Austria's OMV and Iran Ink Upstream Activity Agreement
May 04 2016 - 9:34AM
Dow Jones News
By Miriam Malek
LONDON--Austria's OMV (OMV.VI) has inked a memorandum of
understanding with National Iranian Oil Company to develop Iran's
upstream oil and natural gas sector.
The deal is the first agreement OMV has signed with an Iranian
company since sanctions gainst Iran were lifted and it is one of
the first European companies to ink an MOU in the post-sanctions
environment.
In a statement released by OMV, the company said it will work
with Iran to explore the hydrocarbon potential in the Fars area.
NIOC and OMV have agreed a two-year timeline to complete
studies.
The company will also look at developing enhanced oil recovery
in the Cheshmeh Khosh and Band-E-Karkheh fields. The latter field
was discovered in the Mehr block which OMV operated prior to
sanctions.
Among the European countries that have already signed MOUs are
Italy's Saipem SpA (SPM.MI) and France's Total SA (TOT), but these
have not been focused on development in the upstream sector.
Iran's upstream sector lacks foreign investment. Many banks are
still cautious about going into Iran while U.S. sanctions, related
to terrorism, are still in place. The U.S. sanctions prevent
companies from transacting with Iran using the dollar.
OMV has previously been active in Iran, working with the company
as the operator of the Mehr exploration block.
Write to Miriam Malek at miriam.malek@wsj.com @WSJenergy
(END) Dow Jones Newswires
May 04, 2016 09:19 ET (13:19 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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