TEHRAN Mar 17 (Shana) – A senior Petroleum Ministry official for international affairs voiced Iran’s readiness to practice an unprecedented level of flexibility in oil contracts with foreign companies and put forward more appealing deals
Iranian Deputy Oil Minister for International and Trade Affairs Ali Majedi said on Monday that Iran is resolved to offer contracts with more appealing terms to foreign companies.
He reiterated that Tehran welcomes foreign contractors to seal deals for expansion of the country’s petroleum fields in the Caspian Sea.
He called on reputable international oil companies to enter the Caspian sea fields to expand deep water drilling and production projects in areas Iran has less experience in.
Majedi further underlined the ministry’s determination to revive crude oil swap mechanisms, adding that the ministry has invited major firms for talks over the issue.
Iran’s Petroleum Ministry has recently unveiled the draft model of its new oil contracts aimed at drawing more foreign companies to develop Iranian hydrocarbon reservoirs.
The Iranian Petroleum Contract (IPC) is replacing “buy-back” contracts which are no longer attractive to foreign companies.
Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.
But under the IPC, National Iranian Oil Company (NIOC) will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.
Iran is predicted to attract $100 billion in investment in its energy sector over the next four years after its new model of oil contracts takes effect, Mehdi Hosseini, who advises Oil Minister Bijan Namdar Zanganeh on oil contracts, said on February 26.
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