Russia's Lukoil eyes return to Iran once sanctions are lifted

The head of Lukoil said on Monday that the Russian energy group wanted to return to Iran as soon as sanctions on Tehran are lifted, the latest foreign company to signal interest in developing the country's oil and gas after a nuclear deal with the west.

Vagit Alekperov, Lukoil president, told reporters at the CERA Week energy conference in Houston that the group's office in Iran, recently reopened, was studying geological data so it could take advantage of any opportunities should international sanctions be eased.

He said: "We hope that sanctions will be lifted in the medium term, in the near term, and that we will be able to come back to Iran and come back to the field we were working on."

Mr Alekperov disclosed that he met Iranian oil minister Bijan Zanganeh at the World Economic Forum in Davos, where he signalled that Lukoil was "ready to participate" in the development of the oil industry.

Lukoil and Norway's Statoil began work on the Anaran oilfield in 2003, but were forced to withdraw when economic sanctions were imposed on Iran. "Our priority, after sanctions are lifted, would be to come back to work on that field and start developing it."

The Russian group is the latest of several foreign companies to voice interest in a return to Iran.

Claudio Descalzi, chief executive of Eni, told the Financial Times in an interview that the Italian group would also be likely to move if western sanctions were lifted, but only if Tehran were to offer production-sharing contracts.

"That should be the fast way to restarting in Iran," said Mr Descalzi.

Tehran is desperate to revive its oil and gas industry and attract foreign investment after companies including Royal Dutch Shell, Spain's Repsol and France's Total pulled out in 2010.

Sanctions aimed at reining in Iran's nuclear activities have reduced its crude output to about 2.8m barrels a day, from 3.6m b/d in 2011. Exports from the Opec producer stand at about 1.1m b/d, half their pre-sanctions level, but some observers believe export volumes could recover within months.

A sustained rise in output, say to 4m b/d, would require substantial foreign investment since many of Iran's fields are in long-term decline.

It is also an enticing prospect for foreign investors, with some 40 per cent of its 187 existing fields and discoveries yet to be developed.

But, while foreign companies see long-term promise in Iran, they will want more attractive terms than have been on offer in the past.

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