Gazprom Neft, the oil arm of the giant Russian Gazprom, signed a memorandum of understanding (not a contract) in November 2009 to develop the Azar and Changul oilfields. It was touted as proof that Western sanctions that had driven Western oil companies out of Iran would not stop Iran’s oil development.
But Gazprom Neft did very little work and kept putting off the signing of a firm contract.
Last month, the National Iranian Oil Co. (NIOC) said it was going to boot Gazprom Neft out of Azar, but then backed off for more talks.
On Sunday, Ahmad Qalebani, NIOC managing director, said the talks were over and Gazprom Neft has been dumped from the project.
“Unfortunately, the Russian Gazprom company delayed fulfilling its understandings and the NIOC has given it repeated warnings, which were never heeded,” Qalebani said. A contract will now be signed with an Iranian company, he said, without naming any company.
The Azar field sprawls across the border with Iraq, where it is called Badrah. Iran has said repeatedly—since the 1990s—that its first priority is to develop oil and gasfields that are shared with neighboring countries so the neighbors can’t suck all the resources out of the shared fields first. Little has been done, however.
Qalebani said, “After consideration of the facts, it was decided that we terminate our cooperation with the company and cede the job to domestic contractors.” Qalebani appeared to be saying that Iran would not continue to talk to Gazprom about the Changul field either. It wasn’t known if there is any project in Iran that Gazprom is still working on.
Oil Minister Rostam Qasemi has said repeatedly that Iran has no need for foreign expertise to develop Iranian oilfields and increase Iran’s production capacity.
But Iranian production continues to decline, slowly but consistently. Iran does not show those declining figures to the public. The one oil statistic it constantly repeats is that Iran has a production capacity of 4.2 million barrels a day, a figure that is generally believed to be mythical.
