Iran to replace Gazprom with local contractors

Iran is cancelling plans to work with Gazprom’s oil unit on the Azar field and will offer it to a domestic consortium, the head of its state oil company was quoted as saying yesterday, as deals worth billions of dollars with foreign companies appear to be put into jeopardy.
If confirmed, the move could be a setback for the Russian energy giant, which has an agreement to develop the Iraqi side of the field.

“Unfortunately Russia’s Gazprom failed to fulfill its commitment and ignored ultimatums of National Iranian Oil Company,” the Fars news agency quoted NIOC’s managing director Ahmad Ghalebani. “We decided to end our cooperation in the Azar oil field and give the project to domestic contractors.”

Iran, however, frequently issues threats of ending talks when it is dissatisfied with the progress of a deal and Russia said last month talks continued.

In 2009, Iran had signed preliminary agreement with Gazprom Neft, Gazprom’s oil unit, which didn’t return a request for comment, for a potential contract of $2bn to develop the field.
Azar is a cross-border field shared with Iraq, where it is called Badra. Reserves on both sides total 400mn barrels, according to Fars.

A consortium led by Gazprom Neft has secured a $2bn deal to develop Iraq’s Badra.
Iran has bet on oil companies from Asian and ex-Soviet Union companies to replace Western European giants after they pulled out due to international pressure over its nuclear programme.
Yet little has materialised from a string of the preliminary agreements signed with them.
As a result, new oil minister Rostam Ghazemi, a former Revolutionary Guard who was appointed this summer, has vowed to increasingly rely on domestic firms.

In August, Belarusian national oil company Belarusneft pulled out from the development of an Iranian oilfield over contractual disagreements. Iran has also warned it could cancel $5bn in contracts signed with China National Petroleum Corp if the delays in developing the phase 11 of the South Pars gas field continue.

And on Saturday, the Iranian Offshore Oil Co, said plans to build a $7bn liquefied-natural-gas plant on Lavan Island with an unnamed European company had been cancelled.

Source: Gulf Times