Iran embarks on new wave of foreign oil deals
Iran embarks on new wave of foreign oil deals
VIENNA (Reuters): Iran is about to launch a new wave of foreign investment in its oil and gas sector and has found little trouble attracting interest despite the threat of U.S. sanctions, Iranian Oil Minister Bijan Namdar Zanganeh said.
Tehran was set to sign a deal within the next two weeks with Australian energy and mining group BHP Billiton and Iranian partner Petro Iran, Zanganeh said.
The project will redevelop the offshore Foroozan-Esfyandar fields, tripling output to 150,000 barrels per day.
"These sanctions are only bad news for U.S. companies, not for us because we have done everything that we have wanted in previous years and U.S. sanctions couldn't prevent us from developing our oil and gas fields and our petrochemical plants," Zanganeh told reporters.
U.S. companies are banned by executive order from Iran while the 1995 Iran-Libya Sanctions Act seeks to punish international companies that invest more than US$20 million in the oil and gas industries of Iran or Libya.
Italian energy company Eni was the latest company to defy possible sanction under ILSA by signing a $550-million deal June 30 to develop the onshore Darkhovin oil field.
The terms for BHP are similar to Eni's for Darkhovin in its inclusion of a risk-reward element based on production guarantees, Zanganeh said.
BHP and its partner face possible penalties if they cannot boost the fields' output to 150,000 bpd from 50,000 in four to five years.
Zanganeh said Tehran planned to finalize a deal for phases nine and 10 of the South Pars gasfield by the end of August.
Once phase nine and 10 are concluded attention would turn to phases 11 and 12 for which France's Total, BP, Eni and Spain's Repsol have submitted separate bids.
Zanganeh said Iran aimed to conclude negotiations within 18 months with Japanese firms -- Japan National Oil Corp (JNOC), Indonesia Petroleum Ltd, Japan Petroleum Exploration Co (JAPEX) and Tomen -- for development of a part of the giant Azadagen field.