IPC Unveiling in Tehran Before London Seminar

IPC Unveiling in Tehran Before London SeminarIPC Unveiling in Tehran Before London Seminar

Iran will lift the curtain on the framework of its long-awaited multibillion-dollar oil contracts in a seminar in the capital Tehran in November before a full-fledged unveiling later in London, deputy oil minister said on Thursday.

“We are planning to exhibit the new Iran Petroleum Contract (IPC) primarily in Tehran and about two months later (in a seminar) in London,” Rokneddin Javadi was quoted by ISNA as saying on the sidelines of a ceremony marking the fifth anniversary of the Iranian Offshore Oil Company.

Since March 2014, the Oil Contracts Revision Committee Group, a subsidiary of the Oil Ministry, was expected to hold an international seminar on Iran's oil and gas industry and its potentials for a post-sanctions era.

IPC was the main topic of the scheduled conference. Up to 50 projects valued at $40 billion are to be offered.

Some of these pertain to the development of the remaining South Pars Gas Field phases, as well as other offshore and onshore fields. There are also projects for exploration and development of new fields.

The seminar was initially planned to be held in April 2014, and was rescheduled to February 2015, only to be postponed time and again.

Major international oil and gas firms are eagerly anticipating the unveiling to claim a stake in Iran's rich energy projects following the lifting of decades-long western sanctions against the Islamic Republic.

Iran and six world powers reached a historic deal on July 14 in Vienna that would limit the Persian Gulf country’s nuclear program in return for removing sanctions on its energy and financial industries.

  Oil, Gas Production

Javadi said SP phases 15 and 16 will be fully launched in the next few weeks, hoping that phases 17 and 18 will become operational in the current Iranian year ending March 19, 2016. Gas sweetening trains of phases 19-21 are also expected to go on stream less than six months from now.

The official said the oilfields under development by the IOOC hold an estimated 100 billion barrels of crude, comprising roughly 15% of the country's total oil reserves.

"Boosting extraction rate (from IOOC fields) will increase oil production by 1 billion barrels," he said without elaboration. "We can raise the IOOC's output to 800,000 barrels of oil per day, from 500,000 at present."

Regarding the already oversupplied oil market and Iran's plans to boost crude output by 500,000 barrels per day shortly after the removal of sanctions, Javadi said, "Whether or not we ramp up production, low oil prices are here to stay, because supply is now significantly more than demand."

Tehran plans to produce up to 3.9 million barrels of oil a day by March, with output rising by 500,000 barrels a day soon after the sanctions are lifted and by 1 million barrels within the following five months.

Oil Ministry officials have already started negotiations to find buyers for the country's surplus output in the post-sanctions era.

The deputy minister stressed that Iran cannot afford to lose its international market share "just because prices are falling."

He predicted oil prices to swing around $40-45 over the next several months and said the Iranian crude is proportional to global prices.

Iran holds less than 10 million barrels of oil on its vessels, the official said, stressing that storing oil is a "common strategy" when demand is low.

The statement comes as New York-based information website Platts reported last month that Iran is stockpiling as many as 53 million barrels of oil and condensate at sea, up from a previous estimate of 40 million to 42 million, a claim the Iranian officials have previously denied.

  Talks With Indians

Javadi also mentioned India's renewed interest in developing Farzad-B Gas Field in the Persian Gulf.

"Negotiations with Indians commenced long ago … but came to an end after they stopped operations (at Farzad-B field) due to sanctions," he said.

Except allocating Farzad-B field to India's state-owned Oil and Natural Gas Corp, allocation of no other oil and gas field has been discussed with foreign companies.

Earlier this week, ONGC Videsh Ltd, the overseas arm of India's state company, submitted a $10 billion integrated proposal to Iran for developing the Farzad-B field, which was discovered by a consortium of Indian companies in the Farsi block in 2008.