Iranian official sees US ties as key to oil and gas growth

Iran needs $200-250 billion dollars in investments to bring stability to its oil and gas sectors, an official in the chamber of commerce said, reiterating previous comments by the oil minister.

Arash Najafi, head of the energy commission at Iran’s Chamber of Commerce told local media, "In recent years, due to sanctions, we have been deprived or had limited access to many of the world’s latest technologies. At present, we need modern technology, up-to-date equipment, and serious investment to tap into the country’s underground resources, increase gas reservoir pressure, and revive oil fields."

While Iran struggles to increase oil production, its gas output is steadily declining due to loss of pressure in its main South Pars gas field in the Persian Gulf. Only multinational Western energy companies have the technology to install very large gas platforms to boost production.

"We need more than $200 to $250 billion in investment to bring the country’s oil and gas sector to a stable state. Investment is essential for energy transmission to refineries and petrochemical plants, as well as for infrastructure and related facilities,” Najafi added.

Iran's oil minister Javad Owji has also said in the past that Iran needs a minimum of $200 billion investment in its energy sector.

Tehran and Washington are currently negotiating over Iran’s nuclear program and other issues with the hope of reaching an agreement that can gradually reduce or eliminate tough US sanctions. Only then Iran can freely export oil and receive the proceeds through normal banking channels. Currently 95% of shipments go to China and it is not clear how much cash Tehran receives.

Najafi expressed hope that if relations improve with the US Iran can benefit in the energy sector. "The United States is currently a leader in the oil sector, and if we engage in economic cooperation with the US and establish an economic corridor between the two countries, we could benefit not only from its technologies but also from its investment to help develop our oil and gas fields.”

He added that Iran could also attract capital from multinational companies and move toward a stable position in the oil and gas sector.