Iran Oil Ministry Minimizes Risk of New Sanctions

EghtesadOnline: International companies should seize new opportunities for investment in Iran's economic and energy sectors despite the talks about new sanctions in the wake of increasing political tensions between Tehran and Washington, a top oil official says.

News ID: ۷۴۱۱۴۸

24 April 2017

"If there are new restrictions, it will not affect the deals that are concluded after the easing of restrictions last year," Amirhossein Zamaninia, deputy oil minister for international affairs, was quoted as saying by Shana on Sunday.

He made the statement on the sidelines of the 13th Iran Petrochemical Forum which brought together representatives from 76 international and 385 domestic firms for two days in Tehran.

In response to speculations that the Trump administration’s hawkish stance toward Tehran has discouraged foreign investors, Zamaninia said, "International majors' lack of trust and their reluctance to invest in Iran's economy and energy sectors will not last long. We have held extensive negotiations with multinationals and the talks will gain momentum in the coming days."

Downplaying the possibility of a 'snap back' of trade and economic restrictions, the official reiterated that possible new sanctions by the United States against Iran cannot and will not apply to agreements undertaken prior to the new sanctions, Financial Tribune reported.

"There is nothing to worry about. In case of new economic restrictions (and any impediment in cooperation), foreign contractors will be remunerated based on the terms and agreements of their deals," Zamaninia said.

The snap back mechanism allows previously lifted sanctions to be quickly reinstated if signatories of the nuclear deal find Tehran's activities in violation of the agreement.

--- Making Economic Sense

According to senior oil official, Iran's neighbors are in critical need of natural gas to meet their rising energy demand, which explains why investing in the country's gas projects is economically reasonable and defendable.

He believes that massive oil and gas deposits, political stability, skilled human resources and easy access to raw material as well as being located in a strategic position due to proximity to international waterways are among factors that can appeal to foreign firms to fund energy and petrochemical projects in Iran.

Highlighting the challenges of winning international majors' trust to transfer their advanced technology for upstream, mid-stream and downstream industries, Zamaninia said, "As long as we cannot create a win-win situation to work together in infrastructure development, they will not be convinced to join in and contribute to our projects."

"Increasing petrochemical production and exports is just part of our ambitious goals," he reiterated.

"Completion of the value chain in the petrochemical sector, increasing production of value-added goods (for export) and developing new energy hubs in the region are on the agenda. But none of these plans will be realized unless we build strong relations with foreign companies and ensure them of reliable and transparent rules and regulations for investment."

The government wants to create 100,000 jobs by Mach 2018 by developing energy projects with the help of foreign companies, the told the conferees.