Iran wants Turkish companies for oil projects

 Iran wants Turkish companies for oil projects

Iran is seeking further engagement with Turkish companies especially in upstream and downstream projects, a top Iranian official on energy said yesterday. "We will welcome greater engagement by Turkish companies into Iranian upstream and downstream projects," Dr. Amir Hossein Zamaninia, Iran's deputy minister of petroleum for trade and international affairs told Anadolu Agency on the sidelines of the World Petroleum Congress, Daily Sabah reports in its article Iran wants Turkish companies for oil projects.

"Turkey is one of our customers," Zamaninia said. "We have a long-term contract to supply oil to Turkey that is going pretty well." According to Turkey's Foreign Ministry, Turkey and Iran signed a Gas Sales and Purchase Agreement in 1996. "According to this agreement, Iran started to deliver 3 billion cubic meters (bcm) of gas per year to Turkey in 2001 and gas deliveries are expected to reach 10 bcm per year," the ministry said. There are many common grounds for investment between Iran and Turkey, Zamaninia said. "We need to work together to find projects that suit both companies in Turkey and Iran, of which there are plenty," he added. Zamaninia said that he was already in contact with several Turkish companies during the Istanbul congress but did not disclose any further details.

"Turkish companies are into power generation, into the importation of gas and oil, and we want to encourage them to engage in upstream projects as well," Zamaninia said. The Iranian diplomat said that considering Iran's hydrocarbon reserves, the country's production has not reached it maximum capacity.

"Production is much less relatively speaking to the reserves that we have," Zamaninia explained. "Therefore the cost of production in Iran is very low," he added.

Following the Joint Comprehensive Plan of Action (JCPOA) for Iran's nuclear program, the situation normalized to the extent that the country is engaging with both international and national oil companies.

"We have about 27 negotiations ongoing for different upstream projects," he said. Zamaninia said that the contract with French energy giant Total was concluded within 18 months, explaining that this was "normal" for a major oil and gas contract.

Iran signed a new contract at the beginning of July to develop Phase 11 of the world's largest gas field development project, the South Pars gas field with French Oil Company, Total and China National Petroleum Corporation and Iranian company Petropars.

"When it is finished in three years, it will add about 56 million cubic meters of gas to our production," he said. "It is a 20-year contract and has two phases. The initial direct investment is somewhere close to $4.8 billion," he added. Iran has "parallel negotiations with other companies that will come to fruition in a few weeks," he said: "You will hear about other contracts that have been made," Zamaninia said, though he did not elaborate on what companies would potentially participate. "I will not give names but I will tell you that as I said there are 26 negotiations [excluding Total] that are ongoing in parallel, all of them upstream projects and little by little they will come to contract fruition as early as the end of August," he said. Zamaninia said that all negotiations that Iran has been engaging in contain an important technology transfer component including "technology transfer, management and investment."

Iran holds the world's fourth-largest proven crude oil reserves and second-largest natural gas reserves, according to the U.S. Energy Information Administration. However, the country's oil and gas production was hampered in the past few years because of international sanctions. Iran aims to revive its oil and gas sectors in the aftermath of sanctions relief following the nuclear deal between Iran and P5 +1 countries signed in July last year.