Why BP Plc Royal Dutch Shell plc. interested to invest In Iran

Foreign companies including Shell and BP have expressed interest in investing in as soon as sanctions are removed.

Since 1979, the United States has forced sanctions on Iran because of Islamic Revolution. International countries, due to that are not able to invest in Iran. However, the things are going to change in June, if America was able to enter a nuclear deal with Tehran. Foreign companies and investments are expected to come back to the country.

Energy companies of Europe such as BP plc and Royal Dutch Shell Plc have shown their interest to invest in Iran, which has substantial oil & gas reserves attracting European countries. Iran has the 4^th biggest oil reserves, together with the second biggest gas reserves.

Bloomberg reported, CEO shell, Ben Van Beurdon in an interview at OPEC meeting said, : “Iran is a wonderful country with a fantastic resource base, as soon as there is legitimate opportunity, we will be looking at Iran. Everybody in the oil industry wants to go back to Iran once the international sanctions have been lifted.”

Patrick Pouyanne, CEO Total also showed interest to invest in the country. Following by a meeting with Bijan Namdar Zanganeh, oil minister of Iran, Mr. Pouyanne stated: “We like Iran”.  Because of the sanctions, the country has significantly suffered as it was deprived of any kind of foreign investments plus was unable to take advantage from the technical proficiencies that these international firms could have provided them.

Due to these sanctions, oil output of the country has dramatically decline. In 1974, Iran produced around 6 million barrels of oil per day; however it went down to 4 million barrels later in 2003. Currently, the country oil output stands at 2.8 million barrels per day. As per International Energy Agency, Iran badly requires some restoration

Mr. Zanganeh is profound to get foreign investments and specified that Tehran has attractive and a lot better to offer to these foreign companies. He said, “The new terms are long-term, with better situation, rather than the previous framework that we have.”

International investment by the firms will support the revival of oil and gas industry in the country. As pointed out by Mr. Zanganeh, Iran requires almost $200,000 billion of investment in the industry. Presently, Iran has not revealed any terms and regulation of the contract, but these are most likely to be more rewarding then the old contracts. Bloomberg reported, the latest contracts will help the foreign firms to acquire field production share.

While many firms had shown their interest to invest in Iran, however only when the sanctions will be lifted

BP plc to face another lawsuit by Ohio over tank cleanup

On Monday, as reported by Bloomberg, a lawsuit has been filed against BP plc by Mike Dewine an attorney General at Ohio and Underground Storage Tank Compensation Board. The state legal representatives accused the company of taking wrongfully an amount of $33 million from the compensation fund and insurers to get rid of the leaks caused by the company’s storage tanks situated at various different gas stations.

The British oil major along with Amoco Oil and Atlantic Richfield Co, Standard Oil of Ohio, & Standard oil and affiliates are also involved in the lawsuit filed by the state board. Mr. Dewine mentioning the British oil giant said, it was same as every other company and the company must stick to the laws set by state. He further said, BP should be ready to face the music if it did not do anything about its misconduct.

According to Bloomberg, British Petroleum acquisition has provided the companies a way in to various service stations and underground tanks for storage.

According to Mr. Dewine the insurers fund and state board were built to guard the owners of the tanks with no accidental insurance, and the British oil company has misused the situation for its own purpose. Ohio attorney general said the company put out of sight its insurance and applied for reimbursement of the cleanup cost from the state board. The compensation board told that the company claim of $22 billion is still in the pipeline.

The England based Oil Company, who is already finding it difficult to maintain its liquidity; this is considered as a major setback for them. With declining crude oil prices from past 7 months to almost 50% and BP is still stuck in the oil spill lawsuit, which is still in progress and US Federal court is expected to impose a penalty of $13.7 billion on London oil giant.

The company has now considered value program, based on quality instead of quantity. It has reduced its capital expenditures along with a substantial ct in its workforce. Bearing in mind all these sacrifices, these lawsuits will hurt the company’s reputation in front of its shareholders.

As reported by Wall Street Journal, Jason Ryan a Spokesperson at BP plc. said the company will face the lawsuit and its actions will be based on good faith.

BP plc. Stock was trading at $41.74 at market close on Tuesday after it went up by 1.07%.