Oman and Iran have second thoughts about the Kish gas field
Earlier this week, Upstream Online announced what seemed to be a turnaround in Omani policy towards joint development with the Iranians of Iran's Kish gas field.
An Omani source was quoted as saying that the Sultanate was finding it hard to obtain credit in order to proceed with financing the operation in the current economic situation. The development would be put on hold for at least a year.
Just last November, Oman's Oil and Gas minister, HE Mohammad bin Hamad bin Seif al-Rumhy, told Reuters that Oman would have to slow down some of its oil and gas developments.
Oman had been in discussions to develop the Iranian gas field and to build a 200km pipeline to the LNG gas refining plant at Sohar
This idea came to the fore, when, back in 2007, Oman was seeking to extend its access to gas sources following Qatar's announcement that it would have no gas to spare for export to its Gulf cousin. Thus Oman was intensively seeking other energy sources to power its other industrial projects.
Simultaneously with the announcement of the delay in the Kish venture, Upstream Online also published news that Oman was seeking to buy more gas from UAE's Dolphin Energy. Dolphin Energy processes gas from Qatar's offshore North Field, which is probably contiguous with Iranian gas fields.
Essentially, Oman has switched back to its original, favoured supplier. Prices are likely to be more favourable too, since there is currently a glut of gas on the market.
The Iranians were always likely to ask for a higher price for their gas, dependent on the use to which the gas was put. and it's been suggested that the price per thousand standard feet that Iran was asking was 14 times that currently being paid by industry in Sohar.
Two days later, Energy Intelligence Group (subscription only), published another version of the story. Allegedly according to Omani sources, it's the Iranians who are dragging their feet. It seems that there are elements within the Iranian government who want to keep the gas for Iran rather than sending it to Oman. Iran has its own energy supply shortages. Naturally, the Omanis would be loath to finance development of a gas field when the gas might not be sent to Oman after all.
The gas field would also be technically difficult to develop. The project would need a foreign partner with the appropriate technical expertise.
Negotiations are said to be continuing.
Of course, it must be entirely coincidental that Oman's foreign minister has recently held discussions in Washington with Secretary of State Hillary Clinton while HM Sultan Qaboos received George Mitchell, US Special Envoy to the Middle East, in Muscat. It is conceivable that the Americans reminded Oman that they might be uncomfortable about Oman having substantial trade relations with Iran, particularly now that the Sultanate and the USA have a bilateral free trade agreement, and also because of the Americans' own strained relations with Iran.
An Omani source was quoted as saying that the Sultanate was finding it hard to obtain credit in order to proceed with financing the operation in the current economic situation. The development would be put on hold for at least a year.
Just last November, Oman's Oil and Gas minister, HE Mohammad bin Hamad bin Seif al-Rumhy, told Reuters that Oman would have to slow down some of its oil and gas developments.
Oman had been in discussions to develop the Iranian gas field and to build a 200km pipeline to the LNG gas refining plant at Sohar
This idea came to the fore, when, back in 2007, Oman was seeking to extend its access to gas sources following Qatar's announcement that it would have no gas to spare for export to its Gulf cousin. Thus Oman was intensively seeking other energy sources to power its other industrial projects.
Simultaneously with the announcement of the delay in the Kish venture, Upstream Online also published news that Oman was seeking to buy more gas from UAE's Dolphin Energy. Dolphin Energy processes gas from Qatar's offshore North Field, which is probably contiguous with Iranian gas fields.
Essentially, Oman has switched back to its original, favoured supplier. Prices are likely to be more favourable too, since there is currently a glut of gas on the market.
The Iranians were always likely to ask for a higher price for their gas, dependent on the use to which the gas was put. and it's been suggested that the price per thousand standard feet that Iran was asking was 14 times that currently being paid by industry in Sohar.
Two days later, Energy Intelligence Group (subscription only), published another version of the story. Allegedly according to Omani sources, it's the Iranians who are dragging their feet. It seems that there are elements within the Iranian government who want to keep the gas for Iran rather than sending it to Oman. Iran has its own energy supply shortages. Naturally, the Omanis would be loath to finance development of a gas field when the gas might not be sent to Oman after all.
The gas field would also be technically difficult to develop. The project would need a foreign partner with the appropriate technical expertise.
Negotiations are said to be continuing.
Of course, it must be entirely coincidental that Oman's foreign minister has recently held discussions in Washington with Secretary of State Hillary Clinton while HM Sultan Qaboos received George Mitchell, US Special Envoy to the Middle East, in Muscat. It is conceivable that the Americans reminded Oman that they might be uncomfortable about Oman having substantial trade relations with Iran, particularly now that the Sultanate and the USA have a bilateral free trade agreement, and also because of the Americans' own strained relations with Iran.
Comments
newsbriefs wrote:
05/14/09 11:31:38
Within a week of reports appearing in the press stating that the joint venture between Oman and Iran to develop the Kish gas field had been put into abeyance, no less a figure than Dr Ali Larijani, speaker of the Iranian Islamic Shura Council, came to Muscat to meet HM Sultan Qaboos bin Said al-Said.
The Times of Oman published a statement from Dr Larijani following his meeting, in which he affirmed that His Majesty was positive about the project. http://www.timesofoman.com/...
Very interestingly, IranGCC blog reports 'Larijani’s trip coincided with an official visit to the Sultanate by the head of Hamas’ political directorate Khaled Mishal.' Did they meet in Muscat? http://irangcc.wordpress.co...