Iran in talks with investors to bid on 50 oil and gas projects

Golnar Motevalli and Hashem Kalantari October 19, 2016

TEHRAN, Iran (Bloomberg) -- Iran is negotiating with 16 international energy companies to help operate and manage 50 oil and natural gas projects around the country to boost production after years of international sanctions.

The projects are feasible even with oil at $40/bbl, Gholam-Reza Manouchehri, a deputy director of the National Iranian Oil Co., told reporters in Tehran on Wednesday. Azadegan field, on Iran’s southwestern border, will be the first deal announced, and probably needs $10 billion to add 600,000 bopd of output, he said.

“We have a lot of companies approaching NIOC,” Manouchehri said. “I’m not sure when we’ll sign the first contract. I hope it will be earlier” than a year from now.

Iran is recovering from sanctions that strangled its economy and choked off investment in its oil and gas industry. An easing of sanctions in January has allowed the country to ramp up oil exports, to 2 MMbpd in July from 1.4 MMbpd at the end of last year, Joint Organizations Data Initiative data show. Brent crude, the international benchmark, was trading at about $52/bbl on Wednesday.

$200 billion

The Persian Gulf nation is seeking to boost production at oil and gas fields, and will need about $200 billion over the next four years for energy investments, according to figures provided by Iran’s Petroleum Minister Bijan Namdar Zanganeh on Tuesday.

The International Monetary Fund said Wednesday that economic conditions in Iran are improving and forecast growth of 4.5% this year compared with 0.4% in 2015.

Iran wants to produce about 4 MMbopd to regain its pre-sanctions share of the market, Zanganeh said Tuesday. Iran’s output was 3.63 MMbopd in September, data compiled by Bloomberg show.