The looming US sanctions against Iran’s oil industry does not mean the country will not be able to carry out projects in the key sector as domestic exploration and production (E&P) companies can pool minds to overcome technological and financial constraints.
Narsi Ghorban, a prominent Iranian energy consultant in the UK and Iran, told Financial Tribune's sister daily Donya-e-Eqtesad that most local E&P firms either lack state-of-the-art technical know-how to conduct complex operations, or they suffer from funding problems, he said.
"However, mergers could solve both problems.”
Ghorban who also serves as the managing director of Narkangan Gas to Liquid International Co. said value added gained from working as a group rather than as separate energy companies can help Iranian enterprises play a bigger role in E&P initiatives.
"The National Iranian Oil Company has already approved 17 local firms that were supposed to play a role in oil and gas field development with the help of foreign partners," he noted. “Now that oil majors are not willing to work in and with Iran, the local firms can pool resources and have a voice in implementing mega projects.”
Some companies and groups that have NIOC backing for participating in energy projects are Petropars, Oil Industries Engineering and Construction, Dana Energy Company, Petroiran, MAPNA Group, Ghadir Investment Company, Pasargad Development Company and Petro Gohar Farasahel Kish Co.
Warning Against Nepotism
Nevertheless, the export stressed that commissioning big projects to so-called "eligible firms" that have been selected by pulling strings and taking undue advantage of their connections would indeed be a recipe for disaster because the key oil/gas industry is not a place for trial and error.
He said he was amazed at the high number of local E&P firms in the country, adding that in developed countries “there are normally two or three such companies. In Iran the number is far too many and each is saddled with some serious deficiency.”
Ghorban proposed teaming up with small-scale foreign partners instead of signing deals with international firms that will never put themselves at risk in critical situations, like when the US seeks to add pressure on Tehran and slap new oil sanctions.
"Collaboration with small foreign companies that have no banking relations with the United States could produce the desired results,” Ghorban said but did not propose any company or country with which Iranian firms could start working relations.
US sanctions against Iran’s energy, ports and shipping sectors, as well as foreign financial institutions doing business with Iran, are expected to go into effect on November 4.
