Page 37 - IRANRptJun18

9.2 Major corporate news 9.2.1 Oil & gas corporate news
Lukoil, Russia’s second biggest oil producer, on May 29 said it would not presently go ahead with plans to develop projects in Iran due to the threat of US sanctions. Lukoil has been in talks with National Iranian Oil Company (NIOC) since December over developing the Abe Timur and Mansuri oil fields. On a related note, BP has also said on May 22 it is deferring further work on the Rhum gas field in the North Sea that it co-owns with a subsidiary of NIOC due to impending US sanctions , according to the UAE’s The National . The long-running saga of the jointly-owned gas field dates back nearly a decade, with the project having had to stop gas production in 2010 when the EU and the UK applied sanctions to NIOC. Given BP's significant stakes in US energy extraction, the British energy giant has decided to cool its relationship with its Iranian partner. BP is believed to generate roughly $31mn of annual profit from the joint operation, 50:50 owned by itself and NIOC. Companies such as Poland’s PGNiG, Germany’s Wintershall and French energy major Total, among many others, look set to avoid irking Washington. They seem unlikely at this point to keep their current business ties with Iran.
A Chinese investment company is looking to invest $2bn in developing an oil refinery in Iran’s Mazandaran Province located along the southern coast of the Caspian Sea, Islamic Republic News Agency (IRNA) cited an Iranian official as saying on May 29. The official, Moosa Qasem-Piseh, did not disclose the name of the potential investor but reportedly added that the Chinese have a certain interest in making the investment and face no competition from investors from other countries. Some Chinese investors have cooled on Iran since US President Donald Trump on May 8 announced Washington was w ithdrawing from the nuclear deal . Qasem-Piseh added that Chinese, German and Austrian companies have received permits from regional authorities to build three power plants in the province, with a value of $37mn. The projects are scheduled to commence in coming months. However, it is likely that the German and Austrian enterprises will wait to see what practical protection the European Union can offer them from US penalties before deciding whether to push ahead.
Chinese oil and gas giant China National Petroleum Corporation (CNPC) is willing to purchase the 50.1% stake held by French energy major Total in the Phase 11 development project covering part of the South Pars gas field off Iran’s Persian Gulf coast, Ria Novosti reported on May 12. There is a big question mark as to whether Total can continue with the project contract, worth up to several billion dollars, given Trump’s May 8 decision to pull the US out of the Iran nuclear deal . Total, which has substantial assets in the US and would be exposed to any move by Washington to levy heavy sanctions on foreign companies continuing to do business with Iran, has not yet made clear what its approach to South Pars will be from this point onwards—it may be waiting on tangible results from the commitment of France, Germany and the UK to maintain the nuclear deal . CNPC currently holds a 30% stake in the Phase 11 contract, signed in July last year, while Iran's Petropars has 19.9%.
37 IRAN Country Report June 2018 www.intellinews.com