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Page added on April 18, 2015
Oil Executives Circle Iran
International sanctions have yet to be lifted on Iran, but Western oil executives this past week showed an appetite for doing business there at a stately hotel a few blocks from the Danube River.
A little-publicized conference, the South Caspian Region Petroleum & Energy 2015 Summit, drew energy executives from Houston and London to Vienna where they shared coffee and cake with Iranian government officials on Tuesday and Wednesday.
Among the international companies that sent executives were Chevron Corp. and Amec Foster Wheeler PLC, according to attendees.
The presence of Western oil officials at an Iran-focused conference points to the shaping of a new business landscape in the Persian Gulf country with the prospect that economic sanctions could be lifted sometime this year.
Iran and a group of Western nations led by the U.S. agreed this month to a political framework for lifting a crippling set of sanctions tied to the country’s nuclear program. A final deadline for an agreement has been set for June 30, one sticking point being a timetable for lifting the sanctions.
Western executives have maintained clandestine contacts with Iranian energy officials, and that isn’t illegal. But it is still viewed as a sensitive matter.
“Energy companies are clearly interested in Iran,” said Peter Harrell, a former top sanctions official at the U.S. State Department and now a principal at consultancy Prospect Global Strategies LLC.
A spokesman for British oil-services company Amec Foster Wheeler said, “We don’t have operations in Iran. We might be interested in opportunities in Iran of and when sanctions are lifted.” A Chevron spokeswoman said, “We always act in compliance with current laws and regulations.”
Since the tentative agreement was unveiled, U.S. officials, including Treasury, have been doing a series of off-the-record calls and briefings for the business community with the message that it is too early to actively engage Iran, according to a person familiar with the calls. A spokeswoman for the U.S. Treasury Department declined to comment.
Still, some of the secrecy has relaxed in recent weeks.
“Before, when I met Iranian officials in Tehran, I had to introduce myself as ‘company-X’” for fear of leaks, said one Western European oil official at the Vienna summit.
At this conference, he said, “I finally could say who was my employer.”
For Tehran, the conference represented a chance to promote its vast resources. It holds the world’s fourth-largest crude oil reserves and the second for natural gas in fields that are cheaper to exploit compared with options in the U.S. that require hydraulic fracturing technology.
Iran also needs Western technology, know-how and buyers. Since the last Western oil companies left in 2010, Iran’s oil production has fallen by 27% to 2.7 million barrels a day.
Lola Bourget, a spokeswoman for the conference, said its focus wasn’t exclusively on Iran and noted that there were discussions about other Caspian countries such as Azerbaijan. The event was closed to the news media.
“This was a business-to-business meeting allowing experts to network,” Ms. Bourget said, adding that it wasn’t publicized because organizers considered it not relevant to the media.
Speaking outside the conference, Western oil officials said they were still unsure how attractive doing business in Iran will be. Previous terms offered by the Islamic Republic were so tough that most Western companies were unable to recoup their costs, though new contracts are being written. Some Western officials are still reeling from their past experience with Iran’s punctilious bureaucracy.
But the Vienna summit, held in the Palais Hansen Kempinski Hotel, provided an opportunity for conversations between Iran and the West.
In the lobby, a group of Western oil executives and an Iranian oil official held forth over silvery teapots and fine china under a giant chandelier. A European executive pulled out a printed Power Point presentation touting his company’s technological prowess in extracting heavy oil. He said it would suit aging onshore oil fields Iran is planning to offer to investors in September.
The Iranian official responded that his country was more interested in technologies for developing light oil. The company could offer that too, the executive said.
The exchange was hardly clandestine, taking place within earshot of tuxedo-clad hotel staff.
Still, the executive, in an interview retelling the conversation, didn’t want to go on the record with his name and company.
“We want to remain welcome everywhere,” he said.
10 Comments on "Oil Executives Circle Iran"
Perk Earl on Sat, 18th Apr 2015 8:21 pm
How are sanctions going to be lifted with the partisanship in DC?
Makati1 on Sat, 18th Apr 2015 8:49 pm
Israel doesn’t want this new ‘oily’ arrangement to happen. They may do something stupid (well more stupid than usual) to try to prevent it, but with China and Russia as Iran’s buddies, that may be difficult.
