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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Exxon Setting Its Sights On Iranian Oil Fields

Exxon Setting Its Sights On Iranian Oil Fields

The deadline for a comprehensive deal between Iran and the P5+1 nations is quickly approaching, with the outcome no more certain than it was a few months ago.

Negotiators are keeping their progress close to the vest, letting out very few details on where they are going with the talks. Hungry for intelligence, Bloomberg reported that ExxonMobil hired an outside lobbying firm to track any activity related to sanctions on Iran. Related: China To Create An Oil Supermajor Twice The Size Of Exxon?

The oil giant emphasized that it is not lobbying the US government on removing sanctions on Iran, but there is no doubt that the firm is highly interested in Iranian oil fields. Having been essentially locked out of Iran for nearly four decades, American oil companies are eagerly watching the negotiations to see if the door will be opened in the Persian Gulf.

Iran has vast oil and gas reserves, but with a lack of investment, they are operating far below their full potential. More importantly, however, is the fact that the US government forbids western oil companies from working in Iran. But that could all change if a deal is signed in June. Related: Saudi Arabia Planning For Transition To Renewables

ExxonMobil hired outside help to learn more about when and how the US government might tweak or remove its sanctions regime. However, ExxonMobil dismissed the Bloomberg report. “ExxonMobil is not lobbying on Iran sanctions,” the company’s vice president of government affairs, Ken Cohen, said in a terse press release. “Erroneous media reports resulted from errors in a consultant’s lobbying disclosures. Current U.S. law prohibits American companies from operating in Iran.” Related: Oil Futures Prices Divorced From Physical Markets For Now

Nevertheless, the fact that it hired a firm to monitor the situation demonstrates the company’s interest in Iranian oil. For its part, Iran has been interested in attracting international oil companies, anticipating a removal of western sanctions. Having seen its oil exports slashed by around 1 million barrels per day as a result of sanctions, it appears to be preparing for a post-sanctions environment. Since 2013 at least, it has courted private oil companies. The Iranian government is under a lot of economic pressure, and promises to its populace about economic growth stemming from a removal of sanctions has upped the ante on the negotiations.

Still, a deal is far from certain. A lot more will be known in the weeks ahead.

By Charles Kennedy of Oilprice.com

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