Falling oil prices may have already increased the costs for production in many countries. However, Iran says its oil industry has today become a heaven for investors because production costs in the country are lower than many other countries.

“The risks for making investments in oil projects are too high in the United States and certain other countries,” said Mehdi Hosseini, a senior Iranian official at the Ministry of Petroleum (MoP). “However, there is no high risk involved in Iran’s oil sector projects”.

Hosseini, who is in charge of devising a new format of oil contracts at MoP, said the decreases in international prices of oil have already boosted the lure of Iran’s oil projects.

“The falling oil prices will benefit Iran’s oil industry and will eventually make the investors more interested in taking up projects in the Iranian oil sector,” he said as quoted by IRNA.

Before the implementation of the US-engineered sanctions on Iran’s oil industry, Iran said the costs for the production of oil – both in onshore and offshore projects – were below $10 per barrel.

The sanctions are believed to have pushed that figure higher. Iranian officials have not specified a recent average cost for the production of a barrel of oil. However, analysts believe that it is not as high as $40-$80 per barrel that countries like the United States spend for production of crude oil from shale projects or the deep water prospects.

Hosseini’s remark comes as his team is preparing for a much-awaited conference in London in September in which Iran will introduce its new format of oil contracts.

The new format - named as Iran Petroleum Contract (IPC) – is a modification of the traditional buy-back risk service contracts and has been specifically designed to increase the attractiveness of Iranian oil projects for foreign investors.

The IPC offers different stages of exploration, development and production to the contractors as an integrated package. Also, Iran will set up joint ventures with the contractors to extract reserves at the fields. The contractors will be accordingly reimbursed through a share of production from the fields.

By Press TV