The Ministry of Petroleum (MOP) () manages all aspects of the Iranian oil industry, including the discovery, extraction, production, distribution, and importation and exportation of crude oil and petrochemical products. The Ministry has been sanctioned by the United States Department of State since 2020.
According to BP, Iran has of proven oil reserves and 29.61 trillion cubic meters of proven gas reserves. Iran ranks third in the world in oil reserves and second in gas reserves. It is responsible for applying the principle of Iranian ownership and sovereignty over oil and gas reserves. Also, it is undertake the separation of sovereignty tasks from management and development of country's oil and gas industry.
The Ministry was established after revolution in Iran and in the interim government of Bazargan, after departure of Hasan Nazia, the managing director of National Iranian Oil Company from the country in 1979. The organizational structure of this ministry consists of a central headquarters and four subsidiaries, including National Iranian Oil Company, National Iranian Gas Company, National Iranian Petrochemical Company and National Iranian Oil Refining and Distribution Company. It monitors the operations of exploration, extraction, marketing and sale of crude oil, natural gas and oil products in the country through its subsidiaries. In addition to meeting its major energy needs, the ministry supplies over 80% of foreign currency earnings by exporting crude oil and refined petroleum products.
According to the Fourth Economic, Social and Cultural Development Plan, the Government has been required to transfer at least 10% of the activities related to the exploration, extraction and production of crude oil to the private sector, while in the meantime retaining its ownership of oil resources. This is also the case in other fields of the Ministry of Petroleum's activities.
Iran plans to invest $500 billion in the oil sector until 2025. As of 2010, US$70 billion worth of oil and gas projects were under construction. Iran's annual oil and gas revenues were expected to reach $250 billion by 2015.Mehr News Agency: Iran eyes $250 billion annual revenue in 5 years Retrieved 22 December 2010
History The Islamic Republic of Iran formed the Ministry with the aim of applying the principle of Iranian national ownership and sovereignty to oil and gas resources, and separating sovereignty functions from company in the management and development of oil and gas industry of the country. Since the petroleum industry has a special role in the country's economy as a propellant industry and plays a key role in achieving the major goals of national economy, the ministry's performance is very important.
Iran holds 836.47 billion barrels of liquid hydrocarbon reserves (crude oil, liquids and gas condensate) and about 34 trillion gas reserves. It is ranked first in the world in terms of total hydrocarbon reserves and energy security. Also, the privileges like geopolitical position of the country and availability of powerful human capital have given it more strength.
The National Petroleum Procurement Proposal was signed by 17 representatives of the National Petroleum Commission on 8 December 1950. In the text of message was following: "we are proposing for Iranian oil industry to be announced in all regions of the country without exception under the name of well-being of Iranian people and in order to contribute to peace of the world: all exploration, extraction and exploitation operations be in the control of government."
Following the announcement of this proposal, "the law of oil Nationalization throughout the country and two-month extension to Petroleum Commission to study around implementation of this principle" passed in National Assembly and eventually in the Senate on 29 March 1950. Thus, The National Iranian Oil Company was established.
The first board of directors of the National Iranian Oil Company was constituted by implementing the law of oil industry nationalization and after expropriation of former British oil company in June 1951. Then, new rules were adopted for this new company.
The legal framework for activities of the National Iranian Oil Company in discussion of hydrocarbons sources and its products was determined by approving the "Law on Development of Petrochemical Industries (with subsequent amendments)" on 20 July 1965 and the "Law on Development of Gas Industry" on 25 May 1972. In addition, the extent of Iranian or foreign companies and firms has clarified to participate in petrochemical product plans.
Finally, a detailed description of presenting and receiving proposals, signing contracts, contract termination, conservation and preventing environmental pollution, maintaining Iran's interests and pricing conditions were presented by the approval of first "Oil Act" on 8 August 1974, in addition to defining the terms and conditions of work within hydrocarbon resources of whole country.
Upon approval of first "Oil Act", the "Law on Statute of National Iranian Oil Company" was ratified in five seasons on 17 May 1977.
"General and capital", "subject, duties, rights and authorities of company", "the entity of company", "balance sheet and profit and loss account" have formed first four chapters of the statute. In the fifth chapter of this law is also addressed to "other regulations".
Subsequently, the "Statute of National Petrochemical Company" and "Statute of National Iranian Gas Company" were approved on 21 November, and 25 November 1977, respectively.
After Islamic Revolution of Iran, the editing and approval of new laws were also on the agenda of Islamic Consultative Assembly with the necessity of following some principles and with regard to departure of foreign experts. Hence, new oil law was approved on 9 October 1987.
