Iran’s NIDC, Italy’s Eni sign MoU on drilling

/By AzerNews/

By Sara Rajabova

As part of plans to develop its energy sector, which has been weakened by sanctions, the Iranian government has expanded its cooperation with foreign companies.

Now, clearly visible competition has begun between foreign energy giants, which seek to enter the alluring Iranian energy market.

Iran has aleady signed an initial memorandum with Italian energy company Eni to increase cooperation in the drilling sector.

Mohammad Reza Takaidi, deputy head of National Iranian Drilling Company, described Iran’s energy market as attractive for EU companies, adding that the NIDC is negotiating with Eni and Saipem, the Italian oil and gas industry contractor, which is a subsidiary of Eni.

Takaidi anticipates that negotiations will be concluded in the new future, adding that Iran has expressed its readiness to jointly launch drilling projects inside and outside the country with the two Italian companies, the IRNA news agency reported.

Eni, which is seen as one of the largest energy groups in Europe, signed a $1.5 billion deal for development of Phase III of Iran's Darkhovin oil field in May 2009. In 2010, the company announced that it would cease operations on the Darkhovin field due to sanctions.

Eni has since signed a $550 million agreement to produce 160,000 barrels of oil per day from the field in two phases.

It also had a stake in the development of the Doroud oilfield on Khark Island and the Balal oilfield in the Persian Gulf.

Additionally, the company was involved in the development of Iran’s South Pars Phases 4 and 5.

Recently, Eni expressed its readiness to return to Iran’s oil industry once sanctions are lifted.

Eni’s Chief Upstream Officer, Antonio Vella, told an energy forum in Tehran in mid-October that the company plans to use the latest technologies while working in Iran, stressing that this is crucial in decreasing the project’s costs.

He emphasized, however, that Eni has always used the latest technologies in all projects it carried out in Iran.

Vella further said increasing the efficiencies of projects is one of the key advantages offered by Eni, adding that the company wants to use its expertise in its future projects in Iran, as well.

Iran and the six world powers have reached a comprehensive agreement on the country's nuclear program, which will lead to the lifting of sanctions on Iran's energy sector.

However, the lifting of sanctions depends on verification by the International Atomic Energy Agency of Iran’s readiness to cooperate with regulations proposed by the United States.

European energy giants, such as Total, Shell and BP, had built strong relationships with Iran through work in the country's oil and gas fields, as well as crude oil purchases, before halting them due to sanctions.