The Asian Option To Iran.
In 2004 Iran gave Japan, traditionally its largest customer in Asia, even greater access to oil in a $2 bn buyback contract (BBC) for Inpex (75%) and NICO Investments, the financial arm of Iran's state-owned NIOC (25%) to develop the southern part of Azadegan field. This is Iran's largest oil discovery in the past three decades, with 26 bn barrels in place.
With US oil firms barred because of unilateral sanctions, Iran is open to their state-owned rivals in Asia. In January, India agreed to buy Iranian LNG for 25 years under a $40 bn contract. In return, NIOC gave India's state-owned Oil & Natural Gas (ONGC) a 20% stake in a BBC to develop Yadavaran oilfield which will produce 300,000 b/d. A stake in a phase of the South Pars gas field development BBC is being negotiated by Indian Oil Corp. A similar deal was signed in October to supply China with LNG for 30 years; NIOC gave China's state-owned Sinopec 50% in the BBC for Yadavaran. This LNG/oil BBC deal has a potential value of $70 bn.
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|Publication:||APS Diplomat News Service|
|Article Type:||Brief Article|
|Date:||Apr 25, 2005|
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