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Iran unveils N3.2b investment in oil, gas sector
By Taiwo Hassan with Agency Reports
http://www.guardiannewsngr.com/energy/article06
NOV 13



IRANIAN Government has concluded plan to invest $100 million (N3.2 billion) in Nigerian oil exploration operation.

This may not be unconnected with the Iranian's government bid to expand overseas operations and thereby sealed some contracts with the Nigerian government for oil exploration operations in the West African country.

Already Iran's Oil Exploration Operation Company Limited (OEOC) has submitted a number of international bids among which the contract for oil exploration operation in Nigeria has been finalised, a source from the Iranian company disclosed.

Available information revealed that if the bid were successful, the development operation contract would also be awarded to the Iranian project developer for the construction and drilling of the project. Also, this will be the first foreign contract by the company and will be in collaboration with an international enterprise, ICC, and will be in form of a consortium.

"The exploration operation of the contract is valued at $100 million and if successful, the development operation contract will also be given to the Iranian project developer. Being its first foreign contract, the company will undertake the projects in collaboration with an international enterprise, ICC, in the form of a consortium," said the source.

Meanwhile, the International Energy Agency has forecasted that oil prices could rise a further 50 per cent by 2030 if Saudi Arabia does not muster the political will to invest billions of dollars in new production.

In an interview with the group's Chief Economist, Mr. Fatin Birol said that Saudi Arabia might not make the investment needed to ensure production meets strong demand growth in China and India.

"It is not a problem of availability of reserves or capital. We need to be sure that the increase in production will be high enough and a sustained production capacity increase policy is in place. That will need sustained political will, he said.

Saudi Arabia has plans to invest US$14 billion to raise output capacity from 11 million barrels a day to 12.5 million bpd by 2009, according to a report by Samba Financial Group, a Saudi-based bank.

The IEA said Saudi Arabia would need almost to double current output of 10 million bpd to meet the expectation of demand in 2030. But Birol said the kingdom might muster the long-term political will only to produce just over half the extra barrels deemed necessary.

Iran and Iraqi are also vital to ensuring adequate oil and natural gas supplies in the next 25 years. But both face political hurdles to achieving the necessary investment. Many Middle East countries fear that investing heavily in new oil supplies will deplete fields too quickly and cut revenues by depressing oil prices.

Birol said: "We may end up with much less oil from the Middle East than we demand. There is substantial risk of substantially high oil prices if current investment in the Middle East is not stepped up substantially.

"Such high oil prices would be an additional trigger for major consuming nations to introduce policies to save oil and look for alternative sources. If they don't the global economy but mainly the economies of the consuming nations will suffer."

Th IEA's near-term forecasts are below crude oil's current price rang of about $60 a barrels because the agency, which releases its World Energy Outlook this week, expects new supplies of oil and investment in platforms, pipelines and refineries to ease the current crunch.

Oil demand is expected to more than double by 2030. Much of the increase will have to be met by countries in the Middle East and Africa.

Meanwhile, natural gas demand will grow at a faster rate, with Qatar, Algeria and Iran as its biggest producers, IEA said.