Iran awards key oil deal to Schlumberger

According to the MoU, Schlumberger would be required to study the formations of Shadegan, Parsi and Rag-e Sefid oil fields in Khouzestan

Photo for illustration only.
Photo for illustration only.

Iran says it has signed a memorandum of understanding (MOU) with Schlumberger – the world's largest oil field services company - over the development of several southern oil fields.

The MOU was signed between Schlumberger and the National Iranian South Oil Company (NISOC) – a subsidiary of the National Iranian Oil Company (NIOC) – which is mostly in charge of the developments of prospects in Iran’s oil-rich Khouzestan province.

Accordingly, the French company would be required to study the formations of Shadegan, Parsi and Rag-e Sefid oil fields in Khouzestan.

The projects would be carried out within the framework of Iran’s new generation of oil contracts, Shana news agency reported.

Schlumberger would be the second giant energy corporation to win a deal in Iran’s oil industry. Earlier this month, Total signed a contract to develop a major gas project in Iran’s South Pars gas field. Total and Schlumberger now appear to have provided France with a strong foothold in Iran’s oil industry given that both companies are headquartered in Paris.

Italy’s Eni also announced late last week that it is looking into Iran’s post-sanctions investment prospects, but emphasised that it had to first wait for Iran’s outstanding payments over its previous investments in the country’s oil industry to be settled.

Schlumberger’ contract is one of the most prominent signed the US elections. The upcoming president-elect Donald Trump has vowed to undo the nuclear pact signed with Tehran last year by global powers. His pledge has led many international companies to freeze their plans to enter the Islamic Republic despite the country’s huge potential as an energy and consumer market.

Though most international sanctions on Iran’s energy industry were lifted in January, Washington has maintained a ban on US companies and citizens from investing in Iranian oil fields.

European oil giants have stepped into the breach, culminating with an agreement by France’s Total SA to join a $4.8bn investment in an Iranian gas field hours before Trump was elected.

Despite uncertainty over what the president-elect will do over the Iran nuclear deal, Schlumberger is not the only one to pursue Iranian opportunities. Immediately after Trump’s election, Norway’s DNO signed up to study a key Iranian oil field near the Iraqi border.

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