[LONDON] Exxon Mobil Corp is ramping up lobbying efforts with the US government over Iranian sanctions that have locked out American oil companies from the Middle Eastern nation for more than three decades.
Exxon, the world's largest publicly traded crude producer by market value, hired the lobbying firm founded by former Senator Don Nickles, an Oklahoma Republican, to work on Iranian sanctions, according to federal disclosure documents. This is the first time since 2010 that the Irving, Texas-based oil company enlisted outside lobbyists to discuss Iran.
Western energy companies are eager to tap Iranian fields that are among the biggest and cheapest to exploit in the world, said Morningstar Inc.'s Allen Good.
Iran nationalised oil production in the 1970s. Sanctions imposed after the 1979 Islamic Revolution and later over the country's nuclear ambitions have kept the country largely off-limits to American firms. Iran is home to the world's fourth-largest oil reserves and second-biggest cache of natural gas.
"Given sanctions and the dilapidation of oilfields over time, it looks like it'd be a lot of work" for foreign companies to revive production, said Mr Good, a Chicago-based analyst at Morningstar. "But unlike Iraq, you'd don't have a civil war going on so it'd be an easier path to growing production. You could get a pretty good bump pretty quickly."
Exxon didn't immediately return a telephone call to its corporate media relations office seeking comment for this story.
European oil executives have started courting Iran in anticipation of sanctions relief. On Thursday, Eni SpA Chief Executive Officer Claudio Descalzi said he traveled to Tehran two weeks ago.
Mr Descalzi told Italian newspaper La Repubblica that the Persian Gulf country could "start attracting investment" from foreign companies again if a nuclear deal was sealed.
Iranian Oil Minister Bijan Namdar Zanganeh previously touted the idea of working with Exxon in a post-sanctions environment. Tehran tried to lure the American oil industry back into the country in 1995, reaching a US$1 billion deal with Conoco that was almost immediately scrapped under pressure from the White House.
After the false US start, Iran turned to European oil majors, including Eni, Total SA and Royal Dutch Shell Plc, as well as some Asian companies. The European companies left the country in the early 2000s after the US and the European Union imposed new sanctions on Iran.
Iran and the US face a self-imposed deadline of June 30 to reach a final nuclear agreement that allows the gradual lifting of the sanctions. A deal could open the doors to billions of dollars in investments by foreign oil companies.
A forerunner of Exxon, Standard Oil of New Jersey, first invested in Iran in 1947. In 1954 it became part of a group of eight foreign companies known as the Iranian Oil Participants that ran the day-to-day operations of the country's petroleum industry for the next two decades until the industry was nationalised.