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Iran: No talks with Crescent Petroleum

24 February 2015 9:22

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National Iranian Gas Company (NIGC) has denied reports on negotiations with the United Arab Emirates’ Crescent Petroleum to revive a troubled gas export deal.

“As the issue does not concern the National Iranian Gas Company, NIGC has held no negotiation on exporting gas to the UAE nor revising the contract with Crescent Petroleum and the issue only concerns the Ministry of Petroleum,” the Tasnim News Agency quoted NIGC Spokesman Majid Bojarzadeh as saying on Monday.

He reiterated that no NIGC official has made neither negotiation nor interview in this regard.

Bojarzadeh’s remarks came after a media report quoted an NIGC official as saying that discussions are currently underway with Crescent Petroleum to change the terms of the contract.

Fars news agency reported an unnamed NIGC official that Iran has started planning for the exports of natural gas to the UAE.

Fars said the key topics in fresh negotiations with Crescent Petroleum are the same as those in the troubled deal.

The news agency’s report added that no new deal will be signed and that officials in Iran’s oil industry are working on how to implement the deal.

“However, no specific conclusion has been reached and it is still not clear when gas exports to the UAE will start,” the report added quoting unnamed NIGC officials.

Disputed deal

The National Iranian Oil Company (NIOC) and Crescent signed a 25-year deal in 2001 for the export of 17 million cubic meter of gas per day from Iran’s Salman field in the Persian Gulf to the UAE. However, the deal was suspended and became a subject of controversy in Iran in 2005.

At the heart of the issue – that is still mentioned by the media and officials as the Crescent controversy – was the gas pricing formula. Critics of the deal in Tehran maintained that the price agreed on in the contract was 14 times below the market price.

Crescent Petroleum eventually sought an international arbitration through The Hague over its dispute with NIOC in 2009 and it said in 2014 that it had won the case. The company said an international tribunal had determined that “the 25-year contract between it and NIOC is valid and binding upon the parties, and that NIOC has been obligated to deliver gas under the contract since December 2005.”

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