Burren decides to halt exports of Turkmenistani oil via Iran

Sep 19, 2001 02:00 AM

Burren Energy, an independent British company, announced that it had decided to halt exports of Turkmenistani oil via Iran. Burren has been sending oil to market within the framework of a swap deal with Iran. The swap provides for Burren to send oil from Nebit-Dag, an onshore field in western Turkmenistan, by tanker to Neka, an Iranian port on the Caspian Sea. Iran then reserves the Turkmenistani oil for refining and distribution in the northern part of the country and makes an equivalent amount of crude extracted from its own southern fields available on Burren's behalf at the Kharg Island terminal on the Persian Gulf.

This oil export arrangement has so far been slightly more cost-effective than other available options, Burren's Marketing Director Helmut Mayrhofer told the Financial Times. He said, though, that the British company had nevertheless decided to export its crude via the Georgian Black Sea port of Batumi. The oil will be tankered across the Caspian from Turkmenbashi to Baku and thentransported by rail through Azerbaijan and Georgia, he said.
Mayrhofer said that Burren had decided against making further use of the Iranian route because it had encountered too many obstacles in Iran. Specifically, he said, dealing with multiple agencies and shipping delays in Iran has proven difficult. Burren had been one of the few oil producers to send its output to market under an Iranian swap deal; the company's output of 3,200 bpd accounted for fully one third of all oil exported in this manner. Iranian officials in Tehran have said they hope to see the swap program expanded.

For example, Ahad Gazai, Iran's ambassador to Baku, said at an industry conference in Baku earlier this year that Tehran wanted to expand the capacity of the swap route from the present level of 120,000 bpd to more than 300,000 bpd. He also reiterated the claim that Iranian swaps were more cost-effective than other export options. The fee for exporting Turkmenistani oil has been cut from $ 21 per ton to $ 16 per ton, and the fee for Kazakhstani oil has been cut from $ 21 per ton to $ 13 per ton.
Mayrhofer expressed scepticism, however, saying he did not think Tehran was taking the steps necessary to make swaps more attractive. The Iranian side's efforts to attract customers seem more rhetorical than practical, he remarked.

Source: NewsBase
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