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Sat 11 Oct 2008 06:21 PM

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Iran seeks investors for $25bn oil, gas project

World's fourth largest oil exporter reveals plan to double refining capacity by 2015.

Iran is looking for domestic and foreign investment in a $25 billion scheme to double oil and gas refining capacity by 2015, Oil Minister Gholamhossein Nozari said on Saturday.

"These developments projects fall in five categories with a total production capacity of 1,750,000 barrels per day (bpd) and an estimated cost of $25 billion," Nozari told an oil conference in the Iranian capital.

"This will be an excellent opportunity for both Iranian and foreign companies to come in and develop the country's refineries," he said.

Iran, the world's fourth-largest oil exporter, lacks refining capacity and must import huge amounts of costly gasoline to meet its needs, a sensitive issue as the West continues to seek ways to penalise Tehran for its disputed nuclear activities.

In 2006, the country started a multi-billion dollar, five-year programme to expand and upgrade its domestic refining capacity to 3.3 million bpd from the current 1.65 million bpd.

But analysts have said that surging costs and poor state funding for these projects will likely see the target date of completion pushed back. A senior official was quoted in May as saying the refineries would come on stream by 2012.

On Saturday, Nozari said the projects to expand refinery capacity would be completed by the end of Iran's fifth five-year plan, which runs between 2010 and 2015.

Iran's access to financing major projects have been hampered by curbs from European banks and energy firms to do business with the Islamic Republic, which is under U.N. and US sanctions over its disputed nuclear activities.

Asked whether international sanctions were hindering Iran's efforts to raise capital for investment in the energy sector, Deputy Oil Minister Mohammad-Reza Nematzadeh told Reuters: "There is problem but the route is not closed and we are doing our job." (Reuters)

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