MNA– NIOC deputy head said France’s Total will receive bonus for investment in Phase 11 of South Pars as envisaged in the new model of new model of oil contracts, dubbed as the Iran Petroleum Contract (IPC).
Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manouchehri described the mechanisms for bonus remuneration to Total oil company for the contract to develop South Pars Phase 11 saying “the new IPCs, which have been approved by the government, contains procedures for offering extra payments to foreign firms active in development of Iranian oil and gas fields.”
He underlined that the bonus scheme was a process akin to the model for buyback contracts asserting “the new oil industry contracts have a length of 20 years during which bonus will be paid to investors in accordance with cumulative production of oil and natural gas.”
“For instance, if a company manages to achieve a one-million-barrel uplift in oil output or a one-million-cubic-meter upsurge in gas production, they will receive a remuneration package worth one billion dollars.”
Manouchehri stressed that the amount of bonus for Total will be calculated and paid on the basis of every one-cubic-meter rise in gas recovery; “in other words, if activities of Total lead to a rise in gas output, the French company will receive bonuses proportionately.”
When asked on procedures for payment of large bonuses to Total and other foreign firms, the official said control mechanisms had been defined in that bonus payments had a highest permissible value.”
Meanwhile, Managing Director of the Pars Oil and Gas Company (POGC) Mohammad Meshkinfam had also noted that Total would receive bonuses for every 1000 cubic feet of gas production over a 20-year time period though payments will be reduced if gas output plunges.
“The formula for bonus calculations will definitely take into consideration crude and natural gas markets in certain global markets,” emphasized the official recalling that no final agreement had been reached on the issue.
National Iranian Oil Company (NIOC), in consortium led by France’s Total, signed into a contract worth 4.8 billion dollars for development of Phase 11 of South Pars joint gas fields.