Mehr News Agency, Iran
May 6 2005

TEHRAN, May 6 (MNA) – Hadi Nejad-Hosseinian, deputy oil minister for
international affairs on Friday described objectives for making
relations between the domestic companies affiliated to the Oil
Ministry and the state-run companies in the foreign countries.
“The primary relations between the domestic and foreign companies is
made by the International Affairs Directorate of the Oil Ministry,
after which the companies themselves enter into dialogue to sign
contracts”, the Iranian Students News Agency (ISNA) reported him as
saying.

Speaking about the gas export, the deputy noted before developing the
South Pars phases, the gas production was used only to meet the
internal needs and for injection into oilfields, but presently Iran
is exporting the product for which it is making new contracts.

As examples, he pointed to contracts signed for gas export to
Pakistan, India, and Turkey – although export to these countries is
yet to be carried out due to the political issues – in addition to
the recent negotiations with Armenia and the United Arab Emirates as
well as Kuwait.

Calling project of gas export pipeline to Europe as economical,
Nejad-Hosseinian said, “Studies were conducted on different roots for
transferring gas to Europe since 1990s, which resulted in selecting
Turkey and Ukraine as the appropriate roots, among which Turkey has
less costs.”

Gas export to Europe is of interest for both parts, and Iran is not
pressurizing Europe in this regard, the deputy stressed.

He opined due to the current conditions, the world price of gas is
inappropriate, stating, however, in its contracts signed or about to
be signed, Iran has put the gas price as dependant on the world price
of oil. Therefore, the gas price will be pushed up upon an increase
in the oil price, he added.

Also in his remarks, the deputy named Iran’s advantages for
possessing the world oil and gas market, as he said, “Real
independence of Iran is of paramount importance for the countries
such as China and India as well as for the European Union.

He pointed out to the contract on Yadavaran Oilfield inked with China
and noted, “Exporting LNG (liquefied natural gas) to China and
developing the oilfield at the foreign investment provide the
interests of the two countries, that is why the issues of LNG and
developing Yadavaran are important.”

Commenting on disturbance of supply and demand in the oil market,
Nejad-Hosseinian said in the oil market, supply shortage is
irreparable in the short-terms. Moreover, the oilfields decline every
year and require investment in order to be maintained.