Paulo Scaroni, chief executive of Italy’s biggest oil company Eni SpA, said he had a “fairly long and warm meeting” with Iran’s petroleum minister to discuss possible future energy projects and money owed to Eni.
Speaking to reporters outside the Vienna hotel room of the minister, Bijan Zanganeh, Scaroni said any oil and gas projects would wait until sanctions ended. Their discussion included possible modifications to so-called buyback contracts as well as monies owed relating to the Darquain and South Pars fields, where the Rome-based company previously operated, he said.
“We’ve been discussing potential new activities of Eni in Iran, of course all this is subject to lifting of the sanctions,” Scaroni said. They discussed “the contractual framework of Iran, the famous buyback.”
Iran, which has dropped to sixth-largest producer within OPEC, from second place, hopes to rekindle investment in its energy industry once world powers lift sanctions tied to nuclear research. Zanganeh said yesterday he would meet international companies in Vienna today, and in London in March, without saying which ones.
Gerhard Roiss, the chief executive officer of Vienna-based OMV AG, the biggest central European energy company, also met with the Iranian minister at his hotel today, after Scaroni. Roiss declined to comment upon entering, and leaving, the minister’s hotel suite.
The Iranian minister said he also met with Ian Taylor, the CEO of Vitol Group and officials from Royal Dutch Shell Plc. He said yesterday that he hopes Eni, Shell, Exxon Mobil Corp., BP Plc and Statoil ASA will invest in the country, saying there were no barriers from Iran’s side.
Zanganeh was in Vienna after attending yesterday’s meeting of the Organization of Petroleum Exporting Countries, at which the group reaffirmed its production target.
Scaroni said Eni wouldn’t work under Iran’s current buyback model and suggested modifications to the structure that he said he believes the minister was willing to adopt.
Before European Union sanctions restricted activities last year, the Islamic republic had offered buyback contracts under which a foreign company would be paid for its work in oil and gas over a limited period of time. The terms of the contract are meant to comply with Iran’s constitution, which forbids foreign ownership of energy reserves.
South Pars is the Iranian name for a giant gas field that straddles the country’s maritime border with Qatar. Scaroni attended an inauguration ceremony for the development of the Darquain field in July 2005 along with Zanganeh, who was petroleum minister at the time, according to Eni’s website.
Speaking to reporters after his meetings today, Zanganeh said that Iran may consider production sharing agreements for projects in the Caspian Sea and that, as far as its reserves in the Persian Gulf are concerned, “our large offshore fields have more priority for us, fields like Foroozan and Salman.”
Iran wants to produce 4 million barrels of crude a day after international sanctions are lifted, regardless of prices, “even if it goes down to $20 per barrel,” Zanganeh said on Dec. 4. “Under no circumstances will I renege from Iran’s right to produce 4 million barrels a day, and I am sure OPEC will exercise wisdom in this matter.”