Western oil companies treading carefully on Iran, experts say

Western oil and gas companies are treading carefully on Iran as the wider market takes in the possibility of international sanctions on Tehran being lifted at some point, according to senior industry executives.

Speaking at the Baker & McKenzie Global Oil & Gas Institute in Houston, USA on Monday, Brad Eastman, vice president and deputy general counsel at Cameron, said companies do not want to jump the gun on Iran's lucrative oil and gas industry, especially as a whole plethora of complicated US sanctions were in place atop what the global community had imposed.

"Of course, if and when sanctions are lifted, global players would like to go in but people are cautiously examining the situation rather than rushing in."

Carista Hill, general counsel (Americas) at Weir Group, echoed similar sentiments. “As with any company in the oil and gas industry, we are examining the opportunities and complexities, and keeping a careful eye out for what emerges over the coming months on the international stage.

"There is a sense within the sector that no one wants to be caught out on the wrong side of existing sanctions in a rush to avail opportunities.”

Citigroup’s vice chairman and global head of energy Stephen Trauber said caution was also warranted as there had been many false dawns with Iran. “Besides, even when the inclination is there, sanctions cannot be decoupled instantly given the scale on which they have been imposed by successive US administrations.”

Trauber also said Europe and the US would approach the subject of lifting sanctions at a different pace when the global community crosses that bridge. "The US will almost certainly opt for a phased, gradual lifting of sanctions, while the Europeans would favour a faster approach."

Iran itself is more likely to look east, said Mona Dajani, a senior legal practitioner at Baker & McKenzie. “In making overtures to China, Russia and seeking project partners in Pakistan, it is broadly evident that Iran is seeking is cooperation elsewhere when the sanctions are lifted.”

Recent nuclear talks with Iran have raised the possibility that international sanctions imposed on it over the years related to its uranium enrichment programme, marked by an escalation in 2012, would finally be lifted at some point.