Since 1979, the United States has forced sanctions on Iran because of Islamic Revolution. International countries, due to that are not able to invest in Iran. However, the things are going to change in June, if America was able to enter a nuclear deal with Tehran. Foreign companies and investments are expected to come back to the country.
Energy companies of Europe such as BP plc and Royal Dutch Shell Plc have shown their interest to invest in Iran, which has substantial oil & gas reserves attracting European countries. Iran has the 4th biggest oil reserves, together with the second biggest gas reserves.
Bloomberg reported, CEO shell, Ben Van Beurdon in an interview at OPEC meeting said, : “Iran is a wonderful country with a fantastic resource base, as soon as there is legitimate opportunity, we will be looking at Iran. Everybody in the oil industry wants to go back to Iran once the international sanctions have been lifted.”
Patrick Pouyanne, CEO Total also showed interest to invest in the country. Following by a meeting with Bijan Namdar Zanganeh, oil minister of Iran, Mr. Pouyanne stated: “We like Iran”. Because of the sanctions, the country has significantly suffered as it was deprived of any kind of foreign investments plus was unable to take advantage from the technical proficiencies that these international firms could have provided them.
Due to these sanctions, oil output of the country has dramatically decline. In 1974, Iran produced around 6 million barrels of oil per day; however it went down to 4 million barrels later in 2003. Currently, the country oil output stands at 2.8 million barrels per day. As per International Energy Agency, Iran badly requires some restoration
Mr. Zanganeh is profound to get foreign investments and specified that Tehran has attractive and a lot better to offer to these foreign companies. He said, “The new terms are long-term, with better situation, rather than the previous framework that we have.”
International investment by the firms will support the revival of oil and gas industry in the country. As pointed out by Mr. Zanganeh, Iran requires almost $200,000 billion of investment in the industry. Presently, Iran has not revealed any terms and regulation of the contract, but these are most likely to be more rewarding then the old contracts. Bloomberg reported, the latest contracts will help the foreign firms to acquire field production share.
While many firms had shown their interest to invest in Iran, however only when the sanctions will be lifted
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