Iran's Rouhani Collects Letters of Intent in Europe
Iran’s president, Hassan Rouhani, visited Italy and France in late January where a number of letters of intent and memorandums of understanding were signed.
He met France’s president François Hollande on January 28, the first time an Iranian leader had visited the country since 1999. He also met Total CEO Patrick Pouyanne and the two signed a letter of intent, covering crude purchases and access to technical data regarding oil and gas projects to assess the development potentials in Iran.
“It’s the beginning of a story, both parties are willing to cooperate”, Pouyanne said.
“Iran is the energy hub of the region and Total can make the best use of the good opportunities in the energy field regarding its experiences of cooperation with Iran”, Rouhani said.
Total had invested in Iran in the past and has maintained a representation even when sanctions forced foreign companies to flee the country in 2010. In the 1990s, Total developed four gas fields in the including the early phases of South Pars field.
Pouyanne made the point about Total’s history in Iran during the meeting, according to a statement from the Iranian government saying: “Total is ready to come back to Iran and resume cooperation in development of energy fields in the country”.
The Iranian delegation came with a clear message: Iran is open for business. Iran “seeks joint ventures with major international companies in the new atmosphere and based on new principles.” Among these principles are “production sharing” contracts which will allow western companies to make longer-term and more profitable investments.
Francis Perrin, chairman of Strategy and Energy Policies centre, talked to NGE in early January about the competitiveness challenge Iran faces. “When companies like Total were forced to suspend their activities in Iran, many professionals in the oil industry said that buy-back contracts were not very attractive. The challenge for Iran is to know what oil companies think of the new contracts. Is Iran attractive enough to foreign investors to embrace and sign new contracts? Oil companies will have to decide whether or not investing and developing new projects in Iran is sufficiently cost-effective compared with another producing country,” he said.
Before Paris, Rouhani was in Rome where Saipem, the Italian infrastructure company, signed a memorandum of understanding regarding cooperating with the National Iranian Gas Company on two pipeline projects: Igat 9 – the so-called European pipeline – and Igat 11. They would supply gas to western Iran and bring gas to the border with Turkey, starting at Assaluyeh, landfall for South Pars gas.
Kevin Bonnaud