Iran prepares to sign first new oil project buy-back deals

Oct 01, 2001 02:00 AM

Iran is preparing to sign the first of a wave of new oil project buy-back deals this month, setting the stage for BHP Billiton to buy into a $ 359 mm petroleum project in the oil-rich nation. Iranian oil minister Bijan Namdar Zanganeh said the government was set to sign the deal to redevelop the offshore Forouzan-Esfandyar field.
The project will triple oil output from the offshore Forouzan and Esfandyar fields to 130,000 bpd. The Iranian government has already flagged the likelihood that BHP Billiton would partner national company PetroIran in the development.

BHP Billiton spokesman Michael Buzzard said the company had been examining commercial opportunities in Iran, including the Forouzan project. "For commercial reasons, we are not able to comment further at this point in time," he said.
The deal -- which would give BHP Billiton its first exposure to Iran -- will centre around a buyback arrangement due to the ban on foreign investment in the Iranian energy sector. Under the arrangement, aimed at raising funds for further development or upgrades of existing projects, investing companies are repaid in kind, in oil and gas, recouping the cost of their investment plus an agreed return. BHP Billiton is also considering investing in Iran's South Pars gas field.

Source: Asia Pulse
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