Initial Oil Deals With Europe Reach 300,000 bpd

Initial Oil Deals With  Europe Reach 300,000 bpd
Initial Oil Deals With  Europe Reach 300,000 bpd

Iran has signed deals to export a total of 300,000 barrels of oil per day to European customers since sanctions against it were officially lifted in January, with supplies to French oil and gas major Total to begin later this month, Oil Minister Bijan Namdar Zanganeh said on Saturday.

"Based on the contract signed between the National Iranian Oil Company and France's Total, it was agreed that Total will buy 160,000 barrels of crude oil per day from Iran to be delivered in Europe," Zanganeh was quoted as saying by Shana.

He said the contract with Total would take effect on Feb. 16 –precisely a month after the US and the European Union sanctions against Tehran were officially revoked—but did not give an exact breakdown of the intake of each customer.

Hellenic Petroleum, Greece's biggest refiner, was the first European company that signed a deal after the lifting of sanctions to import an undisclosed amount of Iranian crude. The refiner is expected to begin importing Iran's oil in the second half of the year, with the aim of covering a quarter of its needs.

According to reports, Iran used to sell as much as 800,000 barrels per day to European refiners in Italy, Spain and Greece before the sanctions over its nuclear program were imposed.

Total also wants to expand cooperation on exploration and production front.

Zanganeh confirmed news on Total’s prospective partnership with Iran LNG and also in South Azadegan Oilfield.

“Total has expressed keenness to cooperate with Iran LNG company and in North Azadegan … Iran is due to provide necessary information about the projects to be assessed by the French company,” he said.

The minister stressed that no agreement has been reached on delegating the company to implement a project.

Total was active in developing Iranian energy projects for more than 20 years, including the development of Iran's biggest gas field, South Pars, which holds about half of the country's gas reserves.

However, it ceased operations in Iran in 2010 following disagreements over contract terms as well as pressure from the French and US governments over oil and trade sanctions against Tehran.

The Persian Gulf country's oil exports, which had peaked at more than 3 million barrels per day in 2011, fell to a little more than 1 million bpd after tougher sanctions were imposed in 2012 targeting its nuclear program.

After the rubber-stamping of the nuclear deal with world powers last year, however, Tehran has ordered a 500,000 bpd increase in oil output.

*** Italian Interest

Zanganeh noted that Italy's Eni is interested in buying 100,000 barrels of crude oil from Iran and its representatives would visit Tehran in the near future to discuss the contract.

"Eni has voiced its interest in one of Iran's fields, which will be treated like the agreement reached with Total," he said.

Iran's oil minister said Italian refiner Saras is also planning to buy 60,000-70,000 bpd of oil from Iran.

Tehran is sweetening the terms it offers on oil development contracts to draw the interest of foreign investors deterred by sanctions and low crude prices, as its pragmatic president seeks to deliver on his promise of economic recovery.

The new contracts, which include those in the upstream exploration and development sectors are expected to attract more than $40 billion in foreign investment.

Iran has postponed a planned oil conference in London, which was due to have taken place in February to reveal its new contracts, until November.

*** Oil Debt Repayment

The oil minister said the country is opening a bank account, through which oil and gas companies will repay oil debts to Iran that were blocked due to sanctions.

“The companies that owe money to Iran, including the Emirates National Oil Company, are awaiting the bank account to be opened to clear their debts,” he added.

Zanganeh noted that cash-restrained Greece, which owes billions of dollars to international creditors, is poised to clear its oil debts to Iran in installments.

“Hellenic Petroleum, one of the largest oil companies in the Balkans, will repay the debts according to a timetable, although this has not been finalized,” he said.

"Greece's oil debt will be among the issues discussed with Greek Prime Minister Alexis Tsipras when he arrives in Tehran on Sunday for a two-day visit."