Iran Says U.S. Firms Eye Iranian Oil Deals
By Edmund Blair
TEHRAN (Reuters) - U.S. oil firms have shown an interest in helping develop a major Iranian oil field but have not pursued the issue because they are barred from doing so by U.S. legislation, a senior Iranian official said on Saturday.
Hossein Kazempour Ardebili, who is in charge of international affairs at the Oil Ministry, also told Reuters that talks on energy ``buy back'' deals were going ahead with other foreign firms, including negotiations for the Cheshmeh Kosh field which were near completion.
Under the buy-back terms, a foreign firm recoups its capital expenditure and makes a profit by receiving a cash payment from part of the project's output.
Iran, which has awarded buy-back deals worth billions of dollars, has several major projects in the pipeline, including one to develop part of the giant Azadegan field.
``There was interest shown on the part of American companies, including ExxonMobil and Conoco for upstream projects in Iran, including Azadegan,'' Kazempour said.
``Of course, it did not proceed because they were barred by executive order,'' he added.
The United States, which broke diplomatic ties with Tehran in 1980, bars U.S. companies from Iran, while it has also warned foreign firms against investing in Iran's energy sector under the Iran-Libya Sanctions Act (ILSA).
``I understand that the interest remains and if there will be a relaxation on the part of the executive order, these companies may reach to some understanding with the Japanese for the Azadegan field,'' he said.
Japanese firms, who have been joined by Anglo-Dutch firm Royal Dutch/Shell, have submitted a plan to develop part of Azadegan field. The plan is now under evaluation.
Iran has said the Japanese firms include Japan National Oil Corp, Japan Petroleum Exploration Co and Tomen.
The U.S. Congress is currently considering an extension to ILSA, targeting firms investing more than $20 million a year in Iran. However, sanctions have not been applied in the past on European firms winning energy deals in Iran.
SANCTIONS HURT U.S. FIRMS
Kazempour said sanctions imposed by Washington were hurting U.S. firms who were keen to become involved in Iran.
He also suggested that ILSA should have no impact on foreign firms signing buy-back contracts, because the deals were structured so as not to involve foreign investment.
``It (ILSA) does not have any impact on foreign companies' involvement in Iran because this involvement does not constitute investment,'' he said, adding that the buy-back structure was drawn up because of Iran's constitutional ban on foreign ventures in the upstream energy sector.
On other buy-back contracts, Kazempour said the deal for Cheshmeh Kosh was ``in the final stages and should be finalized in a few days.'' Iranian officials have said Spain's Cepsa is the frontrunner.
On the Bangestan field buy-back, he said the technical assessment of bids was almost finished, but the financial proposals still had to be reviewed. The bidders include Shell, TotalFinaElf and ENI.
``I know we are endeavoring to complete that as soon as possible,'' he said.
Oil analysts said awards were being delayed because of some political uncertainty ahead of an expected cabinet reshuffle next month by recently re-elected President Mohammad Khatami. |
