General Electric Company is plotting a strategy for its oil and gas business in Iran, as the western sanctions against the petroleum-rich country are eased.
Lorenzo Simonelli, the head of the company’s crude division, said he visited Iran in recent weeks to “understand what was taking place in the country”.
"GE will only proceed if US government rules allow the company to do business there," Simonelli was quoted as saying by Bloomberg.
“Iran is a big market from an oil and gas perspective,” Simonelli said. “We will abide by the sanctions, but it’s a market where we used to transact.”
For oil explorers and the service companies, Iran represents a huge bonanza. The Persian Gulf nation’s 157.8 billion-barrel cache of untapped oil is more than four times the US endowment, according to the Energy Information Administration.
The country also boasts the world's largest natural gas reserves.
Remaining US sanctions allow foreign subsidiaries of American companies to operate in Iran, but they require a separation of those projects from US employees and offices.
GE said in a statement last month that Simonelli had visited Iran to test the waters for "potential business opportunities in Iran".
GE’s oil and gas division is one of the world’s largest equipment manufacturers for crude explorers. The company is pursuing growth as it weathers a slowdown in global activity driven by the collapse in crude prices.
Energy companies slashed more than $100 billion in spending worldwide last year and cut 250,000 jobs amid the oil price decline. Brent, the global benchmark for crude, has fallen by almost two-thirds since June 2014.
"While GE is a relatively new entrant to the global oil market, growth has helped the company establish a presence with customers," Simonelli said.
GE built up its oil and gas unit over the past decade through more than $10 billion in acquisitions, including a $3.3 billion deal in 2013 for Lufkin Industries Inc.
