Iran Gives Investors Glimpse of $30 Billion in Oil Deals

Iran Gives Investors Glimpse of $30 Billion in Oil Deals
Iran is targeting about $30 billion in investment by offering 70 oil and natural gas projects to international companies as the Persian Gulf country anticipates the lifting of economic sanctions.

(Bloomberg) -- Iran is targeting about $30 billion in investment by offering 70 oil and natural gas projects to international companies as the Persian Gulf country anticipates the lifting of economic sanctions.

Iranian officials presented the projects at a two-day conference in Tehran as part of an effort to attract more than $100 billion to revive the energy and petrochemicals industries and generate much-needed government income. Oil Minister Bijan Namdar Zanganeh introduced them along with a new type of investor contract offering better incentives than the buy-back agreements Iran offered in the past. The work covers 52 production and 18 exploration projects, both onshore and in the Gulf and Caspian Sea.

Iran is offering a negotiable framework for new oil deals rather than a uniform contract for all investors, Roknoddin Javadi, managing director at National Iranian Oil Co., said Saturday in Tehran. The government may modify the framework and plans to present more details in February at a conference in London, Seyed Mehdi Hosseini, chairman of the ministry’s Oil Contract Restructuring Committee, said Sunday in an interview.

Here are five things to know about this turning point in Iran’s campaign to upgrade its energy industry:

* The new investor contract will give companies a share of the oil they produce and let them sell it globally, Hosseini said in Tehran. International companies will be paid in cash or in kind based on a fee per barrel, Talin Mansourian, a consultant with Hosseini’s committee, said Saturday. Iran would reduce the fee if oil prices fell by more than 50 percent and increase it if prices rose by a corresponding amount, Mansourian said.

Iran’s old buy-back deals paid companies a fixed fee regardless of how much oil they produced and offered them no incentive to exceed output targets. Buy-backs also paid no compensation to companies that spent more than budgeted amounts to develop a field.

Under the new contracts, the NIOC won’t limit capital spending and will approve budgets on a yearly basis, though companies still won’t receive a higher fee if they produce above their output targets, Hosseini said.


123

View Full Article

Copyright 2016 Bloomberg News.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post 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.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Project Management
Location: Houston, TX
 
Project Accountant
Expertise: Accounting
Location: Nashville, TN
 
US Conroe: Accountant - Sr. Accountant
Expertise: Accounting|Financial Analyst
Location: Conroe, TX
 
search for more jobs

Brent Crude Oil : $53.89/BBL 1.67%
Light Crude Oil : $50.84/BBL 2.14%
Natural Gas : $3.7/MMBtu 2.77%
Updated in last 24 hours