August 16, 2011 / 1:14 PM / 8 years ago

Belarus company withdraws from Iran oil field -agency

* Belarusneft quits Jofeir field development -Mehr

* The $500 mln buy-back contract was clinched in 2007

* Belarusneft not immediately reachable to comment

TEHRAN, Aug 16 (Reuters) - The Belarusian national oil company Belarusneft is pulling out of developing Iran’s Jofeir oilfield over differences with the state National Iranian Oil Co.(NIOC), the semi-official Mehr news agency reported on Tuesday.

“Belarusneft has brought to an end to all its oil activities in Iran since (late June), and it is predicted that the European company’s contract on the development of phase one of the Jofeir oil field will be cancelled on (Tuesday),” the agency said quoting unnamed NIOC sources.

The $500 million buy-back contract at the Jofeir oil field, in the southwestern province of Khuzestan on the Iraq border, was signed between NIOC and Belarusneft in September 2007.

The report said the differences between the two companies stemmed from “the manner of the field’s production, Belarusneft compensation from the development of the field and some technical issues.”

However, Naji Sadouni, the director of the state Petroleum Engineering and Development Co., said the Belarus company had failed to meet its contract commitments on the oilfield.

“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.

Sadouni said the remaining differences between NIOC and the Belarusneft would be settled later on Tuesday and the Belarus company would be officially out of the contract.

No Iranian oil officials were immediately available to comment.

Belarusneft could not be reached to comment while a Belarus government spokesman said he was unaware of the development reported by Mehr.

In March, Washington slapped sanctions on Belarusnaft over its $500 million investment contract with the NIOC by cutting its access to the U.S. market and imposing other punitive measures.

The move was part of the U.S. efforts to isolate Iran over its nuclear activities that Washington fears are aimed at making bombs, something Tehran denies.

Almost all European companies have been forced to pull out of Iran by U.S. and EU sanctions that ban companies from investing in Iran’s oil and gas industries.

Asian companies, among them Chinese ones, have taken much of that business but Iran has expressed dissatisfaction with their pace of work.

Iran warned to China on Saturday it could lose the contract for the development of phase 11 of the South Pars gas field in the Gulf by China National Petroleum Corporation (CNPC) unless it speeded up development efforts.

Iran’s new Oil Minister Rostam Qasemi has said the Islamic state did not need foreign companies to develop its oil and gas fields and that the Iranian Revolutionary Guards’ engineering arm should take over from them. (Writing by Hashem Kalantari; Editing by Anthony Barker)

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