TEHRAN, Oct 1, (RTRS): Iran is inviting foreign investors to actively develop its energy industry after sanctions are expected to ease in 2016, under a nuclear deal between Iran and six global powers, deputy Oil Minister Rokneddin Javadi told Reuters on Thursday. “We welcome all oil companies, including the Americans, that meet Islamic Republic’s requirements to invest in Iran. We welcome competition among foreign oil companies,” Javadi said in a telephone interview from Tehran.
Business delegations from around the globe have rushed to Iran after the July 14 deal, in which Tehran agreed to curb its nuclear programme in exchange for an end to economic sanctions that have hit the country’s oil production.
Major Western oil companies started withdrawing from OPEC member Iran after the United States and European Union imposed sanctions on the country in 2012. Javadi said Iran placed no limitations on Western companies, including US companies, investing in its oil and gas sector. He said Iran needed foreign know-how and technology to help develop its oil fields and improve pipeline and refinery infrastructure. “Our policy is that all foreign companies can bring their investment, technology and advanced management skills to develop our oil industry. Iran’s market will not be monopolised by a few companies,” he stressed. “Iran has never banned American companies from working in Iran. It was their government’s imposed unjust limitations that took this chance away from them.” US companies will still not be able to return to Iran because US sanctions related to human rights and terrorism will not be lifted under the landmark deal.
The sanctions have halved Iran’s oil exports to around 1.1 million bpd from a pre-2012 level of 2.5 million bpd. The loss of oil income has hampered investment in new development and the country has struggled to pay for the equipment and services needed to maintain smooth production. Javadi said Iran would hold an international oil and gas strategy conference in Tehran from Oct 19-21.
“During the conference … one of our goals is to introduce potentials of Iranian private sector and connect them to foreign partners so they can cooperate in upcoming oil and energy projects,” he said. “Many projects will be presented in this conference.” In November, Iran plans to announce its new oil contracts in Tehran, which it says would be a major improvement not only on the so-called buy-back contracts but also on the contracts rival and neighbour Iraq offered to oil majors during 2000s. Since the deal was reached in July 14, Iran has repeatedly announced plans to boost oil production and exports when sanctions are lifted to reclaim its position as the Organization of the Petroleum Exporting Countries’ second-largest producer.
Iran has said details of the new contracts would be presented to foreign investors in London in February. Some oil majors have said they would return to Iran if it made big improvements to the buy-back contracts, which some foreign companies complain made them no money or even incurred losses. “Our priority is developing the joint oil fields with neighbouring countries,” Javadi said. Analysts say Iran remains a difficult place for Western firms to do business. “Beside Iran’s complex political system there are some laws that make doing business with Iran very difficult. It may decrease foreign investors’ eagerness to do business with Iran,” said economist Sadegh Siami. But Javadi said the rights of foreign investors are protected under the Iranian investment law. “We have good laws, which with its correct implementation, the rights of foreign investors will be protected,” Javadi said.