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Iran Monthly February 2017
Transcript of Iran Monthly · owned subsidiary of Oman Oil Facilities Development Company LLC, ... of mobile...
Iran MonthlyFebruary 2017
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Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
Contents
1 Editorial
2 Energy and Resources
5 Trade
5 Automotive and Transport
5 Banking and Finance
5 Legal, Political and Sanction Developments
6 Key Contacts
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Pinsent Masons | Iran Monthly
Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
EditorialIn this month's editorial, we will explore the recent activities of our Iran Group across our global offices. 2017 kicked off with a busy and positive start for us as we saw more and more interest in the Iran market, despite recent global politics.
London
1. "Assessing the Investment Climate in Iran" (Access for Women in Energy)
On the 6th of February 2017, Pinsent Masons sponsored the Access for Women in Energy Event, organised by Dr Carole Nakhle of Crystal Energy and supported by Pathfinder Trade and Invest. The session was aimed at assessing the investment climate in Iran, and looking at the political, economic, legal and social conditions that will shape any investment decision especially in the energy sector.
The event was chaired by Lord Howell of Guildford, Chairman of the International Relations Committee of the House of Lords. Senior members of our Iran team were on the panel and they provided their expert insights on the following topics:
• George Booth looked at the current European and U.S. sanction framework. George also explored the theme of localization and the role this plays in Iran seeking foreign investment, as well as advising on the legal requirements of local partners and the preference given to local suppliers in some sectors
• Ava Zadkhorvash spoke on the cultural and practical considerations of doing business in Iran, including the importance of understanding Iran's recent history and politics and the part this can play when doing business in Iran. She also advised on the provisions to include in a proposal and the strategy to adopt when entering the Iran market.
The participation was at full capacity, clearly reflecting the strong interest in the subject.
To read the summary of the discussion click here.
2. "UK Overview of the Iranian Business Environment" (Ernst and Young LLP)
On the 24 January, the head of Pinsent Masons' Iran practice, George Booth, joined the panel of oil and gas experts at Ernst and Young's' event which was aimed at understanding the Iran business environment.
The panel discussed the transactional banking issues (payment flows in-and-out of Iran) that could affect Iranian and UK entities wishing to engage in business. It also covered the issues involved in raising finance for UK firms who wish to invest in Iran.
George provided an overview of the current oil and gas regime in Iran with a focus on exploration and production. This included the qualification process and the estimated timelines for completion as well as the list of Iranian companies qualified to engage in joint ventures with international oil companies.
In particular, George also highlighted the Bilateral Investment Treaties and tax incentives which exist between Iran and certain other countries and the commercial benefits of using these when doing business with Iran.
Dubai
3. "Iran-Europe conference" in Berlin (4th Iran Europe Oil and Gas Energy Summit)
At the end of last year, Jason Rosychuk, a senior Associate in our Iran Group, was in Berlin to provide a workshop at the 4th Iran Europe Oil and Gas Energy Summit. Jason explored the legal framework relating to Iran’s oil and gas industry and the recently announced Pre-qualification Criteria for international oil companies to participate in Iran’s oil and gas upstream projects.
The worksop covered:
• Iran's current petroleum and oil and gas regime
• risk mitigation in Iran's oil and gas sector
• the IPC and the cabinet resolution
• on-going risks of doing business in Iran
• issues, requirements and considerations of technology transfer, and much more.
Our team are always happy to answer any questions you may have in relation to the Iran market, whether you have invested in Iran or are thinking to do so.
Please do not hesitate to contact us.
George BoothLondon/DubaiM: +44 (0)7766 820814/+971 50 621 0537E: [email protected]
Jason RosychukDubaiM: +971 50 450 4143E: [email protected]
Niazi KabalanLondonM: +44 (0)7584 362167/+98 93 7493 5901E: [email protected]
Ava ZadkhorvashLondonM: +44 (0)7795 644389/+98 935 295 6985E: [email protected]
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Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
Energy and ResourcesVitol clinches $1 billion pre-finance oil deal with Iran: sourcesReuters – 4 January 2017
It has been reported that the world's largest oil trader, Vitol, and the National Iranian Oil Company (NIOC) have signed a deal last October to provide loans of an equivalent $1 billion in euros guaranteed by future exports of refined product. The deal is expected to come into fruition this month (January).
