Iran Has Natural Gas, But No International Money Backing

You can cut a deal with the Devil, but you better make sure the Devil has the money to pay for the pipeline. Forbes reports today that the stakes are very high for investing in Iran, and Turkey has found out the hard way: it has failed to get financing from overseas big money for a $3.5 billion gas deal with the Islamic Republic, a development which points to further problems for the likes of Shell and Total in getting their Iran deals done..

The Turkish Energy Ministry was quoted as saying Wednesday that state-owned energy company TPAO is going it alone, once an agreement is finalized later this month, to develop several phases of the South Pars natural gas field in Iran for $3.5 billion.

With international pressure from the European Union and the United States mounting over Iran's pursuit of nuclear power, international investors are less willing to invest hard cash by putting down money down, regardless of the financially lucrative rewards.

"It is increasingly impossible to get financing," said Global Insight analyst Samuel Ciszuk. He said that with costs going up all the time across the energy sector, it would be even harder to make sure the budget of $3.5 billion would be feasible.”