Iran says going nuclear will free up crude for export
Doha (Platts)--24Apr2006
Iranian oil minister Kazem Vaziri Hamaneh said Monday that advancing
Iran's nuclear program would eventually help oil markets because it would free
up crude oil for export after US Energy Secretary Samuel Bodman's advised
against doing business with Iran to force it to end its nuclear ambitions.
Asked by reporters if developing nuclear power would help the market,
Vaziri Hamaneh replied: "Definitely that is the case because this will save
oil and gas that we are consuming and that would be available for the
international markets and that's one of the ideas for going for the nuclear
energy."
"I think this is his [Bodman's] views but the truth is that the investment
in Iran is doing very well and it is for the oil and gas and we have no
concerns," Vaziri Hamaneh said on the sidelines of the 10th International
Energy Forum, a biannual talking shop for oil producers and consumers.
The US and its allies are accusing Tehran of pursuing a clandestine
nuclear enrichment program to develop a nuclear arsenal, a charge the Islamic
Republic denies.
OPEC number two Iran, which is desperately trying to raise its crude oil
production capacity and develop its massive gas reserves, second only to
Russia, has argued that it needs nuclear power to boost crude exports and meet
rising world demand, thereby easing consumer fears over energy security, a key
theme at the Doha conference.
But the US, which imposed sanctions in 1996 against Iran and Libya --
sanctions against Tripoli were dropped in 2004 -- has made public its
displeasure at energy deals involving Iran, in particular a gas pipeline deal
to India through Pakistan, a Japanese agreement to develop the 26 billion
barrel Azadegan oil field and an LNG and oilfield development project with
China.
Iran, which puts current production at its OPEC quota of 4.11-million b/d
-- which is close to its maximum capacity -- has been somewhat shackled in its
efforts to raise production capacity to over 5 million b/d by 2010 and to 8
million b/d by 2015 partly by the US sanctions, which has kept out US majors
and the likes of BP.
Another deterrent has been the buyback formula used by Iran to bypass a
constitutional ban on production-sharing, the terms of which are currently
being amended to help along stalled projects like the Yadavaran and Azadegan
oilfield development projects with Japan and China.
Iran's Vaziri Hamaneh denied in Doha that foreign investment flows into
the energy sector were slowing down because of US pressure on potential
investors and he blamed US foreign policy for high oil prices as well as on
speculators he said were "inflaming" oil markets.
Vaziri Hamaneh, who met with the Japanese, Indian and Pakistani ministers
on the sidelines of the Doha conference, said Tehran was pressing ahead with
its energy development projects.
"I think next week, we're going to send a delegation to China to discuss
the Yadavaran field and also the LNG project. We are preparing the initial
stage of preparing the contract but the contract is not yet signed. But we are
preparing the stages for the signing," he said.
The agreement, worth $100-billion includes a 25-year LNG export
agreement. The agreement would also grant a 51% share in the development of
Iran's onshore Yadavaran oilfield to China Petroleum and Chemical Corp
(Sinopec), which would receive 150,000 b/d of the field's crude oil for the
same period.
Chinese energy demand growth as well as its position as a permanent
member of the UN Security Council has made the success of the mega oil and gas
deal increasingly important for Tehran, which faces the prospect of possible
UN punitive action over its nuclear program.
Vaziri Hamaneh also said that he met Japanese energy minister Toshihiri
Nikai in Doha to try to push forward the Azadegan oil field development Tehran
has been negotiating with a Japanese consortium.
"I just talked to the minister of energy and he emphasized that it is one
of the most important energy projects they have," Vaziri Hamaneh said, adding
that a Japanese delegation was in Tehran on Monday "negotiating, finalizing
some of the points."
He added: "We have the written commitment and their willingness from
their side they would like to pursue this project." A Japanese government
official March 23 denied a report that the US had informally asked Japan to
delay the development of Azadegan by Japan's Inpex.
Japan has stressed the importance of the $2 billion project to Japan,
which is wholly dependent on imported crude to meet its oil needs.
Another project that appears to have been propelled forward by the
presence of key ministers at the Doha talks was the proposed gas pipeline from
Iran to India through Pakistan.
"We had a meeting with our counterparts from Iran and Pakistan the day
before yesterday. We are willing to have this project and we are also willing
to do this project together and we are hopeful this will be done. We are not
concerned," Vaziri Hamaneh said. "They (India and Pakistan) are interested and
we are willing so all parties are willing to do it so we have no concerns," he
said. Pakistani oil minister Amanullah Khan Jadoon said Sunday that he hoped
to sign an agreement with Iran and India in Jund for a $7-billion gas pipeline
to carry Iranian gas to both countries.
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