Iran's oil and gas industry is vital to its economy and government. Oil export revenues have accounted for more than 24 percent of Iran's gross domestic product and between 50 and 76 percent of the Iranian government's revenues in recent years. Iran has the world's third largest oil reserves and second largest gas reserves, according to the Congressional Research Service (CRS), and is the world's fourth largest producer of crude oil, according to the Central Intelligence Agency (CIA) World Factbook. However, Iran has not reached peak crude oil production levels since 1978, does not produce sufficient natural gas for domestic use, and lacks the refining capacity to meet domestic demand for gasoline, according to the Department of Energy (DOE) and IHS Global Insight. IHS Global Insight reports that Iran's priorities for the next five years are to (1) raise oil production and exports as much as possible, (2) increase natural gas production for domestic use, and (3) expand refining capacity if financially and technically possible. CRS reported that the Deputy Minister of the National Iranian Oil Company said in November 2008 that Iran would need about $145 billion in new investment over the next 10 years to build a thriving energy sector. Accordingly, Iran is seeking the participation of foreign firms in providing financing and technical assistance in numerous oil, gas, and petrochemical projects, according to DOE. Although Iran prohibits non-Iranian firms from obtaining an ownership interest by investing in oil and gas fields, Iran allows them to enter into "buy-back" arrangements in which the foreign firms may receive entitlements to oil or gas for a limited time in exchange for the funds they expend on the project, according to DOE. U.S. law restricts U.S. firms from investing in Iran's energy sector through a variety of sanctions administered by the Department of the Treasury to discourage Iran from supporting terrorism and developing nuclear weapons. In addition, the Iran Sanctions Act, as amended, provides for sanctions against persons, including foreign firms, who invest more than $20 million in Iran's energy sector in any 12-month period. This correspondence (1) provides a list of foreign firms reported in open sources as engaging in commercial activity in Iran's oil, gas, or petrochemical sectors from 2005 to 2009 and (2) provides information about these sectors. We define commercial activity as having signed an agreement to conduct business, invested capital, or received payment for the provision of goods or services in the Iranian oil, gas, or petrochemical sectors. We did not review the contracts and documents underlying these transactions and did not independently verify these transactions. We did not attempt to determine whether the firms in this list meet the legal criteria for an investment specified in the Iran Sanctions Act. The Secretary of State is responsible for making such determinations.
Skip to Highlights