“No Deal” Under New Oil Contracts

An Iranian lawmaker quoted Oil Minister Bijan Namdar Zanganeh as saying that the country has not signed any deal with foreign customers using a new model of oil contracts, giving an assurance that the much-questioned model will be revised.

Speaking to the Tasnim News Agency, Javad Hosseinkia, member of the parliament’s industries and mines commission, said the oil minister attended a Tuesday session of the commission to brief the MPs on the latest developments in the oil industry.

In the gathering, Mr. Zanganeh said his ministry has not still signed an agreement with any country using the new model of contracts, stressing that the draft contracts which have been challenged by critics, will be modified in order to address the concerns of the lawmakers and experts, the MP added.

Earlier in August, President Hassan Rouhani’s cabinet approved an amended draft of the new model for oil and gas contracts.

The new amendments were endorsed after Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei stressed last month that no new oil and gas contracts for international companies would be awarded without necessary reforms.

The new oil and investment contract for international firms, known as the Iran Petroleum Contract (IPC), will replace Iran’s buyback oil deals. Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.

Iran worked on the oil contract model for two years. The country hopes to draw as much as $50 billion a year from major oil companies such as Italy’s Eni SpA and France’s Total to develop its oil and gas fields.

(Source: Tasnim, under Creative Commons licence)

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