Iran Post-Sanctions: Opportunities for Japan
July 29, 2015
Who was cited:
Dr. Fereidun Fesharaki
A group of six nations led by the US compiled the “Joint Comprehensive Plan of Action (JCPOA)” on Iran’s nuclear program. It restricts Iran’s nuclear development drastically; and the EU and US will lift economic sanctions against Iran. What kind of impact would it have on Iran’s oil and natural gas developments, and as well as on international markets as the sanctions are expected to be lifted by the end of the year? The interview is conducted with Dr. Fereidun Fesharaki, Chairman of FGE, a global energy consulting firm.
Q: It could be easier for international companies to invest in Iran when the sanctions are lifted.
A: I met with Minister Zangeneh both before and after the six-nation group negotiation with Iran. He expressed great expectation toward Japan and Korea, in addition to Europe and the US, as Iran needs partners who have high-level technology for resource development. There is a view that the removal of the sanction, preventing the US companies from participation in Iran, may be delayed. If that’s the case, it puts Japanese companies (with skills/technology) in an advantageous position.
A: In 2014, Iran retracted the contract for the Azadegan development with a Chinese company. Iran seemed to have sent a sign to let others know they are opening the opportunity for all overseas companies. There might be an opportunity for the Japanese company once participated in.
Q: Some observe Iran’s oil and natural gas export will increase.
A: Iran is currently producing 2.8 mmb/d and plans to increase to 5 mmb/d within the 10 years. Iran would need some US$280 billion investments for restoration work. Iran has an expectation toward the role of foreign capital.
A: Iran also promotes natural gas production. It has 15 prospective gas fields mainly in the Persian Gulf region, but only a portion of them, such as South Pars, will be developed. Most of the recently-discovered fields have remained underdeveloped due to the sanctions. The success rates from wildcat drilling in the world are generally 30-35%, but Iran has recorded a success rate of 79% in the exploration.
Q: Does the removal of the sanctions impact on Iran’s politics and society?
A: Younger people under the age of 35 account for 75% of the population. They are using Internet and eager to be connected to the world. (Considering such trend), Iran’s policy will focus on capturing more business opportunities.