Iran, the country holding the world’s second-largest natural gas reserves, risks turning into a net gas importer unless it finds some $50 billion investments in its gas industry, Iranian media report.
Although it is home to over 17 percent of the global gas reserves, Iran has been suffering from chronic underinvestment lately after President Trump withdrew the United States from the so-called nuclear deal with Iran and reimposed economic sanctions that drove away the energy supermajors that had the means to help Tehran develop these reserves.
President Biden has engaged Iran in new talks, but these have recently stalled as neither side appears willing to make necessary concessions. As a result, the Iranian government has warned this winter could bring power cuts because of insufficient gas supply for power plants. The managing director of the National Iranian Oil Company, for his part, has warned the country risks becoming a net importer of gas unless steps are taken urgently, Iran International reports.
Iran’s biggest oil deposit is the South Pars offshore field, which it shares with Qatar—the latter refers to it as the North Field. Five years ago, Tehran struck a deal with French TotalEnergies to invest $5 billion in the development of yet another phase of the field, but with the snap-back of U.S. sanctions, TotalEnergies left the country, leaving China’s CNPC to take its place. However, development of the field has been slow in coming, apparently. A recent Bloomberg report put Iran’s gas shortage at 200 million cubic meters daily.
To reduce the risk of blackouts this winter, Iran has been building its crude oil reserves, Bloomberg reported earlier this month, but according to the Iran International report, the future of the country’s oil production is no less grim than the future of its gas production without some $150 billion in fresh investments.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Money Managers Are Throwing Their Weight Behind The Oil Price Rally
- Pipeline Leak Disrupts Libya’s Oil Exports
- Who Will Win The Race For India’s Emerging EV Market?