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Thu 9 Aug 2007 10:41 AM

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Buying time or sour deal?

Iran talks about new gas deal but Crescent maintains old deal is still binding.

Despite reports that its Iranian gas suppliers are looking for a new customer, Crescent Petroleum says its contract situation has not changed.

This week Reuters reported remarks made by the Iranian oil minister, Kazem Vaziri-Hamaneh, that indicated the Iranian government is on the hunt ‘to find a replacement for the Emirates for ... the Crescent deal'. The minister said his government was taking on further negotiations with buyers ready to pay a ‘market price'.

Earlier in the year words had been exchanged between Crescent and Iran, with the Iranians saying it had issued an ‘ultimatum' to Crescent about resolving the differences or losing the gas. Iranian feelings about the price of the gas seemed to be the issue. Crescent however maintained the deal was still alive and more importantly, binding.

According to a senior company source, who did not wish to be named, this week's additional rumblings from the Iranians are nothing new and have not changed the status of Crescent's deal.

"The company has no issue with price according to market," he said. "Current negotiations and differences of opinion revolve around the rights to additional quantities as stipulated in the contract. The main problem in reality is that NIOC is very late and much of the public statements appear to be attempts to shift the blame."

The Iranians may just be playing for time, or actually feel they've done a duff deal. Either way, continued delays are making some, specifically the emirate of Sharjah, look elsewhere for the much-needed gas supplies.

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