Iran urges foreign firms to return to oil sector

4th February 2014, Comments 0 comments

Iran urged foreign companies to return to its oil sector Tuesday as a delegation of leading French business people visited Tehran in the hope that Western sanctions may be eased.

In a speech to the delegation, deputy oil minister Ali Majedi said Iran's latest five-year plan, running from 2010-2015, calls for $230 billion (170 billion euros) worth of investment in its petroleum industry, of which $150 billion would go to upstream activities, according to the official IRNA news agency.

Fifty-five percent of investments would be used to "develop and expand the production of oil and gas fields," he said in the speech before dozens of representatives from the French employers' union Medef.

He added that Iran was reviewing its contracts to encourage foreign investment, and that nearly all downstream projects, for refineries and distribution, would be offered on a build-operate-transfer (BOT) or build-own-operate-transfer (BOOT) basis.

Major oil companies have steered clear of Iran in recent years because of strict Western sanctions aimed at curbing Tehran's nuclear activities.

But the election of President Hassan Rouhani, a reputed moderate, and the clinching of a landmark nuclear deal in November, have raised hopes of a diplomatic thaw and prompted an increasing number of high-level visits by diplomats and business people.

Western countries have long suspected Iran of covertly pursuing nuclear weapons alongside its uranium enrichment programme, allegations denied by Iran.

The agreement reached in November between Iran and the P5+1 -- Britain, France, the United States, Russia and China plus Germany -- requires Iran to scale back its nuclear activities for limited sanctions relief.

The six-month accord, which took effect January 20, is aimed at buying time for a comprehensive agreement that could see sanctions lifted on the oil and gas-rich country with a population of 76 million people.

The nuclear negotiations are set to resume February 18.

But a senior US official said last month that the easing of some sanctions under the interim agreement "does not mean Iran is open for business".

"Quite on the contrary, the overwhelming majority of our sanctions, and the basic structure of oil and banking sanctions remain in place," the official said.

Oil giants Total and GDF-Suez have nonetheless sent representatives to Tehran to explore a possible return to the country.

Iran possesses the world's fourth largest oil reserves and the second largest gas reserves, but its petroleum exports have plummeted more than 50 percent because of the Western sanctions.

© 2014 AFP

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