Italian energy firm Eni is looking forward to working in Iran's oil industry but is waiting for the finalization of the country's new model of contracts for dozens of oil and gas projects, the company's CEO said.
"We are in discussions with the Iranians. We have always been there and have very good relationships. I don’t exactly know when we can sign a contract since there are still discussions in Iran and we are waiting like other companies," Claudio Descalzi told Bloomberg TV in an interview in Italy.
Descalzi did not elaborate on the details of talks. However, Eni is in negotiations to continue where it left off after international restrictions on Iran's nuclear program forced it out of the country.
Eni came to Iran in the early 2000s. It was to develop Phase 3 of Darkhovein Oilfield in Khuzestan Province and Phase 19 of South Pars Gas Field, but halted operations due to sanctions.
Eni is active in exploration and production sector as well as downstream projects, including refining and marketing of petroleum products. It is one of the world's major oil and gas contractors in engineering, construction and drilling projects both offshore and onshore.
It is also discussing terms to resume crude imports from Iran. According to reports, Eni wants to take in 100,000 barrels of Iranian crude per day.
The Italian major is also exploring grounds for dozens of oil and gas projects that Tehran hopes to put out to tender within the next few months.
But there are concerns that the wait is getting too long as Iran's hesitation in getting the new oil contracts on the table, coupled with a long-lasting downturn in the oil industry, may discourage major foreign companies from investing in the Iranian energy projects.
Moreover, any new investment by Eni in upstream oil and gas projects is seriously in doubt, as the company has felt the pinch of downward spiral in crude prices since their peak of $115 per barrel two years ago.
Eni reported a $1.4 billion (€1.24 billion) loss in earnings during the first half this year.
------- Global Market
On a different note, Descalzi said he favors OPEC freezing oil output and hoped there will be equilibrium between demand and supply by the yearend.
"I hope they (oil procuring nations) can find a wise solution to stabilize production without further increasing output as happened in the previous months," he said.
Descalzi added that the oil market is worried and "just the news that an agreement can be reached immediately leaves a positive impact on prices without an agreement in place".
Global crude benchmark Brent made some sharp gains following Russian and Saudi upbeat comments that they are willing to coordinate on prices in a meeting of OPEC and non-OPEC producers in Algiers, Algeria, in September.
It is still unclear if Iran will attend the meeting or join a possible pact to freeze production to prop up prices.
A similar meeting was held in Doha, Qatar, in April, but Saudi Arabia sabotaged what looked like a freeze deal well within grasp after Iran refused to join the talks.
Tehran has said it is open to the idea of capping production once it reaches its pre-sanctions output level of 4 million barrels per day. Currently, the third-largest producer in the Organization of Petroleum Exporting Countries, Iran is now pumping 3.6 million-3.8 million bpd, according to multiple sources.
But chances of a meaningful agreement look thin. In a neck-to-neck race for market share, Saudi Arabia and Russia have consistently pushed their crude production to new highs over the past few months. This is while second-tier producers such as Iran and Iraq are keen to add more barrels to a market flooded with excess oil.
