Iran seeks $25bn as new oil con­tract un­veiled

Kuwait Times - - FRONT PAGE -

TEHRAN: Iran un­veiled a new model of oil con­tracts yes­ter­day aimed at at­tract­ing for­eign in­vest­ment once sanc­tions are lifted un­der a land­mark nu­clear deal reached ear­lier this year and said US com­pa­nies would be wel­come to par­tic­i­pate. The new Iran Petroleum Con­tract re­places a pre­vi­ous buy­back model, in which con­trac­tors paid up-front in­vest­ment costs in re­turn for pro­ceeds from the oil pro­duced un­der the deal.

Iran has sweet­ened the terms, hop­ing to bring in $30 bil­lion in new in­vest­ment. The new con­tracts last 15-20 years and al­low for the full re­cov­ery of costs. The older con­tracts were shorter term, and in­vestors com­plained of heavy risks and suf­fer­ing losses. Some 50 up­stream oil, gas and petro­chem­i­cal projects are be­ing in­tro­duced dur­ing a two-day con­fer­ence in Tehran that be­gan yes­ter­dayt. Iran will pay for­eign oil com­pa­nies larger fees un­der the new con­tracts to pro­vide greater in­cen­tives to in­vestors. Oil Min­is­ter Bi­jan Nam­dar Zan­ganeh told the con­fer­ence that un­der the new con­tracts, for­eign in­vestors will be re­quired to form a joint com­pany with an Ira­nian part­ner to carry out ex­plo­ration, de­vel­op­ment and pro­duc­tion oper­a­tions.

“Any for­eign com­pany that wants to work in Iran in this new pe­riod must have an Ira­nian E&P (Ex­plo­ration & Pro­duc­tion) com­pany on its side as a part­ner,” he told the con­fer­ence. “To con­tinue to play the role (as a ma­jor oil sup­plier), we hope to enjoy work­ing with rep­utable in­ter­na­tional oil com­pa­nies un­der a win-win sit­u­a­tion.” Zan­ganeh wel­comed US in­vest­ment in Iran’s en­ergy sec­tor. “We have no ob­jec­tion to and prob­lem with the par­tic­i­pa­tion of Amer­i­can com­pa­nies. The way for the pres­ence of th­ese com­pa­nies in Iran’s oil in­dus­try is open,” he said. Mahdi Hos­seini, a se­nior of­fi­cial in charge of the new con­tracts, told the con­fer­ence that the new model is an at­tempt to re­pair Iran’s re­la­tions with the in­dus­tri­al­ized world.

“The new model of oil con­tracts is an in­stru­ment to re­pair (our) re­la­tions with the in­dus­tri­al­ized world,” he said. Iran is hop­ing to at­tract over $150 bil­lion in for­eign in­vest­ment in five years to re­build its en­ergy in­dus­try, which has suf­fered from sanc­tions.

OPEC mem­ber Iran cur­rently ex­ports 1.1 mil­lion bar­rels of crude oil per day and hopes to get back to its pre-sanc­tions level of 2.2 mil­lion, last reached in 2012. Iran’s to­tal pro­duc­tion now stands at 3.1 mil­lion bar­rels per day. In­ter­na­tional sanc­tions on Iran’s oil in­dus­try were tight­ened in 2012 over its con­tro­ver­sial nu­clear pro­gram. Western na­tions have long sus­pected Iran of se­cretly pur­su­ing nu­clear weapons, charges de­nied by Tehran, which in­sists the pro­gram is en­tirely peace­ful.

Un­der the agree­ment reached in July with the US, Bri­tain, France, Ger­many, Rus­sia and China, Iran will curb its nu­clear ac­tiv­i­ties in ex­change for the lifting of sanc­tions. Zan­ganeh said last week that Iran will ex­port an ad­di­tional 500,000 bar­rels of oil a day af­ter sanc­tions are lifted - likely in early 2016 - to re­claim its mar­ket share de­spite low prices.— AP

MOSCOW: A trader pre­pares veg­eta­bles for cus­tomers at Doro­gomilovsky food mar­ket in Moscow on Fri­day. Since the plane was shot down Tues­day on the Syria-Tur­key border, Rus­sia has al­ready re­stricted tourism, left Turk­ish trucks stranded at the border and con­fis­cated large quan­ti­ties of Turk­ish food im­ports. —AP

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