Petrofac wins $600m Oman gas project dealTimes of Oman – 11 January 2017
Petrofac has signed a contract worth $600 million with a wholly-owned subsidiary of Oman Oil Facilities Development Company LLC, Salalah LPG. Petrofac will undertake the engineering, procurement and construction of its Salalah LPG extraction project in the southern area of Oman. The 36-month lump sum contract, will be triggered when Salalah LPG issues the notice to proceed. Petrofac’s scope of work will include the construction of the liquefied petroleum gas (LPG) unit, which includes tie-ins to existing pipeline infrastructure and LPG storage and jetty facilities at the Port of Salalah.
More oil companies to be approved for Iranian tendersFinancial Tribune – 16 January 2017
The National Iranian Oil Company (NIOC) plans to announce a second list of international oil companies approved to bid in its oil and gas tenders. The first list was issued last month with the names of 29 oil and gas companies. The oil companies listed include; Total, Schlumberger and Royal Dutch Shell. Moreover, it appears that Russian oil companies, Lukoil and Gazprom Neft, have signed deals to study seven Iranian oil and gas reservoirs and they are due to submit their findings to the NIOC.
Iran’s oil and gas revenues to reach 41 billion dollarsOil Price- 17 January 2017
Iran's Oil Minister, Bijan Zanganeh, stated that Iran’s crude oil and condensate revenues are expected to reach 41 billion dollars in the country’s current fiscal year ending on 20 March 2017. For the first nine months of the current Iranian fiscal year, oil revenues reached 24.7 billion dollars.
Iran to build oil and gas storage facilities in SyriaTehran Times – 17 January 2017
Tehran and Damascus signed five memorandums of understanding (MOUs) for economic cooperation, including one that related to the construction of oil and gas storage facilities and terminals in Syria by Iran. The MOUs also set the stage for collaboration on the operation of mobile phones and agricultural fields.
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Pinsent Masons | Iran Monthly
Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
Iran and Sri Lanka sign a MOUMehr News Agency – 18 January 2017
Iran and Sri Lanka signed a MOU for cooperation on laboratory analysis for oil and gas. The countries also plan to exchange technological equipment. Iran’s Vice-President for Science and Technology and Sri Lanka’s Minister of Science, Technology and Research signed an agreement for expanding technological cooperation between the two countries in various fields. These sectors include; nanotechnology, biotechnology and advanced materials.
Iran, China to sign $3 billion contract to upgrade Iranian refining capacityMehr News Agency – 18 January 2017
Iran and China will reportedly sign a contract worth $3bn to upgrade Iran's oil refining capacity. Iran’s deputy oil minister has mentioned this deal will be focused on the Abadan oil refinery. Chinese officials will visit Iran next month (February) by which time the deal is expected to be signed.
Iran’s oil tanker traffic grow 50%Petro Global News – 20 January 2017
The Managing Director of Oil Terminals Company (IOTC), Seyyed Pirouz Mousavi, stated that, “given the removal of sanctions against oil exports in the past year, there has been a 50 per cent increase in arrival of oil tankers, as well as those which carry gas condensate in Iranian oil terminals in the Persian Gulf as compared with a year ago.” The tankers were leased out by several international companies, including France’s Total and Italy’s Eni. They are currently arriving and being loaded at Iran’s southern terminals. With an upsurge in gas condensate output, the export volume of petroleum products has also augmented.
Iran drills 231 km of oil & gas wells in 9 monthsTrend News Agency- 22 January 2017
The National Iranian Drilling Company (NIDC) drilled about 231 kilometres of oil and gas wells using its drilling fleet, during the first nine months of the current Iranian fiscal. The company has carried out 152 offshore and onshore gas wells. Iran holds 157.8 billion barrels of recoverable crude oils.
Siemens and Mapna to supply locomotives to IranMeed – 23 January 2017
Siemens is due to reportedly sign a contract with Iran’s Mapna to manufacture electric locomotives, primarily in Iran. Sources suggest that the contract will be for 150 locomotives. Siemens also signed a contract last year with the Iran Railways Agency to supply 50 diesel-electric locomotives at a facility owned by Mapna in Karaj, Iran. Siemens has also reportedly signed an agreement for the redevelopment of the Tehran-Mahshad railroad.
OMV inks deal to assess oil developments in Iran with private Iranian companyS&P Global Platts – 25 January 2017
Iran’s Dana Energy and OMV have signed an MoU to evaluate oil and gas projects in Iran. An Arabian state entity holds substantial equity in OMV. This is unusual as they will be teaming up with an Iranian private-sector petroleum company instead of a company owned by the Iranian government.
