves of 157 billion barrels, or about 13.1 percent of the oil reserves of OPEC, putting Iran at similar level of significance to Venezuela and Saudi Arabia. Despite this important potential in terms of oil reserves, production and export has never been in a capacity to fully seize upon its potential, even if the pre-sanctions rate of barrel production reached 6 million (decreasing to 2.5 million barrels during the sanction period – about one million barrels of exports).

With regard to the nuclear declaration in Switzerland and increasing the possibility of sanctions, some media and analysts to assess the future prospects of oil production began. In the meantime, a number of oil production in Iran is considered a potential high jump and even up to eight million barrels have estimated. But many oil industry officials and activists, these numbers are unrealistic. A month ago, “Rokneddin Javadi” Managing Director of National Iranian Oil Company, the oil production capacity in the drilling industry’s development depends. He said Iran’s oil production capacity is now about four million barrels per day.

The natural gas sector is slightly different. Iran could be an option for Europe to reduce dependency on Russian gas, and this is an issue which Iranian oil officials have repeatedly mentioned. It should be noted that a high consumption of gas in the country in the amount of gas injected into storage tanks and export (to Oman, Iraq and Pakistan) reduces the volume of gas available for export. Another barrier in this area is the lack of necessary infrastructure for gas exports to Europe. Under these conditions it is possible Western countries may not be able to wait as such a process requires at least 10 years.

To improve conditions for its oil and gas sectors Iran needs capital and technology that can be provided by international oil company access. Several informal talks between officials from the Ministry of Petroleum of Iran’s clerical government and representatives of international companies has been done. An example of the talks in September 2013 during the annual meeting of the United Nations and the OPEC summit in Vienna took place the same year. These companies have declared interest in participating in Iran’s oil and gas sector, but not at any cost.

Oil price falling is a serious problem toward Iran return to world oil market, and also oversupply by OPEC member and none-OPEC members.  In natural gas Iran have a chance to play key role in regional gas market. Iran is planning to begin export sag to Iraq, Oman and Pakistan via under construction pipelines. In Long-Term Iran is able to export gas to European market. But Iran’s first priority to complete its first LNG project and export LNG to European market by 2018.  Iran has a potential  to be game changer in world energy market but it required using energy diplomacy and more active foreign policy.