07 December 2013, News Wires – Paolo Scaroni of Italy’s Eni met with Iranian Oil Minister Bijan Zanganeh on Thursday, the first Western oil CEO to do so publicly with the minister since last month’s interim nuclear deal, according to reports.
The meeting, in the minister’s Vienna hotel suite following Wednesday’s OPEC talks, came after Zanganeh named Eni as one of seven Western companies he wanted to invest in Iran’s energy sector if international sanctions are lifted, Reuters reported.
The talks also covered debts Eni is owed by Iran for previous investment and future terms for foreign companies to help revive Iran’s oil and gas industry, Scaroni told reporters after the meeting.
“We had a fairly long and very warm meeting with the minister, who is a person we know very well,” the news wire quoted him as saying. Zanganeh was reappointed oil minister after an eight-year break by new reformist President Hassan Rouhani.
“We have been discussing potential new activities of Eni in Iran – of course all this is subject to lifting of the sanctions,” Scaroni said. “This is the key issue.”
He said new investment would probably involve oil and gas projects.
Iranian oil production has fallen more than a million barrels a day since oil trade, shipping insurance and banking sanctions were imposed last year to pressure it to stop nuclear enrichment.
Tehran reached an interim six-month agreement last month with six world powers to downgrade enrichment and other parts of its nuclear programme.
“Of course we hope the sanctions will be lifted in the next six months or in the near future,” Scaroni said. “Considering that for us Iran is really a legacy country – we have been there since 1955 – we never abandoned the country, not even in the last difficult years.”
Other Western oil executives also visited Zanganeh’s suite, including CEO Gerhard Roiss of Austrian energy group OMV AG, who declined to comment to reporters.
An informed source said officials from energy company Royal Dutch Shell and oil trader Vitol also met with the Iranian minister.
Shell declined to comment. Vitol also declined to comment while adding that its position on Iran remained unchanged and it had ceased all business dealings with the country.
Iran’s buyback investment model with foreign firms – which does not allow them to book reserves or take equity stakes in projects – would need to be changed to attract major new investment, Scaroni said.
“We have been discussing about potential modifications to the contractual framework of Iran – the famous buyback – which we certainly do not consider a good way of attracting international oil companies in Iran,” Scaroni said.
“We felt that the minister is certainly ready to modify this framework in such a way to make attractive.”
He said the discussion also covered outstanding payments due to Eni for previous investments, including the South Pars 4 and 5 gas projects.
“We plan to continue to be in Iran and possibly increase our activity as long as the sanctions regime is lifted,” Scaroni said. “There are so many opportunities in Iran both in oil and gas that we will certainly find a common area of interest.”