Iran Unveils New Oil Contracts

Zanganeh further denied that the slump in oil prices may discourage foreign investors to participate in the country’s oil and gas projects and said even if the oil prices fall again, investment in Iran’s oil and gas projects is still beneficial.

The proposed new deals will allow more flexibility in recovering costs-including the possibility of choosing repayment in oil or cash-Iranian oil officials said in the presentations. “Also, it contradicts state expediency and promotion of local oil firms in many respects which could inflict huge losses on the country”, MP Ahmad Tavakkoli said Sunday.

Iranian Oil Minister Bijan Zanganeh has said that Tehran is only capable of delivering gas to Turkey within the framework of an existing contract with Ankara, Shana news agency reported November 28.

“The reason we have defined a period of 20 years for these contracts is that the foreign company in the meantime guarantees production with the condition that it will stand by our side throughout the tapping phase”, he added.

The new contract will instead launch joint ventures for crude oil and gas production with global companies being paid a share of the total output, officials said.

The conference also heard details of a new Iranian Petroleum Contract (IPC), which will replace buyback deals.

Under the accord reached in Vienna on July 14, Iran will be subject to longer-term restrictions on its nuclear programme in return for the removal of USA, United Nations and European sanctions.

Experts believe that Iran’s economic growth would rise remarkably after the final nuclear deal takes effect. Shell, Total, and Lukoil have reportedly specified fields they would be interested in developing.

Foreign companies, however, can not dash out of their contractual obligations if sanctions are ever re-imposed on Iran. The country hopes it can reach an agreement with fellow members of the Organisation of Petroleum Exporting Countries so that Iran’s planned additional production remains within the 30 million barrels a day OPEC production ceiling, he said. The sanctions were introduced to keep Iran’s exports at around 1 million bpd, down from 2.5 million bpd in 2011, and force Tehran to the negotiating table over its disputed nuclear activities.

Meanwhile, Iran will overtake Qatar in terms of producing gas from the huge offshore South Pars gas field, Iranian deputy oil minister stated.

Iran will not have a problem to sell an additional 500,000 BPD once the sanctions are lifted, and the quantity will not have a significant impact on prices, Mr. Zamaninia told reporters.

Iran could sign its 1st development contract in March or April, Kardor said. In the mid-1970s, its oil output was as high as 6 million barrels per day.

The energy majors are eager to use the considerable reserves of petroleum in Iran.