International Firms Will Be Vetted for Oil, Gas Projects

International Firms Will Be Vetted for Oil, Gas ProjectsInternational Firms Will Be Vetted for Oil, Gas Projects

A senior oil official announced on Tuesday that the process of vetting foreign companies for Iran’s oil and gas projects under the new Iran Petroleum Contract will start in late May.

Ali Kardor, director for investment and finance at National Iranian Oil Company, also told ISNA that prior to holding an IPC tender for upstream projects, Iran should prepare a list of well-known oil companies.

The IPC aims to attract foreign capital, services, knowhow and technology, integrate the exploration, development and production phases, and reduce investment risk by offering more flexibility in terms of cooperation.

The new contract has been a subject of debate over the past few months. Opponents proclaim the new framework is essentially a concession of hydrocarbon reserves to foreign contractors and a return to the old days before the oil industry was nationalized; proponents say the development of oil and gas fields is bound to attract foreign technology and investment.

In late December 2015, Tehran unveiled 52 oil and gas projects worth an estimated $185 billion in a two-day conference that brought together more than 1,300 officials and representatives from 335 domestic and foreign companies.

Iran is one of the richest countries worldwide in terms of oil and gas reserves, making the country a hotspot for energy investment after the sanctions relief.

“The vetting process, which takes a month to be completed, focuses mainly on three factors: reservoir management, equipment and cutting-edge technology,” Kardor said, adding that the enterprises must be of exploration and production type.

An exploration and production company is known to be in a specific sector within the oil and gas industry. Companies involved in the high-risk/high-reward area of exploration and production focus on finding, augmenting, producing and merchandising oil and gas.

Explaining the procedure of selecting international oil and gas companies, the official said Iran first collects information on the companies and then divides them into three groups in terms of size, before permitting them to operate in the Persian Gulf country.

Kardor stressed that Iran will not put its energy projects to international tender before verifying the list of companies capable of implementing the country's strategic oil and gas projects, adding that Iran is yet to determine the fields to be offered under the new contractual terms.

The official added that about 10-12 Iranian oilfields, which are either joint fields or developed ones that need to boost their rate of recovery, have priority over other projects.