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How Iran Manipulates Foreign Investment Statistics

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Iran’s Foreign Investment Organization CEO claims the country has attracted $10.6
billion in “foreign investment” since President Ebrahim Raisi assumed office in
August 2021.

Ali Fekri stated that almost half of this figure is related to the oil and gas sector, with Russia leading other foreign investors with $2.7 billion in funds.

He went on to say that the attracted investment value during the last fiscal year, from March 2022 to 2023, was $4.2 billion. However, according to the United Nations Conference on Trade and Development (UNCTAD), Iran attracted only $1.5 billion in foreign direct investment in 2022.

Fekri’s claim about $10.6 billion in “foreign investment” came after he recently cited the figure of $9.2 billion in an interview with the semi-official Tasnim news agency on November 23, 2023.

He explained at the time that the figure doesn’t mean $9.2 billion foreign cash funds flowed into the country; rather, it is the amount of “approved investment projects and contracts by foreigners” since the start of the Raisi administration. In simpler terms, what he refers to as “attracted foreign investment” is indeed the value of contracts with foreigners.

Fekri also mentioned that during the last fiscal year ending March 21, 2023, Iran attracted $4.2 billion in foreign investment, about 170% more than the previous year. However, UNCTAD’s statistics do not indicate any significant investment inflow to Iran during 2022 compared to 2021.

He did not elaborate on why his claimed “attracted investment value” increased from $9.2 billion to $10.6 billion since November 2023, especially considering that Iran has not announced any new contracts with foreigners in the last three months. He named Russia, China, UAE, and Turkey as the biggest “investors” in Iran since August 2021.

Russian ‘Investment’

Regarding Russian “investment,” his claim about attracting $2.7 billion in investment came while Russian companies have only sealed contracts to drill wells in seven Iranian oil fields. This represents service exports rather than investment contracts. For example, one of these companies, Russian ZN Vostok Ltd., is obligated to drill 20 wells and install 22 pumps in the Cheshme Khosh oil field. Its CEO, Azamat Faridovich Ismagilov, stated that the total value of contracts with Iran is $500 million, including $170 million for the Cheshme Khosh field.

It’s CEO, Azamat Faridovich Ismagilov said on February 6 that ZN Vostok’s total value of contracts with Iran is $500 million, including $170 million on Cheshme Khosh field. “We have three drilling rigs in Iran and have a plan to add another one for drilling 6 new wells”.

ZN Vostok signed the contract with Iran in April 2022 to develop the above-mentioned field. It has increased the field’s production by 29% to 62,000 barrels per day so far by drilling 14 wells.

Iran has a history of exaggerating cooperation levels with its “anti-western” partners like Russia and China, especially when good economic news becomes scarce and the national currency, rial, nosedives. Since the beginning of January the rial has lost more than 10 percent of its value against the US dollar and other major currencies.

For instance, while Iran proudly announced the signing of the “largest oil and gas agreements in the country’s history worth $40 billion” with Russian Gazprom in 2022, Morteza Behruzifar, an energy expert in Tehran told the ILNA news website that even before the Western sanctions on Russia, it had not invested a penny in Iran.

Like most Russian companies, Gazprom is hardly in a position to invest in another country. Its revenues plunged to $3.1 billion in the first half of 2023, from $16.5 billion in 2022.

Although Gazprom plans to invest $17.5 billion in 2024, 20 percent less than 2023, none of its mentioned investment are related to Iran.