The National Iranian Oil Company (NIOC) has announced plans to make $19 billion of investment in the upstream oil sector by March 2015, according to news site Zawya.
In order to attract these resources, the company will benefit from Iranian Petroleum Contracts (IPC), Shana reported.Iranian oil officials have announced that the country needs over $150 billion in investments in the next five years.With the easing of sanctions, Iran will raise its oil production capacity to 5.7 million barrels per day (mbpd) by 2018.Iran’s crude oil production declined from 4 mbpd to 3.4 mbpd, as US and EU approved illegal sanctions against Iran in 2012.
The NIOC is exclusively responsible for the exploration, extraction, transportation and exportation of crude oil, as well as sales of natural gas and liquefied natural gas. After meeting the oil and gas requirements of domestic refineries and manufacturing plants, NIOC exports its surplus production in the framework of the quotas determined by the Organization of Petroleum Exporting Countries (OPEC) and at prices prevalent in the international markets. The NIOC has long-term buyback contracts with foreign companies to exploit the national oilfields and export its products, but the new contracts will be signed in the IPC framework.
The IPC was unveiled in February to revise oil contracts. In the new contracts, different stages of the oil industry (exploration, development and production) are commissioned in an integrated manner.
The IPC is replacing buyback contracts that 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 produced. But under the IPC, the NIOC will set up joint ventures with international companies, which will be paid with a share of the output.Iran’s total in-place oil reserves have been estimated at more than 560 billion barrels, with about 140 billion barrels of recoverable oil. Heavy and extra heavy varieties of crude oil account for roughly 70-100 billion barrels of the total reserves.
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