Asian Powers Look to Iran and Beyond: Asian Investors-Both Private and Public-Are Increasingly Looking towards Middle Eastern Energy Markets. Their Reasons Are Two-Fold: To Make a Healthy Return on Their Capital and to Ensure a Stable Flow of Oil and Gas Imports

The Middle East, January 2005 | Go to article overview

Asian Powers Look to Iran and Beyond: Asian Investors-Both Private and Public-Are Increasingly Looking towards Middle Eastern Energy Markets. Their Reasons Are Two-Fold: To Make a Healthy Return on Their Capital and to Ensure a Stable Flow of Oil and Gas Imports


THE VAST BULK OF COMMERCIAL INVESTMENT in the Middle East has come from one of two sources: Domestic, mainly state owned enterprises and private sector companies from North America and Western Europe. Now, however, there appears to be a growing trend of Asian private and state owned companies investing heavily in the region. The deal that will see Sinopec develop the Yadavaran field in Iran has made most of the headlines over the past few weeks, but this is just one example of a trend that looks sure to grow over the next few years, particularly in Iran.

One thing the governments of India, China and Japan have in common is a growing desire to improve their energy security. The energy needs of India and China have increased sharply over the past decade and look like continuing to increase rapidly for a long time to come. While both countries possess their own sizeable hydrocarbon sectors, both need to import a growing proportion of their oil and gas needs. General fears of global insecurity and wide fluctuations in oil prices have prompted Beijing and Delhi to direct state owned oil companies to make upstream investments around the world, while Japanese companies are following suit.

It is felt that state owned companies can help ensure oil supplies, while Middle Eastern governments that offer stakes in upstream developments to Asian companies are keen to secure markets for gas exports. For example, the Indian government is committed to investing $1bn a year in overseas oil and gas fields for the next 15 years. A spokesperson for India's Oil & Natural Gas Commission (ONGC) said: "We are looking at acquiring equity in any country here which will lead to stable long term supplies. The government of India is also encouraging Indian oil companies to invest overseas and to take equity in energy related projects for future supplies."

Such benefits have prompted a series of visits by high level delegations from India and China to Iran, the United Arab Emirates (UAE) and other Gulf states over the past couple of years. Given that the Middle East is located relatively close to many of the main Asian markets, has good sea links with the region and holds a high proportion of the world's oil and gas reserves, the relationship should benefit both sides.

Asian investors are committing themselves to projects that some western firms have shied away from under pressure from their governments. While US companies have been dissuaded by Washington from investing in Iran by the Iran-Libya Sanctions Act (ILSA), the US has also attempted to deter oil companies from other countries from investing in Iran, particularly since fears of an Iranian weapons programme first emerged. Despite such pressure, a Japanese consortium, including Japan Petroleum Exploration Co (Japex) and backed by the Japanese government, signed a $2bn deal to develop the Azadegan oil field in Iran.

Azadegan is estimated to contain 26bn barrels of oil, making it one of the biggest fields in the Middle East and possibly the biggest proven, undeveloped field in the world. Production on the field is expected to begin in 2006 and reach 260,000 barrels a day (b/d) by 2012, helping Iran to meet its target of increasing its oil production capacity to 5m b/d. The Japanese consortium has taken a 75% stake in the project, providing much needed investment in an Iranian oil and gas sector crying out for development but hindered by domestic controls on foreign investment.

While the deal reinforces Japan's dependency on Middle Eastern oil as a whole, it reduces its reliance upon Saudi Arabia and the UAE. Upon agreeing the investment, Bijan Zanganeh, the Iranian Oil Minister, insisted that the tie up reinforced an obvious relationship. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Asian Powers Look to Iran and Beyond: Asian Investors-Both Private and Public-Are Increasingly Looking towards Middle Eastern Energy Markets. Their Reasons Are Two-Fold: To Make a Healthy Return on Their Capital and to Ensure a Stable Flow of Oil and Gas Imports
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.