Faced with the prospect of tougher sanctions over its nuclear programme, Iran sets up a fund to help finance the development of its crucial oil and gas sector.
Iran sets up fund to finance oil ventures
Faced with the prospect of tougher sanctions over its nuclear programme and with western investors pulling out, Iran has set up a fund to help finance the development of its crucial oil and gas sector, and has implicitly asked its neighbours for help. "The National Energy Fund, with the help of the resources of four local banks and the central bank, has been established to help finance major parts of the oil industry's activities," the official IRNA news agency yesterday quoted the oil minister Massoud Mirkazemi as saying.
While suggesting Tehran would encourage domestic companies to play a greater role in Iran's major oil and gas developments, he also reached out to neighbouring countries, saying the fund would enable local and foreign firms to participate in energy ventures. "By using domestic resources, we would pave the way for the presence of local firms in oil and gas projects, but at the same time we won't block attracting foreign resources," Mr Mirkazemi said. "It is necessary to invest in the country's oil and gas development, particularly in joint fields with the neighbouring states."
Iran shares the world's biggest gasfield, South Pars/North Field, with Qatar. It also shares some of its biggest onshore oilfields with Iraq; some Gulf oil and gasfields with Iraq, Kuwait, Saudi Arabia, the UAE and Oman; and claims oil and gas exploration rights in disputed waters of the Caspian Sea. In December, Iraqi officials reported that Iranian soldiers had crossed the border to seize the Fakkah oilfield, while Tehran claimed the field it calls West Paydar was in its territory.
The incident, only recently resolved by a joint committee, marked the first serious confrontation between the two states since the fall of Saddam Hussein's regime in 2003. Iranian experts have estimated that US$60 billion (Dh220.37bn) of investment was needed in the shared fields, but sanctions have limited Tehran's access to capital and advanced oilfield technology. If Iran continues to develop the border-straddling resources at a slower pace than its neighbours, however, it risks losing significant reserves, as the remaining oil and gas in a reservoir naturally moves towards the more exploited side.
The semi-official Fars News Agency recently reported that Iran's partners extracted nine times more oil and gas from shared fields than Iran, the second-biggest OPEC oil exporter. Iran's oil ministry yesterday announced the discoveries of a new oilfield and a new gasfield, both of moderate size and entirely within its territory. Mr Mirkazemi said the Soumar field in Kermanshah province had 475 million barrels of oil, of which 70 million were recoverable. He said Halgan gasfield, 73km north of the town of Assaluyeh, could produce 50 million cubic metres of gas over 20 years.