Iran is targeting an investment of $185 billion in its upstream, midstream and downstream oil sectors over the next five years, deputy oil minister for international affairs announced on Sunday.
“We can attract $40-50 billion in oil investment per annum,” Amirhossein Zamaninia was also quoted as saying by Shana.
Zamaninia added that the final draft of Iran Petroleum Contracts is expected to be prepared in one and a half months and the first oil contract will be signed in early autumn.
Raising the production rate of the joint fields is the high-priority issue in IPC tenders.
Iran unveiled its new contracts for more than 50 oil and gas development projects in a major conference in November 2015. Government officials say the new contracts are more appealing to international investors compared to the buyback contracts that were in place for the past decades.
The IPC has been a subject of debate over the past few weeks. Opponents proclaim the new framework is essentially a concession of hydrocarbon reserves to foreign contractors. Proponents say the development of oil and gas fields is bound to using foreign technology and investment.
Underlining the improved condition of the industry following the lifting of the sanctions in January, the official noted that the Persian Gulf country has managed to double its oil export from 1 million barrels a day under sanctions regime to the current 2 million barrels only in three to four months after constraints against Iran’s oil and trade sectors were removed.
“Prior to the implementation of the Joint Comprehensive Plan of Action, the country’s export of gas condensates was 230,000 barrels per day, while the volume has now reached 450,000 barrels,” he said.
Zamaninia also commented on the insurance limitations Iranian tankers were grappling with due to the embargoes imposed by the West, saying problems concerning the issue have been alleviated, except that the American insurers and their affiliates still refuse to cover Iran’s tankers.
Costs Reduced to One-Third
The deputy oil minister said JCPOA has significantly reduced Iran’s costs for transferring money, adding that currently Iran has access to the main providers of equipment with no need to contact the middlemen, which has cut costs to one-third of the past.
The official, who was speaking at an international conference in Allameh Tabatabai University in Tehran, highlighted the fact that IPC is due to be studied in other universities, including those in Ahvaz, Shiraz and Isfahan.
However, he criticized the protracted process of surveying the terms of the contracts, noting that after two years of scrutiny, no contract under the new terms has been signed, which can be referred to as sanctions imposed by insiders.
Underscoring the importance of scrutinizing the legal implications of IPC terms, Zamaninia called for accelerating the process and starting negotiations with international giants to safeguard national interest.
$8-10 Billion Loss per Month
Seyed Mehdi Hosseini, head of the Oil Contracts Revision Committee, said at the conference that Iran’s loss over every month of delay in implementing the new contracts amounts to $8-$10 billion. According to Zamaninia, IPC encompasses general circumstances under which foreign and domestic companies will work on the oil and gas fields, thus the contracts differ in their details.
“In an era of $40-per-barrel oil, nations are in intense competition to absorb investment, as investment levels have met a sharp decline with the fall of oil prices,” he said.
However, the official added that Iran has advantages over other rival producers, which include huge oil and gas resources as well as more political and national stability compared with other regional countries.
Elham Aminzadeh, Iran’s vice president for legal affairs, also noted that the new contractual framework will be revised based on the guidelines of the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei for creating more transparency in the contracts.
