IRAN'S OIL AND GAS INDUSTRY POST-SANCTION

Transcription

1 The Introduction of New Iran Petroleum Contracts IPC Tehran 2015 IRAN'S OIL AND GAS INDUSTRY POST-SANCTION By: Amir Hossein Zamaninia Deputy Oil Minister for Trade and International Affairs

2 JCPOA(Joint Comprehensive Plan of Action) Approaches and mechanism to address challenges of JCPOA Opportunities to integrate Iran s economy with global economies

3 Possible challenges of implementation of JCPOA for long-term economic contract: Snapback of sanctions Importance of addressing this challenge by EU and governments negotiated the JCPOA collectively and individually to allow for confidence and predictability to prevail for trade and investment in Iran and long-term economic and industrial partnership between Iran and its foreign partners. Importance of public encouragement of major banks and export credit agencies(aca) by their governments for engaging with Iran.

4 Political Environment of Iran Internal political stability Democratic principles and pluralism Internal Security Foreign Policy of constructive engagement, moderation, recognition of legitimate interests in regional context Promotion of the rule and principles of international law to resolve international conflicts Integrity of judicial system

5 Hospitable environment for foreign investment and partnership(foreign Investment Promotion and Protection Act(FIPPA)) Ease of doing business in Iran,(Iran s ranking in the world, in terms of Ease of doing business has improved 20 steps since 2014) Transparency of business transactions (Predictability, Intolerance for corruption) New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

6 Foreign Investment Promotion and Protection Act(FIPPA) Equal Treatment of foreign and domestic investors Foreign Investment shall not be subjected to expropriation or nationalization Possibility of capital inflow and capital and profit repatriation No limits on profit transfer, capital repatriation, equity percentage(downstream) Tax Holidays (exemption of 80% of income for 4 years in production activities, 100% exemption for 10 years in less developed regions, )

7 UAE Bahrain Qatar Oman Tunesia Morroco Malta Saudi Arabia Kuwait Jordan Iran Lebanon Egypt Iraq Algeria Yemen Djibouti Syria Libya West Bank and TEHRAN SUMMIT THE INTRODUCTION OF NEW IRAN PETROLEUM CONTRACTS - IPC Ranking countries in MENA region starting a business enforcing contracts Iran s ranking in MENA region: 4 in terms of starting a business 5 in terms of enforcing contract

8 Transparency of Business Transaction 1.Predictability Relative stability of currency exchange rate Steady reduction of inflation rate (34.7% in decline to 15.6% in ) Increased economic growth, (-1.9 in 2013 increased to 0.6 in 2015)

9 Transparency of Business Transaction 2.Intolerance for corruption Public debate Frequent reporting by the media Judicial determination to combat corruption High level task force against corruption( Heads of three branches of state)

10 Strategic location(15 neighbors, 1800km shore in Persian Gulf and Oman Sea) Suitable, safe and secure transit route, security of installations and pipelines Wage-competitive young and skilled human capital( Iran ranks 5th in the world in number of engineering graduates) Profitability of projects: low cost of oil production, low-risk investment for EOR/IOR projects Relatively low risk for development of green fields

11 Skewed relation between volume of hydrocarbon reserves and production rate(r/p ratio) Iran holds 9% of world s proven oil reserves while having less than 3% of world s oil production Iran holds more than 18% of world s proven gas reserves, while having less than 5% of world s gas production These figures translate into huge business opportunities for the years to come Low oil prices renders many non-conventional oil projects infeasible, making Middle East projects and in particular Iran s oil projects more attractive

12 Skewed relation between volume of hydrocarbon reserves and production rate(r/p ratio)

13 Partnership with international companies Transfer of technology Empowerment of Iranian private sector

14 Improved industrial base and engineering services in oil and gas industry Decreased dependency of national budget on oil revenue (from 50.5% in to 40% in )

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