Rouhani urges Abe to boost oil, gas investments in Iran

Rouhani urges Abe to boost oil, gas investments in Iran

Iranian President Hassan Rouhani has urged Japanese Prime Minister Shinzo Abe to boost oil and gas investment in Iran. S&P Global Platts reports in its article Iranian president urges Japanese PM to boost oil, gas investments in Iran that during a 40-minute meeting with Abe in New York Tuesday, on the sidelines of the UN General Assembly, Rouhani was quoted as saying that Tehran hopes Japan would expand its energy investments with a focus on the oil and gas sectors, as well as in other fields including environment. In response, Abe noted that he will support Japanese companies' activities to expand bilateral economic relations.

Abe was also quoted as saying that his special envoy Masahiko Komura reported having a "very meaningful" meeting with Rouhani during his recent visit to Iran over September 5-7. Komura is vice-president of the ruling Liberal Democratic Party and chairman of Japan-Iran Parliamentary Friendship League, as well as a former MOFA minister. During the meeting in New York, when Rouhani invited Abe to visit Iran, he replied that he hopes to do so at a suitable time.

Masahiko Komura

Japan's Inpex said on September 13 that it may still bid for Iran's Azadegan field, although it is not clear what the National Iranian Oil Company's view is regarding its candidacy for operatorship of the giant oil field.

"While it is unknown whether NIOC positions Inpex as a candidate for operator or not, it is our understanding that we remain on the list of prospective bidders," an Inpex spokesman said in response to an S&P Global Platts report dated September 13 that Iran rejected a technical proposal from Inpex for Azadegan.

The reason given was Inpex's lack of water-injection experience, which will be required for development of the giant reservoir, Ali Kardor, managing director of NIOC, told the oil ministry's monthly journal Iran Petroleum.

Kardor said NIOC had narrowed the list of final bidders for the significant oil reserve that straddles the border with Iraq. "We have carried out pre-tender for Azadegan. The list of bidders has been finalized. Around 15 companies have expressed interest in this field," Kardor said in Iran Petroleum's August edition.

NIOC has prequalified 34 foreign companies for Iranian oil and gas upstream projects. "We have told everybody that Azadegan is an important field for us. NIOC has even rejected technical proposals of some reputable operators. One example is Inpex, which is known as a technical and powerful company. But after the field's study and some meetings, we both reached the conclusion that they cannot develop the field as an operator and the way Iran has in mind," said Kardor, who is deputy oil minister for oil affairs.

The Inpex spokesman confirmed that the company has been in contact with NIOC about the Azadegan field but declined to elaborate on the content of meetings, citing nondisclosure policies. "It is also a fact that the tender process for the Azadegan oil field development is ongoing, and Inpex has been invited to take part in this process," the spokesman said.

"At this point, Inpex has made no decision on whether to tender a bid [for the Azadegan oil field]," the spokesman said. "A final decision will be made based on a comprehensive evaluation taking into account the information and intelligence currently being gathered, the state of international affairs and our own investment strategies." Inpex had been the operator of the South Azadegan field from 2004 with a 75% stake. It cut its stake to 10% in 2006, transferring the operatorship to Naftiran Intertrade, an NIOC subsidiary.

In 2010, the company withdrew completely, following the Japanese government's decision to impose additional sanctions on Iran. But it was one of five companies to sign an agreement with NIOC to carry out studies at the South Azadegan field last June.

The Azadegan tender is Iran's first bidding round for a major oil field. It previously relied on bilateral negotiations to award development contracts. It is also the first under Iran's much delayed new contract model, the Iran Petroleum Contract, which is yet to be published. This replaces the old buyback contract, which failed to attract sufficient investor interest due to its tough terms.

Azadegan currently produces around 125,000 b/d of crude -- 75,000 b/d from the northern portion and 50,000 b/d from the south. NIOC plans to raise the production to 150,000 b/d in the north and as much as 600,000 b/d in two phases from South Azadegan.


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