Iran to seek foreign investment in Caspian energy
By Mehrdad Balali
TEHRAN, May 10 (Reuters) - Iran 's parliament passed a law on Wednesday
allowing the government to seek foreign investment to develop the keenly
sought after energy riches of the Caspian Sea.
The ruling limited the opening to buy-back deals, under which a foreign
company recoups its investments through a share of a project's oil or gas
Iran has already secured a series of buy-back deals with foreign companies
for energy projects in the Gulf.
The new bill, pushed through by the oil ministry, won overwhelming support
from deputies amid growing concern that Iran may be falling behind its
northern neighbours in developing the Caspian , seen as a new oil frontier
with large potential.
The bill still needs approval by the powerful Guardian Council, which
vets parliamentary legislation, before becoming law.
Iran has so far sat on the fringes of an international race to develop
the Caspian because of U.S. sanctions prohibiting virtually all trade with
the Islamic republic.
Other littoral states have attracted huge investments by Western consortiums
to develop their Caspian resources.
Largely left out of the race, Tehran has argued for a halt to development
of the sea's resources until a legal regime is agreed.
But the other littoral states have said every country should be free
to develop its own area of the Caspian .
Iran shares the closed sea with Russia and the former Soviet republics
of Kazakhstan, Turkmenistan and Azerbaijan.
The sea's last comprehensive legal regime was signed in the 1940s between
Iran and the Soviet Union. But the 1991 collapse of the communist state
rendered the framework null and void.
IRAN PLAYS CATCH-UP
Mohsen Yahyavi, a member of parliament's oil commission, said the bill
was in Iran 's best interest.
"Because of the lack of a legal regime and to assert our sovereignty
in light of the unjust exploitation of the Caspian Sea's resources, we
have allowed deals based on the buy-back programme," he said during
a debate broadcast on state radio.
"Our rivals are making the most out of the Caspian resources. We
seek deals with foreign partners to develop our 20 percent share of the
sea," he said.
Iran has been so far bypassed as a route to carry Caspian oil to world
markets, mainly due to U.S. pressure, despite Tehran's repeated arguments
that Iran is the most economically viable route for a pipeline.
The United States, which wants to isolate Iran for its alleged support
of terrorism, has fiercely opposed any Caspian route through the Islamic
Washington says such a pipeline would give Iran undue control over the
flow of vital oil suplies to the West.
But Tehran has been in talks with Kazakhstan to build a pipeline to
ship Kazakh oil to the Gulf under a swap deal.