Iran says no problem financing oil projects
Tehran, July 17, 2007
Iran's oil industry is not facing any shortage of financing to implement energy projects, the Iranian oil minister said, despite US pressure to deter foreign banks and energy firms from investing.
Washington, leading efforts to isolate Iran over its atomic programme, has slapped sanctions on two Iranian banks and has for years threatened penalties on foreign firms investing in Iran's oil industry.
Sanctions imposed by the UN on the Islamic Republic have also targeted a bank and world powers are considering expanding sanctions with a new UN resolution.
"Iran's oil industry faces no financial problems and none of the projects of this industry have been put on hold for lack of finance," Oil Minister Kazem Vaziri-Hamaneh was quoted by the IRNA news agency as saying.
Stuart Levey, the US Treasury's top anti-terrorism official, warned multinationals in March to steer clear of Opec's second biggest producer. He said leading financial institutions and corporations were re-evaluating business with Iran, concerned about "the risk and their reputations".
French bank Societe General had pulled out of financing a $5 billion project to develop part of Iran's massive South Pars gas field because of US pressure, an Iranian official said in May.
Major oil companies such as Statoil and Total were also being leaned on, he added.
To sidestep such issues, Iran has said it is planning to set up an overseas investment fund in Bahrain or Dubai to help finance the country's massive South Pars gas field.
As well as vast oil reserves, Iran has the world's second biggest gas reserves behind Russia. But Tehran has been slow to develop exports in part because US sanctions hinder access to technology and deter investors, analysts say.
Iran says foreigners are keen to invest in its oil and gas industry. At least $100 billion of foreign cash will be needed over the next decade to boost output by 1 million barrels per day (bpd) to 5 million, some Iranian officials say.
Iran's central bank, which is sitting on the country's windfall oil earnings, buoyed by surging crude prices, has said it is seeking to help Iranian businesses where they face challenges in securing international financing.