Iran expecting new source of revenue from opening oil sector, but maintains economy is moving away from reliance on petroleum. File photo by William S. Stevens/U.S. Navy/UPI | License Photo
TEHRAN, July 11 (UPI) -- The Iranian government expects to bring in at least $40 billion in investments per year to an opening oil industry, a deputy trade official said.
According to Deputy Petroleum Minister for International Affairs and Trading Amir Hossein Zamaninia, Iran expects to see signatures on the first new post-sanctions oil contracts within the next three months. Characterizing the current status of the oil industry as satisfactory, the minister said Iran expects to bring in significant revenue from oil once new contracts unfold.
"We expect to attract at least $40 billion to $50 billion of investments annually," he was quoted by the semiofficial Fars News Agency as saying.
Iran in 2015 exported around 1.4 million barrels of oil per day, compared with an average of 2.6 million bpd in the era before sanctions were imposed in 2011. A multilateral nuclear agreement was verified in January, lifting some of the sanctions, and Iran said it's now exporting roughly 2 million bpd.
Royal Dutch Shell was among the first companies to buy Iranian crude oil in the post-sanctions era.
Nevertheless, Iranian First Vice President Eshaq Jahangiri said Sunday the government was bent on establishing an economy that wouldn't rely too heavily on oil for a source of revenue. Early this year, Moody's Investor's Service said the Iranian economy was more diverse than other oil exporters in the region. Working under the pressure of Western economic sanctions meant Iran had to retool its economy and adapt to lower oil revenues before crude oil prices started their swift decline from $100 per barrel.
According to Iran's Central Bank Governor Valiollah Seif, the oil sector accounts for less than 15 percent of the total Iranian gross domestic product.
New contract terms for Iran call for the establishment of joint ventures between the National Iranian Oil Company and its foreign counterparts, who will be paid with a share of any production. Previous terms gave energy companies a predetermined price for production volumes.