Tehran: Iran expects to sign a contract to develop part of the world’s biggest natural gasfield in the next two weeks in what would be the first investment in the country by international energy companies since sanctions were eased last year.
Energy giants Total SA and China National Petroleum Corp signed a “heads of agreement” with National Iranian Oil Co in November to develop phase 11 of the South Pars gasfield, a deal that was valued then at $4.8 billion (Dh17.63 billion). Total chief executive Patrick Pouyanne told Euronews television on Tuesday that the company will sign a contract for the offshore gas project in the next few weeks.
“The text of the contract on phase 11 of the South Pars has been finalised and we think the contract will be signed within a week or two,” NIOC managing director Ali Kardor told reporters Tuesday, without specifying which companies would be signing. Iran also plans to hold a bidding round for rights to develop the Azadegan oilfield in south-western Iran in the next three to four months, he said.
Iran has the world’s biggest gas reserves and is the third-biggest oil producer in the Organisation of Petroleum Exporting Countries (Opec). The country aims to attract companies such as Total, Royal Dutch Shell Plc and Russia’s Lukoil PJSC and Gazprom Neft PJSC to its oil and gasfields with new technology to boost energy output. Its oil production climbed 33 per cent last year after sanctions related to its nuclear programme were eased in January 2016, according to data compiled by Bloomberg.
Total in November put the cost of the first part of the South Pars project at $2 billion, with Total’s share at $1 billion. “We will sign this contract in coming weeks,” Pouyanne said in the Euronews television interview. “It will be an important project, aimed at the Iranian domestic market.”
Paris-based Total was working on South Pars until sanctions forced the company to pull out in 2009.
Eni SpA of Italy also may return to an Iranian field where it once worked. It signed a memorandum of understanding in Tehran on Tuesday to study development of the Darquain oilfield, in south-western Iran near the Iraqi border, and the Kish gasfield in the Arabian Gulf. Eni was developing the Darquain field in 2009 and ended the project by 2010.
