Iran is planning to open the bidding process for nearly 15 oil and gas projects to international companies in summer, Oil Minister Bijan Namdar Zanganeh said.
"In the first round of tenders, 10 to 15 projects will be introduced to develop the existing fields, while exploration projects will be offered in the future," Zanganeh said in an interview with ISNA.
The priority in exploration and production (E&P) projects will be to develop joint fields.
"The first round of tenders will be held in summer," he said, adding that the first tender could be held as early as mid-July.
The tenders are aimed to bring back major international companies to help develop Iran's hydrocarbon reserves after years of sanctions that undermined investment in the key oil and gas sector.
Iran is planning to boost crude production to 5.8 million barrels per day in five years, including 4.8 million bpd of heavy crude and 1 million barrels of condensate—a type of light, sweet crude extracted from gas fields in the Persian Gulf.
Tehran is also targeting an output of 1 billion cubic meters per day of gas by 2021.
The new contracts will be signed under the Iran Petroleum Contracts (IPC), a new contractual framework that offer more attractive terms to foreign firms for investment and partnership in Iran's energy industry.
------- IPC Revisions
The government is still working on the IPC draft which was met with domestic opposition, the minister said, adding that some terms of the new contracts will be flexible based on proposals of foreign contractors.
He said some criticism to the IPC has been addressed since its first unveiling late November. "There were some legal issues regarding foreign investment in the oil industry which have been partially resolved."
Enforcing a two-step verification process for new contracts was another important revision to the IPC.
Initial IPC drafts stipulated that each contract had to get the stamp of approval from a workgroup that is especially formed to oversee the new contracts. But according to revisions, the contracts must get the green-light from the state-owned National Iranian Oil Company as well.
Iran for the first time lifted the curtain on its new oil and gas contracts in an international conference in Tehran last year. But the new framework has since faced setbacks.
The government was set to display more details of IPC in a second conference in London and possibly start receiving bids in February, but the conference was postponed to an unspecified time and venue.
IPC is a replacement to the so-called buyback contracts that have been in place for the past 20 years. But Zanganeh said older investment models will not be entirely sidelined.
"We are open to buyback or other models in our projects," Zanganeh noted. "Some of the critics were accusing us of betrayal. We could not have a discussion with them. The other group had raised some issues on the model of these contracts and we held meetings with them."
------- E&P Company
One of the prerequisites of IPC is the partnership of foreign contractors with Iranian firms. Zanganeh hoped the new contracts will pave the way for forming a major Iranian exploration and production company "108 years after the first oil extraction in Iran."
"We don't need 7-8 E&P companies … one company can and will develop the industry," he said, referring to the limited number of E&P corporations in the world.
Data show that, for instance, South Africa has one E&P company (Sasol), with the number also limited in countries such as Saudi Arabia (1), Kuwait (1), Qatar (1) and Iraq (4).
Zanganeh said Iran's oil industry was hit the hardest during the second term of former president Mahmoud Ahmadinejad in office, when the US and EU sanctions were tightened.
"The industry incurred the most losses between 2009-13. Contribution of Iranian firms in oil and gas projects was reduced to 30% from 50%" after an increasing number of Chinese contractors took over energy projects in those years."
