Tuesday, Jun 15, 2010
(Adds Ahmadinejad quotes, background)
TEHRAN (AFP)--Iran Tuesday signed 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 United Nations Security Council imposed Wednesday.
The other deals were won by groups led by Iran's Industrial Development and Renovation Organization 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 Royal Dutch Shell PLC (RDSA) and Spain's Repsol SA (REP), but the two energy majors held off on a final decision as new U.N. sanctions loomed against Tehran over 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 hard-liner 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."
The Guards 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.
Iran shares with the tiny state of Qatar the South Pars gas fields which comprise of 28 phases and is located in the Gulf.
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.
(END) Dow Jones Newswires
15-06-10 0941GMT
