UN sanctions against Iran, levied because of the Islamic Republic's nuclear program, aren't affecting Iran's ability to attract foreign investment to its oil and natural gas industry. OMV AG is leading efforts to build the €5 billion Nabucco project.
„There's a great amount of interest,” National Iranian Oil Company Director Gholam Hossein Nozari said today at a conference in Vienna. „There are many countries here.” Iran's state-owned oil company, which controls the world's second-largest oil and natural-gas reserves, is tendering 17 oil blocks to investors. Austria's OMV AG, Spain's Repsol SA, Norway's Statoil ASA and Russia's OAO Lukoil are sponsoring a two-day conference in Vienna where the tenders are being presented. The US is facing resistance from European governments and companies to end business and financial dealing with Iran, the New York Times said January 29, citing unidentified diplomats. The UN Security Council voted to apply sanction on Iran in December over its nuclear work. The US says Iran is try to make an atomic weapon; Iran says it wants to generate electricity.
Iran needs about $94 billion of foreign investment by 2014 to maintain production rates, Nozari said. The country is losing about 7% of production annually because of depletion, he said. „Lukoil is very serious about developing oil and gas projects in Iran,” said Andrey Kuzyaev, the president of Lukoil Overseas Holding Ltd. „We're trying to expand our activities there.” Moscow-based Lukoil, Russia's biggest oil company, is planning to drill two exploratory wells next year in Iran's northern Caspian basin, Kuzyaev said. Iran is sweetening exploration contracts to attract more bidders by reducing risk, Nozari said. The country will double the time private companies can expect to make money on oil discoveries to around 15 years.
Iran is also ready to fix capital expenditure costs for companies ready to invest. The 17 exploration tenders will attract at least €460 million ($598 million) in investment, according to published guidelines. Companies must submit proposals by June 20. „Iran would be the ideal partner for us,” said OMV's exploration chief, Helmut Langanger. „No company can afford to not look at Iran. There are still enormous reserves to be discovered and exploited in the future.” OMV is developing an oil block along with Repsol on the Iranian side of the Iraq border, Langanger said. The Austrian company is leading efforts to build the €5 billion Nabucco project, a pipeline that may transport gas from Iran to Europe. (Bloomberg)