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Heightened geopolitical tension is deterring international investors from returning to Iran’s upstream. Iran has successfully brought crude output and exports back up to pre-sanctions levels since January 2016 ( MEES, 9 February ). But foreign participation is required if it is to make the next step.
Oil Minister Bijan Zanganeh says Iran’s oil and gas sector needs $200bn investment, of which 65-75% ($130-150bn) would be from international firms. But to date, the only post-sanctions deal remains June 2017’s $4.8bn agreement with France’s Total and China’s CNPC for Phase 11 of the South Pars gas field ( MEES, 23 June 2017 ).
At the time, the managing director of the National Iranian Oil Company (NIOC), Ali Kardor, said he aimed to sign contracts worth $15bn with IOCs during the current Iranian year (ends 20 March 2018). With Phase 11 valued at $4.8bn, this implies at least two more deals by late-March. Further contracts are always just around the corner according to Iranian officials, and never quite materialize.
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