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Iran's Economy Before & After Sanctions

Source: www.gulfoilandgas.com 12/28/2016, Location: Asia

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Iranís domestic and international predictions expect that economic growth will be more than 5% in 2016, after emerging from years of isolation and crippling international sanctions over the country's nuclear program. Also Iran expects the upcoming awards to help increase its crude production by 600,000 to 700,000 barrels a day over the next five years.

In July 2016, the contracts for development of a number of Iranian fields changed to buy-back or Engineering, Procurement, Construction and Financing Contract (EPCF) in nature. Also Iranian Minister of Petroleum said there is the prospect of entering oil investment deals to the tune of 30 billion dollars under the new contracts model. Iran will be able to sign 10 to 15 billion dollars of the new petroleum contacts by 2017. Accordingly, projects had different stages of exploration, development and production and the contractors will be required to put emphasis on enhanced and improved recovery in projects.

Iran needs hundreds of billions of dollars in investment to develop its offshore oil and gas reservoirs, which include joint fields with neighboring countries. The oil industry requires an annual amount of $40 billion investment by 2021, which marks the end of the sixth five-year national development plan.

Iran welcomes foreign investors including private companies of EU members including Slovakia. Iran can become a suitable target for investments, production and export of European industrial goods in the region and the EU. Also Germany's giant chemical company BASF is planning to invest 4 billion dollars in Iran's petrochemical industry. The Rouhani Administration is planning to invest 200 billion dollars in oil sector in a push to develop the industry by employing new technologies. In May 2016, ICOFC has privatized 11 billion dollar worth of production and development projects within framework of Iran oil contracts. Also Indonesia's state energy company Pertamina signed the first deal to purchase a stake in an oil and gas block in Iran.

In July 2016, Petropars, Oil Industries Engineering and Construction Company (OIEC), Dana Energy, PetroIran, MAPNA Group (MAPNA Oil and Gas Company), Khatam ul-Anbia Construction Headquarters, Industrial Development & Renovation Organization of Iran known as IDRO Group, and Execution of Imam Khomeinis Order (EIKO) (Persian Oil and Gas Development Company) are selected by the Iranian Ministry of Petroleum as the local partners for foreign energy firms.

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