Iran is OPEC’s second-largest oil producer and the fourth-largest crude oil exporter in the world. According to the 2008 BP Statistical Energy Survey, Iran had proved oil reserves of 138.4 billion barrels at the end of 2007 or 11.18 % of the world's reserves. Iran produced an average of 4401 thousand barrels of crude oil per day in 2007, 5.42% of the world total and a change of 0.3 % compared to 2006.
Iran has the world's second-largest reserves of natural gas, after Russia. According to the 2008 BP Statistical Energy Survey, Iran had 2007 proved natural gas reserves of 27.8 trillion cubic metres, 15.67% of the world total. The South Pars field, offshore in the Persian Gulf, is the northern extension of Qatar's North field. Taken together, these two fields form the world's largest gas reservoir. Qatar has been aggressively developing its side of the field, and has lately been signing large contracts with foreign oil companies to liquefy and export gas. Iran, which previously exported little gas, is now trying to develop its gas-export infrastructure, and, according to the 2008 BP Statistical Energy Survey, had 2007 natural gas production of 111.9 billion cubic metres, 3.79% of the world total.
In March 2004, President Bush extended sanctions originally imposed in 1995 by President Clinton for another year, citing the "unusual and extraordinary threat" to U.S. national security posed by Iran. The 1995 executive orders prohibit U.S. companies and their foreign subsidiaries from conducting business with Iran, while banning any "contract for the financing of the development of petroleum resources located in Iran." As a result U.S.-based Conoco was forced to abrogate a $550 million contract to develop Iran's offshore Sirri A and E oil and natural gas fields. France's Total and Malaysia's Petronas were awarded the contract.
The state-owned National Iranian Oil Company (NIOC) is responsible for oil and gas production and exploration. Iran has the largest oil tanker fleet in the Middle East, the National Iranian Tanker Company, which holds 29 ships including Very Large Crude Carriers.
The Iranian constitution prohibits the granting of petroleum rights on a concessionary basis or direct equity stake. However, the 1987 Petroleum Law permits the establishment of contracts between the Ministry of Petroleum, state companies and "local and foreign national persons and legal entities." "Buyback" contracts, for instance, are arrangements in which the contractor funds all investments, receives remuneration from NIOC in the form of an allocated production share, then transfers operation of the field to NIOC after the contract is completed.
Iran plans to double national oil production to more than 5 million bbl/d by 2009 and 7 million bbl/d by 2024. The country is counting on billions of dollars in foreign investment to accomplish this, but this is unlikely to be achieved without a significant change in policy to attract such investment. To date, the Economist Intelligence Unit (EIU) estimates that Iran has attracted some $15-$20 billion in foreign investment for its hydrocarbons sector (the largest being Eni's investment in the South Pars gas field).
According to the 2008 BP Statistical Energy Survey, Iran had a 2007 refinery capacity of 1857 thousand barrels a day, 2.11% of the world total. Iran’s nine refineries are operated by the National Iranian Oil Refining and Distribution Company (NIORDC), a NIOC subsidiary.
