Another Company Withdraws from Iran as Tensions Mount with Poland

Polish Oil and Gas Company (PGNiG)

The U.S. recently announced that it would be holding a conference in Poland to discuss the Middle East and Iran in particular. In response to Warsaw being the host of the conference, which is scheduled to take place on February 13 and 14, the Iranian regime has spoken up regarding what it feels is a betrayal of their relationship to date. Tensions between the two countries have increased ever since.

On January 17, another layer of tension was added as Polish Oil and Gas Company (PGNiG) announced its withdrawal from Iran and the closing of its office there. The withdrawal, despite its timing, was not a recent decision but was part of an internal process that had begun in May 2018 after the U.S. withdrew from the Joint Comprehensive Plan of Action (JCPOA).

The company has not released the exact date that its Iranian office will cease to function. The Iranian regime has not commented on the company’s announcement or how it will impact relations with Poland.

PGNiG Signs Agreement with UAE

The United Arab of Emirates (UAE) is the beneficiary of its withdraw from Iran as PGNiG also announced that it has signed an agreement with the UAE to explore an area of 619 sq km and also to undertake production activities if any gas is found during their efforts.

“We are entering a region of fundamental importance for the global oil and gas market in what marks another step in the pursuit of the PGNiG Group’s strategy to strongly expand the international presence of its exploration and production segment,” said Piotr Wozniak, the head of the PGNiG.

The license that is part of the agreement was acquired via a tender in December 2018. The agreement allocates obligations and provides for a split of costs and profits under the license. It was signed in the presence of the Ruler of Ras Al Khaimah, His Highness Sheikh Saud Bin Saqr Al Qasimi.

Agreement Spells Out Stages of Exploration

The work will be carried out in three two-year exploration stages, to be followed by a 30-year production phase. PGNiG can choose to relinquish its interest in the license after each exploration stage.

The Ras Al Khaimah Petroleum Authority regulates the oil and gas sector in the emirate. RAK GAS LLC is the national oil company for the emirate and its business includes exploration, production, delivery, and processing of any hydrocarbons.

The UAE has reserves of about 98 billion barrels of oil and over 6 trillion cubic meters of natural gas, according to the latest OPEC statistics.

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