Investment

In the normal run of things, between $20 billion and $25 billion is invested annually in the petroleum industry. A variety of options are available for financing petroleum industry projects. Some of them are dipping into the National Development Fund of Iran, foreign finance, banking and money market resources, bonds and Islamic financing instruments, and selling corporate assets for investment in new projects. Oil managers have experienced these options which are recognized in the stock market. However, other instruments and options are needed for financing petroleum industry projects. The petroleum industry needs technology and finance. Dozens of billions in credit is needed for developing the petroleum industry, developing oil and gas fields, renovating and rebuilding oil installations. The Ministry of Petroleum has not limited itself to a specific model of oil contract and it is working on EPC and EPD as well. It has also attracted financing from the capital market in order to keep activities running.

Half-complete petrochemical projects envisaged for the coming five years are valued at $30 billion. These projects are making progress and investors can afford their financing. Scattered money may be used for completing these projects and operating new ones. It is also possible to invest up to $20 billion in petro-refining projects, optimizing existing refineries and building new refineries. Investment in petrochemical plants and petro-refineries is generally done by private companies. However, semi-private companies may also make contribution. Investment in the gas industry is mainly provided by government-run bodies and the private sector may only finance distribution networks. Of course the private sector can get involved in underground gas storage projects. Oil extraction, exploration and production also offer grounds for investment. Iranian companies are unlikely to assume exploration risks. Rather, they would develop locations determined by National Iranian Oil Company (NIOC) or work for preservation of production inactive fields.

Financing is a significant obligation in implementing petroleum industry development projects. Since it is not easy to apply traditional tools and corporate financing due to international restrictions and financial bottlenecks, modern field-oriented financing tools relying on the capital market potential and definition of new international mechanisms for financial exchanges may serve as an effective step in attracting resources and facilitating financial exchanges in the petroleum industry in favor of economic resilience. The successful experience of development of the South Pars gas field as a significant factor in the development of national industry and economy may be repeated in other areas by adopting new investment options. Iran invested $68 billion plus IRR 33,000 billion from 1998 to 2019 to develop the jointly-owned South Pars gas field. The amount of investment for petrochemical industry development is estimated at $8 billion plus IRR 172,250 billion. Foreign exchange fluctuations, more than IRR 25,000 billion has been invested in infrastructure.