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Belarus and Iran have completely abandoned their oil project, Iranian ambassador says

Belarus and Iran have completely abandoned their joint oil production project, the new Iranian ambassador, Mohammad Reza Sabouri, told reporters in Minsk on Tuesday.

A decision to this effect was made about a year and a half ago, Mr. Sabouri said. "The project no longer exists, no work is being done within its framework," he said.

When asked by a BelaPAN correspondent about the reasons for terminating the Belarusian-Iranian oil deal, he cited "legal and technical problems" but did not elaborate.

"We couldn't reach agreement in dealing with these problems, which is why we've stopped this work," Mr. Sabouri said. "We hope that Belarus will be able to use its experience in the oil sphere to participate in other projects in Iran."

In August 2011, the press office of Belarus' Belarusnafta announced that the company had decided to withdraw from an oil deal signed with the National Iranian Oil Company (NIOC) in 2007.

Belarusnafta was initially scheduled to develop Iran's Jufeyr oil field, located some 50 miles southwest of the city of Ahvaz in the province of Khuzestan, in several phases, and produce more than nine million tons of oil before the end of 2020. The development of phase one was completed in September 2010, the press office said.

"In the course of the work, new details on the geological structure of the oil field emerged, demanding changes in the technical, financial and economic terms of the project," said the press office. "With regard to this, the Belarusnafta enterprise decided to withdraw from the said contract following phase one."

The $500-million buy-back contract allows Belarusnafta to pull out of developing the field, according to the report.

Earlier that week, Reuters reported with reference to Iran’s semi-official Mehr news agency that Belarusnafta had made the decision because of differences stemming from "the manner of the field's production, Belarusnafta compensation from the development of the field and some technical issues."

However, Naji Sadouni, director of Iran’s state-controlled Petroleum Engineering and Development Company, told Reuters that Belarusnafta had failed to meet its contract commitments on the oil field.

"Based on the contract the Belarus company was supposed to produce more than 3,500 barrels of oil per day from the field, but in practice the production never went beyond 2,800 barrels," he said.

In March 2011, Washington imposed sanctions on Belarusnafta over its $500-million investment contract with Iran by cutting its access to the US market and imposing other punitive measures.