Monday, July 19, 2010

Global firms invited to join Iran energy projects

ASSALOUYEH, Iran — Global energy majors are welcome to help develop oil and gas projects in Iran despite new sanctions imposed on the Islamic republic, a top official told reporters on Monday.

"We welcome all international companies, eastern or western. The oil industry cannot be deprived of cooperation," said Mohammad Hossein Mousavizadeh, adviser to Pars Oil and Gas Co, which is developing the giant South Pars fields in Gulf waters.

Several top global energy majors have either quit Iran or are considering an exit since world powers in June slapped new UN sanctions on Tehran over its controversial nuclear programme.

Mousavizadeh said the development of South Pars, which holds about eight percent of world gas reserves, was not affected as Iranian companies were replacing global firms or foreign firms were staying on as associates.

"The development of South Pars is a closed chapter. The contracts have been closed with big consortiums," he told reporters after they were given a tour of phases 14, 15, 16, and 18.

"These (Iranian) consortiums have foreign associates ... In the past, foreign companies came as leaders of consortiums such as (France's) Total which was in charge of construction, technology and finance," he said.

"But that model is over now," Mousavizadeh said, indicating that Iranian companies were now leading the projects and sanctions were not affecting the development of South Pars.

"The sanctions are mainly for their companies not ours. We are not worried about sanctions in terms of technology. If we face any problem, we have to plan for it."

Mousavizadeh also gave an explanation of why Khatam al-Anbiya, the industrial wing of Iran's elite Revolutionary Guards, had pulled out of two development phases -- 15 and 16 -- of South Pars.

"They (Khatam al-Anbiya) preferred to pull out because of their construction activities elsewhere," he said.

"Any consortium that cannot observe the timetable of the project for any reason should step aside and be replaced. And they have been replaced by domestic companies."

On Friday, Khatam al-Anbiya said it was pulling out of the two phases as it had been slapped with sanctions and continuing to work in the fields would have "endangered the nation's resources."

Khatam al-Anbiya won the contract in late June 2006 to develop the two phases in a deal worth 2.09 billion dollars.

The industrial conglomerate is one of 15 Iranian companies linked to the Guards which have been targeted in the latest round of UN sanctions.

The firm was created during the 1980-1988 Iran-Iraq war to help rebuild the country. It has since diversified into mechanical engineering, energy, mining and defence, especially under the presidency of Mahmoud Ahmadinejad.

Iran, OPEC's second largest oil exporter, also has the world's second-largest reserves of natural gas after Russia.

The South Pars field, which Iran shares with the small state of Qatar, is comprised of 28 phases and holds around 14 trillion cubic metres (500 trillion cubic feet) of gas.

But its development has been delayed amid a lack of investment in a country faced with severe gas needs of its own and because of difficulties in procuring the required technology.

The town of Assalouyeh in the southern Iranian province of Bushehr has been chosen as the base for developing the offshore field.

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