And now? The lighthouse is aimed at'Eni and on oil. The deal on Iran's nuclear program is rightly considered a historic breakthrough but its impact on crude oil and the black gold market needs time to bear fruit. On the other hand, already yesterday the Six-legged dog made it known that he was considering the agreement “an encouraging stop” . So much so that, sources from the group observed, “we could consider new investments in the country”. Under certain conditions, however: the effective suspension of sanctions and a renegotiation of contracts on international standards and more profitable than the current "buy back" model are the sine qua non. On the other hand, both Iran, which needs Western technologies to relaunch its oil sector, and ENI are interested in making this happen. And the mission of CEO Claudio Descalzi in May served precisely to lay the foundations for a renegotiation of credits (about 800 million) with Tehran and to prepare for the post-sanctions period. "If Tehran takes this step, and I think it is interested, it could be the turning point" said the head of ENI at the time, interviewed by Repubblica. But on the plate of the 5+1 agreement (China, Russia, United Kingdom, Germany, France, USA), sealed by the European Union with Iran, there is also more in terms of business with our country: according tolatest Sace report, released just yesterday, I'm on the ball 3 billion possible exports by 2018 and a doubling of sales compared to 2014 levels, which fell to a record low of 1,15 billion. The sectors most interested in this growth are oil & gas, but also the automotive, defence, transport and construction sectors.
THE THIRD WORLD EXPORTER RETURNS TO THE MARKET
Iran is second only to Saudi Arabia in reserves of conventional oil. An estimated 140 billion barrels against about 260 billion of the Wahabi kingdom. A historical competition between titans, always in competition with each other both for the productive hegemony and for the geopolitical leadership of the Middle East area. Before the embargo, Tehran produced around 3,5 million barrels/day, which dropped to 2,5 million last year. ENI is the only Western company still present today in Iranian territory where two Chinese companies also operate (Sinopec and Cnpc-PetroChina). The presence of the six-legged dog is linked to the "buy back" contracts signed in 2000 (forms of reimbursement of the investments made by the companies in barrels of oil) and still being recovered. This is why Europe has authorized our oil group to stay. But what can happen now? The suspension of sanctions is a first step, but not the only one. Eni is certainly interested like any company in keeping its feet in an area where it has been present, on and off, since 1957. Just as the Iranians are interested in using advanced Western technology. The turning point could therefore also be near, predictably, nothing will happen before the end of the year. In fact, realistic estimates indicate that Tehran will be able to increase its exports in the short term by about 300 barrels or perhaps 500 by the end of 2016, mainly thanks to the accumulated storage. Instead, for production to resume heavy investment is needed and these don't come from the sky, especially in a period of low oil prices. We need different contracts more in line with international practices (the PSAs, Production sharing agreements, are among the most applied) and a mountain of investment is needed to recover from the 10-year embargo that "frozen" the sector. Today Iran has a very reduced production capacity and it is expected that after an initial recovery to return to at least 3 million barrels/day, it will take a few years to really revive production. In the 70s Iran produced up to 6 million barrels, after the crisis it has never recovered this level.
PRICES
The American WTI yesterday lost 2% to 51 dollars and is recovering today at $ 53. Crude has become a full-fledged financial commodity and yesterday's correction already seemed to discount the expectation of increased supplies from Iran. It will then be necessary to see if, when the quantities are physically available, the reaction will be the same or if in the meantime the market will have already realigned itself with an increase in consumption. In any case, prices will still be affected by US shale production and market volatility linked to China and Greece variables.
A SAFER WORLD
Most commentators agree: with the Iranian nuclear deal, the world is taking a path of greater security and stability. But there are also those who point out that the Vienna agreement is focused on nuclear power. It therefore does not remove Iran from the list of "rogue countries" and does not eliminate the sanctions related to the accusation of financing terrorism. It is not obvious, even if it is likely, that Iran will become a political counterpart for the USA. It will therefore be necessary to see how the agreement will be concretely applied and to understand what policy the United States will adopt in the Middle East where America previously relied on the support of Saudi Arabia and Israel and today can also work with a third protagonist, Iran. What will the new balance be? Teheran, a point of reference in the Shiite world, claims leadership in the area, in open competition with Saudi Arabia, and is considered a fundamental country in the fight against ISIS, an indispensable support for Iraq, an important player on the Syria. Therefore some unknowns remain, but there is no doubt that the Vienna agreement is a fundamental step forward which will allow us to turn the page and tackle one at a time, with more solid foundations, the many problems still open in one of the most turbulent areas of the planet.
Attachments: focus-on—iran (1).pdf
