Updated at 16:11,02-12-2016

Belarusnafta announces withdrawal from oil deal with Iran

Belarus Belarusnafta announced on Wednesday that it had decided to withdraw from an oil deal signed with the National Iranian Oil Company. (NIOC) in 2007, BelaPAN said.

In a statement posted on Belarusnaftas website, its press office said that the Belarusian company had been initially scheduled to develop Iran`s Jufeyr oilfield, located some 50 miles southwest of the city of Ahvaz in the province of Khuzestan, in several phases. The development of phase one was completed in September 2010, it said.

In the course of the work, new details on the geological structure of the oil field emerged, demanding changes in the technical, financial and economic terms of the project, said the press office. With regard to this, the Belarusnafta enterprise decided to withdraw from the said contract following phase one.

The $500-million buy-back contract allows Belarusnafta to pull out of developing the field, according to the report.

On Tuesday, Reuters reported with reference to Irans semi-official Mehr news agency that Belarusnafta had taken the decision over differences about the project.

"Belarusnafta has brought to an end all its oil activities in Iran since [late June], and it is predicted that the European company`s contract on the development of phase one of the Jufeyr oil field will be cancelled on [Tuesday]," Mehr said quoting unnamed sources in NIOC.

According to the report, the differences between the two companies stemmed from "the manner of the field`s production, Belarusnafta compensation from the development of the field and some technical issues."

However, Naji Sadouni, director of Irans state-controlled Petroleum Engineering and Development Company, told Reuters that the Belarusian company had failed to meet its contract commitments on the oilfield.

"Based on the contract the Belarus company was supposed to produce more than 3,500 barrels of oil per day from the field, but in practice the production never went beyond 2,800 barrels," he said.

In March, Washington slapped sanctions on Belarusnafta over its $500-million investment contract with Iran by cutting its access to the US market and imposing other punitive measures.