SHAFAQNA – International sanctions have yet to be lifted on Iran, but Western oil executives this past week showed an appetite for doing business there at a stately hotel a few blocks from the Danube River.
A little-publicized conference, the South Caspian Region Petroleum & Energy 2015 Summit, drew energy executives from Houston and London to Vienna where they shared coffee and cake with Iranian government officials on Tuesday and Wednesday.
Among the international companies that sent executives were Chevron Corp. and Amec Foster Wheeler PLC, according to attendees.
The presence of Western oil officials at an Iran-focused conference points to the shaping of a new business landscape in the Persian Gulf country with the prospect that economic sanctions could be lifted sometime this year.
Iran and a group of Western nations led by the U.S. agreed this month to a political framework for lifting a crippling set of sanctions tied to the country’s nuclear program. A final deadline for an agreement has been set for June 30, one sticking point being a timetable for lifting the sanctions.
Western executives have maintained clandestine contacts with Iranian energy officials, and that isn’t illegal. But it is still viewed as a sensitive matter.
“Energy companies are clearly interested in Iran,” said Peter Harrell, a former top sanctions official at the U.S. State Department and now a principal at consultancy Prospect Global Strategies LLC.
A spokesman for British oil-services company Amec Foster Wheeler said, “We don’t have operations in Iran. We might be interested in opportunities in Iran of and when sanctions are lifted.” A Chevron spokeswoman said, “We always act in compliance with current laws and regulations.”
Since the tentative agreement was unveiled, U.S. officials, including Treasury, have been doing a series of off-the-record calls and briefings for the business community with the message that it is too early to actively engage Iran, according to a person familiar with the calls. A spokeswoman for the U.S. Treasury Department declined to comment.
Still, some of the secrecy has relaxed in recent weeks.
“Before, when I met Iranian officials in Tehran, I had to introduce myself as ‘company-X’” for fear of leaks, said one Western European oil official at the Vienna summit.
At this conference, he said, “I finally could say who was my employer.”
For Tehran, the conference represented a chance to promote its vast resources. It holds the world’s fourth-largest crude oil reserves and the second for natural gas in fields that are cheaper to exploit compared with options in the U.S. that require hydraulic fracturing technology.
Iran also needs Western technology, know-how and buyers. Since the last Western oil companies left in 2010, Iran’s oil production has fallen by 27% to 2.7 million barrels a day.
Lola Bourget, a spokeswoman for the conference, said its focus wasn’t exclusively on Iran and noted that there were discussions about other Caspian countries such as Azerbaijan. The event was closed to the news media.
“This was a business-to-business meeting allowing experts to network,” Ms. Bourget said, adding that it wasn’t publicized because organizers considered it not relevant to the media.
Speaking outside the conference, Western oil officials said they were still unsure how attractive doing business in Iran will be. Previous terms offered by the Islamic Republic were so tough that most Western companies were unable to recoup their costs, though new contracts are being written. Some Western officials are still reeling from their past experience with Iran’s punctilious bureaucracy.
But the Vienna summit, held in the Palais Hansen Kempinski Hotel, provided an opportunity for conversations between Iran and the West.
In the lobby, a group of Western oil executives and an Iranian oil official held forth over silvery teapots and fine china under a giant chandelier. A European executive pulled out a printed Power Point presentation touting his company’s technological prowess in extracting heavy oil. He said it would suit aging onshore oil fields Iran is planning to offer to investors in September.
The Iranian official responded that his country was more interested in technologies for developing light oil. The company could offer that too, the executive said.
The exchange was hardly clandestine, taking place within earshot of tuxedo-clad hotel staff.
Still, the executive, in an interview retelling the conversation, didn’t want to go on the record with his name and company.