Western oil groups in no rush to return to Iran

In southern Iran, workers are putting the finishing touches to the latest extension to South Pars, the world’s largest gasfield.

This work on Section 19 of the field is notable because it has been carried out by Iranian companies rather than western groups. “This site proves that Iranians have finally learned how to do the job,” says a young engineer at South Pars, near the port of Assaluyeh, before adding pointedly: “But we still need the western technology and knowledge direly.”

France’s Total and Norway’s Statoil helped develop South Pars in the late 1990s and early 2000s, but they and other international oil companies — including Anglo-Dutch group Royal Dutch Shell and Spain’s Repsol — left at the turn of the decade amid complaints about the terms under which they operated in the country. These companies were also wary of escalating tensions between the Iranian government and western countries over Tehran’s efforts to make a nuclear bomb.

The stand-off eased markedly in January, when the US and EU lifted many nuclear-related sanctions that had enfeebled Iran’s oil industry. But Tehran is struggling to persuade western energy companies to make a rapid return to Iran and ensure a lasting revival of the country’s antiquated oil and gas industry.

Iran has the world’s second-largest gas reserves, and fourth-largest oil reserves, according to the US Energy Information Administration, and the country wants $200bn of investment in its energy industry over the next five years in order to ramp production.

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https://www.ft.com/content/06acb822-95fe-11e6-a80e-bcd69f323a8b