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News number: 8803200996

15:50 | 2009-06-10

Economy

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Senior Iranian Oil Official in Malaysia

TEHRAN (FNA)- Managing Director of the National Iranian Oil Refining and Distribution Company (NIORDC) Noureddin Shahnazi-zadeh is in Kuala Lumpur to attend a seminar on investment opportunities in Iran's oil industry.



Shahnazi-zadeh, who is also Iran's deputy oil minister, arrived in the Malaysian capital early on Wednesday to attend the seminar, due to be held on the sidelines of the 2009 Asia Oil and Gas Exhibition.

The exhibition is slated to be held on June 11 (tomorrow) in Kuala Lumpur.

The Iranian oil official along with his entourage visited the Malaysian city of Kedah on the first leg of his visit in a bid to observe the process of construction of a refinery by the Iranian experts there.

The trip came two days after Malaysian oil and gas company (Petronas) announced on Monday that it will stay in a project to develop Iran's South Pars gas field and review its position with the project's new Chinese partner.

Iran has said that China National Petroleum Corporation (CNPC) is to replace Total to develop phase 11 of the South Pars field after it inked a $4.7 billion deal with the Chinese oil company.

Petronas and France's Total had signed an agreement in 2004 with Iran to develop phase 11 of South Pars. But Tehran signed the contract with Chinese company after Total delayed decision and participation in the deal.

"We will stay in the project and review (it) with our new partner," Petronas Chief Executive Officer Hassan Marican told Reuters on the sidelines of an oil and gas conference in Malaysia.

The field is part of the world's largest gas reservoir.

Iran, which sits on the world's second largest reserves of both oil and gas, is facing US sanctions over its civilian nuclear program.

Iranian officials have dismissed US sanctions as inefficient, saying that they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing up to oil and gas deals.

In a recent case, Iran signed gas deals worth $14 billion with Malaysia's SKS Group in early December, including a contract to build an LNG plant.

Following US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran, which is rich in oil and gas, but not getting into big deals that could endanger their interests in the US.

Yet, after oil giants in the West witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to sign up to an increasing number of energy projects and earn billions of dollars, many western firms are increasingly showing interest to invest or expand work in Iran.

Some European countries have also recently voiced interest in investment in Iran's energy sector after a gas deal was signed between Iran and Switzerland regardless of US sanctions.

The National Iranian Gas Export Company and Switzerland's Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March for the delivery of 5.5 billion cubic meters of gas per year.

The biggest recent deal, worth €100m ($147m, £80m), was signed by Steiner Prematechnik Gastec, the German engineering company, this year to build equipment for three gas conversion plants in Iran.