Iranian oil tankers return to European watersFinancial Times – 26 January 2017
Tankers from Iran’s state-owned oil fleet sailed to Europe for the first time since sanctions were eased last year. The National Iranian Tanker Company has two giant vessels that sailed towards the storage and trading port of Rotterdam after loading at Kharg Island earlier this month. Each of the very large crude carriers are capable of carrying more than 2 million barrels of oil. Sirus Kianersi, NITC managing director, stated that there had been a “resolution“ of the insurance and international certification issues that had delayed the Iranian oil shipper from sending its own vessels to European ports. Before 2012, when co-ordinated Western sanctions on Iran’s oil exports came into force, NITC was one of the world’s largest tanker operators with about 65 vessels.
Russia's Lukoil hopes for Iran oilfield development decision this yearReuters – 30 January 2017
Lukoil hopes to make a decision on developing two new oilfields in Iran. Lukoil is talking with the NIOC on taking part in the development of the Abe Timur and Mansuri fields in Iran. Lukoil's vice president and head of upstream operations in the Middle East, stated that Lukoil is in active discussions with the NIOC with respect to budget cost structure, and that the oil company will subsequently start negotiations on contractual terms if the development plans that are proposed are accepted and agreed.
Petroleum Conference Iran 2017Petroconfex – 30 January 2017
The 2017 Petroleum Conference took place in Tehran, 30 January – 1 February 2017. The event covered all facets of the oil, gas and petrochemical sectors, with a particular focus on the midstream and downstream opportunities currently available. For the first time, leading Iranian oil and gas business associations came together as a united voice for the Iranian petroleum industry’s private sector.
The conference gained support from the chairman of the Iranian Parliament, Ali Larijani. An additional event will be held on 1 October 2017, which will focus on increasing collaborations in the Iran oil and gas private sector and initiatives for an independent regulatory body for the petroleum sector.
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Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
Oman-Iran change route on subsea gas pipelineMeed – 8 February 2017
In 2013, Iran and Oman signed an Agreement which would allow 10 billion cubic metres of Iranian liquefied natural gas to be supplied to Oman annually. This will be done through a undersea pipeline, costing $60 billion. Despite the removal of sanctions, no further work was undertaken to develop the pipeline. Iran and Oman have agreed to alter the route of the planned pipeline bypassing the waters of the UAE. According to Iran’s oil minister, representatives from Shell, Total and KGC attended the meeting with proposals for the pipeline.
Oil major Total says final investment decision on Iran project depends on renewal of U.S. waiversReuters – 9 February 2017
Oil major Total has declared that their decision to invest $2bn on a gas project in Iran is dependent on the renewal of sanctions waivers. Total’s Chief Executive commented “there are two executive orders that are supposed to be renewed before the summer…trump will have to, or not, renew these sanction waivers.”
Polish refiner Lotos aims for long-term oil supply deal with IranReuters – 12 February 2017
Polish oil refiner Lotos is seeking to secure a long term supply deal with Iran. It has signed an agreement with NIOC and the first oil tankers arrived in Poland in August, 2016. CEO Marcin Jastrzebski commented “we are negotiating a supply of heavy oil from Iran…we assume that shipment of two million barrels will reach [Poland] at the beginning of May.”
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Pinsent Masons | Iran Monthly
Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
TradeFirst new Airbus in decades arrives in IranAljazeera – 12 January 2017
The first Airbus passenger plane ordered by IranAir is now in service on domestic flights in Iran. The 189 seat plane is the first of 100 planes ordered from Airbus. IranAir has also ordered 80 planes from Boeing and is also negotiating an order of 20 turboprops from ATR.
Trade Min. in Baghdad to open Iran specialized expoMehr News Agency – 14 February 2017
Iran’s Minister of Industries, Mines and Trade visited Iraq to mark the opening of the exhibition of the Islamic Republic. The exhibition will last for four days with the aim of introducing the latest Iranian products and achievements across various sectors (including food, home appliances, auto making and cosmetics) to international consumers and producers.
Automotive and TransportPSA to carry out Iran plans despite US threatsPress TV – 14 February 2017
PSA says that it will go ahead with their Iran investment plans despite recent anti-Iran comments from the U.S. PSA Middle East chief says "this is our opportunity to accelerate…it will become even harder for American companies to operate, that's for sure. We've opened up a lead and we plan to hold on to it."
