As Western sanctions have started to take real effect on Iran’s oil exports its production volumes have been reduced sharply throughout 2012, which allowed Iraq to overtake Iran as the second largest producer in OPEC.
Iran’s oil minister, Rostam Qasemi, said that in order to try and maintain a decent position in the OPEC table, and keep the corresponding influence that the position brings, Iran has had to invest $25 billion on upstream oil and gas production since last March, and will need to keep this level of investment up in the future.
As crude oil sales have been squeezed Iranian officials have stated that they should look to invest more in boosting the country’s refining capacity, and concentrate on selling finished fuels.
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Qasemi spoke at a finance conference in Tehran about the need to, “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;” suggesting that as much as $400 billion dollars must be invested in the energy sector over the next five years.
The $400 billion may be difficult to find as sanctions have reduced crude oil revenues, and the high risk investment environment has scared most investors away. Even investors who specialise in high risk debt have claimed that the various banking obstacles are likely to deter foreign investors.
In order to try and overcome this several government ministers have been given permission to issue billions of dollar’s worth of bonds in order to raise the required funds.
By. James Burgess of Oilprice.com
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