The world will notice Iran's new image, said the Iranian president on Wednesday, as he prepared to board his plane for the World Economic Forum (WEF), in a push to translate a landmark nuclear deal into contracts with European firms.
Downplaying hopes for breakthrough in Geneva talks – which opened in Montreux without Iran – President Rouhani, who was about to embark on his first three-day European trip since taking office, described the Davos summit as a "pivotal gathering of world leaders".
"They have invited the Islamic Republic of Iran to Davos to let the world see the new post-election image of Iran and hear our views on economic ties and its prospects," said Rouhani before heading for the Swiss resort of Davos.
"Everyone is sniffing around and having meetings"
Accompanied by a high-level delegation of his close aides including foreign minister Mohmmad Javad Zarif and oil minister Bijan Namdar Zanganeh, Rouhani is willing to attract Western companies to invest in the country's sanction-hit oil sector and he is also set to reshape Iran’s image in Europe, once Iran's largest trading partner.
"It is obviously a good opportunity for him and FM Zarif to meet some people it would be difficult (or politically costly) to meet in a purely bilateral context," a senior Tehran-based European diplomat told Your Middle East. "So we are hoping for further active engagement with the international community, definitely reading the trip as positive event."
Having witnessed intense diplomatic traffic in its capital since last month, Iran is bracing for more high-profile visits by several European ministers, including Sweden's Bildt and Poland's Sikorski, next month.
Rouhani didn't only address the WEF plenary on Wednesday but also gave a short speech to chief executives from many of the oil majors that have reportedly been assessing and examining a return to Iran, a market of 75 million people.
"The interest is growing and Iran is mentioned as one of the most promising prospective markets in many sectors -agriculture and chemical industries for example - but the companies also need to analyze thoroughly the current framework and existing opportunities," said the diplomat who requested not to be identified by name.
Possible oil contracts
Iran which holds the world's fourth-largest proven oil reserves plans to boost its oil output – down by a million bpd since 2012 – to four million bpd under a deal with world powers which has offered sanctions relief in exchange for curbing its disputed nuclear program.
Experts, however, see that figure as ambitious, hinting that a full return will only come once Iran and powers strike a permanent deal. "It will possibly rise between 80,000 and 100,000 bpd as some of Iran's customers look to take advantage of the lifting of the EU ban on both the insurance and reinsurance of Iranian crude over the coming six months," said Nader Itayim, Iran Editor for the Middle East Economic Survey (MEES).
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"France's Total were the first to hold talks with Iran over a come-back in October last year," said Mr. Itayim. "This was followed by meetings between Iran's Oil Minister Bijan Zanganeh and representatives from Shell, Eni, OMV and Vitol in Vienna in December."
Fall in global demands for OPEC crude is another challenge Iran faces, preventing it from reaching that goal, experts say.
"Iran has about 25 million barrels of unsold crude oil stored on tankers and can boost exports whenever the global markets demand," said Dalga Khatinoglu, an Energy expert and the head of Iran News Service of Trend News Agency.
Fall in global demands for OPEC crude is another challenge
"Alongside this potential capacity, I think Iran is able to boost oil output to 3.5 mbpd from the current 2.7 mbpd (million barrels per day) level in six months actually, but increasing this amount to 4 mbpd would likely take more time, because of technical obstacles as well as the fact that the global oil demands for OPEC's crude would decrease in 2014 by at least 400,000 barrels per day compared to 2013."
Reza Sanati, an energy security strategist and research fellow at Middle East Studies center, is more positive, noting that Rouhani’s economic policies could also be determinative.
"However, the main engine to Iran's economic recovery will rest on the vision and skill of President Rouhani's economic policies for the next two years," said Mr.Sanati. "This has to do with how oil revenue is spent, the pace of Iranian diversification to non-oil exports, the revitalization of Iran's natural gas industry, and how Iran's nuclear program is integrated into Iran's domestic energy basket."
Zarif in Germany
In less than one week, Iran FM Zarif is scheduled to take part in the 50th Munich Security Conference, after which he visits the capital Berlin to meet his German counterpart.
"Besides delivering a speech at the Munich Security Conference, the Foreign Minister will also make speeches at two meetings in Berlin, one of which will be attended by German economic section,” Iran’s ambassador to Berlin Alireza Sheikh Attar told the semi-official Mehr news agency.
Representatives from big firms in Germany, the largest EU economy, have been commuting between the two capitals in the past couple of months to explore whether they can seize their share of billions of dollars Iran is thought to access as the suspension of some sanctions on its auto sector and petrochemical exports gradually come into effect.
"So waiting another one to two years to ensure that investments will not be negatively affected is the most likely option. Everyone is sniffing around and having meetings though," said a senior expert for a European oil company.
"Talking is not sanctionable."