Iran says EU firms interested in new oil deals

Iran said on Tuesday that several top European energy corporations have voiced interest in its new format of oil contracts.  

The announcement has been made by Mehdi Hosseini, the head of an expert team that has been set up by the Ministry of Petroleum (MoP) to revise the current format of Iran's oil contracts. 

Hosseini added that some Russian and Chinese companies have also informed the MoP that they are interested in Iran's new oil deals which will be unveiled in a conference in London in September. However, he did not provide the names of the companies.    

“International oil majors have strongly welcomed Iran's new format of oil contracts,” he told IRNA. “They are waiting for the results of Iran's nuclear talks [with P5+1] and the removal of sanctions [against Iran],” he added.    

The new format of Iran’s oil contracts - named as Iran Petroleum Contract (IPC) – will be 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.

Hosseini said Iran will consider no priority to foreign companies that approach it to take up investment projects in the oil sector. However, he emphasized that the companies need to have the required technology and expertise as well as the adequate ability to provide the capital needed to implement the projects.     

“The companies also need to be ready to transfer their technical oil expertise to Iranian companies,” he added. 

The prospects for the removal of anti-Iran sanctions in light of an emerging final agreement between Iran and P5+1 over the country’s nuclear energy program have already made Iran prepare for a post-sanctions era. To the same effect, it is modifying its oil contracts to make them more attractive to investors.

The country’s current oil production is estimated to be around 2.7 million barrels per day of which about 1 million barrels are exported – as required by the current regime of US-engineered sanctions.

Last month, the country’s petroleum minister said Tehran was ready to increase its oil exports by one million barrels per day a few months after the sanctions against the country are lifted.