Iran agrees to supply Indonesia with oil technology, services

  • World
  • Tuesday, 26 Nov 2013

DUBAI (Reuters) - Iran has signed an initial agreement to supply oil sector technology and engineering services to Indonesia, less than two days after inking a key nuclear deal with the West, the National Iranian Oil Company (NIOC) said on Tuesday.

Iran and six world powers clinched a deal on Sunday to curb the Iranian nuclear programme in exchange for limited relief from some sanctions.

Western sanctions that have prevented Tehran from accessing foreign technology or services needed to boost its creaking energy industry remain in place. But Iranian oil officials say international isolation has also forced Iran to develop its own technology and services, which they hope to export.

According to state-run NIOC, the head of Iran's Oil Industry Research Center, Hamidreza Katouzian, and Indonesian Parliament Speaker Marzuki Alie have signed a draft deal for Iran to export technological and engineering services Indonesia needs to revive its outdated and offline oil wells.

"The Research Center is ready to cooperate with Indonesia on the issue, and the implementation of the project is possible given our rich experience in the oil and gas sector," Katouzian was quoted by NIOC as saying.

Katouzian said Iran and Indonesia should also cooperate on oil sector technology transfers and exploration projects internationally. It is not clear whether the agreement includes a provision for Indonesia to supply technology to Iran.

Indonesia used to be a net oil exporter and a member of the Organization of the Petroleum Exporting Countries (OPEC), but it pulled out of the group in 2009, five years after becoming a net importer of oil.

Although several big international energy companies work in Indonesia's oil industry, an unattractive investment climate and ageing infrastructure have seen its production steadily decline for over a decade while domestic demand has risen.

While Indonesia has struggled to attract investment to revive its flagging production largely because of a risky regulatory environment, Iran's oil industry has suffered from a lack of investment and technology because of Western sanctions.

(Reporting by Daniel Fineren; Editing by Dale Hudson)

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