Iranian Gov't to Approve New Oil Contracts

 Iranian Gov't to Approve New Oil Contracts Iranian Gov't to Approve New Oil Contracts

Oil Minister Bijan Namdar Zanganeh said on Monday the government would endorse the new model of contracts for Iran's oil and gas projects within the next few days in what could be a final seal of approval for the disputed 'Iran Petroleum Contract' that has long been in the making.

"IPC will be discussed in a cabinet meeting this week and process will begin to set the contracts in motion after approval," Zanganeh was quoted as saying by the semi-official ISNA news agency.

Last month, the Resistance Economy Headquarters—a top government economic advisory body—approved the IPC the after some amendments. It is now awaiting government approval.

The body oversees Iran's major economic plans and policies to ensure they are in line with the principles of the "resistance economy"—a set of guidelines proposed by the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei to counter sanctions and boost domestic production.

Iran will gradually put out to tender dozens of new oil and gas projects it introduced in an international conference in Tehran last year.

"We will not hold tenders for several oil projects in the first round. This will be done gradually," the minister said.

Sitting on the world's largest natural gas reserves and the fourth-largest crude reserves, Iran is planning to expand its footprint in the global energy market after punitive restrictions on its nuclear program were lifted in mid-January following a landmark agreement in July 2015 with world powers to scale back its nuclear activities in exchange for sanctions relief.

Planning for the new contracts started after President Hassan Rouhani took office in mid-2013. IPC was designed as a replacement to the lackluster buyback contracts which have been in place for more than 20 years. But according to reports, both models will be in effect for the new oil and gas projects.

Iran lined up some 50 projects in its upstream petroleum industry in November to be tendered under the IPC framework. Some of the projects were expected to be put out to tender in February, but opposition to the terms in the new contracts by some powerful economic lobbies and the political opponents of the Tehran government led to the postponement of the bidding process.

The first oil and gas deals under the IPC model are expected to be signed within three months.