Crescent Petroleum denies Iran gas deal is off

12 August 2010

Iranian media reports claimed deal was cancelled

The UAE’s Crescent Petroleum has denied reports that its deal to import natural gas from Iran has been cancelled.

National Iranian Oil Company (NIOC) and Crescent signed a 25-year gas supply agreement in 2001. A spokesman for the Sharjah-based company told MEED, “The 25-year contract between NIOC and Crescent is valid, internationally binding and currently in international arbitration, as is known, and neither side has cancelled it.”

Under the proposed 2001 agreement, 500 million cubic feet a day (cf/d) would be exported from Iran’s offshore Salman field in the Gulf, starting at the end of 2005.

After waiting more than three years delay to receive gas from Iran, Crescent took its complaint to the International Chamber of Commerce in July 2009. More than a year later and the issue has still not been resolved (MEED 21:7:09).

The Iranian official’s statement appears to have been misinterpreted, says the spokesman, adding that the news outlet, the semi-official Mehr news agency, also incorrectly cited Jawad Oji as managing director of NIOC. Oji is Iran’s deputy oil minister and head of National Iranian Gas Company.

Iran has argued that delays have been caused by Crescent’s refusal to pay a higher price for the gas. Mehr quoted Oji as saying on 5 August the “oil ministry’s policy is the direct sale of gas to the UAE government”. For sales to neighbouring countries “a unified price formula has been set and all negotiations will be conducted on the basis of this formula obtained on the basis of oil and oil derivative prices.”

Crescent, however says much of the problem is due to NIOC failing to complete the facilities required on time.



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