The sanctions' pressures on Iran are making the Islamic republic to consider switching its payments for its crude oil exports' currency to Europe from the euro to the UAE dirhams; also the west imposed sanctions have led Iran’s guards wing to pull from gas projects that were taking place in the South Pars gas field in the Gulf.
The currency switch
In a move that looked like an attempt to blunt the impact of financial sanctions soon to be adopted by the European Union, the International Oil Daily industry newsletter said that Iran is considering switching payments for its crude oil exports to Europe to the UAE dirham currency instead of the euro.
It quoted industry sources as saying the state National Iranian Oil Co. (NIOC) had sounded out European term customers about the possible change, but had yet to make a firm decision.
"There's something happening -- the Iranians are testing solutions," it quoted one industry executive as saying. "They've put out feelers very recently about taking payment for oil in dirhams."
It quoted another industry source as saying the move was prompted by concerns in Tehran that euro transactions were no longer safe and could be blocked by EU member states.
"Basically, they'd be happy to get paid in any currency as long as it's not the dollar or the euro," the source said.
Although Iran's crude oil exports are priced in dollars and are likely to remain so for some time, all of its customers pay in other currencies, it said.
Iran halts its South Pars gas field developments
An industrial wing of Iran's elite Revolutionary Guards said on Friday it was pulling out of two development phases related to the giant South Pars gas field in the Gulf.
"Recently, in an oppressive move by the West, Khatam al-Anbiya has been slapped with sanctions," the industrial group said on its website Khatam.com.
"Given the current circumstances, continuing of our work in phases 15 and 16 may endanger the nation's resources. So we and our affiliate companies are pulling out of the consortiums (developing) phases 15 and 16."
It did not offer other details.
Khatam al-Anbiya
In late June 2006, Khatam al-Anbiya had won the contract to develop the two phases in a deal worth 2.09 billion dollars.
Khatam al-Anbiya is one of 15 Iranian companies linked to the Guards which have been targeted in the latest round of UN sanctions imposed against Iran on June 9 over its controversial nuclear program.
The industrial conglomerate was created during the 1980-1988 Iran-Iraq war to help rebuild the country, and since then has diversified into sectors such as mechanical engineering, energy, mining and defense, especially under the presidency of Mahmoud Ahmadinejad.
Several Guards commanders have previously said that the force could take up projects in the energy sector by replacing Western companies who halt their investments due to the sanctions.
Iran, OPEC's second largest oil exporter, shares with the small state of Qatar the offshore South Pars gas fields in the Gulf that comprise 28 phases.
Development of the giant offshore fields has been delayed by a lack of investment and technology, exacerbating Iran's severe gas needs
EU sanctions
New EU sanctions, which EU leaders agreed in June, are expected to be approved by the end of this month.
They will focus on trade, transport and key sectors of the gas and oil industry. Energy sector sanctions would prohibit "new investment, technical assistance and transfers of technologies, equipment and services related to these areas.
The newsletter said the EU would also introduce restrictions against Iranian banks and target the European operations of Iran's central bank.
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