New Petroleum Contracts Producing more than Oil

By Reza Yeganehshakib, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.

After Iran and the six world powers signed the nuclear deal last summer, the Iranian Cabinet on Sept. 30 approved the general terms for new upstream oil and gas contracts, known as the Iran Petroleum Contract. The aim? Facilitating the inflow of foreign investment.

The Oil Ministry presented the Iran Petroleum Contract to more than 300 major international energy investors at the Nov. 28-29 Tehran Summit. However, it seems that parliament is not yet in full agreement with the general terms of the new oil contract.

On Jan. 4, Oil Minister Bijan Namdar Zangeneh said that the parliament’s Committee for the Evaluation of Government Acts’ Compliance with the Law had approved the general terms of the Iran Petroleum Contract, and that work related to the contract had therefore been “finalized.” However, two days later, nine members of the parliamentary committee denied that they had evaluated the general terms.

Further twisting the situation, the parliamentary committee does not actually have the power to change the legal status of the general terms of the contract, which have already been approved by the Cabinet.

Al-Monitor spoke with Iman Rajabi, a Tehran-based lawyer, to clarify the legal situation. He explained that when parliamentary action on a document can change its legal status, the latter is considered to be a bill submitted by the executive branch. However, the Cabinet-approved general terms of the Iran Petroleum Contract are not a bill in this sense.

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