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Iran Oil Contractors Want Work Guarantees From Foreign Investors

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Feb. 19 (Bloomberg) -- Iran’s association of oil-industry contractors and suppliers is seeking assurances it won’t lose business should foreign energy companies return to Iran.

“We’re not concerned about the presence of foreign companies here, we are concerned about how they will operate here,” Hasan Kazemi, a member of the board of the Society of Iranian Petroleum Industries Equipment Manufacturers said in a phone interview on Feb. 17.

The association will attend a seminar on changes to the country’s oil-investment contracts to be held on Feb. 22-23 in Tehran. Oil Minister Bijan Namdar Zanganeh will discuss with local and foreign industry executives rules that would govern oil and natural gas production should Western curbs on Iranian energy exports be lifted, allowing international companies back in the country.

Christophe de Margerie, chief executive officer of Total SA, said Jan. 22 that he sees potential for the French oil producer to return to work in Iran after halting development of the South Pars gas field in 2009. Eni SpA Chairman Giuseppe Recchi said the same day he’s interested in seeing Iran open up.

“Before you present contracts to firms such as Eni or Total, you have to give a presentation showcasing the country’s domestic capabilities and showing what Iran’s domestic firms are capable of,” said Kazemi, who manages Part-Sazi Mashhad, a producer of nuts and bolts for the energy and auto industries. “If Total and Eni don’t go and buy unbranded nuts and bolts from China, then we won’t be in competition with China.”

Gas Deposits

Iran holds the world’s largest natural gas reserves and fourth-biggest oil reserves, after Venezuela, Saudi Arabia and Canada, according BP Plc. Its daily crude production dropped from 4 million barrels in 2008 to 2.5 million barrels last year, data compiled by Bloomberg show. Iran reached an agreement in November that eased sanctions imposed by Western powers over its nuclear program.

Iran, a member of the Organization of Petroleum Exporting Countries, will offer better terms than fellow OPEC member and neighbor Iraq to attract investments needed to revive its energy industry, Mehdi Hosseini, who leads the oil ministry’s committee on contracts with foreign companies, said on Feb. 9 in Tehran.

To contact the reporter on this story: Golnar Motevalli in Tehran at gmotevalli@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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