Tehran Expects Oil Deals Worth $25b in 2 Years

Tehran Expects Oil Deals Worth $25b in 2 YearsTehran Expects Oil Deals Worth $25b in 2 Years

Iran expects foreign oil companies to sign deals valued at $25 billion in the following year under the terms of a new contract model approved last week, the managing director of National Iranian Oil Company said.

"The state energy producer plans to tender contracts over a period of six months to a year to develop several oil and gas fields," Bloomberg also quoted Ali Kardor as saying on Tuesday.

"NIOC has identified 34 foreign companies as suitable bidders," he added, stressing that it is also seeking investments under existing models.

Iran approved the new contract model on Aug. 3 to attract foreign investment and technology to rebuild its energy industry, the largest sector of the economy. The government hopes foreign companies will invest as much as $50 billion a year in Iran’s oil industry. Major European oil companies such as Italy’s Eni SpA and France’s Total SA have expressed interest in developing Iran’s oil and gas fields.

"NIOC has identified 12 to 13 fields as a priority for the first round of investment," Kardor said, without naming the fields.

Oil Minister Bijan Namdar Zanganeh last week said Iran has prioritized joint oil and gas fields, as well as production from fields where recovery rates could be improved.

International oil companies must form a joint venture with an Iranian partner under the new contract model. The government has approved eight Iranian exploration and production firms as eligible partners, and Kardor said this number will likely increase.

Iran has already succeeded in meeting its pledge to regain market share it lost due to the sanctions over its nuclear program. It boosted crude output to 3.85 million barrels a day, Fars News Agency reported on Wednesday, citing statements made by Zanganeh in the parliament.

That would be the highest since December 2008, according to data compiled by Bloomberg.