An Iranian bank plans to target foreigners with the first fund dedicated to investing in the country’s oil and gas industries, in anticipation of a further easing of sanctions against the Islamic republic.
Kardan Investments is preparing to set up a Global Energy Fund to invest in projects to develop Iranian oil and natural gas fields and joint ventures between local and international oil companies, Chief Executive Officer Majid Zamani said in an interview in Tehran. Kardan will seek to sell shares in projects and ventures to institutional investors in Europe, he said.
“Iran’s oil and gas industry needs a lot of investment, and not all of this can come from inside Iran,” Zamani, a former consultant to the Washington-based World Bank, said March 12. “A lot of it has to come from outside.”
Sanctions imposed by the U.S. and European Union have deterred many foreign companies from investing in oil and gas fields and energy projects in Iran. The country’s crude output, which exceeded 4 million barrels a day in 2008, declined to 2.69 million a day in February, data compiled by Bloomberg show. Oil exports, Iran’s main revenue source, have dropped 50 percent as a result of the curbs, according to the International Energy Agency in Paris.
The U.S. and EU imposed the restrictions because of Iran’s nuclear program, which they say may hide efforts to develop atomic weapons technology. Iran says it wants nuclear power only for civilian use. Iranian diplomats and counterparts from six world powers ended two days of talks in Vienna yesterday aimed at building on an interim accord that offered Iran as much as $7 billion in sanctions relief. They agreed to reconvene in April and set a July 20 target for a final pact that will limit Iran’s nuclear work and lift sanctions, negotiators said.
Kardan began three years ago as an investment consultant before receiving an investment banking license in January. With $80 million in shareholder capital, it runs a $35 million private equity fund specializing in e-commerce, manages fixed-income funds and underwrites debt and equity, Zamani said. Unlike these domestic activities, the company’s Global Energy Fund would seek business from investors overseas, he said.
“We want to partner with European banks and financial institutions and work with them, so we can discuss together opportunities in the oil and gas sector in Iran,” Zamani said. “We also want to look at floating current Iranian companies on an overseas stock exchange.”
The Petroleum Ministry is redesigning its oil and gas contracts to make them more attractive to international companies, in the event of a removal of sanctions. The ministry has said Iran needs as much as $150 billion of energy investments.
The Persian Gulf state holds the world’s largest gas reserves and belongs to the Organization of Petroleum Exporting Countries.
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