Malaysian state oil firm Petronas is "very happy" with its investment in Iran and is looking for more deals in the upstream, despite the geopolitical risks, its top executive told Reuters on Friday.
Hassan Marican, President and Chief Executive Officer of Petroliam Nasional Berhad said the firm had no intent of selling down its 10 percent stake in the multi-billion-dollar Pars LNG project led by Total.
French oil major Total and Petronas will make a final investment decision on the project this year, he said. "We're very happy. We're there in Iran and we've been there since 1994," Hassan said in a wide-ranging interview ahead of the Asia Oil and Gas Conference (AOGC) in Kuala Lumpur next week.
Echoing officials of Total, Marican vowed to forge ahead despite US pressure on its allies not to invest in Iran, which the United States and Europe fear is pursuing a nuclear programme to build a bomb. Tehran says it needs nuclear energy for power.
Although Petronas halved its stake in the project to 10 percent two years ago, it has no intention of selling down further, Hassan said. Total holds 40 percent and the National Iranian Oil Company (NIOC) holds the other half. "Iran is one of the focus countries that we've identified and we continue to evaluate opportunities in the upstream sector in particular," he said.
"Off and on we make proposals to the Iranian government for an opportunity to invest." Asked whether any deals were imminent, he said: "Nothing to announce at this moment." Iran, whose liquefied natural gas (LNG) industry has foundered despite holding the world's second-largest natural gas reserves, is pressing for Total to agree a final deal within the next two months after reassessing an initial cost estimate, Deputy Oil Minister Gholamhossein Nozari said last week.
Hassan declined to say whether they would meet the deadline.
"We're jointly looking at the economics, the viability. We will be making some decision during this year," he said, on whether or not Petronas would proceed with the investment.
Total CEO Christophe de Margerie has said mounting costs, which an Iranian official said Total had put at around $10 billion, and political concerns could delay the project. Total and Petronas first agreed on the LNG project in 2004 with a target start date of 2009, which has since been deferred to 2011 amid years of wrangling common for Iranian deals. Petronas is no stranger to investing where other companies would not, being one of the biggest producers in Sudan.
Petronas partnered with European major Total and Russian giant Gazprom in the $2 billion development of Iran's South Pars phases 2 & 3, the first of 14 developments planned for the world's biggest natural gas field. Pars LNG Ltd, which is expected to have two liquefaction trains, each with a annual capacity of 5 million tonnes fed by the South Pars gas field, has sealed one 3 million tonnes per year sales contract with Thailand's top energy firm and another deal with PetroChina. Total and Petronas also each agreed in 2005 to lift 3 million tpy, the Pars LNG Web site shows.