Economy, Business And Markets

Bank Mellat, NIOC Cement Ties

Bank Mellat, NIOC Cement TiesBank Mellat, NIOC Cement Ties

Bank Mellat is willing to enhance cooperation with the oil and gas sectors, the bank’s CEO said.

Bank Mellat and the National Iranian Oil Company finalized a contract for the Kangan oil and gas development project in a meeting last week, the bank’s website reported Ali Rastegar as saying.

He referred to the bank’s “past experience in financing key energy projects” and called for reinforcement of ties. “Bank Mellat is the energy bank,” he said.

Rokn-Aldin Javadi, NIOC chief executive, said supporting and “expanding the role of Bank Mellat in the domestic economy would benefit oil and gas sectors.”

The senior oil official thanked the private lender for “constructively supporting the Oil Ministry and its subsidiaries.”

Established in 1980, Bank Mellat is a private bank. Last October, deputy oil minister, Kazem Vaziri Hamaneh, criticized the process whereby Iranian banks provide funding for the oil industry’s strategic projects, saying the ministry’s efforts to get loans for the Persian Gulf Star project had been an exercise in futility.

Pars Kangan is host to Phase 12 of the major South Pars Oilfield in the Persian Gulf with approximately $17 million in daily revenues. The project is expected to return the investments in the first three years of its operation.

Both state and private oil/gas contractors depend on domestic banks to fund most, if not all, of their multi-billion-dollar development projects, especially after the nuclear sanctions were imposed on Iran more than a decade ago. The US-led West claims the nuclear energy program is a cover for developing a secret nuclear weapon, a charge Tehran vehemently denies. Iran has declared that the nuclear program is geared to peaceful uses of nuclear energy.

Six world powers (permanent members of the UN Security Council plus Germany) and Iran signed an historic agreement in Viena in July that will put an end to most intentional sanctions in return for concessions that will curb Tehran’s nuclear agenda.