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ECONOMY

Iranian oil minister confident sanctions will be lifted

  • October 6, 2014
  • , Yomiuri
  • JMH Translation

(Yomiuri: October 6, 2014 – p.4)

On October 4, Iranian oil minister Zangeneh revealed in an exclusive interview with Yomiuri that the major oil producing country will “make an announcement at a briefing for foreign companies in London on February 22 and 23 of next year” on a new contract procedure for oil and natural gas development. The minister demonstrated confidence on reaching a final agreement on the nuclear issue by the negotiation deadline of November 24, and expressed hope that the United States and European countries will lift their ongoing sanctions against Iran.

It is unusual for the Iranian oil minister to respond to an interview with Japanese media. Anticipating that the sanctions will be lifted, the Iranian government is reviewing its current contract procedures for oil and natural gas development. During the planning briefing in London, it will announce the following items regarding the new procedure: (1) The contract term with foreign companies will be extended from the current maximum 10 years to 15-20 years; and (2) additional profits will be distributed in proportion to the output.

Interview with Petroleum Minister Zangeneh

Yomiuri: What’s your outlook for the ongoing nuclear talks?

Zangeneh: My outlook is optimistic. The importance of Iran in terms of diplomacy, such as measures against Islamic extremists, is growing. This is a perfect opportunity.

Yomiuri: What is your expectation for Japanese companies?

Zangeneh: Japan is good at the downstream sector (such as refinement and transportation), but the upstream sector (such as oil and gas field development) is also open to the country. We would like to build a long-term relationship with Japan. How much discussion we can have before reaching a final agreement will be crucial.

Yomiuri: How much investment is needed for oil and gas development?

Zangeneh: Between $150 billion (16.05 trillion yen) and $200 billion (22 trillion yen) over the next ten years.

Yomiuri: Iran places priority on exporting natural gas.

Zangeneh: We’ve already signed contracts with India, Pakistan, and Turkey, as well as with Oman. Talks with other gulf states are in progress. (Abridged)

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