​Iran body approves new oil deals

An Iranian advisory body has approved the text of the new format of its oil sector contracts after they were put through certain amendments that had earlier been raised by the critics in the country. 

The seal of approval for the contracts was put by the Resistance Economy Committee, Reuters reported.

Their launch has already been postponed several times as criticisms grew at home that they undermine national interests.  They are generally believed to be a cornerstone of Iran’s plans to raise crude production through foreign investment.

In late May, Iran’s First Vice President Ehsaq Jahangiri called on Petroleum Minister Bijan Zangeneh to make some amendments to the emerging format of Iran’s oil sector contracts to soothe the concerns of the critics.

Jahangiri also urged Zanganeh to invite all the critics to listen to their points.

Iran’s new format of oil contracts will replace buyback deals. 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 new contracts, the 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.

Under the new contracts, 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.

Architects of the new contracts say foreign companies can no longer dash out of their contractual obligations if sanctions are ever re-imposed on Iran. But critics cite numerous shortcomings which seriously plague the new formula.

The Resistance Economy Committee is important as the advisory body was formed last year to implement the economic views of the Leader of Iran’s Islamic Revolution Ayatollah Seyyed Ali Khamenei.

By Press TV