Arash Najafi, head of the Energy Commission of the Iran Chamber of Commerce, reported a “red alert” for oil investments in the country due to the lack of foreign investment.
On Tuesday, June 25, Najafi told ILNA News Agency that no direct investment with its own capital is being made, adding: “All investors, considering their financial capabilities, enter projects through banks. Foreign banks, regardless of the sanctions issue, refrain from investing because Iran is on the Financial Action Task Force (FATF) blacklist.”
Iran’s status concerning the FATF has been raised several times in the debates of presidential candidates of the Iranian regime, with some candidates criticizing Iran’s presence on the blacklist and the prevention of passing laws to join it.
The Iranian Chamber of Commerce official further stated that investors do not enter projects when they cannot obtain the necessary guarantees.
Najafi did not disclose the amount of oil investments, but Ebrahim Raisi’s government has allocated only $3 billion for oil investment this year.
In the first session of the Economic Council chaired by Mohammad Mokhber, the acting president of the Iranian regime, in late May, an “emergency plan” to increase Iran’s daily crude oil production to “4 million barrels” with a $3 billion foreign investment was approved.
According to a report by the Parliament Research Center, annual oil investment in Iran during the 2000s was over $18 billion, but in the early 2010s, this figure dropped to $7 billion and has fallen to $3 billion since 2018.
The last major foreign investment in Iran’s oil sector was related to the South Azadegan field, which the China National Petroleum Corporation (CNPC) signed in 2009. Despite Iran pre-selling the oil produced from the Azadegan field to this Chinese company, the project was abandoned halfway.
The contract was valued at $1.76 billion, and Iran settled the principal and interest owed to the Chinese company by delivering oil produced from this field.
According to reports from the Iranian Ministry of Oil and the U.S. Energy Information Administration, 80% of Iran’s active oil fields are in the second half of their lifecycle, and their production decreases by 8 to 12 percent annually.
Iran needs annual investments of over $20 billion to maintain its oil production levels.
The Iranian regime has temporarily managed to prevent a sharp decline in oil production by drilling more wells, but it faces extensive delays in developing new fields.
The approved $3 billion investment for 2024 comes as the International Energy Agency estimates that $570 billion will be invested in global oil and gas fields this year, which is 9 percent more than last year.
Iran has the second-largest gas reserves and the fourth-largest oil reserves in the world, but its share of global oil investments is only half a percent.
