(Reuters) – Paolo Scaroni of Italy’s Eni (ENI.MI) met with Iranian Oil Minister Bijan Zanganeh on Thursday, the first western oil CEO to meet publicly with the minister since last month’s interim nuclear deal.
The meeting, in the minister’s Vienna hotel suite following Wednesday’s OPEC meeting, came after Zanganeh named Eni as one of seven Western companies he wanted to invest in Iran’s energy sector if international sanctions are lifted.
The talks also covered debts Eni is owed by Iran for previous investment and future terms for foreign companies to help revive Iran’s oil and gas industry, Scaroni told reporters after the meeting.
“We had a fairly long and very warm meeting with the minister, who is a person we know very well,” he said. Zanganeh was reappointed oil minister after an 8-year break by new reformist President Hassan Rouhani.
“We have been discussing potential new activities of Eni in Iran – of course all this is subject to lifting of the sanctions,” Scaroni said. “This is the key issue.”
He said new investment would probably involve both oil and gas projects.
Iranian oil production has fallen more than a million barrels a day since oil trade, shipping insurance and banking sanctions were imposed last year to pressure it to stop nuclear enrichment.
Tehran reached an interim six month agreement last month with six world powers to downgrade enrichment and other parts of its nuclear program.
“Of course we hope the sanctions will be lifted in the next six months or in the near future,” Scaroni said. “Considering that for us Iran is really a legacy country – we have been there since 1955 – we never abandoned the country, not even in the last difficult years.”
Iran’s buyback investment model with foreign firms – which do not allow them to book reserves or take equity stakes in projects – would need to be changed to attract major new investment, he said.
“We have been discussing about potential modifications to the contractual framework of Iran – the famous buyback – which we certainly do not consider a good way of attracting international oil companies in Iran,” Scaroni said. “We felt that the minister is certainly ready to modify this framework in such a way to make attractive.”
He said the discussion also covered outstanding payments due to Eni for previous investments, including the South Pars 4 and 5 gas projects.
“We plan to continue to be in Iran and possibly increase our activity as long as the sanctions regime is lifted,” Scaroni said. “There are so many opportunities in Iran both in oil and gas that we will certainly find a common area of interest.”
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