Uplifting of sanctions, increasing foreign investments, and the growing oil and gas sector will propel the demand for oilfield services market in Iran to grow at a compounded annual growth rate (CAGR) of 13 per cent until 2021, a report said.

As of 2015, Iran had the highest success rate of natural gas exploration of 79 per cent in comparison with the global average of nearly 30 to 35 per cent, said the new report from TechSci Research, a global management consulting firm.

Further, uplifting of sanctions and establishment of new cost-effective transit routes is anticipated to revive oil and gas production in the country. Few of the leading firms offering oilfield services in Iran are National Iranian Drilling Company, Well Services of Iran (Schlumberger Methods) and Mehran Engineering & Well Services.

Lifting up of the sanctions, along with decline in crude oil prices is a major reason pushing growth in oil and gas exploration and production activities in Iran. In addition, cheaper oil and gas exploration cost in Iran make it a profitable venture for US-based global firms to explore oil in Iran, as the cost to produce a barrel of crude in Iran is $12.90 as compared to $36.90 in the US.

However, in the face of challenges such as geo-political issues, terrorism and chances of imposition of sanctions again, conservative firms would restrain from investing in Iran.

"With the uplifting of sanctions, Iran is undergoing a major positive transformation, which is leading to developmental activities being undertaken in oil and gas sector," said Laltu Sinha, manager Research with TechSci Research.