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Thread: Europe eyes Iran as new energy source

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  1. #1
    Senior Member Mazea's Avatar
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    Iran Netherlands

    Europe eyes Iran as new energy source

    Europe looks to Iran to diversify energy supplies after the lifting of sanctions on the Islamic Republic, head of Italy’s Eni SpA Claudio Descalzi says.

    Iran owns the world’s largest gas reserves but its share of the market is negligible because much of the gas produced goes to local consumption which is huge by all standards while sanctions have curbed efforts to ramp up production.

    Descalzi said Iran will need to invest at least $150 billion in infrastructure to become a major gas producer.

    The country emerged from years of sanctions on Saturday, removing many hurdles on the way to access investment, equipment and technology and allowing Iran to embolden its footprints on the global energy map.

    “I’m very happy that Iran has returned because for us it means the European system will have a more diversified energy supply,” Descalzi told RAI television.

    “To make the big jump, which could take four or five years, a jump that could have a real impact on the global market, Iran would need to attract $150 billion for development,” he said.

    Iranian officials hope to attract $40 billion in the gas industry now that the sanctions are gone.

    The country seeks to raise gas production to 1.2 billion cubic meters (bcm) a day in five years, from 800 million cubic meters now. Annual output totals 166 bcm, which is mostly used at home.

    The EU plans to send around 15 EU officials to Tehran in February to explore energy ties with Iran, European Climate and Energy Commissioner Miguel Arias Canete said on Sunday.

    The "technical assessment mission" includes the initial four-day technical visit after which high-level commission staff, possibly with a business delegation, will travel to Iran.

    Potential areas for cooperation include all areas of energy ranging from nuclear, oil, gas and renewable energy to energy efficiency, Arias Canete said.

    In particular, he mentioned developing liquefied natural gas and also pipeline shipments through a route the European Union refers to as the "Southern Gas Corridor" to carry supplies into southern Europe.

    The Europeans are also trying to recover the ground they have lost in Iran. Before the sanctions, the bloc’s annual trade with Iran stood at 27.8 billion euros, which fell to 7.6 billion euros in 2014.

  2. #2
    Senior Member Hope's Avatar
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    Pakistan United Arab Emirates

    Re: Europe eyes Iran as new energy source

    Iran to boost oil output by 500,000 barrels

    TEHRAN: Iran is aiming to increase its oil production by 500,000 barrels per day now that sanctions have been lifted under a landmark nuclear deal with world powers, a top official said.

    In comments posted on the Oil Ministry’s website Monday, Deputy Oil Minister Roknoddin Javadi said Iran is determined to retake its share of the oil market, which plunged after crippling sanctions were imposed in 2012.

    The UN nuclear agency certified Saturday that Iran has met all its commitments under last summer’s agreement, prompting the lifting of a broad range of economic sanctions, including those covering the oil industry. Other sanctions unrelated to Iran’s nuclear program remain in place.

    Iran used to export 2.3 million barrels per day but its crude exports fell to 1m in 2012. Iran’s total production currently stands at 3.1m barrels per day. “In the wake of removal of sanctions, Iran is prepared to increase its crude output by 500,000 barrels per day. Today, a government order was issued to increase production,” Javadi said, adding that it will take a year to return to pre-sanctions production levels.

    Oil prices have recently plummeted to under $30 a barrel, the lowest in 13 years. Javadi said an oversupply of some 2m barrels a day is to blame.

    Barclays analysts Alia Moubayed and Michael Cohen wrote in a research note to investors that the anticipated ramp-up in Iranian production comes “at a very bad time” for the oil market given the existing pressure on prices.

    “It is too early to say what kind of market impact Iran’s return will have or how much of Iran’s return is already priced in,” they wrote. “Our view is that Iranian wellhead production and sales from existing onshore and offshore storage will surprise the market initially, as the country shows its muscle, leading to downward price pressure,” they added.

    They estimate that Iran already has some 46m barrels of petroleum pumped and stored offshore and another 30-40m barrels reportedly in storage on land. They expect it will try to quickly reclaim lost market share in Europe, but getting additional sales out of customers such as India and China could prove trickier.

    Iran has vowed to boost crude exports and retake its market share even if prices fall further, saying fellow Opec members exporting more oil than their quota are should be blamed. Iran’s regional rival Saudi Arabia is Opec’s largest producer.

    Iran unveiled a new model of oil contracts in November aimed at attracting foreign investment in anticipation of the lifting of sanctions.

    Iran has sweetened the terms of the new model, hoping to bring in $30 billion in new investment. The new contracts last 15 to 20 years and allow for the full recovery of costs. The older buyback model contracts were shorter term, and investors complained of heavy risks and suffering losses.

  3. #3
    Senior Member Fassi's Avatar
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    Re: Europe eyes Iran as new energy source

    Now surely oil prices will come down at the pumps

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