Iran: $5 Billion in Oil, Gas Recovery Projects Planned for 2 Years

"The [$5 billion] investment package to increase oil and gas recovery rate should be implemented within two years," Zanganeh was quoted as saying on the sidelines of the Third Iranian Petroleum and Energy Club Congress in Tehran, the National Iranian Oil Company's news portal reported.

Zanganeh said the new investments will be divided into several projects of no more than $300 million.

"We have called on Iranian firms for the new opportunities … They can raise funds through foreign companies," he said, adding that the Oil Ministry is open to a variety of finance measures, from issuing bonds and opening usance letter of credit to taking loans and tapping into the National Development Fund of Iran.

"We are focused on two things in the next two years: drilling new wells to ease [production] bottlenecks and conduct repairs [on projects operated] by the Iranian Offshore Oil Company and Iranian Central Oil Fields Company," he said, referring to two of the largest subsidiaries of state oil company NIOC.

Iran currently produces about 880 million cubic meters of gas per day. Plans are in place to raise output to 1 billion cubic meters per day by March 2018 and reach the 1.3-bcm mark in five years.

Crude oil production capacity is also planned to rise by nearly 1 million barrels a day to about 4.7 million bpd by 2021 from the present 3.8 million barrels a day.

The plan comes as Iran hopes to attract many more billions of dollars to explore and develop dozens of oil and gas fields.

Zanganeh said the ministry hopes to make a decision on how to develop all oil and gas fields by the middle of 2021, the end of his second consecutive tenure as oil minister under President Hassan Rouhani's administration.

"Making a decision does not mean full development, but it is about hammering out a framework to develop the fields," he said.

In July, French energy major Total landed the first major contract in Iran's energy market after last year's lifting of sanctions. The world's fourth-biggest oil company will lead a consortium of Chinese and Iranian firms to finance and develop a $5 billion gas venture off the Persian Gulf coast as part of the giant South Pars Gas Field that is shared by Iran and Qatar.

Tehran has signed a raft of agreements with the likes of Eni, Shell, Schlumberger, Lukoil, Wintershall and OMV to study and potentially develop its massive oil and gas deposits.

  Gas Trade With Armenia

In a meeting between Zanganeh and Armenian Prime Minister Karen Karapetyan in Tehran on Tuesday, the two sides explored avenues for boosting natural gas trade.

"Apart from the natural gas that is exchanged with electricity between the two states, Armenia is willing to import more gas from Iran," Karapetyan said, noting that serious talks are underway with the National Iranian Gas Company. According to the Armenian official, swapping natural gas from Turkmenistan to Armenia was another issue the two sides nodded in agreement.

"Tehran has agreed to cooperate with Yerevan in swap operations," the Armenian official added without elaborating.

Welcoming Armenia's interest in purchasing more natural gas from Iran, Zanganeh said promoting collaboration with the neighboring state in gas and power sectors is on the agenda"

The two sides also exchanged views about establishing a joint venture for transferring Iran's gas to Georgia, among other destinations, through Armenia.

In 2004, Tehran signed a 20-year contract with Yerevan to export gas to its northern neighbor. Based on the agreement, Iran's natural gas is used by Armenian power plants to generate electricity, which is then exported to Iran. The cross-border gas pipeline was commissioned in 2007 and exports began in mid 2009. Armenia's Energy Minister Levon Yolyan has already offered the prospect of raising gas imports from Iran to more than 3 million cubic meters per day by 2018 from the present 1 mcm/d.

Reportedly, Iran and Armenia are already connected by two power transmission lines and a third power line, to be completed by the end of 2018 at an estimated cost of $107 million, is part of an agreement reached by Iran, Russia, Armenia and Georgia to synchronize their power grids by 2019.

The new infrastructure will raise Iran-Armenia electricity exchange capacity fourfold to around 1,200 megawatts.