Oil and gas operators planning to re-enter the Iranian market could face months of delay even if sanctions are lifted this month, according to energy experts at international law firm Pinsent Masons.
The so-called P5+1 countries – four members of the Security Council plus Germany – are in the final stages of negotiations, which could result in a complete or partial relaxation of onerous sanctions placed on trading with Iran in attempt to curb the development of its military nuclear programme.
While oil and gas operators are hopeful sanctions on the oil and gas rich jurisdiction will be lifted later this month, Pinsent Masons says those gearing up for re-entry are likely to face significant delays – and continued risk of prosecution for breaches – as complex restrictions are unwound by international regulators.
“With the March deadline fast approaching we are seeing more O&G operators getting their ducks in a row. Irrespective of price volatility, we’re seeing many organise finance, approach shareholders and engage with third party suppliers in the expectation that the sanctions will be lifted,” George Booth, Partner and expert in oil and gas at Pinsent Masons, says:
“They want to put themselves in the best possible position to secure access to Iranian resources.”
“Setting aside the current trading price, the long term view is that Iran is still likely to be central to the future of global natural resources. European oil and gas players, particularly small and nimble players, are keenly tuned in to the negotiations as they unfold.”
“However, it is critical to remember that sanctions will not simply vanish even if an agreement to lift them is reached.
“This is just the start of the process and it will take time to unravel the complex web of restrictions on trade which have been in place for several years. Breaches can still be penalised in the transition phase and people need to be alive to that.”
“Detailed due diligence will play a major role in safeguarding against any breaches. Businesses should avoid signing on the dotted line and firming up any arrangements until it is clear that it is safe to do so.”
In addition to a range of trade sanctions imposed by the US in 2010, the EU banned the import, purchase and transport of Iranian crude oil as well the construction of oil tankers for the country.
