|Iran to unveil new oil contracts in November: official||
Tehran (Platts) -- Iran plans to unveil its new upstream oil contract model in early November but is keeping a close eye on the ongoing nuclear negotiations with six world powers that could have an impact on the event, a senior Iranian official said.
Mehdi Hosseini, in charge of designing the new contracts, told Platts that Iran would launch the new contract at a London roadshow on November 3-4, but hinted that the date could change if the negotiations were ongoing.
“We haven’t touched the date of the conference and, God willing, we won’t,” Hosseini said. “We expect our conference to be a successful one. I personally think the nuclear talks will have good results and before the date of our conference they will yield the result.”
“If the results are not known by then [the date of the conference] and if this is going to have an impact on our seminar, we should naturally consider it,” he said. “Our work will be based on the country’s interests.”
Iran and the six world powers -- Britain, China, France, Germany, Russia and the United States -- agreed on Friday to extend an interim deal on its nuclear program by four months until November 24 to give negotiators more time to thrash out differences standing in the way of a comprehensive agreement that would lead to sanctions being removed. The six-month interim deal, which gives Iran limited sanctions relief in exchange for nuclear concessions, was to have expired on Sunday, July 20.
Iran’s oil-dependent economy has been hit by the swinging sanctions and has refurbished its oil and gas contract model in a bid to make it more attractive to investors.
As well as introducing the new model, Iran plans to present a series of investment packages for its underdeveloped oil and gas fields. In recent years, the combination of sanctions banning investment in Iran’s oil and gas sector and the shortcomings of the contract model that has governed upstream investment in the past -- the so-called buyback -- has discouraged foreign investment.
The London event has been previously postponed due to what Iranian Oil Minister Bijan Namdar Zanganeh has described as “foreign pressures.”
Asked whether the November roadshow would be cancelled if the nuclear talks failed to reach agreement, Hosseini said, “We have fixed the date and we don’t want it to be the case [that no nuclear deal is reached], and we hope the negotiations will reach a positive result.”
Projects covering the development of large “shared fields” that extend into neighboring countries -- from which Iran wants to exploit abundant amounts of oil and gas over the next four years -- will be among those offered in London, Hosseini said. The oil ministry, he said, “has a comprehensive plan for projects to present.”
After several months of work and scrutiny, the new model has been finalized and is now in the hands of the oil ministry, which will present it to the cabinet for final approval, Hosseini said.
“We used a lot of comments and opinions from experts and big foreign companies,” he said, refusing, however, to identify the relevant companies or specify their nationalities. “We received very positive feedback from them and I think they will welcome the new model very well.”
The old buyback contract, which confers no ownership of reserves onto the contractor, repays investors in project revenues. Even before the imposition of the various sanctions that forced European companies to pull out of Iranian projects, poor rates of return and short-term participation of the foreign partner were acting as a deterrent to investment.
Iran has said it will offer more attractive terms than those offered by neighboring Iraq, with which Iran shares several big reservoirs.
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