Iranian Parliament's Energy Commission Lends Support to IPC

Majlis oversees and assesses the IPC and it does not need to be put to the vote.Majlis oversees and assesses the IPC and it does not need to be put to the vote.

The Majlis Energy Commission voiced his support for Iran's new model of oil contracts on Monday following reports that a group of lawmakers are taking action to limit the extent of the government's involvement in the contracts.

"According to Iran's Constitution and the Guardian Councils' interpretation of law, the new oil contracts do not need the approval of parliament," Fereydoun Hassanvand was quoted as saying by IRNA.

The Guardians Council is a top body in the Iranian establishment that vets laws.

The MP made the statements as a group of parliamentarians are reportedly collecting signatures for a bill to confine the Oil Ministry's freedom in drafting the terms of the contracts, dubbed Iran Petroleum Contracts.

The move comes as the government of President Hassan Rouhani hopes to wrap up the first deals under IPC before the yearend.

Hassanvand added that the proposed legislation "has to do with the patterns and the general framework of IPC and does not target details of the contracts".

IPC is aimed at bringing back foreign companies to Iran's oil and gas projects following years of limited cooperation with multinationals and limited investment in the key sector.

But the new contractual framework has faced strong opposition inside the country.

Some domestic opponents say IPC would allow foreigners cheap access to Iran's massive hydrocarbon resources under long-term contracts.

Advocates argue that Iran needs to make up for years of underinvestment in the energy sector by sweetening the terms of oil and gas contracts.

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In a similar statement last week, parliament member, Abdolhamid Khedri, said Majlis oversees and assesses the IPC and "it does not need to be put to the vote in parliament."

IPC 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.

The new model has got the approval of several bodies after months of strict oversight.

The outlines of IPC were approved in a Cabinet meeting earlier this month shortly after it got the green light from Resistance Economy Headquarters—a top government economic advisory body—after some amendments.

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. The government now expects to start the bidding process for some oil and gas projects under the IPC framework in two months.