New oil contracts to help Iran beat sanctions: minister

Iranian Oil Minister Bijan Namdar Zanganeh says the newly developed model of oil contracts, dubbed as Iran Petroleum Contract (IPC), will help the country beat the international sanctions.

The Iranian oil industry will go ahead regardless of the sanctions, the Tasnim News Agency quoted Zanganeh as saying on Saturday.

Iran’s Oil Ministry has recently unveiled the draft model of its new oil contracts aimed at drawing more foreign companies to develop Iranian hydrocarbon reservoirs.

The IPC is replacing “buy-back” contracts which are no longer attractive to foreign companies.

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 IPC, 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.

Iran is predicted to attract $100 billion in investment in its energy sector over the next four years after its new model of oil contracts takes effect, Mehdi Hosseini, who advises Oil Minister Bijan Namdar Zanganeh on oil contracts, said on February 26.

“Iran enjoys lots of attractions for investment in the oil sector, and therefore with the resolution of the contracts’ problem, the grounds will be prepared for the renewed presence of big oil companies in the country,” said Hosseini.

Iran’s Oil Ministry plans to hold a conference in London in July to introduce the new contract terms to international companies.

World oil giants have shown interest in returning to Iran following the easing of sanctions against Iran in light of the implementation of Tehran’s nuclear deal with world powers.