Italy's Eni signs deal with Iran on oil and gas field studies

LONDON/MILAN (Reuters) - Italian oil major Eni signed an agreement with Iran on Tuesday for feasibility studies to develop an oil field and a gas field, signaling a possible return to Iran’s upstream sector.

FILE PHOTO: Eni's logo is seen in front of its headquarters in San Donato Milanese, near Milan, Italy, April 27, 2016. REUTERS/Stefano Rellandini/File Photo

The Iranian oil ministry’s official website SHANA reported Eni had signed a Memorandum of Understanding with the National Iranian Oil Company (NIOC) for studies on the Kish gas field and the third phase of the Darkhovin oil field in southern Iran.

Eni has six months to present the results of its studies.

“The agreement with NIOC does not include any commitment to invest,” an Eni spokesman said on Tuesday.

State-controlled Eni, which entered Iran in the 1950s, was involved in the development of the Darkhovin field and the offshore South Pars gas field before U.S.-led sanctions stopped oil majors investing.

Eni was given a special dispensation to recoup investments in the country by taking Iranian oil by way of payment.

“The (Tuesday) agreement sets out conditions for recouping outstanding payments of $280 million still owed Eni for previous investments,” the Eni spokesman said.

Eni CEO Claudio Descalzi has previously said the group would start working again in Iran when investments were repaid and the type of contracts offered by Tehran known.

An Iranian oil official said this month that Eni was also interested in the tender for development of the Azadegan oil field in southern Iran.

Tehran needs billions of dollars of investment from foreign energy corporations to boost crude production and natural gas capacity in the country.

In January, Iran named 29 companies from more than a dozen countries that would be allowed to bid for oil and gas projects using the new, less restrictive Iran Petroleum Contract (IPC) model.

Last year it signed provisional agreements with Royal Dutch Shell and Russia’s Gazprom and expects to sign a long-delayed gas deal with French oil major Total soon.

Reporting by Bozorgmehr Sharafedin and Stephen Jewkes, Editing by Richard Pullin and Adrian Croft