"The western countries' sanctions against our country haven't had any effect on oil production and investment in the field of oil and gas exploration," Ghasemi was quoted as saying by official news agency IRNA.
"We are fully active in the South Pars [gas field]. We are also active in oil and gas fields and there are no restrictions for us," he said, reiterating: "These sanctions are not having any impact on our oil and gas activities."
Ghasemi said EU countries would not find it easy to secure alternatives to the crude they currently buy from Iran.
"Iran's oil cannot be [removed] from the international market," he said. "European countries have imposed the oil sanctions against Iran themselves and the impacts of these sanctions will definitely turn back to themselves," he said.
Ghasemi said his administration was still awaiting the result of a plan being worked out in parliament to halt oil exports to Europe, IRNA reported.
"This motion is being examined in the parliament but it hasn't been finalized yet and we are waiting for its final results," Ghasemi was quoted as saying.
On Jan. 29, Ghasemi said Iran would soon stop exporting oil to "some" European countries but did not name them.
Ghasemi's assessment of the impact of the sanctions on the oil and gas industry was, however, in stark contrast to a more gloomy picture painted by the head of Iran's parliamentary energy committee Hamidreza Katouzian.
Katouzian said the sanctions were likely to have a negative impact on the budget of Iran, which relies on oil revenues for more than half of state earnings.
He told labor news agency ILNA that if the EU sanctions force Iran to cut its exports, the budget would be affected and the government would have to amend its revenue assumptions.
This would, in turn, force the government to dip into its already depleted stabilization fund into which oil revenues in excess of budgetary assumptions are usually deposited.
Katouzian also said several Iranian gas projects were suffering from delays because of a cash shortage.
On Jan. 31, he told the semiofficial Mehr news agency the cash crunch had delayed startup of the remaining phases of the South Pars gas field, the largest concentration of non-associated gas in the world. Two more phases are likely to come on line within 90 days after a two-year delay, he said.
"Based on the National Iranian Oil Company's program, all the offshore wells of phases 9 and 10 will start production within the next three months," Katouzian said.
He blamed a "shortage of cash" for the delay in completing the two phases on time, adding that the delay translated into a loss of over $6 billion (B).
Iran is home to the world's second largest conventional gas reserves after Russia with more than half of its 1,046 trillion cubic feet (Tcf) of reserves located at South Pars.
South Pars, a geological extension of Qatar's North Field, is being developed in 28 full phases, but work has been plagued by delays as local contractors took over from Western oil companies that pulled out of Iran because of international sanctions.
Although President Mahmoud Ahmadinejad launched phases 9 and 10 in March 2009, the project has yet to reach its targeted production capacity of 50 million cubic meters/day.
The two phases will also produce 80,000 barrels per day (b/d) of condensates, as well as 400 metric tons per day (mt/d) of sulfur, 1 million mt/year of ethane and 1.05 million mt/year of LPG.
Katouzian said the financial problems have also impacted remaining phases under construction. "Because of the cash shortage, it's not possible that these phases become operational simultaneously," he said.
Completion of phases 15-18 is unlikely to occur during the current Iranian year, which ends on March 20, though some South Pars phases may become operational next year, he added.
Total, Shell, Spain's Repsol, Italy's Eni, Sasol of South Africa and Norway's Kvaerner are among foreign oil companies that pulled out of South Pars projects in recent years for fear of incurring penalties under unilateral U.S. sanctions, which limit the amount of investment allowed in Iranian energy projects.
The EU last year approved sanctions against Iran that also banned investment in Iran's oil, gas and petrochemicals sectors.
Chinese state-owned oil companies were awarded contracts abandoned by the western oil majors but these projects, both relating to South Pars and oil field developments, have been delayed, prompting Iran to issue a warning to the Chinese companies to speed up the projects or risk losing them altogether.
Iran has already been forced to abandon plans to become an LNG producer after Total and Shell pulled out of two joint venture projects and Tehran has had to watch the rapid development of the North Field by Qatar, the world's largest LNG exporter with current capacity of 77 Mmt/year.
But deputy oil minister Ahmad Ghalehbani has painted a rosier picture, saying last week several South Pars phases were more than halfway completed.
"Development of some of the South Pars phases that were due to be completed in 35 months has reached 50%," Ghalehbani was quoted as saying by oil ministry news service Shana.
"This is a kind of record considering the problems for finance and procurement of equipment," he said, without giving details of which projects had progressed.
In June 2010, Iran awarded contracts worth $21.5B for development of phases 13, 14, 19 and 22-24 of South Pars to several domestic contractors, including Khatam al-Anibya, the contracting arm of the Islamic Revolutionary Guard Corps. The consortiums were given a 35-month deadline to complete the projects.
According to Shana, the South Pars gas field is currently producing 7.4 Bcf/d.
Despite its massive gas reserves, Iran is a relatively small exporter of gas because of high domestic demand from both the industrial and household sectors.
The Ahmadinejad government, frustrated at the constant delays, has declared South Pars a priority project and set tight schedules for contractors though Katouzian's remarks suggest these will not be met.
Aresu Eqbali, Platts
