Making serious attempts to attract foreign investment to develop joint oil and gas fields with the help of Iran's new oil contracts—known as Iran Petroleum Contracts or IPC—will help secure national interests by protecting hydrocarbon resources, a member of the parliamentary panel said on Saturday.
“Now that we have access to neither the much-needed fund nor the cutting-edge knowledge to develop the joint fields, we can take advantage of foreign oil giants' expertise to extract our valuable hydrocarbon resources instead of letting them be plundered,” Gholamali Jafarzadeh Imenabadi was also quoted as saying by Shana.
"Interestingly, this is the approach followed by most of our developing and underdeveloped neighboring states."
He pointing to the fact that neighbors have invested heavily to exploit the fields.
"If we were in a better economic condition, more lucrative contracts could be drawn up. Nevertheless, now that we cannot afford the massive expenses, relying on international companies to help extract as much oil and gas as we can is definitely much better than having no shares from the joint fields whose reservoirs will be depleted sooner or later," he said.
Underscoring the fact that attracting foreign investment via IPC has been politicized, the official said, “Those who are not willing to let the initiative be finalized cannot prioritize crucial issues. The least advantage of getting help from international oil and gas giants to develop joint fields is that the plunder of our natural resources by neighboring states will end. In other words, they will not own the lion's share of the fields anymore.”
Production Share
Stressing that having a small share from joint fields is better than holding no stakes, Imenabadi noted that nothing beats securing national interests and IPC has been drafted to bring back foreign companies to Iran's oil and gas projects following years of limited cooperation with multinationals and inadequate investment in the key sector.
The new contractual framework has faced strong opposition inside the country. On the other hand, advocates of IPC argue that Iran needs to make up for years of underinvestment in the energy sector by sweetening the terms of oil and gas contracts.
IPC started to take shape after President Hassan Rouhani took office in mid-2013. In 2014, a special committee was formed to revise the lackluster buyback model that has been the main model of contracts in Iran's oil industry for over 20 years. The new model has got the approval of several bodies after months of strict oversight.
The outlines of IPC were approved in a Cabinet meeting earlier this month shortly after it got the green light from Resistance Economy Headquarters—a top government economic advisory body—after some amendments.
Iran for the first time unveiled the outlines of IPC, along with some 50 oil and gas development projects, in an international conference in Tehran last year.
The first round of tenders under the IPC was slated for February. The government now expects to start the bidding process for some oil and gas projects under the IPC framework within two months.
