European companies rush to Iran's energy market

13 April 2016 17:41 (UTC+04:00)

By Aynur Karimova

Since the international nuke-related sanctions imposed against Iran were lifted, the oil and gas companies of Europe have been showing great desire to regain their previous places in the Islamic Republic's energy market.

French Total Head Patrick Pouyanne has announced that his company is interested in the projects in the gas and petrochemical industries in Iran.

"Today all [sanctions] are removed, and we go back to Iran. Gas is a priority for us. Petrochemical [industry] is a way to monetize the gas," Pouyanne said at a press briefing on the sidelines of the LNG conference in Australia.

Despite the speculations in media, Total has not yet concluded with Tehran any transactions in the oil sector, he told journalists on April 13.

In late March, Reuters cited Iranian Oil Minister Bijan Namdar Zanganeh as saying that Iran has signed an agreement with Total on the development of the South Azadegan oil field.

Until January 2016, Total was unable to work in Iran due to the international nuclear-related sanctions imposed on the Islamic Republic.

MoU signed

Not only oil sector is priority for the European companies. The Italian multinational manufacturer and distributor of electricity and gas, Enel has concluded a Memorandum of Understanding with the National Iranian Gas Export Company.

The company's spokesman told Trend on April 12 that the two companies inked a MoU, "setting forth the main principles for possible future cooperation between the two companies in natural gas, LNG and/or related infrastructure."

These principles might include sharing of information, studies, analyses and training courses, as well as exploring future opportunities for long term supplies.

So far, Iran has failed to produce LNG. Back in 2007, Tehran launched a project for constructing Iran LNG plant, at Tombak Port, approximately 50 kilometers north of Assaluyeh Port, spending $2.5 billion.

However, international sanctions blocked the efforts made for finalizing the project. The project has progressed by 50 percent so far. The capacity of the Iran LNG plant is estimated at about 10.5 million tons a year.

Shell refineries

Energy-rich Iran, which is the fourth country in the world for its proven oil reserves of 158 billion barrels, is also keen to return to the oil market. The country eyes exporting oil to European countries' refineries in third countries.

Mohsen Qamsari, the National Iranian Oil Company's International Affairs Director, has announced that Iran and the British Shell Company are in talks on supply of oil from Iran to Shell's refineries in South Africa.

He said that Iran will provide the relevant volume of oil needed for Shell refineries in South Africa once an agreement is concluded.

As for the amount of oil likely to be sold to Shell, he said it will probably be set at the amount dating to the time that sanctions were imposed on Iran (namely about 100,000 barrels per day), Mehr news agency reported.

He further stated that Iran has also held talks with British Petroleum and Petronas on exporting oil to South Africa.

Before the sanctions were imposed on Iran, the Islamic Republic used to export 2.3 million barrels of oil per day, while under sanctions, this figure shrunk to 1 million barrels of oil per day.

Wintershall signs MoU

German companies also seek a good place in Iran’s energy market. Wintershall Holding, Germany's largest crude oil and natural gas producer did not miss its chance and inked a MoU with the National Iranian Oil Company on potential future cooperation.

Wintershall, a subsidiary of the leading chemical producer BASF, has been active in the Middle East for years.

To prepare for possible further activities in the region, the company inked such a MoU with the Iranian company. The details of the MoU are subject to confidentiality, Stefan Leunig, the Head of Media Relations in Wintershall, told Trend.

SHANA news agency reported under the document, over the next month the companies will exchange data and then the German company will study four reserves in western part of Iran.

Wintershall has never been involved in oil business in Iran.

So not only old partners, but also new companies show interest in Iran. One can expect Iran soon reach its goal - to be on focus of the leading energy companies and reach milestones in the energy sector.

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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

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