Iran unveils long-awaited oil contracts
Iran’s Ministry of Petroleum publishes the new framework of oil and gas contracts which will be presented formally to foreign companies in a conference in Tehran later this month.
The Iran Petroleum Contract (IPC), published on the website of the ministry’s Shana news agency, was given the go-ahead by the government for implementation.
“The newly-devised oil contracts are the result of collective wisdom, approved by the government without the least alteration,” head of the Oil Contracts Restructuring Committee (OCRC) Mehdi Hosseini said on Wednesday.
The government formally notified the Ministry of Petroleum to put the IPC into practice in a letter by Vice President Es'haq Jahangiri.
The new oil and gas contracts will be introduced at conferences in Tehran and London on Nov. 21-22 and Feb. 22-24 respectively.
Hosseini predicted that the conference in Tehran would receive warm welcome by foreign companies, in which about 50 projects worth $185 billion will be unveiled for investment.
The new projects include a combination of brown and green fields as well as exploration blocks up for development.
IPC is replacing buyback deals which required the host government to pay the contractor an agreed price for all volumes of hydrocarbons it produced.
Under the IPC, different stages of exploration, development and production will be offered to contractors as an integrated package, with the emphasis laid on enhanced and improved recovery.
Ahead of the presentation day, executives of major energy companies urged Iran to offer lucrative contracts terms.
"We will be well positioned to look at opportunities in gas, oil, petrochemicals and marketing. But all that is subject to good contractual conditions, so we will see," Total's Chief Executive Patrick Pouyanne told a conference in Abu Dhabi.
Pouyanne said Total was likely to attend the Tehran conference.
Iranian officials are sanguine, saying the low cost of production in the country trumps other considerations.
Iran is the “the world’s cheapest country” for oil production, head of investment at the National Iranian Oil Company (NIOC) Ali Kardor said last month.
“The finished cost of each oil barrel produced in Iran is about $5. This price tag doesn’t exceed $10 with the costliest of processes,” he said on the sidelines of an energy event in Tehran.
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