Malaysia’s national oil firm Petronas postpones making a final decision on a multi-billion dollar natural gas investment project in Iran.
Mohd Hassan Marican, chief executive of Petroliam Nasional Berhad (Petronas), cited the increase in development costs as well as the soaring steel prices as the reasons for the firm’s delay in finalizing its decision to invest in gas-abundant Iran.
“As a result of that (high development costs), the economic and commercial model that was previously worked on does not make the project viable anymore,” Reuters quoted him as saying in an interview in the Malaysian capital of Kuala Lumpur on Monday.
According to an initial agreement, Petronas will have a 10-percent share in a project to develop parts of Iran’s South Pars gas field while France’s Total will hold 40 percent. Iran has repeatedly extended the deadline for both companies to make a final decision on investing in the project.
“It’s very difficult to put a timeline. There are many parts of the equation that must be revisited before a final investment decision can be made, and this is not entirely dependent on us, it also involves the host government. All these things take time, we have said we are continuing with the discussions,” explained the Petronas CEO.
“We have to reach the end of the line before either one can move ahead or not move ahead. It’s a continuing process of discussions,” Hassan concluded.
South Pars is one the biggest natural gas fields in the world, which extends under Iran and Qatar. According to Iran’s Pars Special Economic Energy Zone, the field contains nearly 48 percent of Iran’s confirmed reserves.
MK/AA
