Conditions Outlined for Foreign Oil, Gas Cooperation

Conditions Outlined for Foreign Oil, Gas CooperationConditions Outlined for Foreign Oil, Gas Cooperation

A deputy oil minister outlined Iran’s five prerequisites for delegating development plans in oil and gas fields to international companies in the post-sanctions period.

Describing Oil Ministry’s expectations of foreign companies, interested in making investment in Iranian oil and gas projects, Rokneddin Javadi, who also serves as the managing director of the National Iranian Oil Company, said health, safety and environment, aka HSE, is a “keyword” in the ministry’s new contracts.

“All foreign companies are committed to adopting HSE regulations in a transparent and serious manner in the development contracts of the upstream Iranian oil industry,” he said, predicting an increase in local industrialists’ share in the implementation of oil and gas projects, Mehr News Agency reported.

Based on the law, the minimum share of domestic contribution in oil and gas joint ventures is 51% while in projects currently underway, Iranian contractors hold at least 65%.

Javadi noted that Iran expects the percentage to reach 70%, stressing that plans call for boosting participation to 80% in future.

“Transfer of science and technology is the third prerequisite for oil and gas contracts, as international companies used to do in the past,” he said. “Of course, we welcome these companies’ new investments, if they intend to manufacture commodities in the country.”

Iran’s top priority in establishing ties with foreign companies is to receive state-of-the-art technology.

Earlier in October, Eni officials, who participated in a conference in Tehran, said the Italian giant had always used the most advanced technologies in all of its projects in the Persian Gulf country.

Stephane Michel, the head of Middle East’s exploration and production division at Total, said the French supermajor is ready to finance Iranian oil projects and transfer technology to Tehran. Similar to Eni officials, Michel pledged that Total will introduce cutting-edge drilling and extraction technologies to slash production costs at Iran’s oil and gas fields.

Javadi said Iran needs to develop its oil and gas fields, but construction of infrastructure is also urgent.

“Therefore, we expect that developing infrastructure will be accounted as part of the fields’ development in the prospective contracts,” he said. Employing the latest operational standards in development plans of oil and gas fields is crucial, while the use of modern management techniques will help Iranian companies operate competitively at the global level.