Iran domestic companies can bid on major oil projects

Sunday 23/10/2016
Iran is hungry for better technology and capital from abroad

TEHRAN - Iranian energy companies including one linked to the Revolutionary Guards will be allowed to bid for major oil projects previously earmarked for foreign firms, the oil minister said Sunday.

The move follows complaints from conservatives that foreign energy companies are being allowed to take the lead on major projects as Iran emerges from international isolation following its nuclear deal with world powers.

Companies linked to two major Iranian conglomerates -- Khatam Al Anbia, which is controlled by the elite Revolutionary Guards, and Setad, which is supervised by the supreme leader's office -- both said they wished to enter bids to develop the huge South Azadegan oil field in southwestern Iran.

"They asked us to give them a three-month period to bid for this field and we agreed," Oil Minister Bijan Zanganeh said at a conference in Tehran, according to the ministry's news agency Shana.

The vice-president of the National Iranian Oil Company (NIOC), Gholamreza Manouchehri, told a news conference on Wednesday that South Azadegan and other major projects would be reserved for international firms, with Iranian companies as minority partners.

Iran is hungry for better technology and capital from abroad, but a history of foreign exploitation has left the country highly sensitive to the presence of international firms in its energy sector.

Former conservative MP Ahmad Tavakoli accused the oil minister of favouring French firm Total for the South Azadegan project, which has been valued at $10 billion with a goal of producing 600,000 barrels of oil per day.

Both the Guards-linked Khatam Al Anbia and Setad have widespread economic interests in Iran.

Setad, or the Headquarters for the Execution of Imam Khomeini's Order, was created in the late 1980s shortly before the death of Ayatollah Ruhollah Khomeini who led Iran's Islamic revolution.

Zanganeh also said that a long-awaited new model for oil contracts had not been completed.

"The text has not been finalised yet. It's going through its final stages and we are currently verifying the qualifications of foreign companies," said Zanganeh.