Iranian Companies Only for South Pars

Source:

"Western oil companies warned last month to decide on their investments or be replaced.

Iran on Tuesday signed a $21 billion contract with several domestic companies, including at least one linked to the powerful Revolutionary Guard, to develop the giant South Pars gas field, highlighting the country's self-sufficiency, the president said.

The signing of the deals follows a warning by Iran last month to several Western oil companies that they needed to decide on their investments in South Pars or be replaced by domestic companies. Many international oil companies have been wary about investing in Iran because of the sanctions linked to its nuclear program.

"Those who imagine that the Iranian nation needs them. . .are wrong," President Mahmoud Ahmadinejad said at the signing ceremony, which was carried on Iranian state television.

Ahmadinejad said the project would be financed through domestic banks.

The deals reflect Iran's challenges in developing its grossly underfunded and ill-equipped oil sector.

The country sits atop one of the world's largest proven natural gas reserves and is the second-largest OPEC oil producer, though most of its output is used domestically.

Years of sanctions, augmented just last week by a fourth round of measures by the U.N. Security Council, have deterred significant investment by international companies with deep pockets and technical expertise.

Iran has been forced to rely either on local firms or countries like Russia and China, which are not as swayed by U.S. pressure, to develop its oil sector and boost output.

The report said the local firms included Idro, PetroPars, PetroPaydar as well as PetroSina and Sadra, which is owned by Khatam al-Anbia, the Revolutionary Guards' engineering arm.

The Revolutionary Guards group has been steadily increasing its economic might through lucrative deals in a range of sectors in Iran.

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