Zangeneh voices hope for inking 1st IPC in next three months ahead

TEHRAN, June 12 (Shana) – Iran’s Minister of Petroleum Bijan Zangeneh expressed hope for inking the first Iran Petroleum Contract (IPC) till the next two or three months ahead.

He made the remarks in an interview with Seda Weekly Magazine.

The Minister of petroleum said that he has held several meetings with the critics of new models of Iranian petroleum contracts.

In addition to the critics, supervisory apparatuses had also some considerations that were applied in the latest version of the IPC, he added.

Zangeneh said that there is now consensus among decision makers regarding the new Iran Petroleum Contacts.

Speaking about supervisory apparatuses’ views, he said that they had concerns regarding some legal expressions used in the IPC.

Answering a question regarding his recent meetings with the France’s Total, Eni of Italy and Russia’s Lukoil officials in Vienna, he said that these companies have priority for signing the IPC.

Replying another question about the situation of Iran’s oil industry if the nuclear deal was not inked between Iran and G5+1, he said that it could result in cut of Iran’s oil export.

The lifting of sanctions marks the beginning of a new era for Iran’s upstream industry. The lifting of sanctions marked by Implementation Day paved the way for Iran to target a return to pre-sanctions levels of production and exports at 3.8 mb/d and 2.2 mb/d respectively.

The Iran Petroleum Contract includes payments in kind and a floating remuneration fee linked to oil prices, making this service contract more like a PSC. There has been more interactivity and flexibility created with 20 to 25-year contracts, joint ventures with Iranian companies, and shared risk.

Above all, the IPC addresses weaknesses of the previous buy-back contracts. The new terms are more competitive with no ceiling for cost recovery and a floating remuneration fee per boe based on oil price, exposing investors to upside oil price risk. The model will allow priority or riskier projects to be rewarded with higher returns. Exploration terms have also been made more attractive.