AFP: Iran on Tuesday signed contracts worth 21 billion dollars with local firms to develop six gas fields, some of them awarded to the elite Revolutionary Guards, state media reported.


By Farhad Pouladi

TEHRAN (AFP) — Iran on Tuesday signed contracts worth 21 billion dollars with local firms to develop six gas fields, some of them awarded to the elite Revolutionary Guards, state media reported.

The state television website said the "contracts to develop the South Pars gas fields -- phases 13, 14, 19, 22, 23 and 24 -- were inked with three consortia including Khatam al-Anbiya," the Guards' industrial conglomerate.

Khatam al-Anbiya has been targeted under fresh international sanctions which the UN Security Council imposed last Wednesday.

The other deals were won by groups led by Iran's Industrial Development and Renovation Organisation (IDRO) and Petropars, the report said.

IDRO is a holding company of state-owned industrial groups and Petropars is a subsidiary of state-run National Iranian Oil Company.

Iran previously discussed handing over phases 13 and 14 to Anglo-Dutch Shell and Spain's Repsol YPF, but the two energy majors held off on a final decision as new UN sanctions loomed against Tehran over its nuclear drive.

"This is a very great day for the Iranian oil industry. It is the start of a new era," President Mahmoud Ahmadinejad said in a speech broadcast live on state television after the deals were reached.

"I believe that we can build Iran three times faster by managing our resources better. The (investment) volume of the contracts for the six phases signed today is worth around 21 billion dollars," he said.

He said the total gas production when these fields become operational would be 200 million cubic metres (7.069 billion cubic feet) per day.

Ahmadinejad said the proposed investments would be raised domestically and if required it would be tapped from the world market.

Energy experts say that despite the signed contracts, questions exist on whether Iranian companies are equipped with the management and technical knowhow to handle such large-scale projects.

The awarding of the contracts come at a time when the European Union is finalising its own separate sanctions package against Iran that reportedly targets the oil and gas industry.

The EU at a summit on Thursday is to seek to prohibit new investment as well as the transfer of technologies, equipment and services to Iran.

But Ahmadinejad boasted Iranian companies were able to handle these jobs.

"Ten years ago, if some said that Iranians are going to develop South Pars, many would not have believed it," he said.

"But today, we see (Iranian) contractors with daring and self-reliance shouldering the burden," the hardliner was quoted as saying by the television website.

Criticising Western firms for shunning the projects, he said that "the arrogant countries ink deals (with Iran) but later decide at some other place to pass a resolution and then unilaterally cancel the deals."

On Wednesday, the Security Council passed a US-sponsored resolution imposing a fourth set of sanctions on Iran for its uranium enrichment programme, which the West suspects masks a nuclear weapons drive, a charge denied by Tehran.

The Guards were set up as an elite force to defend the 1979 Islamic revolution from internal and external threats.

Its industrial wing, Khatam al-Anbiya, was created during the 1980-1988 Iran-Iraq war to help rebuild the country, and has diversified over the years into companies dealing with mechanical engineering, energy, mining and defence.

Last month, the Guards said it was ready to take over energy projects in Iran if Western firms stayed away, with its presence in the Iranian economy having expanded under the presidency of Ahmadinejad.

Iran shares with the small state of Qatar the South Pars gas fields in Gulf waters that comprise of 28 phases.

The development of the giant offshore field has been delayed amid a lack of investment in a country faced with severe gas needs of its own and because of difficulties in procuring the required technology.