Perhaps the sale of the Russian S300 anti-missile system to Iran will cool the Israeli war lust? If not, maybe S400s will follow? After all, China is getting them and the West doesn’t like being blocked from any airspace.
Gayle Mullins on Sun, 19th Apr 2015 9:06 am
I continue to be amazed at the thirst for oil from the cheapest source even though the country has a nuclear bomb with our name on it. The oil spills will continue to ruin our oceans. The only answer is to place a high tax on the importation of foreign from over seas. Then support the production of solar energy, natural gas, and hydrogen as GO Juice for America. The continued sales of gasoline powered engines must be made financially prohibitive by a high tax that is used for tax credits to innovative alternatives.
rockman on Sun, 19th Apr 2015 10:48 am
Gayle – “The continued sales of gasoline powered engines must be made financially prohibitive by a high tax that is used for tax credits to innovative alternatives.’ No doubt every Repub in the land would be thrilled if that became a major plank of the Democrat party…especially if Hillary (should she become the nom) is a major supporter of such a policy. It would significantly increase the odds of the R’s winning the whole enchilada IMHO.
Davy on Sun, 19th Apr 2015 11:26 am
Rock, not to mention that would introduce hunger to every Main Street in America.
Speculawyer on Sun, 19th Apr 2015 12:31 pm
Back in the 1990’s a big oil services CEO pushed really hard for the government to loosen our restrictions against Iran so that his company could get into the Iranian market. They even had a subsidiary that did some business there is a way that kinda skirted the law.
History repeats itself.
Oh, that CEO? . . . Dick Cheney of Halliburton.
Speculawyer on Sun, 19th Apr 2015 12:35 pm
Gayle . . . we are lazy and greedy. Just like every other species. We do have a frontal cortex that allows us to plan ahead. But it is not well developed enough for everyone to understand and appreciate the problems we are creating for ourselves. So the lower brain functions dominate and we well continue down a dangerous path until mother nature smacks us down hard enough for some people to get it through their thick skulls.
BobInget on Sun, 19th Apr 2015 12:50 pm
For now, while KSA, day after week after month continues its Yemen genocide, it’s important to keep up that certain fiction; “Iran desperately needs Western technical assistance”
This kind of racist thinking predates Russian/Iranian, Iranian/Chinese partnerships, (joint ventures)
Iran Holds Out Tasty Carrot…. indeed.
Did you believe Russia and China supplied Iran with super sonic (defensive) weaponry out of the goodness of their hearts?
What, other then threats and crippling sanctions
have the US offered Iran?
What has Israel, America’s Allie, offered Iran other then almost constant alienation from Western interests? In modern history no country
faced such belittling economic punishments,
backed up by threats of preemptive war
blackmail. (The US invaded Iraq on suspicion
of nuclear weapons)
No, for the present, it’s best for Iran to ‘seem’
friendly to Western oil interests. Iran knows how
important their carrot becomes as Saudi Arabia
collapses into the father of all failed states and home to dozens radical Muslim groups seeking
then scattered oil wealth.
Because of almost constant warfare, Iraq’s oil, like Iran’s sanctions, avoided over-pumping. Saudi Arabia OTOH continues pushing stressful limits for political propose. The good news, most of KSA’s spare production goes to the US. The Bad News, most of KSA’s spare production goes to the US in an effort to hold oil prices in check.
The ‘new’ OPEC will center around Iraq, Russia, Venezuela, Nigeria, Libya and Iran. In fewer then seven years All of the ‘new’ OPEC’s production will go to India and China. full stop
rockman on Sun, 19th Apr 2015 2:04 pm
Just to be sure everyone understands the reality of the situation: 99.8% of the US oil patch doesn’t want the Iranian sanctions lifted. Just as those same folks would support any effort to inhibit Canadian oil sands production.
Nony on Sun, 19th Apr 2015 3:04 pm
Fuck the oil patch. I want cheap gasoline. I want them burning tail to give it to me. And if I can get it cheaper from SA or Russia or Iran, then I will take it. They can just do some layoffs. Now, if they want more offshore opened or pipelines allowed (and even in the US pipelines are massively held up, look at MN and the Bakken offtake), then I support them. But not when they want supply restricted.