TEHRAN: Iran plans to invest around $70 billion in two major offshore natural gasfields in the 2010-15 period, a senior official said yesterday.
Seifollah Jashnsaz, managing director of the state National Iranian Oil Company (NIOC), said Iran would invest $40 billion to complete remaining projects in the South Pars field during the fifth five-year economic plan, which runs until 2015.
He did not say how Iran, which is also the world's fifth-largest oil exporter, would finance the investments.
For years Iran has struggled to develop its reserves and now has to contend with an international lack of credit, as well as problems specific to the country, which is under international sanctions due to its disputed nuclear programme.
Iran has increasingly turned to Asia, which in some cases still has available cash to invest and whose energy demand is expected to outpace that in the developed world.
Another Iranian official, Hojjatollah Ghanimifard, said on Monday Iran is in talks with Asian banks on a 1bn euro ($1.40bn) bond to finance the development of South Pars, as part of its pursuit of billions of energy sector funding.
The Iranian government has agreed to the oil ministry's proposal to issue such a bond to fund South Pars' development, the semi-official Mehr News Agency reported yesterday.
South Pars, the world's largest reservoir of gas, is shared by Iran and Qatar.
The Iranian part is divided into 24 phases.
An additional $25bn would be invested in the North Pars field, Jashnsaz said.
"Altogether it looks like ... Iran will invest some $70bn in these two fields which is a very high figure and no other field in the country is expected to have such high investment," Jashnsaz told state television.
He did not explain the difference between the $70bn figure and the total of $65bn which he said would be invested in the two fields.
In May, an Iranian state firm said Iran planned to issue $12.3bn of foreign currency and rial-denominated bonds over the next three years to help finance South Pars, industry sources said.
In all, Iran's five-year energy sector investment plan required investment totalling around $30bn per year, Ghanimifard had said earlier in an interview.
Meanwhile, Total's negotiations with Tehran on a multi-billion dollar contract to develop Phase 11 of the South Pars are at a standstill, chief executive Christophe de Margerie said yesterday. The project was overshadowed by haggling over contract terms.
