BP sees no rush to tap into Iran

DAVOS, Switzerland, Jan. 21 (UPI) -- Though doors are opening to the Iranian energy sector, BP's top executive Bob Dudley said few investors will rush in on a whim.

Iran said it secured renewed access to European banking mechanisms after meeting the U.N.'s terms of a multilateral nuclear agreement brokered in July. Iranian atomic energy officials spent last week pouring concrete into some of their reactors.

Iran said it could add hundreds of thousands of new barrels of oil to the international market as sanctions pressures ease. More economic concessions may develop over the coming days from Japan.

Bob Dudley, the chief executive at BP, told the BBC in an interview from the sidelines of the World Economic Forum in Davos, Switzerland, his company was keeping a close eye on investment opportunities in Iran given that some sanctions, particular those imposed by the United States, remain in place.

"We'll have to choose very carefully," he said.

Representatives from some European energy companies were said to have been discussing the opportunities in Iran when so-called Implementation Day was declared during the weekend. Any investment in Iran would come as energy companies are cutting spending in response to the downturn in crude oil prices.

Dudley said uncertainty over the existing sanctions regime and deep reductions in capital spending meant opportunities with Iran should be reviewed with a degree of caution.

"I don't think anyone will invest in Iran just because it is Iran," he said. "I think it has got to be an economic decision on the use of our very scarce capital."

A report last year from analysis firm Verisk Maplecroft said that even as energy sanctions ease, some companies may still face difficulties as military entities tied to the conservative Islamic Revolutionary Guard Corps will remain blacklisted, adding a layer of complexity for companies looking to move into the Iranian market.

Analysis this week from the U.S. Energy Information Administration found sanctions relief will lead to an increase in Iranian crude oil production and exports. Holding steady at around 2.8 million barrels per day under sanctions, Iran's output should increase about 10 percent for the year.