A four-day trip to Europe following the lifting of sanctions against Iran produced a wealth of new partnerships and business opportunities for the country’s newly open economy, chief among them, new efforts to support its energy sector.
Italy’s Saipem finished the week with a $3.5 billion deal to revamp and “upgrade” the country’s Pars Shiraz and Tabriz oil refineries, while France’s Total signed a deal to purchase up to 200,000 barrels of oil per day – a deal worth 6.6 million euros at current prices, according to media reports. Iranian news reports took this a step further, suggesting that Saipem could take part in a $4.3 billion pipeline project with the Italian company controlling about 40 percent of the project.
Further, Italy’s Eni announced that it could see it returning to Iran this year after expressing strong interest in post-sanction business in the country.
The deals were just two of many intended to help Iran in the process of modernizing its infrastructure and economy after years of relative isolation from the global marketplace.
While the country’s new accessibility has provided new opportunities for a number of sectors, including transpiration efforts, the country’s energy potential remains a focal point of foreign investors.
However, according to the New York Times reported that many remain wary about the country’s oil sector due to regional instability and prices that have continued to fall to new lows over the last two years.
And without that needed international support, Iran could face the substantial costs of modernization alone. According to the Times, Iran’s oil and gas fields are in “dire need of infrastructure upgrades”. Analysts have suggested that just the gas pipelines could require up to $100 billion to address.
Earlier this month, oil prices dipped beneath $30 a barrel before recovering to the mid $30s this week, which analysts have suggested is far too low to justify investment efforts in the country’s energy sector.
By Christopher Coats
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