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IdentifierCreatedClassificationOrigin
07IRANRPODUBAI24 2007-04-19 10:48:00 SECRET Iran RPO Dubai
Cable title:  

IRAN OIL OFFICIAL SHOPS AROUND FOR FOREIGN INVESTMENT

Tags:   EINV EPET ENGR PREL IR 
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1.(SBU) Summary: The National Iranian Oil Company seeks
investments from international companies to increase recovery
capabilities, said Iran's Deputy Oil Minister Gholamhossein
Nozari at Dubai's 15th annual Middle East Petroleum and Gas
Conference April 15-17. Nozari repeatedly stressed Iran's
openness to foreign investment in the oil sector. Chairman and
CEO of FACTS Global Energy, USA Fereidun Fesharaki said his
company expects to see much smaller gas export volumes coming
out of Iran due to domestic needs, pricing, and political
factors. Neil Patrick from the International Crisis Group
called on Saudi Arabia - in particular - to ease regional
tensions by interfacing with former President Rafsanjani and
Secretary of the National Security Council Larijani. Rutgers

SIPDIS
University professor Hooshang Amirahmadi said that the stalemate
of "no peace but no war" that has defined US-Iran relations for
the past 28 years cannot continue. One US service sector
company employee complained to IRPoff that American companies
continue to "lose out" as they stand back and watch their
European competitors do business in Iran. End Summary.

2.(SBU) Singapore-based Conference Connection Group organized
the 15th annual Middle East Petroleum and Gas Conference (MPGC)
in Dubai April 15-17. The two-day event focused primarily on
pricing, risk management, downstream projects and upstream
outlooks, with Iran only a small component of the conference.
(Note: This cable focuses solely on the Iran-related content of
the conference. Most conference presentations are available
upon request. Endnote) Iran Deputy Petroleum Minister
Gholamhossein Nozari gave one of two ministerial addresses,
joined by UAE Minister of Energy Mohamed bin Dhaen Al Hamli.
Neil Patrick from the International Crisis Group and Hooshang
Amirahmadi, Rutgers University professor and president of the
American Iranian Council discussed the geopolitical and economic
impact of the Iranian government on the region. One conference
participant estimated that roughly 450 participants gathered in
Dubai for the event but said the real players did not attend the
plenary sessions because they were busy holding meetings
off-site.

Iran: open for business


--------------------------



3.(SBU) Gholamhossein Nozari -- who is both the Deputy Oil
Minister and the Managing Director of the National Iranian Oil
Company (NIOC) -- addressed participants at the MPGC for roughly
15 minutes, covering the current and future development of
Iran's oil and gas fields. Nozari's speech had no political
content and consisted of a general overview of Iran's energy
sector; there was no question and answer session after his
speech. At least five times he stressed that Iran is open to
foreign investment in the energy sector and that the NIOC is
looking forward to cooperating with international companies to
develop Iran's oil reserves (44% of its hydrocarbons) and its
gas reserves (56%). The NIOC would like international support
to increase its recovery capabilities, said Nozari, particularly
in the Azadegan, Yadavaran, and Kish fields. Nozari said crude
oil made up 92% of Iran's hydrocarbon production in 2005, but
expected this number to decrease to 76% of production by 2015.
Nozari predicted only a minimal increase in Iran's oil
production through 2015, but a four-fold increase in gas
production.

Future gas projections


--------------------------





4. (U) In the portion of his presentation that covered Iran,
Fereidun Fesharaki, CEO and Chairman of FACTS Global Energy, USA
predicted reduced natural gas exports from Iran in the future.
FACTS forecasts that Iran has a lifetime liquefied natural gas
export ceiling of 20-30 million tons and "small" volumes of
natural gas exports due to:
-- large domestic grid at prices of 1 cent/cubic meter;
-- massive domestic gas injection requirements of some 10
billion cubic feet/day;
-- massive domestic gas-based petroleum projects;
-- compressed natural gas projects will provide a major volume
of domestic gasoline supplies as early as the end of this
decade;
-- and major political opposition to gas exports.

Geopolitical perspective


--------------------------



RPO DUBAI 00000024 002.2 OF 002



5.(U) Neil Patrick from the International Crisis Group called on
Gulf states to join together and collectively raise the "Arab"
flag and communicate red lines in their dealings with Iran
regarding Iraq, Palestine-Israel, and Iranian-Syrian relations.
Patrick called on Arab states - led by Saudi Arabia - to be more
vocal in determining regional policies. Patrick recommended to
Arab states to maintain dialogue with more "moderate" Iranian
leaders, such as former President Rafsanjani and Secretary of
the National Security Council Larijani, to advance Arab
interests without provoking Iran.

6.(U) Iranian American Council USA President and Rutgers
University professor Hooshang Amirahmadi said the "no peace, but
yet no war" mentality that has dominated US-Iran relations for
the past 28 years cannot continue. Hooshang gave a very
impassioned presentation on Iran's "mismanaged" foreign policy
and Iran's historical lack of trust vis-`-vis the West which he
said has culminated in the current "spiraling conflict with the
US." Answering questions from participants, Hooshang asserted
that USG intentions include regime change.

7.(S) Comment: Because there were no questions after Nozari's
speech, it was difficult to gauge audience reaction to his calls
for foreign investment. While US company officials openly
engaged with IRPoff on the subject of Iran during conference
breaks, non-US company officials shied away once they learned
IRPoff was a US diplomat. American comments were mostly
complaints that their European competitors continue to turn a
profit in Iran, while they are forced to stand on the sidelines.
One employee from India's Reliance Energy quickly headed for
the door after he confided in another conference participant -
in front of IRPoff - that Reliance's business with Iran is still
strong but has tapered off somewhat in recent months. End
comment.
BURNS