$30 BLN FOR IRAN
Total SA, Royal Dutch Shell Plc and Lukoil PJSC are among international companies that have selected oil and natural gas deposits to develop in Iran as the holder of the world's fourth-largest crude reserves presents $30 billion worth of projects to investors.
Total is one of the companies that have been in the forefront of discussions and Eni SpA is also looking to invest, Oil Minister Bijan Namdar Zanganeh said. Shell, Total and Lukoil all specified fields they would be interested in developing in Iran, Ali Kardor, deputy director of investment and financing at National Iranian Oil Co. said in an interview in Tehran.
"Many companies are interested. Europeans are interested, Asian companies are interested," Zanganeh told reporters at a conference in Tehran on Saturday. "Total is interested, Eni is interested."
Iran is pitching 70 oil and natural gas projects valued at $30 billion to foreign investors at a two-day conference in Tehran as the Persian Gulf country prepares for the end of sanctions that have stifled its energy production. All banking and economic sanctions will be lifted by the first week of January," Amir Hossein Zamaninia, deputy oil minister for international and commerce affairs, said at the event.
"We are interested to come back to Iran when the sanctions are lifted and if the contracts are interesting," Stephane Michel, Total's head of exploration and production in the Middle East said at the conference. "We have worked in this country for a long time, so we know specific fields on which we've worked." Representatives of Lukoil and Shell declined to comment at the conference.
Iran won't have a problem to sell an additional 500,000 barrels a day once the sanctions are lifted, and the quantity won't have a significant impact on prices, Zamaninia told reporters. The country hopes it can reach an agreement with fellow members of the Organization of Petroleum Exporting Countries so that Iran's planned additional production remains within the 30 million barrels a day OPEC production ceiling, he said. Iran doesn't expect OPEC to change that output target at its Dec. 4 meeting, Zanganeh said.
The country plans to boost total oil output capacity to 5.7 million barrels a day by the end of 2020, with the help of new production contributed through new energy contact models, Roknoddin Javadi, managing director of state-run National Iranian Oil Co., said at the event. The figure includes both crude and condensate output, he said. Iran pumped 2.7 million barrels a day in October, according to data compiled by Bloomberg.
Iran could sign its first development contract in March or April, Kardor said. The new 20-year energy contracts framework is being introduced to investors at the Tehran conference, he said. "The next step is for foreign vendors to make a technical assessment and choose a domestic partner."
International companies will need to find a local partner for exploration and production projects, with more than half of engineering and construction and equipment manufacture done by Iranian firms, Javadi said.
Iran will ask companies to bid a per barrel fee for energy projects, and they will be paid on a fixed fee basis only and won't receive a premium for producing more than predetermined levels, Talin Mansourian, a consultant for the Petroleum Contracts Restructuring Committee, said. NIOC will announce other bid parameters in four or five months when it will hold an energy auction, she said. The companies won't be asked to pay bonuses on the contracts, she said.
The country is offering 52 oil and gas development projects in addition to 18 exploration blocks, according to a brochure from the Iranian oil ministry. That includes projects at 29 new and currently producing oilfields and 23 gas developments. Onshore fields make up 34 of the projects.
Iran's oil exports fell to an average 1.4 million barrels a day last year from 2.6 million in 2011 due to the sanctions on the country, U.S. Energy Information Administration data show. U.S. sanctions on Iran limit it to selling about 1 million barrels of crude a day to China, India, Japan, South Korea, Turkey and Taiwan, with additional purchases of condensate, a light oil liquid found in gas deposits, also allowed.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.