Hurdles Facing Oil Investors as Iran Braces for Major Field Development

Hurdles Facing Oil Investors as Iran Braces for Major Field Development

Iranian broker Reza Mostafavi Tabatabaei has warned foreign investors heading towards Iran of the difficulties they may face, speaking from his own personal experience.

This was in reference to a $87m deal in 2011 to buy an oil drilling rig that was never delivered, which lead subsequently to accusations of corruption by the state-run media in Iran.

Now living in Dubai, Tabatabaei told Reuters he had not been formally charged, but that his family in Iran could not move their assets frozen till further notice.

“Because of the sanctions, Iran didn’t have enough money to pay for the rig,” he said. “Because of the delay in payments, the selling company cancelled the contract.”

Reuters was not able to confirm his version of the story but they did cite a statement by Oil Minister Bijan Zanganeh reported by the Shana news agency as saying that even though the rig was never delivered to Iran, Tehran ended up paying out all of the $87m.

The minister, however, who was not in office at the time of the deal did not say where the funds were thought to have gone.

“I was supposed to receive $3 million as a broker but most of the money went to the pockets of people in the IOEC who were involved in the contract,” Tabatabaei said, adding that “The missing oil rig case shows that not only sanctions have damaged Iran’s oil industry but also corruption, mismanagement, political rivalries and the influence of security and military forces”.

“We used to do things hoping God would help us,” he also said.

In related news the Iranian oil minister has announced that his country needs $50b in investments to boost recovery from its shared oil and gas fields, such as the South Azadegan it shares with Iraq, said Press TV.

More than $20b alone is needed to boost recovery to 700,000 b/d, he added.

He explained also that the objective of the sanctions on Iran’s nuclear program was “bringing Iran’s petroleum industry to its knees”, adding however that the “personnel of the petroleum industry, with their exemplary resistance, neutralized those objectives”.


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