Five Foreign Companies Vying for South Pars Gas Field Contract

Managing director of the South Pars Oil and Gas Company (SPOGC), Asadollah Salehi Furouz said that the final result of the tender, launched by the National Iranian Oil Company(NIOC), is not yet certain and that NIOC is still working on the proposals.

Phase 11, with estimated production of nine million tons per year, divided in two 4.5-million- tons project, is due to be contracted by the end of the current Iranian calendar year of 1382 (ending March 20, 2004).

“Some of the companies have made two bids for the development of both phases since NIOC has offered the two tenders simultaneously,” Salehi Furouz said, adding that negotiations with National Iranian Gas Export (NIGE) for the development of phase 13 of the gas field are currently underway by SPOGC. 

A few months ago, (NIOC) offered an international tender with the aim of development of Iran’s giant South Pars gas field amid the United States’ pressure on international investors not to invest in the Iranian oil and gas sectors because of Iran’s nuclear programs.

The merged Total Fina Elf Company, Iran's biggest investor with a share in four of the country's seven foreign buyback contracts, in 1995, ignored U.S. opposition to world investment in Iran to sign a groundbreaking deal to develop the Sirri oilfield.

Following the French company, many companies tried to grab lucrative contracts, which proved that the U.S. efforts to isolate Iran with the Iran-Libya Sanctions Act had backfired.

The United States turned a blind eye to the eagerness of their allies investing in Iran.

Oil is responsible for roughly 85 percent of Iran's export revenue, between 40-50 percent of the Iranian government's budget, and between 10-20 percent of Iran's gross domestic product. Current statistics put Iran's proven oil reserves at 90 billion barrels, or approximately 9 percent of the world's total. Some Iranian oil ministry officials claim that the proven oil reserves are more than 100 billion barrels, but the number has not yet been confirmed. 

In 1995, the then U.S. President Bill Clinton signed executive orders prohibiting U.S. companies and their foreign subsidiaries from conducting business in Iran, and specifically any "contract for the financing of the development of petroleum resources located in Iran." The U.S. Helms-Burton Iran-Libya Sanctions Act (ILSA) of 1996 imposes mandatory and discretionary sanctions on non-U.S. companies investing more than US$20 million annually in Iranian oil and gas.

Meanwhile, Iran has already held talks with some companies like Spain’s Repson Co., British Gas 9BG Group), Petronas, and Total Fina Elf to purchase Liquefied Natural Gas (LNG).

Total has had the most progressive talks with the Iranian oil ministry, the official added.

AF/IS

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MNA