DW: What are Iran's short-to-medium oil export prospects?

Richard Nephew: We have to make the clear statement that the sanctions are actually not going to be lifted until next spring. There are some people saying there are going to be increased exports this year. That could happen, but, if so, it would be a breach of sanctions.

I really think you're not going to see any kind of real boost until March or April of next year. And that's all contingent on when the Iranians can undertake a number of very complicated and time-intensive steps. From that point forward, sanctions won't be the inhibiting factor, and it will really come down to what their physical capabilities are. They have some ability to increase production. But my sense is that the amount of production they've had to stop is not as much as we took off the sanctions three years ago. That's for two reasons: One is they were already on the decline when we imposed the export sanctions between 2001 to 2012. And the other point is that when they had to shut down oil fields they probably did some damage to them. My sense is that getting back up to pre-sanctions level is probably several years away.

Given the infrastructure problems on and around the oil fields, how difficult is it going to be pump and process a decent amount of oil?

The Iranians have said themselves that they need between $50 billion and $150 billion of investment from the outside in order to get beyond the pre-sanctions level - beyond 2.5 million barrels per day. I don't think that all of that is to get them up to 3.5 million barrels - that doesn't make a lot of sense. They are going to need to spend some of that money just getting their infrastructure back together. But to me the issue is: they are working old fields now, that's all they've got. And because we [through the sanctions] also had an impact on investment in Iran, I don't think they're in a position to tap those oil fields again and again.

So they would need to find new oil sources?

Either new discoveries or tap those that have been discovered but because of the sanctions companies were reluctant to spend money on. What I found when I was working on the Iran sanctions file at the State Department was that people understood that they had some protection from sanctions because of a cut in oil waivers, because there was a desire not to screw up the international oil markets. But that didn't mean that there were people exploring new oil fields. We were still putting pressure on people not to do that. What I saw was more that people were working in existing places and trying to keep a low profile and even that stopped in 2010 when we really stepped up the sanctions.

They're going to need the money and time and some attention paid to using the new fields they've already found or are still looking for and that's not something they're going to be able to do on day one.

How much willingness and impetus is there for Europeans and the United States to invest?

Well, the US is out. Under the terms of the deal there won't be Exxon or any other pure American company going in. Is there a value in doing work in Iran? Absolutely. Its production costs - whatever they are in the end - are going to be less than those for shale. And, notwithstanding where oil prices are, there is genuine desire to have new, broader, more diverse supplies of oil. So there is going to be interest in going there, but I think it's going to be tempered by nervousness over whether sanctions come back, which is a real issue, or whether any of the Republican candidates for [US] president who come into office kill the deal. There are a lot of things that will make companies say that for external reasons we're not sure we want to do this.

Of course you've also got the internal aspect. I've negotiated with the Iranians for years. They're not easy to negotiate with and their contract terms are not constitutionally advantageous to oil companies. When you're picking the places where you'd really like a lot of oil to do business with, Iran's not one of them. But it is what it is: people will spend the money and they'll spend the time - it will just take longer than a lot of people are anticipating.

Just to play devil's advocate here: Who actually needs Iran's oil?

All the oil guys that I know are long-term thinkers. These are the guys who saw Venezuela go from a really great place to do business with to a terrible place to do business with. I think that people are going to want to spend the money and the time [in Iran], but what I don't think is going to happen is a Texas or California-type gold rush. You're not going to see frantic approaches there. If they don't like what they see in the contract, people will say "write a better contract." There isn't this sense of desperation for Iran that's going to make people accept crappy terms.

Richard Nephew is Program Director for Economic Statecraft, Sanctions and Energy Markets at the Center on Global Energy Policy at Columbia University. He served previously as Principal Deputy Coordinator for Sanctions Policy at the Department of State. Nephew also served as the lead sanctions expert for the US team negotiating with Iran. From May 2011 to January 2013, Nephew served as the Director for Iran on the National Security Staff where he was responsible for managing a period of intense expansion of US sanctions on Iran.