Iran is preparing to start soliciting bids from international companies for rights to develop its oilfields by the end of March 2016.
The Persian Gulf nation, once OPEC’s second-largest producer, wants to begin organizing bids by the next Iranian year starting March 20, Seyyed Mehdi Hosseini, chairman of the Oil Ministry’s Oil Contracts Revision Committee, said Wednesday in an interview in Tehran, Bloomberg reported.
"It is seeking to sign oilfield development contracts within two years at the latest," he said. “We have flexibility in that contract to adjust. I don’t think any two contracts will be the same.”
Iran, with the world’s fourth-largest reserves of oil, is gearing up to boost output once world powers lift the sanctions they imposed to deter the nation’s nuclear program. Oil exports fell to an average 1.4 million barrels a day last year from 2.6 million in 2011, US Energy Information Administration data show.
Hosseini said Iran’s new oil contracts will allow international companies to invest for 20 years with the option of extending for an additional five. "Companies will share in the benefit of an increase in oil prices, but must also help bear the risk of a decrease," he said.
"Investors will be able to negotiate directly for contracts with Iranian authorities and will not be limited only to bidding. Iran will not allow them to escape their contractual obligations if sanctions are ever re-imposed on Iran."
Hosseini said earlier Iran will require oilfield investors to team up with pre-selected local partners.
"The government has approved the new contract framework, though National Iranian Oil Company still must agree to it," he said.
Hosseini presented the contract plan earlier on Wednesday at a conference in Tehran attended by representatives from BP, Eni, Wintershall AG, Sojitz Corp. of Japan and Korea Gas Corp. as well as Iranian contracting and production companies.
"Iran plans to formally present the contract on Nov. 28-29 in Tehran," he said.
