Iran will offer foreign partners incentives to explore and extract more crude oil and natural gas, and is likely pay some fees in barrels, according to Bloomberg.
Iran is looking to boost its income once international sanctions are lifted.
New contracts that the country is developing will offer higher fees for riskier exploration and production projects, oil-ministry officials told Bloomberg at a conference in Tehran.
Local and international executives are attending the two-day meeting that started to discuss rules that would govern oil and gas production if Western curbs on Iranian energy exports are removed. The committee revising the Islamic republic’s contract model presented new terms called the “Iran Petroleum Contract.”
“We’ve analysed all the contracts in the market right now, all available, beneficial models, and this is what we’ve come up with,” Mehdi Hosseini, a government energy adviser who leads the ministry committee, said at the conference. “This is a good model, with flexibility.”
Iran, a member of the Organisation of Petroleum Exporting Countries, is discussing limits to its nuclear programme in exchange for the removal of Western sanctions on its financial and energy industries. It agreed with six world powers on February 20 to start negotiations next month that may achieve a long-term nuclear accord before a six-month interim deal expires.
Under the proposed terms, state-run National Iranian Oil Company will form joint ventures for crude and gas production with international companies to manage projects, provide financing and maximise hydrocarbon recovery, Hosseini said. Partners conducting exploration projects will be paid for their work with a share of the output, according to presentations at the conference.
“Ownership of the reservoirs belongs to the people, so ownership is never possible to be transferred,” Hosseini said. “The ownership of the produced oil can be negotiated,” he said, adding that the government wanted to offer contracts that will help develop long-term relationships with partners.
International companies will act as the sole operator at oil and gas exploration blocks and will be responsible for the risks of those projects. NIOC, as the state firm is known, may be a technical partner in the developments.
Iran is giving priority to investment in common fields shared with neighboring countries such as Iraq and Qatar, and work on those deposits will be remunerated at the higher rate. The contracts will include incentives for extending the life of fields and the recovery rate for oil and gas.
