January 05, 2010

Rafsanjani: West Seeking to Block Investment in Iran's Oil Sector

TEHRAN (FNA)- Head of Iran's Expediency Council Ayatollah Akbar Hashemi Rafsanjani blasted certain western states for their attempts to prevent investment in Iran's oil sector to reduce the country's oil revenues.

Addressing a gathering of Iranian students here in Tehran on Tuesday, Rafsanjani further pointed out that the West is willing to sanction Iran's oil sales in a bid to reduce Tehran's oil incomes and deter the country's progress in the field of nuclear technology.

But it cannot impose such embargoes on Iran because the measure would leave a drastic effect on oil prices and pose a major threat to the already shivering world economy, he added.

"If they choose to boycott Iran's oil sales,…the move would double the oil prices and of course the world economy cannot bear such a measure," he added.

He also underlined that oil has brought massive political power to the developed countries which enjoy advanced technologies, and urged the oil-producing countries to optimize their use of oil in an effort to boost welfare and prosperity for their nations.

Iran, which sits on the world's second largest reserves of both oil and gas, is facing US sanctions over its civilian nuclear program.

Iranian officials have dismissed US sanctions as inefficient, saying that they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing up to oil and gas deals with Iran.

In a recent case, Iran signed gas deals worth $14 billion with Malaysia's SKS Group in December 2008, which included a contract to build an LNG plant.

Following US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran, which is rich in oil and gas, but not getting into big deals that could endanger their interests in the US.

Yet, after oil giants in the West witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to sign up to an increasing number of energy projects and earn billions of dollars, they started showing increasing interest to invest or expand work in Iran.

Some European states have also recently voiced interest in investment in Iran's energy sector after the gas deal was signed between Iran and Switzerland regardless of US sanctions.

The National Iranian Gas Export Company and Switzerland's Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March 2008 for the delivery of 5.5 billion cubic meters of gas per year.

The biggest recent deal, worth €100m ($147m, £80m), was signed by Steiner Prematechnik Gastec, the German engineering company, this year to build equipment for three gas conversion plants in Iran.

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