He believes that Iranian authorities should use domestic capabilities and assets to develop the oil industry and therefore strengthen the economy.
“Iran has 153 billion barrels of proven oil reserves and 33,000 billion cubic meters of natural gas reserves, both among the largest in the world. But, despite that, the country produces and sells less than 5 million barrels of oil in world markets. With an oil barrel sold at $130, annual income would amount to tens of billions of dollars, and today it is necessary to use this money for developing the oil industry.”
According to the op-ed, the Iranian Oil Ministry, with the help of the private sector, should channel the money to the investment in the infrastructure, while domestic consumption should be calculated based on world oil prices in order to contain over-consumption.
“The upstream part of the oil industry needs investment, but this is done slowly,” it said, adding that “358 oilfields have been discovered over the past 110 years of the oil industry’s activity, but only 163 of them have been developed.”
Moreover, the writer said, “almost 48% of Iran’s hydrocarbon reserves are shared with its neighbors”, and this requires increased efforts by the country to increase investment in the upstream sector in order to boost the share of the joint reserves.
According to the op-ed, it is estimated that Iran has $400bn in cash. The writer says that in order to use this money in the upstream part of the oil industry, the Economy Ministry and the Central Bank should encourage banks to give guarantees to the release of bonds for upstream projects. He says a similar method is also required for the development of the downstream part of the oil industry, including petrochemicals and petro-refineries.
“The downstream sector even requires more attention, as currently almost 300 types of petrochemical products are produced in the world, while in Iran, the figure stands at 70.”
The writer concludes that Iranian banks and the capital market should use domestic assets to develop the oil industry, without having an eye on the Vienna negotiations.
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