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EIA foresees the return of international oil companies to Iran

Posted on June 24, 2015 by Grace Montealegre

According to the latest report released by the Energy Information Administration (EIA) of the United States on the Iranian energy sector, the country “is planning to change its contract model to increase the participation of the international oil companies at every phase of the fields operations”.

The organization says that the negotiations that pursuit the curbing of Teheran’s nuclear program should reach an agreement before the next June 30th. If this comes true, the international companies’ appetite to be a part of the oil business in Iran should largely increase.

Estimations suggest that Iran has the fourth largest oil reserves and the second largest natural gas deposits in the world. Nevertheless, since the beginning of the sanctions imposed by the United States and some European countries, its hydrocarbon exportations dropped sharply. While in 2011 Iran sold 2.6 million oil equivalent barrels per day (bpd), in 2013 it only sold 1.3 million bpd.

But the country’s production potential is even bigger. In 2011, Iran produced almost 3.6 million oil bpd, a number that has fallen down to 2.7 million bpd, and which is still a long way away from the 6 million bpd the country used to generate in the 70’s. Meeting such a level would strongly punish international oil prices, but according to the EIA, this scenario should not be expected anytime soon.

La Nota Economica - Media Partner