Azernews.Az

By Sara Rajabova

Giant oil companies such as Shell and Total need to use the full capacity of Iran's domestic manufacturers in order to carry out projects in the country's oil and gas sector, Deputy Iran's Oil Minister Emad Hosseini said on January 14, Mehr news agency reported.

He said the domestic manufacturers also need to boost the quality of their products with a view to meet global standards.

Hosseini went on to say that the cost of oil and gas projects has been increased by three to four times in the past few years.

At the end of the last year Iran named seven Western oil companies it wants back in its vast oil and gas fields if international sanctions are lifted and said it would outline investment terms in April next year.

Iranian Oil Minister Bijan Zanganeh named the seven in order: Total of France, Royal Dutch Shell, Italy's ENI, Norway's Statoil, Britain's BP and U.S. companies Exxon Mobil and ConocoPhillips.

Zanganeh also said that Iran has begun talks with leading Western energy companies to attract them back to the country.

Total moved back into onshore fields in 1997 and Shell in 1999, both while Zanganeh was minister, and both in defiance of U.S. sanctions. President Bill Clinton had blocked a Conoco project in 1995.

In early November 2013, the chief executive of Total, Christophe de Margerie, said the company will "definitely" go back to Iran, if the sanctions are lifted."

Shell's outgoing chief executive, Peter Voser, also said Iran possesses "vast resources" of oil and gas.

Iran has the world's fourth-largest proved national reserves of oil - most of it cheap to produce - and is home to the biggest proved reserves of natural gas, some 18 percent of the global total.

With nationalization in the Islamic revolution of 1979, the oil companies were thrown out and Iran's share of world oil production fell to below 40 percent by 1997 from 55 percent in the 1970s.

Iran's production stagnated through the 2000s amid growing international tensions over its nuclear program. The more effective sanctions instituted in 2012 have choked out foreign investment and sent output down to 2.65 million barrels a day in November from an average of 4.3 million in 2011.

Iran reached an interim deal last month with six western powers to limit its nuclear program, under which sanctions on oil investment and trade with Iran may be eased next year - although for now the agreement does not explicitly include a relaxation of the controls on Iranian oil sales.