The gas sector is likely to burgeon over the next five years and there will be greater possibilities for exporting to neighboring states .The inter-Gulf gas network which is scheduled to be in operation by 2005 under the auspices of the UAE-based Dolphin Energy may , it now appears , provide an additional market for Iranian gas . Meanwhile, Iran is about to enter a new gas era . The opening of its first gas pipeline to a hard -cash market ,Turkey , is imminent . Moreover , the first LNG project ,with the bulk of some 8 MM cm/d of gas going to India, can be expected early in the New Year. And the government has just announced that a proper feasibility study will also be conducted into its long-cherished project of a gas pipeline to Pakistan and , again , India .
With crude production cuts in force , oil production should not rise over the 2nd quarter of 2002 . However , we do expect to see productions soaring in the second half of the year , if global demand continues to pick up . According to the Business Monitor Int’l Ltd. ( BMI ) , an increase in production levels may send prices back down and rising capacity might therefore not be matched with higher revenues from oil exports on the current account .
Development of transportation capacities, establishment of economic oil and gas transit infrastructures , modification of traditional refineries to produce cleaner petroleum products, liquefying natural gas , expanding the use of GTL (gas-to-liquids) and DME (de-methyl ether) , may eliminate some of the obstacles to which the Iranian petroleum industry presently faces , and may guarantee energy supply security in conformity with the objectives of sustainable development . In all these fields , preparations have been made for the implementation of a variety of projects in Iran . Nevertheless , much will still have to wait for the outcome of the comprehensive studies on Iran’s gas future , currently being undertaken by specialists from more than nine major international companies — and the bilateral negotiations that many of those firms are having with the Iranian authorities to secure work in Iran on a buy-back basis .
Among the official Iranian arguments is that , the international oil companies and producer and consumer nations have ” mutual -interests” — and that the Iranian energy development requires the cooperation of foreign companies — which appears to align very much with those who would question Iran’s current investment structures . For while these seem to be working well enough for gas , and could prove particularly appropriate for LNG projects where risk-and-reward elements can be factored into the overseas distribution component , it seems , that attracting the investment necessary to revive existing oil fields and develop new ones , could somehow prove challenging .
There yet may be a need however to consider moves to real partnership between Iranian and foreign companies in developing the country’s oil resources , rather than relying on buy-back arrangements which remain , at heart , a form of glorified service agreement.