Iran aims for tempting new oil contracts soon

Iran wants Western oil companies to revive its giant, ageing oilfields and develop new oil and gas projects

Published: Updated:
Read Mode
100% Font Size
3 min read

Iran’s new development contracts will be finalized soon and presented to the cabinet for approval, its oil minister said, a sign that Tehran is pushing ahead with effort to lure foreign investors once sanctions are lifted.

Iran wants Western oil companies to revive its giant, ageing oilfields and develop new oil and gas projects and has been preparing a new investment model for oil contracts as part of its drive to win back Western business.

The OPEC producer is in talks with six Western powers to reach a deal to limit Tehran’s nuclear program - which could end sanctions on oil investment and trade with Iran. The deadline to reach a deal is Nov. 24.

“The final touches are being made to this type of contracts at the Petroleum Ministry. It will then be submitted to the government for approval,” Iranian Oil Minister Bijan Zanganeh said, according to the ministry’s news agency Shana on Wednesday.

He added that the new model of contracts does not need to win the endorsement of parliament, Shana reported.

Iran had delayed a widely anticipated London conference during which it would offer oilfields, projects and its final investment contract to foreign oil companies until February next year from November, due to sanctions on its oil sector.

“In case the sanctions are annulled, a new model of oil contracts will be unveiled in London,” from Feb. 23 to Feb. 25, Shana cited Mehdi Hosseini, the head of the Petroleum Ministry Oil Contracts Revision Committee, as saying.

Iran’s new contract model, known as the Iran Petroleum Contract (IPC), aims to tempt back oil companies with 25-year deals.

Western sanctions imposed in 2012 on Iran for its nuclear program have choked Tehran’s oil production. Output is down a million barrels per day (bpd) since the start of 2012 at 2.7 million bpd, depriving it of billions in oil revenue.

Top officials say Iran can raise production to 4 million bpd within six months of sanctions being lifted. Western experts are more conservative, saying 3 million to 3.5 million bpd is more likely.

Zanganeh had met some Western oil executives at OPEC’s previous meetings in Vienna, including Italy’s Eni, Royal Dutch Shell and Austrian oil and gas group OMV.

Top Content Trending