Oil law Following the announcement of this proposal, "the law of oil Nationalization throughout the country and two-month extension to Petroleum Commission to study around implementation of this principle" passed in National Assembly and eventually in the Senate on 29 March 1950. Thus, The National Iranian Oil Company was established.
First board of directors of National Iranian Oil Company was constituted by implementing the law of oil industry nationalization and after expropriation of former British oil company in June 1951. Then, new rules were adopted for this new company.
The legal framework for activities of National Iranian Oil Company in discussion of hydrocarbons sources and its products was determined by approving the "Law on Development of Petrochemical Industries (with subsequent amendments)" on 20 July 1965 and the "Law on Development of Gas Industry" on 25 May 1972. In addition, the extent of Iranian or foreign companies and firms has clarified to participate in petrochemical product plans.
Finally, a detailed description of presenting and receiving proposals, signing contracts, contract termination, conservation and preventing environmental pollution, maintaining Iran's interests and pricing conditions were presented by the approval of first "Oil Act" on 8 August 1974, in addition to defining the terms and conditions of work within hydrocarbon resources of whole country.
Upon approval of first "Oil Act", the "Law on Statute of National Iranian Oil Company" was ratified in five seasons on 17 May 1977.
"General and capital", "subject, duties, rights and authorities of company", "the entity of company", "balance sheet and profit and loss account" have formed first four chapters of the statute. In the fifth chapter of this law is also addressed to "other regulations".
Subsequently, the "Statute of National Petrochemical Company" and "Statute of National Iranian Gas Company" were approved on 21 November, and 25 November 1977, respectively.
After Islamic Revolution of Iran, the editing and approval of new laws were also on the agenda of Islamic Consultative Assembly with the necessity of following some principles and with regard to departure of foreign experts. Hence, new oil law was approved on 9 October 1987.
Ministers +No.PortraitNameTook officeLeft officePartyHead of government1Ali Akbar Moinfar29 September 197928 May 1980Independent Mehdi Bazargan2Mohammad Javad Tondguyan25 September 1980 17 August 1981Independent politicianMohammad-Ali Rajai3Mohammad Gharazi17 August 198128 October 1985IndependentMohammad-Javad BahonarMir-Hossein Mousavi4Gholam Reza Aghazadeh28 October 1985 20 August 1997Islamic Republican PartyMir-Hossein Mousavi Akbar Hashemi Rafsanjani5Bijan Namdar Zangeneh20 August 1997 24 August 2005Executives of Construction PartyMohammad Khatami6Kazem Vaziri Hamaneh11 December 2005 12 August 2007IndependentMahmoud Ahmadinejad7 Gholam-Hossein Nozari14 November 20073 September 2009Independent 8Masoud Mir Kazemi3 September 200916 May 2011Front of Islamic Revolution Stability9Rostam Ghasemi3 August 2011 15 August 2013Independent10Bijan Namdar Zangeneh15 August 201325 August 2021Executives of Construction PartyHassan Rouhani11Javad Owji25 August 202121 August 2024Independent Ebrahim Raisi
Constitution
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, 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 the National Iranian Oil Company (NIOC) in the form of an allocated production share, then transfers operation of the field to NIOC after a set number of years, at which time the contract is completed.
Since the 1979 revolution in Iran, the country has been under constant US unilateral sanctions. The first U.S. sanctions against Iran were formalized in November 1979, and during the hostage crisis, many sanctions were leveled against the Iranian government. By 1987 the import of Iranian goods into the United States had been banned. In 1995, President of the United States Bill Clinton issued Executive Order 12957, banning U.S. investment in Iran's energy sector, followed a few weeks later by Executive Order 12959 eliminating all trade and investment and virtually all interaction between the United States and Iran.
Specifically the ministry has been on the sanction list of the European Union since 16 October 2012.
Fifth Development Plan
Features of fifth development plan in oil industry The features of fifth development plan in oil industry include: a systemic template of a set of interconnected components that interact with each other to exchange data, information, materials and products, and they perform a targeted move. Also, different parts of the plan have been coordinated and have been seen as a value chain in industry as a whole.
The major goals of Iran's oil and gas industry in fifth development plan Objective 1: increase the share and improve position of oil, gas and petrochemical industry in the region and the world, to increase extraction of oil and gas with priority of common fields with neighboring countries, increasing refining capacity
Objective 2: Optimum use of hydrocarbon reserves of the country as backing and stimulus for sustainable economic development of the country.
Objective 3: Use of oil and gas industry capacity to defend national interest
Objective 4: Implement energy management to prevent waste in the country's fuel consumption, reducing energy intensity and granting targeted subsidies
Objective 5: Establishing effective and constructive interaction with energy producer and consumer countries; playing management role of Iran in energy distribution and transit.
Objective 6: Realizing the general policies of article 44 of the constitution in oil industry