Spain, Austria Scrutinize Energy Deals With Zanganeh

Spain, Austria Scrutinize  Energy Deals With ZanganehSpain, Austria Scrutinize  Energy Deals With Zanganeh

Oil Minister Bijan Namdar Zanganeh hosted Spain's Minister of Industry, Energy and Tourism Manuel Soria in Tehran on Monday to explore cooperation in a wide range of economic and energy ties.

Shortly after, Zanganeh met with Rainer Seele, CEO of the Austrian oil and gas company OMV, in one of the busiest days for the Iranian minister after an agreement was reached on Tehran's nuclear program in July, Shana reported.

After meeting Zanganeh, Soria said, "We are in Tehran to lay the groundwork for the presence of Spanish companies in economic, energy and industrial sectors. We seek a long-term and sustainable presence in Iran."

A high-ranking delegation of around 70 businessmen from Spain's oil, gas, renewables, engineering, industrial and infrastructure sectors is accompanying Soria in his visit to Tehran.

The Spanish mission is the fifth European delegation to arrive in Tehran after Iran and six world powers reached a historic deal on July 14 in Vienna, which would limit the country's nuclear program in exchange for removing sanctions on its energy and financial industries.

The Spanish minister said the two countries had established strong economic ties, but the sanctions against Tehran limited their trade cooperation.

"However, we hope to have a stronger presence in Iran's economic, industrial and energy sectors, once the sanctions are removed," he said.

"Madrid has high interest in boosting the Persian Gulf country's exploration and refining capacities."

Soria noted that Spain can become a major portal of gas exports to European markets for the Islamic Republic.

Petrochem Talks

Zanganeh said negotiations are underway to deliver Iran's liquefied natural gas, or LNG, to Spanish terminals, and from there, to other European destinations.

He added that Spanish companies are welcome to invest in Iran's petrochemical industry, following the recent political developments as well as the private sector's increasing investment in the petrochemical sector in the past few years.

The oil minister called on Spanish companies to look beyond the Iranian market to become a major exporter of goods and equipment to the Middle East.

Trade between Iran and Spain reached a record high of $5.2 billion in 2011, as energy comprised the lion's share of bilateral trade that year.

However, the volume shrank to a meager $321 million in the previous Iranian year, according to Iran's Chamber of Commerce, Industries and Mines.

Crude Exports to Spain

Iran is planning to increase oil exports to Spain to the pre-sanctions level of 200,000 barrels per day, Seyyed Mohsen Qamsari, director of international affairs at the National Iranian Oil Company, said on the sidelines of the Monday meeting.

"The volume of crude exports to Spain will depend on the situation after the sanctions and we have not yet agreed on a specific volume. However, reaching the pre-sanctions level is a possibility," he said.

Iran is planning to ramp up crude production by 500,000 barrels per day in the first step to gain a bigger share of the global crude market after the lifting of sanctions. Most of the new batch is expected to be supplied to Asian and European destinations.

Iran plans to produce up to 3.9 million barrels of oil a day by March, with output rising by 1 million barrels within five months of the removal of sanctions.

Tech Trade With Vienna

Rainer Seele, who has been at the helm of the state-owned OMV for merely two months, was the next in line to explore areas of cooperation with Zanganeh.

Seele said Iran can utilize Austrian technology to boost extraction from its rich oil and gas fields, adding that Tehran should sweeten its oil and gas deals for foreign contractors, since the plunge in crude prices has discouraged major oil and gas companies from making investments in this key sector.

OMV, which is 31.5% state-owned, is one of Austria’s largest listed industrial companies with a workforce of around 25,500 employees. It operates a major domestic gas pipeline network as well as gas storage facilities in Austria and Germany.

Upon his visit to Tehran, Seele hailed the nuclear agreement and said it would create attractive investment opportunities for Iran's oil and gas sector.