DUBAI Jan 6 Iran has spent almost $25 billion
on upstream oil and gas projects since last March but needs to
keep investing to keep its influence in OPEC, Iran's oil
minister said on Sunday.
Iranian oil production fell sharply last year, as Western
nations tightened sanctions to starve Tehran of funds for its
disputed nuclear programme, allowing Iraq to overtake Iran as
the oil exporting group's second-largest producer.
The sanctions, aimed at stopping what the West says is a
weapons programme but which Tehran says is purely peaceful, have
slashed tens of billions off Iranian oil revenues over the past
year and weakened OPEC price hawk Iran's influence in a group
now effectively steered by Saudi Arabia.
Iranian officials have maintained a brave face as exports
have fallen to about half levels seen in 2011, arguing that
selling less crude is good for the economy while calling for
more investment to boost capacity and refine more crude into
"We should raise production capacity in the mid-stream
sector and protect our place in OPEC with regard to sensitivity
of the oil market and at the same time try to curb selling
materials in raw form," oil ministry news website Shana reported
oil minister Rostam Qasemi as saying at a finance conference in
Qasemi said as much as $400 billion dollars of energy sector
investment was needed over five years, although Iran already
struggles to sell the oil it already produces because of
pressure from Washington on big Asian customers to buy less.
International banking restrictions have made it very
difficult for Iranian oil buyers to send funds to an isolated
Islamic Republic seen by many investors as high risk.
Qasemi said foreign investment in Iran's oil and gas sector
had nevertheless risen to $20 billion dollars recently,
according to Shana.
Iran's central bank has also agreed to channel funds it has
been holding in foreign banks - largely because of difficulties
repatriating export earnings - into oil industry projects in
Iran, Qasemi said, without explaining how it could be done.
Isolated from international credit lines and western
technology during a long standoff with Washington, Iran has
resorted to issuing bonds to generate funds for energy projects.
In the latest sale, Iran Offshore Oil Company (IOOC) plans
to issue rial denominated bonds on Monday, offering 20 percent
interest over four years, Shana reported on Sunday.
Shana said that under this year's annual budget, several
government ministries had also been given permission to issue
billions of dollars worth of bonds to fund oil projects.
Even investors who specialise in high risk debt say the many
banking obstacles are likely to deter any foreign investors in
The International Energy Agency (IEA) estimates that Iranian
oil exports have slumped from 2.2 million bpd at the end of 2011
to just 860,000 bpd in September 2012.