Reuters: Norwegian oil company Statoil (STL.OL: Quote, Profile, Research), one of the few Western oil firms operating in Iran, said the OPEC member needs to offer more attractive terms if it wants to encourage investment from foreign companies. LONDON (Reuters) – Norwegian oil company Statoil (STL.OL: Quote, Profile, Research), one of the few Western oil firms operating in Iran, said the OPEC member needs to offer more attractive terms if it wants to encourage investment from foreign companies.
Most analysts say Iran needs foreign investment to turn around falling oil production but executives at some international oil firms believe Iran’s terms are too tough.
“The financial terms, the contract terms, they need to improve generally I think, to attract international oil and gas investors…for there to be a link between risk and reward,” Chief Executive Helge Lund told the Reuters Global Energy Summit on Wednesday.
Lund said this was the case even ignoring the recent deadlock over Iran’s nuclear program, which could lead to sanctions against the country.
Statoil has a stake in a gas project in the Iranian sector of the Gulf.
Illustrating some of the risk of doing business in Iran, the company was forced to write down the value of its participation by 2.2 billion crowns ($334.2 million) earlier this year, due to delays and increased costs.
Iran is the world’s fourth biggest oil exporter and holds 10 percent of proven global oil reserves.
In April it pumped about 3.8 million barrels per day, making it the second-biggest producer in the Organization of the Petroleum Exporting Countries behind Saudi Arabia, according to the U.S. Energy Information Administration.
