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Austria's OMV stands by Iran project

May 24/ 12:17

Vienna. Austrian energy group OMV is continuing with planned Iranian energy projects despite the United States’ withdrawal from a nuclear pact with Tehran, but said on Tuesday it had made no investments there yet. 

European firms doing business in Iran face sanctions after the US unilaterally withdrew from a deal it had signed with France, Germany, Britain, Russia, China and Iran, which lifted sanctions in exchange for Tehran limiting its nuclear program, Reuters reported. 

The other signatories have indicated that they hope to salvage the deal. French Finance Minister Bruno Le Maire brought up the idea that the European Union could compensate European companies that might face US sanctions. 

Last week, French energy giant Total joined other European companies in signaling a possible exit from Iran in light of the US decision. 

"OMV was monitoring political developments in the US and the European Union very closely," OMV’s upstream chief, Johann Pleininger, told its annual shareholder meeting in Vienna. 

“The project has not come to a standstill; it is continuing,” Pleininger said with regard to Iran. 

The Austrian group, which generates the bulk of its profit in Europe, started operations in Iran in 2001 as the operator of the Mehr exploration block in the west of the country. 

OMV halted operations in 2006 due to sanctions, but following sanctions relief in January 2016, it signed in May 2016 a memorandum with the National Iranian Oil Company for projects located in the Zagros area in the west and the Fars field in the south, where foreign firms often need a local partner. 

In June 2017, OMV and Russia’s Gazprom Neft announced a memorandum of understanding to work in Iran’s oil sector. 

At last year’s shareholders meeting, Pleininger said NIOC still owed OMV $48 million. The latter is expected to receive Iranian crude oil in lieu of this debt. 

OMV is Austria’s former state petroleum company and the government still holds a 31.5% stake. Its second-biggest investor is Abu Dhabi industrial group Mubadala Investment with 24.9%.

According to Kurt Wagner, OMV's Orient Upstream general manager, OMV is seeking to expand cooperation with the NIOC to secure a footprint in the country's upstream sector.

"We are very upbeat on the future of collaborations with NIOC and look forward to further our activities in the oil discovery, production and development fields," Wagner said early this month.

The official described the two companies' previous cooperation as promising, saying talks are underway to sign a deal with NIOC, within the framework of Iran Petroleum Contract, the country's new model of contracts for oil and gas projects. 

The Vienna-based company looked into investment opportunities in Iran right after the lifting of international curbs in 2016.

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