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Iran’s Rouhani Invites Oil Investment as Sanctions Eased

Gas Field

Christophe de Margerie, chief executive officer of Total SA, said yesterday he sees potential for the French oil producer to return to work in Iran after halting development of the South Pars gas field in 2009. Eni SpA Chairman Giuseppe Recchi said yesterday he’s interested in seeing Iran open up.

Total, based in Paris, has an “old relationship” with Iran, de Margerie said.

“It is true we know them maybe a little bit more than others,” he said yesterday. “You cannot say Total has more interest than Chevron or Exxon or whatever,” de Margerie said, referring to the biggest U.S. oil companies. “What is more important is when can we really have negotiation.” The time is “still not right but it’s a potential.”

Iran has postponed a conference in London at which it plans to introduce new contract terms to international energy companies to give itself more time to prepare, said Mehdi Hosseini, an adviser to Oil Minister Bijan Namdar Zanganeh.

‘Central Issue’

Iran’s existing buy-back contracts require companies to pay for oil and natural gas exploration and recover their investment from any production at a pre-arranged rate of return. Hosseini said in November that the nation was working on new terms that conform more closely with international norms to attract foreign partners to help develop energy resources.

Rouhani took office in August after being elected on a pledge to steer Iran away from the confrontational stance adopted under his predecessor, Mahmoud Ahmadinejad, and end the country’s growing political and economic isolation.

In his first 100 days in office, he broke taboos by pursuing a rapprochement with the U.S., including a phone conversation with President Barack Obama, and empowering his foreign minister, Mohammad Javad Zarif, to reach the nuclear accord.

As that interim deal kicked in this week, sanctions on precious metals, petrochemicals and shipping insurance as well as airplane and auto parts were lifted, the European Union said. Iran will receive the first payment on $4.2 billion in previously blocked funds on Feb. 1, when it gets a $550 million installment.

To rescue the economy, “it was very clear that Iran had to change its foreign policy orientation,” said Mahmood Sariolghalam, professor of international relations at Tehran’s Shahid Beheshti University, during a panel discussion in Davos yesterday. “The nuclear problem was the central issue.”

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