Page 6 - MEOG Week 35.indd

MEOG FINANCE & INVESTMENT MEOG

Iran’s plan to offer oil

backed bonds held up

IRAN IRANIAN Finance and Economic Affairs Min- to up its oil revenues at a time when it is strug-
ister Farhad Dejpasand has said that the plan to gling to sell crude on export markets due to the
offer oil via oil-backed bonds on the Iran Energy US effort to use sanctions to drive its oil con-
Exchange (Irenex) has been temporarily halted, signments as low as possible. The Irenex was due
Tasnim news agency reported. to offer crude oil via standard parallel Islamic
Dejpasand was quoted as saying on a live “salaf” bonds on August 16.
TV programme that the Economy Council The National Iranian Oil Co. (NIOC)
had approved the plan, but that it would not be had planned to offer 20 trillion rials (around
implemented as yet due to some reasons that $476.1mn at the official rate) of heavy crude oil
posed obstacles. to back the bonds, the Tehran Times reported.
There have been reports of substantial oppo- Each salaf contract was to have an equivalent
sition to the plan in the Iranian parliament, with value of one barrel of heavy crude oil priced at
some lawmakers doubting that oil bonds would 9.446mn rial (around $224 at the official rate) in
prove viable. Iran. Under a salaf contract, the full price of the
Those backing the plan see it as a way for Iran contract must be paid in advance.™

PERFORMANCE

Analysts ponder whether

Turkey’s gas find could be a dud

TURKEY ENERGY import-dependent Turkey has hailed and predicted that there would be much more
its gas discovery in the Black Sea as a “miracle”, discovered in the vicinity—was designed to give
insisting it has the potential to meet one-third the embattled Turkish president a lift with an
of its natural gas needs, but some analysts are unhappy electorate and help defend the Turkish
sceptical that it will turn out to be anything like lira, facing turbulent times on the currency mar-
as impressive. kets once more.
“The find was very hastily announced after Erdogan pledged that the first gas from
such a limited period of exploration,” Nate Sakarya would reach Turkish consumers by 2023
Schenkkan, director for special research at US but given the complex nature of deepwater gas
think tank Freedom House, told DW in assessing extraction that may be overly optimistic.
the potential of the Sakarya gas field, announced “The targeted start-up date already looks
with great fanfare by Turkish President Recep ambitious” as it would require a “world-class and
Tayyip Erdogan on August 21. near-unprecedented project execution,” Ashley
“If you say this is an economic miracle and Sherman, principal analyst Caspian & Europe
that it’s going to have this enormous impact, you at energy research house Wood Mackenzie, told
have to be able to explain the dynamics behind DW. Turkey, however, lacks experience of deep-
it,” he added. “We want to know the price of sea gas production.
extraction, the price at which you’ll be able to Sherman also reportedly said that more wells
sell it, the rate of extraction.” needed to be appraised first to confirm resource
Turkey currently relies on Russia, Iran and estimates at Sakarya and to understand the geol-
Azerbaijan for up to three-quarters of its energy ogy of the field, as the Black Sea posed additional
needs. logistical challenges.
It is also possibly slipping towards a second Some analysts think that it could take up to a
balance of payments crisis within two years decade to begin to extract the gas and that state-
and there is suspicion that the timing of the gas run energy firm TPAO will need to form a joint
discovery announcement - in - which Erdogan venture with a foreign energy giant to fully real-
gave a preliminary estimation of 320bn cubic ise the project. Ankara has insisted it will go it
metres (11.3 trillion cubic feet) of natural gas alone.™

P6 www. NEWSBASE .com Week 35 02•September•2020