Iran is one of the most significant producers of crude oil and natural gas in the world. According to the OFAC Annual Statistical Bulletin 2015, Iran has proven crude oil deposits equating to 157,530 million barrels and natural gas reserves of 34,020 billion cubic/meters. While subject to comprehensive international sanctions, the Iranian natural resources sector had severely limited access to international markets both for export and inward investment.
However, since the declaration of Implementation Day under the Joint Comprehensive Plan of Action (JCPOA), which resulted in the relaxation of EU and US secondary sanctions in return for Iranian compliance in the nuclear sector, the Iranian economy is no longer subject to such prohibitive restrictions.
Details of Iran’s first petroleum licensing round are expected to be announced in February. Notwithstanding the current low oil price environment, intense interest is expected as this will be a rare opportunity for E&P companies to gain access to proven, cheap to produce reserves in large quantities.
Although there are substantial opportunities for those involved in the oil and gas sector, companies should still be aware that a range of EU sanctions remain in effect and little has changed for US Persons who are still largely prohibited from any dealings with Iran.
To read the full update, click here.