Italian Firms Can Help in Caspian Energy Projects

Italian Firms Can Help in Caspian Energy ProjectsItalian Firms Can Help in Caspian Energy Projects

Iran and Italy held negotiations to restore ties in oil, gas and petrochemical sectors, Oil Minister Bijan Namdar Zanganeh said following his meeting with the visiting Italian delegation in Tehran.

"Iran had constructive collaboration with Italian companies in development of South Pars Gas Field and a number of oilfields in the southern regions, such as Darkhovin Oilfield," Zanganeh said. "The oil industry currently needs the services of Italian companies in the Caspian Basin as well as enhanced oil recovery projects."

Italian oil giant Eni had a $550 million deal to develop Darkhovin, which is projected to produce 160,000 barrels per day, before suspending operations in 2010 under sanctions pressure, ILNA reported.

Eni also collaborated with the National Iranian Oil Company and Petropars Company for the development of South Pars phases 4 and 5.

Before the imposition of sanctions against Iran, Italian companies participated in the construction of petrochemical plants, transfer of know-how, manufacture of equipment and financing of petrochemical projects in Iran.

Iranian crude was also used as feedstock of Italian refineries prior to the tightening of sanctions against Iran in 2012.

"We have invited Italian companies to take part in petrochemical projects, as Iran is planning to revamp its petrochemical industry with the help of foreign investment and expertise," Zanganeh said. "Iran can also resume oil exports to Italian refineries when sanctions are lifted."

He further said Italian and Iranian companies can pool resources to manufacture oil industry equipment, which will be utilized not only in Iran's domestic market, but also in the regional markets.

The European Union imposed restrictions on cooperation with Iran in foreign trade, financial services, energy sectors and technologies, and banned the provision of insurance and reinsurance by member-states to Iran and Iranian-owned companies. In January 2012, the EU agreed to an oil embargo on Iran and to freeze the assets of Iran's central bank.

Senior executives, including Eni Chief Executive Claudio Descalzi, were among the hundreds of representatives who joined Italian Foreign Minister Paolo Gentiloni on the recent official visit to Tehran.

Gentiloni said on Wednesday Iran is open to changing contract terms with Italy's state-owned oil company Eni.

"The contracts will likely be modified in the interest of the companies that want to invest," Gentiloni told reporters in Tehran.

Eni said earlier this month it would consider investing in Iran after sanctions are lifted and if Tehran offers more favorable contract terms in line with international standards.

International companies operating in the oil and gas sector have been long awaiting their return to Iran's lucrative market. Analysts say Iran needs more foreign investment if it were to sharply boost capacity.

The nuclear agreement reached between Iran and the world powers (Britain, China, France, Russia and the US plus Germany) in Vienna on July 14 paved the way for foreign companies to restore their activities in Iran.