In fact, the government acknowledges, without additional investment production will fall so low in just five years that exports would come close to halting.
A fall in output of more than one-quarter will occur naturally without further investment.
“The national oil company plans to invest $150 billion during the Fifth Five-Year Development Plan,” which ends in 2015, Deputy Oil Minister Mohsen Khojasteh-Mehr said Monday.
“If the investments are not realized…, the country’s oil output will drop to 2.7 million barrels per day” from the current production of 3.7 million, he said.
Iran’s current consumption is about 2.1 million barrels a day and rising. If total production falls to 2.7 million, there will be little left for export by 2015.
The proposed investment would raise Iran’s oil production capacity to 4.7 million bpd by 2015, while gas production would increase to 1,470 million cubic meters from 600 million, he said.
According to Khojasteh-Mehr, $75 billion would be used to develop gas projects, $34 billion to develop oil fields, and $32 billion to maintain production capacity. That left $9 billion unexplained.
Of the $150 billion, he said $60 billion would be financed by foreign investors; he didn’t name any. US sanctions have barred American investment in Iran since 1995. EU sanctions stopped European investments in the oil and gas industry as of last year. Japan has instituted a similar policy.
Iran announced the $150 billion investment target a few months ago, but this was first time an Iranian official said where the regime expected to get the money.
Khojasteh-Mehr said another $50 billion would come from the Oil Ministry—that is, from oil sales revenues—and the remaining $40 billion would be invested by Iranian banks.
