Iran, Europe Seek Further Economic Engagement

Since the nuclear-related sanctions against Iran were lifted a year ago, several European companies have started negotiations to establish businesses in Iran’s diversified market.

Stating the above, a report published by the Chinese official news agency Xinhua gave an overview of some of the promising deals. Below is the full text.

According to a report by Fars News Agency on Wednesday, an Iranian oil exploration and production company signed a memorandum of understanding with an Austrian oil and gas company for cooperation in upstream oil projects in Iran.

The Austrian OMV, an integrated oil and gas company based in Vienna, and Dana Energy company, a leading Iranian company active in oil and gas upstream field development activities, signed the MoU and agreed to evaluate prospective development and redevelopment projects in the Iranian oil and gas industry.

The document was signed in Vienna by Mostafa Khoee, Dana Energy board member, and Johann Pleininger, OMV executive board member responsible for upstream projects.

Reportedly, OMV entered Iran’s energy market in 2001. In 2016, the National Iranian Oil Company and OMV signed an agreement concerning the evaluation of various fields in Zagros area in the west of Iran, for potential future development, and to carry out a joint study for explorations in the southern Fars area.

Also, Tasnim News Agency reported on Tuesday that German major oil and petrochemical companies have offered to invest in the Iranian oil and petrochemical sectors.

A total of $12 billion in finance have been offered by the German companies, including the chemicals manufacturing corporation BASF.

BASF, whose managing director paid an official visit to Iran last year as a member of a delegation accompanying German Economy Minister Sigmar Gabriel, has offered to invest $6 billion in a petrochemical project in the south of Iran.

Wintershall Holding GmbH, Germany’s largest crude oil and natural gas producer, is another company that has signed a memorandum of understanding with the National Iranian Oil Company to make studies on four oilfields in the west of Iran.

Besides, a French delegation comprising representatives from six French companies is expected to arrive in Tehran on Saturday for talks on trading opportunities.

The French traders are scheduled to meet with their Iranian counterparts at Iran’s Chamber of Commerce, Industries, Mines and Agriculture on Jan. 28.

French enterprises in fields, such as energy, transportation, mining machinery, forestry, baking industry, home appliances and healthcare products, are seeking to explore avenues for further cooperation with Iranians.

“Iran is planning to establish three trade offices in Europe and launch them before October 2017,” said Abolfazl Koudeie, director general for trade with Europe and the US from Iran’s Trade Promotion Organization.

“We also plan to set up three other trade offices in Ukraine, Armenia and Tajikistan,” Koudeie was quoted as saying by the report.

Moreover, the downturn on the Norwegian continental shelf has sent Norway’s risk-taking oil companies to Iran to engage in business with the Islamic Republic.

“During the past year, we have had around 40 assignments from Norwegian companies wishing to do business in Iran,” said Erik Arvnes, director of the Investigation Department of the KPMG company that helps Norwegian companies conduct surveys of potential Iranian business partners.

“The companies we have worked with come mainly from the oil and gas industry, but there are also those that deal with shipping, seafood and renewable energy,” Arvnes was quoted as saying by the daily Aftenposten on Monday.

“Companies must be more creative and look at new markets where opportunities for growth are bigger. They are forced to think differently, both regarding which markets to enter and which companies to partner with,” Arvnes said.

Oil supply company IKM also saw great opportunities in Iran. Chief executive officer of IKM, Stale Kyllingstad, confirmed to Aftenposten that the company has had a team of 14 people working in Iran since last spring.

“They perform services in subsea technology field. This is a first long-term mission, which will generate between $6-12 million annually in the coming future,” Kyllingstad said.

Iran owns one of the world’s largest oil and gas reserves.