July 22, 2008

Negotiations on With Turkey for Developing Oil Fields – Iran Official

Text of unattributed report in economic desk headlined: "One table and several negotiations" published by Iranian newspaper Aftab- e Yazd on 19 July

These days the 'hot question' in the field of energy which is bringing our energy authorities to negotiate with different clients is: To which countries should we entrust our gas and oil projects? The profit hidden in black gold and gas has made countries alert to express their readiness to seize the chance of playing roles in different phases of development of such projects, in case of any withdrawal; this role is of course more of a technical nature rather than agreements behind the scene.

The reason is that the oil revenue as the most significant income is supposed to go on all Iranian tables. The French who did not bring much to the country in the development of different phases of Southern Pars project, has now given their place to the Turkish companies, who now has to define the issue of the table and oil revenues. Regarding this new presence, the executive manager of Pars Oil and Gas Company, while announcing that the negotiations with Shell and Total Companies have not yet been finished, gave the news of Turkish technological and financial assistance to play a role in phases 22 to 24 of the development project of Southern Pars.

According to Mehr news agency, Ali Vakili added: Considering the fact that Iran has two large consumer markets in the East and West, it is not so dependent only selling L.N.G gas. Besides, regarding the present prices of gas and oil, transferring of gas through pipes is much more economic than L.N.G.

According to the executive manager of Pars Oil and Gas Company, negotiations with Shell and Total is still under way and the future of 11th and 13th phases will definitely be determined before the end of this year. Emphasizing on the possibility of Shell and Total not going on any further in the development of the above two phases for any reason, he said: There will be other European and Asian countries anxiously willing to replace them. In fact, many countries have requested to take part in the development of these phases. Vakili said: At present, Turkey is evaluating its technological and financial capabilities for taking part in phases 22 to 24 of Southern Pars and will give the result of their economic assessments until 15 Mordad [August 7, 2008].

Meanwhile, however, Iran is simultaneously negotiating with domestic companies so that if the Turkish decide not to participate in the project for any reasons, the progress continues with domestic companies. Emphasizing on the fact that the initial stage of phases 6 to 8 of Southern Pars project will start by the end of July and the beginning of August, Vakili blamed sea-storms and other unforeseen climatic events for the delays.

Regarding the latest situation of Pars Northern oil and gas field, Vakili explained: In this field, the contract with the Chinese Sinok is being finalized, while at the same time negotiations with other domestic and foreign companies are under way. He reminded the fact that this year the platforms of phases nine and ten of Southern Pars field will definitely come into production line and its gas will be injected into the pipelines. He said: In addition, the operation of the second platform will be delayed because of the lack of facilities, but utmost efforts are being made to put the mainland section of this phase into operation by making use of the gas produced by phases 6, 8 and 9 of Southern Pars field until the wells of the 10th phase get ready.

Originally published by Aftab-e Yazd, Tehran, in Persian 19 Jul 08.

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