Business | Oil & Gas
Nozari unlikely to favour big oil companies
Working in Opec's second-largest producer could get even harder for international companies after the replacement of Iran's oil minister on Sunday.
- Reuters
- Published: 23:34 August 14, 2007
Dubai: Working in Opec's second-largest producer could get even harder for international companies after the replacement of Iran's oil minister on Sunday.
Increasing US pressure to keep out, domestic political wrangling and what big oil companies see as poor terms have already made Iran a risky prospect.
Those terms are unlikely to improve if President Mahmoud Ahmadinejad's intention is to make more changes in the top brass at the ministry, analysts said.
Ahmadinejad on Sunday appointed the head of the state-owned National Iranian Oil Company (NIOC), Gulam Hussain Nozari, as caretaker minister, replacing Kazem Vaziri Hamaneh.
"The ramifications for the oil industry are not good," said one energy analyst. "This group is very nationalist so I'd be amazed if they started giving concessions and making contracts more attractive."
It was still not clear why Vaziri Hamaneh was replaced.
While some saw it as a step by Ahmadinejad to sweep out a minister who they said opposed the president's planned management changes, others questioned this view, pointing out that Vaziri Hamaneh was made a presidential adviser. It was not clear, however, what power he would have in the new role.
No comment
Iranian oil officials have not made any formal comment on the change.
Analysts say Iran's oil industry needs a big injection of foreign investment and expertise to meet targets to boost output beyond roughly four million barrels per day now and to become a major gas exporter.
But while Tehran has announced many memorandums of understanding for international oil and gas deals potentially worth tens of billions of dollars, it has not signed off on a major deal for years.
It is likely to be some time before a new minister is appointed and that will slow down the already lengthy decision-making process on pending deals.
"Appointing a politically acceptable and suitably experienced minister could prove to be quite difficult in the short term so there is going to be a degree of uncertainty for a while," said Stuart Lewis, Middle East director at energy consultancy IHS.
The last selection process was lengthy.
Tehran raises OSPs for Europe and Asia
Iran has raised the official selling prices (OSPs) of its crude to all destinations in September, with Asian differentials at their highest in over two years, a NIOC source said.
Iran raised prices of Iran Light sold to Asian customers by 20 cents to a premium of 99 cents a barrel to Oman/Dubai, the highest a $1.15 premium in May 2005.
It raised Iran Heavy by 50 cents to a $1.55 discount to Oman/Dubai, the highest since July 2005, when it was set at a $1.20 discount to Oman/Dubai.
September Iranian OSPs for crude heading to Northwest Europe were increased by 30 to 50 cents a barrel. Prices to the Mediterranean were up by a larger 90 cents to $1.10 a barrel.
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