Iran’s semi-official Fars News Agency has reported that the Iranian Oil Ministry has kicked Russian gas giant Gazprom out of its Azar field, citing delays.
“Unfortunately, the Russian Gazprom company has failed concerning its commitments to Iran despite the National Iranian Oil Co.’s (NIOC) repeated warnings which have been completely ignored,” said NIOC chief Ahmad Qalebani.
“We eventually came to the conclusion to cut our cooperation with this company in Azar oil field and strike a deal with a domestic contractor,” Qalehbani told FNA on Sunday.
The latest report may be the latest instance of Tehran’s favoured means of pre-contractual positioning: whilst an initial deal was brokered in 2009, no final contract for the $2 billion, 400 million barrel Azar field – which together with the Badra field in neibouring Iraq is estimated to hold 400 million barrels – has yet been signed.
The Oil Ministry has been getting increasingly impatient with foreign companies’ involvement in its upstream industry, despite undergoing an oil production crisis under which output appears to be in terminal decline.
In August, the ministry warned Chinese state firm CNPC that it would resile on the phase 11 South Pars field development contact if the company did not expedite production improvements.
Oil Minister Rostam Qasemi, a former Revolutionary Guards chief appointed on 3 August, has claimed there is no need for foreign companies to operate Iran concessions, saying that they can be managed domestically.
Analysts strongly doubt Iran has the expertise to either realise it’s full potential as a gas producer or reverse the decline in oil production. Robin Mills, a Dubai-based energy economist cites “the involvement of of poltically-linked but unqualified companies in field developments” as a reason for Iran’s failure to meet production targets.
Â
