Tehran signs $21 billion in contracts with local companies to develop gas fields
By Agence France Presse (AFP)
Wednesday, June 16, 2010

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Revolutionary Guards, other Iran firms bag mega gas deals – state TV

Farhad Pouladi

TEHRAN: Iran on Tuesday signed a series of contracts worth $21 billion with local firms to develop six gas fields, some of them awarded to the elite Revolutionary Guards, state media reported.

The state television website said the “contracts to develop the South Pars gas fields – phases 13, 14, 19, 22, 23 and 24 – were inked with three consortia including Khatam al-Anbiya,” the Guards’ industrial conglomerate.

Khatam al-Anbiya was targeted under fresh international sanctions that the UN Security Council imposed Wednesday.

The other deals were won by groups led by Iran’s Industrial Development and Renovation Organization (IDRO) and Petropars, the report said.

IDRO is a holding company of state-owned industrial groups and Petropars is a subsidiary of state-run National Iranian Oil Company.

Iran previously discussed handing over phases 13 and 14 to Anglo-Dutch Shell and Spain’s Repsol YPF, but the two energy majors held off on a final decision as new UN sanctions loomed against Tehran ver its nuclear drive.

“This is a very great day for the Iranian oil industry. These fields will be developed through Iranian investments,” Iranian President Mahmoud Ahmadinejad said in a speech broadcast live on state television after the Oil Ministry signed the deals.

“The [investment] volume of the contracts for the six phases signed today is worth around $21 billion,” he said, adding the total gas production when these fields become operational would be 200 million cubic meters per day.

He said the proposed investments would be raised domestically and if required it would be tapped from the world market.

Oil and energy experts say that despite the signed contracts, questions exist on whether Iranian companies are equipped with the management and technical knowhow to handle such large-scale projects.

But Ahmadinejad boasted Iranian companies were able to handle these jobs.

“Ten years ago, if some said that Iranians are going to develop South Pars, many would not have believed.

“But today, we see [Iranian] contractors with daring and self-reliance shouldering the burden,” the hardliner was quoted as saying by the television website.

Criticizing Western firms for shunning the projects, he said that “the arrogant countries ink deals [with Iran] but later decide at some other place to pass a resolution and then unilaterally cancel the deals.”

On Wednesday, the Security Council passed a US-sponsored resolution imposing a fourth set of sanctions on Iran for its uranium enrichment program which it suspects is aimed at making nuclear weapons, a charge denied by Tehran.

The Guards were set up as an elite force to defend the 1979 Islamic Revolution from internal and external threats.

Its industrial wing, Khatam al-Anbiya, was created during the 1980-88 Iran-Iraq war to help rebuild the country, and has diversified over the years into companies dealing with mechanical engineering, energy, mining and defense.

Last month the Guards said it was ready to take over energy projects in Iran if Western firms stayed away as over the past few years its presence in the country’s economy has grown under the presidency of Mahmoud Ahmadinejad.

Iran shares with the tiny state of Qatar the South Pars gas fields which comprise of 28 phases and is located in the Gulf region.

The development of the giant offshore field has been delayed amid a lack of investment in a country faced with severe gas needs of its own and because of difficulties in procuring the technology to develop these fields.

The small Iranian town of Assalouyeh in the southern province of Bushehr has been chosen for helping to develop the fields.

Iran, OPEC’s second largest oil exporter, also has the world’s second largest gas reserves after Russia.