Zangeneh Reports Lack of 'Sufficient Resources' for Investment in Oil Industry

Iran's Minister of Oil, Bijan Zangeneh, stated on Tuesday that due to a significant drop in oil prices in recent years, there is currently no money available for investment in Iran's oil industry. Investment has fallen from $40 billion over the past four years to below $6 billion. In a press conference in Tehran on September 3, Zangeneh mentioned that $40 billion was invested in the oil industry in 2011 and 2012, but this figure did not even reach $10 billion in 2013, and barely reached $6 billion in 2014. According to the Shana news agency, affiliated with the Ministry of Oil, Zangeneh continued by saying that 'this year, due to the decline in oil prices, sufficient resources have not been allocated for investment in the industry.' Oil prices were around $108 in the first half of last year but fell dramatically from mid-2014, currently hovering around $40. Iran recently announced that it needs $185 billion in investment for its oil and gas sector over the next five years. This need is attributed to a daily surplus of about 2.5 million barrels of oil production over consumption in the market, as well as low global economic growth. Nevertheless, the oil minister emphasized that despite the sanctions that have been in place for years and continue to persist, Iran's oil exports have increased. According to Zangeneh, Iran's oil exports 'in the first four months of this year increased by 15 percent compared to the same period last year, which has been a very difficult task.' Before Western sanctions, Iran exported up to 2.5 million barrels of oil and gas condensates daily, but after the sanctions, this figure fell to about one million barrels. However, according to international statistics, Iran's crude oil exports have increased somewhat this year, reaching about 1.2 million barrels per day. Zangeneh further compared the conditions of Iran's sanctions to the eight-year Iran-Iraq war, stating that 'the conditions of the sanctions are much more difficult than during the war; in fact, sanctions are a war without fire and smoke, a war that lacks fire and blood, but its blows are more lethal than the eight-year war against Iran.' He also referred to Iran's return to the oil market after the lifting of sanctions, stating that immediately after the sanctions are lifted, Iran will regain its lost oil share of over one million barrels per day, and for this purpose, 500,000 barrels will be added to Iran's oil production in the first days after the lifting of sanctions, followed by another 500,000 barrels shortly thereafter. Regarding the South Pars gas field, Zangeneh mentioned that the project will be completed except for phase 14 by the end of the eleventh government, and gas production in phase 14 will commence after 2017. Iran aims to increase its gas production capacity from the current daily 650 million cubic meters to 1.1 billion cubic meters in the next three years.