Iran's E&P Offensive.

The theocracy in Tehran has launched a campaign to attract IOCs to its petroleum sector. But Tehran has so far achieved limited progress as only Asian firms have agreed to venture into an isolated country. Some Western companies have kept showing interest in oil and gas fields which are to be developed, but none of them has made a firm investment commitment.

Field development projects are offered under buy-back contracts whereby the foreign operator gets a fixed service fee. But there are penalties if the operator's work is below a standard set by the state-owned National Iranian Oil Co. (NIOC).

Iran's 13th international oil, gas and petrochemical exhibition was opened on April 19 by First Vice-President Parviz Davoudi and Oil Minister Gholam-Hossein Nozari. Davoudi said Iran's petroleum industry required $500 bn of new investment in upstream, midstream and downstream projects for the period to 2024. He said foreign companies would be expected to provide a major part of this. Minister Nozari said US and UNSC sanctions against Iran were "warn out tools" belonging to the 1950s and 1960s and were not affecting the country's plans to expand the petroleum sector.

However, independent experts say Iran is losing 500,000 b/d of its crude oil production capacity every year, as a result of under-investment and severe damages in the oilfields. Some of Iran's major oil reservoirs are said to be damaged beyond repair. Iran is also short of oil refining capacity, causing it to import a major part of the country's rapidly growing gasoline requirements.