TEHRAN, Oct. 26 (UPI) -- The exploration and production side of the energy sector needs the bulk of the focus for a re-emerging Iran, a managing director at Iran's oil company said.
Iran next month rolls out the preliminary terms for contracts in a post-sanctions climate. Ahead of next month's investment conference in Tehran, Ali Kardor, deputy managing director at the National Iranian Oil Co., said the county needs at least $250 billion in new investments.
"During 2016-25, our upstream sector needs $176 billion and the downstream sector needs $77 billion of investment," he said.
Lower crude oil prices, down about 45 percent from last year, has forced most major energy companies to cut back on spending in exploration and production, known as the upstream side of the sector.
The health of the upstream sector is in part reflected in rig counts. Oil services company Baker Hughes last week reported there were 1,140 rigs actively exploring for or producing oil and gas internationally in September. That's down 13 percent from last year.
Crude oil prices are lower primarily because lackluster global economic growth leaves markets tilted heavily toward the supply side. More crude oil from members of the Organization of Petroleum Exporting Countries, of which Iran is a member, could put further downward pressure on oil prices.
Iran said side price should be no deterrent to its production objectives.
"Iran has the cheapest oil produced in the world," the deputy managing director said.
OPEC said in a monthly newsletter Iran is expected to start up dozens of oil and gas projects, worth an estimated $185 billion, by the end of the year. Sanctions, easing as a result of a July nuclear agreement with world powers, have nevertheless starved Iran's energy sector of much-needed new investments.
The International Monetary Fund said Iran's economy is facing "severe structural challenges," with postponed investment decisions dragging on growth.