Iran, seeking billions of dollars to revitalize its ailing oil industry, plans to offer significantly better commercial terms to companies prepared to invest.
(Bloomberg) -- Iran, seeking billions of dollars to revitalize its ailing oil industry, plans to offer significantly better commercial terms to companies prepared to invest than offered during the last market opening nearly two decades ago.
Foreign oil executives who have reviewed partial drafts of the new terms, called the Iranian Petroleum Contract, said they’re more generous than the types of deals used in the 1990s and 2000s. Unlike those contracts, which merely paid a set fee for the delivery of a project, the new agreements could give investors some share of a field’s production and allow companies to book more reserves on their balance sheet.
Such arrangements would probably make Iran commercially more attractive than regional competitors for international investment including Iraq and Algeria. The executives asked not to be named because Iran has yet to announce the new contract and terms could still change.
“In simple terms, the message from Iran is that if the sanctions are lifted, in return Iran will offer improved contractual terms to make it easier for international oil companies to tap into its lucrative oil and gas reserves,” said Amir Kordvani, a Dubai-based lawyer at Clyde & Co., a firm specializing in the natural resources industry.
Iran sees the return of foreign firms as a key goal from a potential nuclear deal with the U.S. and the fact the government has started circulating drafts of the terms suggests Iran is expecting to seal an atomic deal. Iran needs $200 billion of investment in its oil industry, Oil Minister Bijan Namdar Zanganeh said last month.
Iran is likely to test the appetite of foreign oil groups this week during a conference before the OPEC meeting in Vienna attended by the bosses of the world’s largest publicly-listed oil companies, including Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., BP Plc and Total SA.
Iranian officials working on the contracts at government ministries weren’t available when contacted by phone or e-mail.
View Full Article
Copyright 2016 Bloomberg News.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you