Economic, Banking and FinanceDanske Bank says in talks with Iran central bank on financingReuters – 9 January 2017
A spokesman for Denmark’s Danske Bank said “to a limited extent and within the international framework, we are open to supporting our clients with activities in Iran financially…we are in dialogue with Iran's central bank about this, but no deal has been reached at this point.”
Exclusive: Global ship insurers to resume near full coverage for Iran oil - officialsReuters – 17 January 2017
Global shipping insurers have arranged a deal which allows for them to provide full cover for Iranian oil exports from next month, without involving U.S. domiciled reinsurers. From February 2017, normal coverage will apply up to $3.08bn and up to $7.8bn for accidents.
Legal, Political and Sanction DevelopmentsIran's former president Rafsanjani dies aged 82The Guardian – 8 January 2017
Ali Akbar Hashemi Rafsanjani was a founding member of Iran’s 1979 Islamic revolution, he was also a senior member of Iran’s assembly of experts and also served for two terms as the president to the Islamic Republic of Iran between 1989 to 1997. His death is said to be due to heart complications.
Iran parliament stresses foreign investment in five-year economic planReuters – 15 January 2017
Iran’s recently announced five year plan has an increased focus on foreign investment. The plan allows for the Iran government to arrange up to $30bn foreign financing each year, with $15bn of FDI in Iran, and $20bn of foreign investment being conducted through local partners. The plan has to be approved by Iran’s Guardian Council.
New US targeted Iran sanctionsEurope Sanctions – 3 February 2017
The US Treasury department has added 13 people and 12 companies to its sanctions list, freezing their assets under US control. The new listings can be found here.
Prime Minister Stefan Löfven visited IranGovernment Offices of Sweden – 11 January 2017
Iran's President Rouhani had invited the Prime Minister of Sweden to Iran between the 11-12 February 2017. The Prime Minister was accompanied by a business delegation led by the Minister for EU Affairs and Trade. He met with Iran’s Supreme Leader and the Speaker of the Parliament to discuss bilateral relations and regional issues. Mr Löfven also met with the Vice-President for Women and Family Affairs to discuss how to strengthen women’s participation in the labour market.
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Pinsent Masons | Iran Monthly
Some Iran sanctions remain in force. This newsletter addresses some of the possible opportunities following Implementation Day. Specific legal advice should be taken before acting on any of the topics covered, including whether or not you are permitted to participate in them under current applicable legislation.
Key contactsFor questions, comments and information on Pinsent Masons’ Iran practice, please contact:
George BoothLondon/DubaiT: +44 (0)20 7490 6984/+971 4 373 9700M: +44 (0)7766 820814/+971 50 621 0537E: [email protected]
Jason RosychukDubaiT: +971 4 373 9656M: +971 50 450 4143E: [email protected]
Niazi KabalanLondonT: +44 (0)20 7418 7104/+98 93 7493 5901M: +44 (0)7584 362167E: [email protected]
Vincent ConnorHong KongT: +852 2294 3490M: +852 9186 7221E: [email protected]
Steve PotterSingaporeT: +65 6309 5671E: [email protected]
Noyan GöksuIstanbulT: +90 212 336 0102M: +90 549 784 6465E: [email protected]
Richard HartLondonT: +44 (0)20 7054 2667M: +44 (0)7956 479393E: [email protected]
Dr Christoph MaurerParisT: +33 1 53 53 09 65M: +33 6 81 986701E: [email protected]
Ava ZadkhorvashLondonT: +44 (0)20 7490 6459M: +44 (0)7795 644389/+98 935 295 6985E: [email protected]
Sachin KerurDubaiT: +971 4 373 9600M: +971 50 450 8129E: [email protected]
Willie ParkAberdeenT: +44 (0)122 437 7947M: +44 (0)7860 606325E: [email protected]
Suzanne AhmadianParisT: +33 1 53 53 08 94E: [email protected]
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This note does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered.Pinsent Masons LLP is a limited liability partnership, registered in England and Wales (registered number: OC333653) authorised and regulated by the Solicitors Regulation Authority and the appropriate jurisdictions in which it operates. The word “partner”, used in relation to the LLP, refers to a member or an employee or consultant of the LLP, or any firm or equivalent standing. A list of the members of the LLP, and of those non-members who are designated as partners, is available for inspection at our registered office: 30 Crown Place, London, EC2A 4ES, United Kingdom. © Pinsent Masons 2017.
For a full list of the jurisdictions where we operate, see www.pinsentmasons.com
