Iran ‘cheapest country’ for oil production
Head of investment at the National Iranian Oil Company (NIOC) says Iran is the “the world’s cheapest country” for oil production as international energy companies are gearing up for a return to the energy superpower.
“The finished cost of each oil barrel produced in Iran is about $5. This price tag doesn’t exceed $10 with the costliest of processes,” Ali Kardor said on the sidelines of an energy event in Tehran.
Low recovery costs are a key driver of an international rush for new business opportunities in Iran amid sagging oil prices which have forced many companies to pull out of shale, deepwater and tar sand developments.
Kardor said Iran needs $250 billion of investment in its oil industry between 2016 and 2025, including $176 billion in its upstream sector and another $77 billion in downstream spending.
Next month, the country will be hosting Iranian and foreign companies as well as economists at a conference in Tehran in order to unveil its new model of oil contracts.
Head of the Oil Contracts Revision Committee Mehdi Hosseini said the event, initially planned in London, will be held on Nov. 28-29.
“In the conference, activities of the oil industry will be presented in reports and the new oil model, the Iran Petroleum Contract (IPC), will be introduced in detail to domestic and foreign investors,” he said on Thursday.
Last month, the government approved the new format which offers different stages of exploration, development and production to the contractors as an integrated package.
It is meant to help maximize Iran’s oil and gas production specifically in reserves that are shared with the neighboring countries, officials have said.
Meanwhile, Iran’s Minister of Petroleum Bijan Zangeneh said he expected pressure on oil prices to continue through 2016.
“Pressure on prices in 2016 will continue to remain at current levels. It is likely that the balance between supply and demand will happen from the second half of 2016 and then in 2017,” he said on Thursday.
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