Iran is taking steps to overhaul the way it offers contracts to foreign energy companies, reports the BBC. Iran will let global and local companies determine the stakes each will hold in joint-ventures formed to develop fields.
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Bijan Namdar Zangeneh, Iran’s Minister of Petroleum, on Saturday spoke at an worldwide petroleum conference here.
The comprehensive nuclear deal between Iran and the six powers would terminate all nuclear-related sanctions imposed on Iran after coming into force, and help the country return to the global market.
The remarks came during a conference in Tehran Nov. 28 presenting the country’s newly designed oil contracts, called the Iran Petroleum Contract (IPC) which is designed as a way to make up for the inefficiencies in Iran’s previous contracts (buyback).
Zanganeh said consultations with worldwide companies led to the new contracts, which would initially be four years in length at the exploration phase, extendible for a further two years.
Oil Ministry officials said 137 foreign companies attended Saturday’s conference, including Repsol, BP, Royal Dutch Shell, Total, Technip, Schlumberger, Eni, Enel, Rosneft, Lukoil, Gazprom, Inpex, Statoil and Daewoo. But as Iranian fighters participate in a new Russian-led offensive against Syrian rebels, Iran’s leaders might have a reason to offer more details of their country’s involvement, said Ali Alfoneh, an Iran expert at the Washington-based Foundation for Defense of Democracies.
“The contract models introduced today are not flawless or ideal, but an effective and responsive model for both sides”, Mr Zanganeh said, noting that $US25 billion of foreign investment would constitute “success”.
“Like any other human creation it may need amendment and development”, he said of the new contract.
Foreign companies are excited at the prospects of big businessin a country which owns the world’s largest oil and gas reserves combined when sanctions are lifted in early 2016 under a nuclear accord.
Iran has sweetened the terms, hoping to bring in $30 billion in new investments.
US Energy Information Administration (EIA) data has disclosed that Iran’s exports have dropped from 2.6 million bpd in 2011 to 1.4 million bpd in 2014.
Iran says it will not increase its gas supply to Ankara in case of a possible shortage of gas in Turkey due to resent tensions with Moscow. “But it’s good to be able to do that now, based on facts”.
The nuclear deal, however, has paved the way for new tie-ups and 152 global companies were at Saturday’s event, organisers said, along with 183 Iranian firms. The country plans to pump an additional 500,000 bpd within a few weeks following the removal of the sanctions; the country produced 2.7 bpd of crude oil last month.
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Iran’s regional rival Saudi Arabia has refused to cut its output despite crude prices falling massively in the past year.
