1st IPC Deals in 2 Months

1st IPC Deals in 2 Months1st IPC Deals in 2 Months

Iran will start to receive bids for some of its oil projects in two months under a new model of contracts, said the deputy oil minister for international affairs.

"Iran's oil projects will certainly be offered to international companies in two months and major deals will be signed in the current (Iranian) year" that ends on March 20, 2017, Amirhossein Zamaninia was also quoted as saying by Shana on Saturday.

Iran has sweetened the terms of its oil and gas contracts under a new contractual model, dubbed Iran Petroleum Contracts, hoping to attract foreign technology and billions of dollars in investment to spur growth in its sanctions-hit energy sector.

The new model gradually started to take shape after President Hassan Rouhani took office in mid-2013. In 2014, a special committee was formed to revise the lackluster buyback model that has been the main model of contracts in Iran's oil industry for over 20 years.

Iran for the first time unveiled the outlines of IPC, along with some 50 oil and gas development projects, in an international conference in Tehran last year. The first round of tenders under the IPC was slated for February, but some domestic opposition groups pushed for revisions to the terms of the contracts, forcing the government to delay the tenders.

"Oil tenders will be held after IPC gets the approval of parliament," he said.

Zamaninia noted that the global downturn in oil market has thwarted investments in upstream projects, as most international oil companies have slashed thousands of jobs and billions of dollars in budget to keep their heads above water.

From a high of $115 per barrel in mid-2014, global crude benchmark Brent hit a low in January untouched since 2004. Oil has since pared some losses, trading at $40-50 in the past few weeks, but many companies say that is not enough to resume operations or start new projects.

------- Cooperation With Germany

Zamaninia said German companies are in a strong position to undertake Iranian projects, as the European powerhouse was the first to send a trade delegation to Tehran following the removal of nuclear-related restrictions in January.

"We have formed close ties with German firms, especially Siemens, and a roadmap for cooperation has been drawn," he said.

State-run National Iranian Oil Company and National Iranian Gas Company signed a memorandum of understanding with Siemens in May on supply of equipment and overhaul of oil and gas facilities.

Zamaninia also said Euler Hermes, Germany's state-owned insurance company, is ready to resume operations after Iran cleared a debt of around $567 million it owed the firm and was unable to pay due to financial and banking restrictions.