Leading regional oilfield services provider, AlMansoori Specialized Engineering’s CEO, Nabil Alalawi has revealed to ArabianOilandGas.com that international sanctions against Iran could renew lucrative pan-Gulf oilfield service links between GCC countries and Iran.
“My hope for the next twelve months is that the tension between Iran and the US is resolved. If the so called super-sanction is put into place and Iran is put in the corner something could happen and it could get physical,” he warned.
Recent announcements by western statesmen have added weight to the possibility of further sanctions against what is perceived to be intransigent Iranian reaction to UN and Western diplomatic efforts.
British Prime Minister Gordon Brown called for fresh sanctions against Iran last Friday to stop Tehran from developing what he called a secret military nuclear program.
Delivering a speech at the Foreign Press Association in London, Brown claimed that Iran was “secretly” pursuing a military nuclear program and urged the international community to take “decisive action” against it.
The AFP reported today that Iranian President Mahmoud Ahmadinejad had accused Western countries of stirring up a “fuss” about the Islamic republic’s nuclear programme.
“They are saying we are worried that Iran may be building a bomb,” Ahmadinejad said in a speech at the inauguration of a new dam in southwest Iran that was broadcast on state television.
“But we are saying you have built it and even used it. So who should be worried? We or you? They are just making a fuss. They have ended up humiliating themselves,” quoted AFP.
Ahmadinejad’s comments came a day after six major powers held a conference call on further UN sanctions against Iran over its controversial nuclear programme.
Further sanctions would be harmful to the Middle East as a whole said Alalawi, speaking from AlMansoori’s oilfield service centre in Abu Dhabi.
“If the sanctions go ahead it would be very damaging to the oil and gas business,”
Alalawi added that although a physical response was a possibility, sanctions may force the withdrawal of many international firms currently working to modernise Iran’s upstream industry.
“If the super sanction happens and the European companies walk out of Iran, local companies will be in the position to take advantage.”
Home-grown GCC oilfield service companies have gone from strength to strength in recent years, capitalising on years of market expansion, and have been, to an extent, insulated from the worst of the oil and gas industry contraction witnessed outside the Middle East.
US sanctions against Iran forced OAO Lukoil Holdings to abandon a project in the Islamic Republic, the Russian oil company confirmed yesterday, as diplomatic pressure starts hurting investments from countries considered close to Iran.
The Wall Street Journal revealed that Lukoil booked an impairment loss of $63 million “for the Anaran project in Iran, which was abandoned due to international sanctions.” The company said, however, that it may return to the project if international political conditions improve.
Earlier this month Royal Dutch Shell stopped gasoline sales to Iran, joining the wave of energy companies scaling back ties with Tehran.
Countries outside the scope of US and EU sanctions have already begun capitalising on the departure of the big oilfield service players. On March 8 ArabianOilandGas.com reported that Iran and China reached a $143 million deal, allowing a Chinese company to set up a drilling rig in the Persian Gulf.
The contract has been signed by Iran’s North Drilling Company (NDCO) and China Petroleum Technology Development Corporation (CPTDC), Shana news agency has reported.
“Based on the contract, CPTDC, which is a subsidiary of China National Petroleum Corporation, will deliver a drilling rig to the North Oil Drilling Company within the next 8 months to be used in the Persian Gulf’s oil and gas fields,”, said NDCO chief Hedayatollah Khademi.
He added that his company has also finalised a deal with another Chinese company for two jack-up rigs that are to be installed in the Persian Gulf.
China currently relies on Iran for more than 15% of its oil and has commitments of over $80 billion in the country’s energy sector.
Additional reporting from Abu Dhabi by Peter Ward.
