News / Middle East

Iran Courts Indian Companies with More Alluring Oil Contracts

FILE - The front of the National Iranian Oil Refining and Distribution Company building is seen in Tehran, November 17, 2009. FILE - The front of the National Iranian Oil Refining and Distribution Company building is seen in Tehran, November 17, 2009.
x
FILE - The front of the National Iranian Oil Refining and Distribution Company building is seen in Tehran, November 17, 2009.
FILE - The front of the National Iranian Oil Refining and Distribution Company building is seen in Tehran, November 17, 2009.
TEXT SIZE - +
Reuters
— Iran has offered new, more alluring terms to reluctant Indian companies to win the investment it craves for its decaying energy sector suffering from tight Western sanctions.
 
Iran started offering production sharing contracts (PSCs), long denied to investors, to a group of Indian oil executives visiting Tehran in January, an Indian industry source said on Thursday.
 
Tehran's insistence, until now, on paying contractors back in oil made projects unattractive to foreign firms even before sanctions made it nearly impossible for most to work there.
 
Iranian Foreign Minister Ali Akbar Salehi pictured in Nicosia, Cyprus on June 26, 2012.Iranian Foreign Minister Ali Akbar Salehi pictured in Nicosia, Cyprus on June 26, 2012.
x
Iranian Foreign Minister Ali Akbar Salehi pictured in Nicosia, Cyprus on June 26, 2012.
Iranian Foreign Minister Ali Akbar Salehi pictured in Nicosia, Cyprus on June 26, 2012.
Iranian Foreign Minister Ali Akbar Salehi repeated the production sharing offer during an India-Iran Joint Commission meeting with Indian external affairs minister Salman Khurshid in Tehran last weekend, Indian media reported.
 
Indian firms say the risks of investing large sums in Iran are still too great, even with a more attractive PSC regime.
 
“We expressed our reservations because of international sanctions and non-availability of services and material required for execution projects,'' said a source who was involved in talks with Iran on potential upstream activities in January.
 
Three Indian companies with stakes in a gas field in Iran - Indian Oil Corp., ONGC Videsh and Oil India - told a U.S. government watchdog late last year that they had no plans to pursue further work on the project.
 
According to Iranian media reports, the National Iranian Oil Company (NIOC) has been drafting production-sharing contracts in the hope of attracting Asian companies, which are not banned by their governments from operating in Iran, to invest in its rundown industry.
 
Indian press reports said that the two foreign ministers discussed PSCs on Saturday at their meeting in Tehran.
 
A statement published by the Indian foreign ministry after the meeting said the two sides agreed to study joint investment prospects in both countries but made no mention of energy agreements.
 
The two ministers did discuss India working to upgrade Iran's Chahbahar Port near the border with Pakistan to help boost trade with land-locked Afghanistan to the north, according to the Indian statement.
 
“We are determined to explore and use all capacities for economic cooperation,'' Khurshid was quoted as saying in a statement published by the Iranian foreign ministry.
 
Under Iran's established buy-back system, contractors are supposed to be paid in oil and gas from projects they develop with their own capital but then have to hand back the project to Iranian companies when completed and wait for pay back.
 
This system has kept oil majors like Italy's Eni waiting for multi-million-dollar payments for projects they completed decades ago, while sanctions make it still more difficult to get the oil from Iran.
 
Under the new contracts, NIOC plans to transfer development of small oil and gas fields to contractors so that the state-run Iranian oil company plays only a supervisory role, NIOC director Ahmad Qalebani was reported as saying by Fars News in March.
 
PSC's would only be offered for shared fields, he was quoted as saying during a meeting in Tehran on the development of Iran's contracting system in March.
 
Iran has been courting Asian and Russian energy companies to develop its vast oil and gas reserves over the last few years, and there are still a number of Chinese and Russian companies working in upstream projects, according to the U.S. government.
 
Western sanctions have also dampened their appetite for long-term investments in the isolated Islamic Republic, on current contract terms, with Chinese companies slamming the brakes on projects they agreed to develop years ago.
 
Under pressure from Washington, India and China - two of Iran's biggest oil buyers - have also sharply reduced their imports of Iranian crude over the last year.

You May Like

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

John the XXIII and John Paul II will be made saints in a ceremony at St. Peter’s Square on April 27 More

Thailand Reacts to Plots Targeting Israelis

Authorities hope arrest of two Lebanese suspects will disrupt plot to attack young Israeli tourists More

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

'Once Upon a Forest' takes viewers deep into heart of tropical rainforest More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pope Francis Hopes Dual Canonizations Will Reconcile Churchi
|| 0:00:00
...
 
🔇
X
Jerome Socolovsky
April 22, 2014 4:14 PM
On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Robotic Mission Kicks Up Lunar Dust

A robotic mission to the moon was deliberately crashed onto the lunar surface late last week, but not before scientists had collected data gathered by the spacecraft which was designed to self-destruct. VOA's Rosanne Skirble reports on the preliminary findings of the craft, called LADEE - an acronym for Lunar Atmosphere and Dust Environment Explorer.
Video

Video Boko Haram Claims Responsibility for Bombing in Nigerian Capital

The Nigerian militant group known as Boko Haram has claimed responsibility for a bombing in the capital on April 14th that killed 75 people. In the video message, Abubakar Shekau, the man who says he ordered the bombing, says nothing about the mass abduction of more than 100 teenage girls, most of whom are still missing. Heather Murdock has more for VOA from Abuja.
Video

Video Ukraine Developments Hang Over Obama Trip to Asia

President Barack Obama's trip to Asia this week comes as concerns over Beijing's territorial ambitions are growing in the region. Those concerns have been compounded by Russia's recent actions in Ukraine and the possibility that Chinese strategists might be looking to Crimea as a model for its territorial disputes with its neighbors. VOA's Bill Ide has more from Beijing.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid