Iran tries to entice foreign oil companies to help develop its resources

Bloomberg/Fuel Fix:
Iran plans to meet with international oil companies as soon as March to try to entice investors to its energy industry once world powers lift sanctions, the Persian Gulf state’s oil minister said.

Iran, once OPEC’s second-largest producer, is talking with European companies about future projects, Bijan Namdar Zanganeh told reporters today in Vienna. The minister said he hopes Exxon Mobil Corp., Royal Dutch Shell Plc, BP Plc, Eni SpA and Statoil ASA will invest in the country. Iranian officials will meet with international companies in London in March, he said, declining to identify them.

The Islamic republic agreed last month to restrict work on its nuclear program for six months in return for a loosening of sanctions that offers about $7 billion in relief and access to $4.2 billion in oil revenue frozen in foreign banks. The accord leaves in place banking and financial measures that hampered crude exports. Zanganeh said he hopes the initial deal will lead to an agreement unfettering all sales of Iranian crude.

“We want to return to the market,” he said. “It’s our main priority,” Zanganeh said in the Austrian capital, where he attended a meeting of the Organization of Petroleum Exporting Countries. The group agreed to keep its crude output target unchanged at 30 million barrels a day.

Iran wants to produce 4 million barrels a day of crude after international sanctions are lifted, “even if it goes down to $20 per barrel,” Zanganeh said. “Under no circumstances will I renege from Iran’s right to produce 4 million barrels a day, and I am sure OPEC will exercise wisdom in this matter.”

The country hasn’t approached any U.S. oil companies, though it has spoken with and plans to meet some businesses that are based in Europe, Zanganeh said. “I’m not sure they would like me to mention their names,” he said in an interview posted today on the Oil Ministry’s news website Shana.
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Actually ConocoPhillips has been named as a potential US player in the Iran oil market.   If Iran drove down the price significantly it could seriously hurt US production that has been growing at the current price.  Oil needs to be selling at about $60 a barrel or more for most fracking wells to be profitable.

Investors should be wary of a commitment as long as the religious bigots are in charge of Iran.  They are still the world's leading state sponsor of terrorism and they are still dedicated to the destruction of Israel and the US.  That makes them an unstable regime whose infrastructure could be at risk in any conflict, meaning any investment would carry significantly more risks.

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