Financial Times– Iran expects to seal energy contracts worth more than $20bn over the next year despite the threat of new US sanctions as it pushes ahead with negotiations with international oil companies, including Royal Dutch Shell, the Anglo Dutch group, and Kremlin-controlled Rosneft.
Amir Hossein Zamaninia, Iran’s deputy oil minister for international affairs, told the Financial Times that the Islamic republic was negotiating 28 provisional agreements with foreign oil companies. These include Maersk Oil and Rosneft to develop the oil layer in South Pars, the world’s largest gasfield, and with Russian firms, Lukoil, Gazprom, and Zarubezhneft to develop oilfields, including Paydar Gharb, Abteymour and Mansouri.
“Any international oil company that you know, we are negotiating with . . . except the Americans,” he said. He added that “if conservatively put” Tehran anticipated signing contracts worth more than $20bn over the next 12 months. Mr Zamaninia said he believed there was “no tangible change in international oil companies’ determination [to invest] and the speed of their negotiations with Iran” since Donald Trump refused to certify Tehran’s nuclear deal with world powers this month.
The US president’s decision meant Congress will decide before the end of the year whether to reimpose nuclear-related sanctions on the Islamic republic. The energy sector has been one of the main beneficiaries of the 2015 accord, under which Tehran agreed to scale back its nuclear activities and many sanctions on the country were lifted. Iran has more than doubled its oil exports to about 2.4m barrels per day since the accord came into effect in January 2016, and is desperate to attract more investment in the sector to upgrade decaying infrastructure and develop fields.
Iran’s South Pars is the world’s largest gasfield © AFP European signatories to the agreement — the UK, France and Germany — have been lobbying hard to prevent the US from killing the deal and consider foreign investment as critical to ensuring its survival. Russia and China, which also signed the deal, are also supportive of the accord. Hassan Rouhani, the president, secured the backing of the regime to sign the agreement because of the expected economic dividend. France’s Total signed a $4.8bn contract in July to develop the South Pars gasfield and has said it remains committed to the project as long as international regulations allow it to do so. Iranians and industry observers are now keenly watching whether Shell will sign a deal to develop one of the giant oilfields in southern Iran.
The company signed a provisional agreement in December to carry out studies of the oilfields of Azadegan and Yadavaran in south-west Iran, as well as the Kish gasfields in the Gulf. “We definitely need modern technology. Iranian companies are not able to develop fields without partnerships with foreign companies,” said Mr Zamaninia. “There is no shame bigger than for Iran, with its huge oil and gas resources, to have such low volumes of oil and gas production.” While Iran is looking to raise its production capacity, Mr Zamaninia said the country in principle backed Opec extending its output cuts, which have been in effect since January 1 this year. Russia, which has joined Opec in the cuts, is considering extending the deal until the end of 2018, with the cartel’s ministers set to meet at the end of November. Iran has a production target of 3.8m b/d, a level reached in the second half of 2017. “We have almost regained our market share,” Mr Zamaninia said.