Lots of big news in oil and gas this week — including some follow-ups to recent stories I’ve been discussing. Including China’s CNPC further expanding influence in Brazil through an MOU with Petrobras, as well as the government of Japan announcing that methane hydrates still don’t really work.
But the biggest update comes from Iran. Where the government moved ahead with a slew of petro-deals — showing the nation truly is open for business in its high-potential oil and gas sector.
The action kicked off over the weekend. When India’s ONGC announced it has offered to spend $11 billion developing Iran’s Farzad-B natural gas field.
ONGC leads a consortium already awarded the Farzad-B project — but the development had been stalled over terms of the investment. With the companies now looking to kick-start things by offering to spend $6 billion on field development plus another $5 billion on a liquefied natural gas export facility.
But the biggest news came from an even further-afield company. France’s Total.
Iran’s oil minister Bijan Zanganeh announced Monday that the government has awarded Total a portion of the massive South Pars natural gas field. With the major now expected to lead a consortium investing $5 billion to bring the field to 400,000 barrel per day of oil equivalent production.
Total will hold 50.1 percent of South Pars, and will be joined by CNPC with 30 percent and Iran’s Petropars with 19.9 percent. Related: Total OPEC Crude Oil Exports Drop In June
This deal is a big one — both in size and significance. Showing that Iran is indeed open for business with foreign E&Ps, with Total CEO Patrick Pouyanne saying the agreement “officially marks our return” to the country.
And it looks like Total isn’t going to stop there. With reports yesterday suggesting the company has also reached a preliminary deal to invest $2 billion in three petrochemical projects across Iran.
All of which is great news for the global oil and gas world. Especially with more field auctions, like the Azadegan oil project, expected within the coming weeks. Watch for further deals between foreign firms and the Iran government — with Europe, Russia and Asian players all in the mix.
Here’s to walking the walk.
By Dave Forest
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