06-12-04

Iranian Oil Minister Bijan Namdar Zanganeh noted that share of Middle East from oil and gas investments have been less than other oil-rich regions of the world.

He told the ninth international conference of the Institute for International Energy Studies that low cost of oil prospecting and production in Middle East can relatively justify low investment in the sector, but there is a wide gap between energy investments in Middle East and other parts of the world.

The minister noted that $ 90-100 bn has been invested in upstream oil industry in the world since the early years of 1990s.
"Limited production and refining capacities, marine transport capacity as well as political developments, especially in Middle East, are major reasons for short-term increase in global oil price," he noted. Zanganeh said basic market factors are major reasons behind long-term oil price hike.
"Due to devaluation of dollars against other international currencies, and the price gap between WTI and Brent, on the one hand, and OPEC benchmark price, on the other hand, price of OPEC crude has been kept within the set range except for recent months.”

Referring to high energy consumption in China and India, the minister noted that big energy consumers are trying to lower their vulnerability and boost energy supply security through diversifying energy carriers, to prevent total dependence on oil and gas resources of Middle East and Persian Gulf regions. He emphasized that major oil consuming countries must continue to cooperate with major oil producers and assure security of countries having rich oil resources.
Zanganeh said investment in Middle Eastern oil and gas reserves is quite profitable, adding, "Based on projections, supplying needed global oil during the upcoming 30 years will require investment in oil producing countries of the Middle East about double the figure realized for 1990s."

The oil minister stressed the need for continued cooperation between national oil companies and international oil majors, saying, "Cooperation between such companies does not contravene the need for direct cooperation of national oil companies with creditable oil service companies and first-rate contractors at regional and international levels." He said Iran seeks an effective role in supplying global energy and to attain that goal, needed improvements should be made to major oil and gas industry companies and suitable grounds should be provided for investments in the industry.
"Based on current plans, Iran will be the world’s number one producer of petrochemical products by 2025, the second crude oil producer within OPEC and the world’s third gas producing country," he noted.

The minister stated that since Iran enjoys the world’s second biggest gas reserves, it cannot remain indifferent toward expanding gas exports and apart from exporting gas to Turkey, the country seeks to export its natural gas to India via a pipeline which is to pass through Pakistan and further extend its gas export pipeline to Europe in thewest.
"At the same time, the Iranian oil industry is giving priority to LNG and GTL production projects," he said.

Source: Netiran economy desk