Tehran, May 14, The Iran Project – Despite sanctions still in effect, western oil companies are now in talks with Iran about purchasing some of the country’s oil. Such businesses discussions can only mean that foreign corporations are confident that the UN’s sanctions to Iran will soon be lifted.
Iran received sanctions 15 years ago as a result of the country’s nuclear program. Since then, the country’s exports of oil have been reduced to more than half, declining to nearly 1 million barrels a day from a total of 2.5 million barrels. Major foreign companies greatly reduced their operations in Iran as a result of the sanctions. Sulzer, an engineering firm that deals in construction and technical assistance for hydrocarbon-based industries and strategic partner of Unaoil in the Middle East, is one of the companies that significantly decreased their business in the country when the sanctions were applied.
Hossein Vafee, one of the key figures of Iran’s oil industry and managing director of Pars Oil Co., said that his firm has been talking to Oil Behemoth Royal Dutch Shell. Vafee said that Shell expressed its desire to resume its work in the country, and other nations such as Italy and The Netherlands will likely follow suit. The U.S. is also showing interest in Iran’s oil, as a group of American-based oil companies went to Tehran last week to discuss about business.
If the UN’s sanctions will be lifted, Iran would be able to immediately export more than 30 million barrels of oil in storage that were amassed during the 15-year restriction.
The sudden interest in Iran, apart from predictions that the sanctions will be lifted soon, is coming from the country’s new format for oil contracts. The new format is based on the country’s traditional buy-back contracts that will ease the process of repayments for unsuccessful investments.
“International oil majors have strongly welcomed Iran’s new format of oil contracts,” said Mehdi Hosseini, Head of Iran Oil Contracts Revision Committee. “They are waiting for the results of Iran’s nuclear talks (on) the removal of sanctions.”