NIOC Preparing Oil Tenders

NIOC Preparing Oil TendersNIOC Preparing Oil Tenders

Iran is expected to receive bids from international companies to develop its oilfields on the Sirri Island in the Persian Gulf in what would be the country's first oil tender after the lifting of sanctions in January.

The project, with an estimated value of $189 million (€170 million), involves drilling 12 oil wells in Sirri to raise crude production in the region by 10,000 barrels a day, Mehr News Agency cited the National Iranian Oil Company as saying.

The report added that the Iranian Offshore Oil Company is finalizing the details of the tender that also includes the repair of 18 wells in Sirri. The project is set to be carried out in three years with a return on investment of €210 million. The report could not be independently verified.

Iran is apparently planning to solicit bids for the Sirri project under a contractual framework different from its new oil contracts, known as Iran Petroleum Contracts, which offer better financial terms for cooperation in the long run.

In related news, Bloomberg said Iran plans to invite international companies to bid for oilfield development rights in June.

The Oil Ministry will solicit bids in a tender starting June 21 and running for a month, Bloomberg cited Mehdi Hosseini, chairman of the ministry’s oil contracts revision committee, as saying.

"NIOC is working on a model investment contract for any development agreement," he said.

Iran is rebuilding its oil and natural gas industries and restoring sales of crude after international sanctions were lifted in January.

The country, which will meet other OPEC members this week in Vienna, is targeting an increase in production and exports to pre-sanctions levels. It refused to join other producers in a push to freeze output at a meeting in Doha, Qatar, in April.

Foreign companies have been awaiting details of the new contracts and bidding rules since Iran in November introduced 52 oil and gas projects to be offered under the IPC.

The Persian Gulf country had planned the second conference in London for February, but it was cancelled due to what Iranian officials blamed on difficulty in getting visas from the British Embassy. International conferences planned as early as 2014 never took place due to sanctions.

  Wary Investors

A senior international analyst said Iran is an exciting market for internationals, but investors are still cautious of doing business with Iran as uncertainties loom about the prospect of investment in the country.

“There’s plenty of opportunity in Iran,” Edward Bell, a commodities analyst at Emirates NBD PJSC in Dubai, said.

“It’s been two years now that we’ve been waiting for these contracts.”

Potential investors may now hesitate to commit to Iran out of concern that the US may toughen its policy toward the country after choosing a new president in November, Bell added. Iran needs about $185 billion in investment to upgrade its oil, gas and petrochemical industries by 2020, the Oil Ministry’s news service Shana reported, citing Amirhossein Zamaninia, deputy oil minister in charge of commerce and international affairs.

Iran’s crude production rose to 3.38 million barrels a day in May from 3.35 million in April, JBC Energy GmbH said Tuesday in an emailed report. The nation pumped 3.6 million barrels a day at the end of 2011, before the US and the EU intensified their sanctions, according to data compiled by Bloomberg. Iran is currently the third-biggest producer in OPEC, after Saudi Arabia and Iraq.