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UK-Based Expert: Dispute Over IPC Not in Nat'l Interest

UK-Based Expert: Dispute Over IPC Not in Nat'l InterestUK-Based Expert: Dispute Over IPC Not in Nat'l Interest

Senior investors and business leaders in oil and gas industry will not wait for Iran's domestic political disputes to be settled, a faculty member at University of Stirling in the UK said.

In an interview with the Iranian Oil Ministry's news agency Shana in Tehran, Kazem Oraei added, "Our perspective on investment opportunities should be based on economic priorities and as long as the attitude is overshadowed with baseless non-technical concerns, development projects cannot get off the ground."

Oraei stressed that those who believe foreign and domestic financiers will wait for the politicians to resolve their seemingly never-ending disagreements and formulate new policies are mistaken.

He added that the investment market has proved to be highly volatile and as soon as investors grasp a better opportunity, they will not hesitate to transfer their capital to those ventures.

Pointing to opponents' perception of the new Iran Petroleum Contract, the expert noted that based on IPC terms, investors can keep exploring and exploiting oil reserves for 25 years, which is completely rational from the scientific point of view and the period can even be extended.

According to Oraei, the first five years of operations in oil and gas upstream sector incur enormous expenses.

"During the second five-year period, risk taking is high, yet the output is low. To put it simply, the investor has only 15 years to make money not only to cover its costs but also to reap the benefit," he said.

The expert further said those who analyze technical issues based on political considerations and believe 25 years are equal to 25 centuries will only cause paranoia about other states' plot to plunder the country's resources.

Stressing that there is no such thing as plundering in today's economics and international investors seek win-win deals, Oraei said if the new contracts are not drawn up based on win-win approaches due to groundless political concerns and baseless criticisms, foreign investors will definitely lose their enthusiasm to inject their money into Iran's development initiatives.

"Investors are smart enough not to embark on long-term ventures whose profit margin is not guaranteed," he said.

"There are a large number of choices on the table for oil giants and naturally they will opt for the most economically viable ones as they are not charity organizations to donate their state-of-the-art technology to us."

Noting that there is no difference between foreign and domestic financiers as their ultimate goal is the same, Oraei said what matters is that the development task should be carried out by those who are willing to transfer the cutting-edge technology to the country without relying on middlemen.

The expert believes that some mix up national interests with personal and ideological benefits.

According to Oraei, Iran's oil and gas industry is in dire need of attracting massive investment, which is not just money as it includes technological issues as well.

To build the future prosperity of the country, practical approaches need to be taken.

The University of Stirling is a UK research-intensive campus university ranked among the top 60 universities in the world that are under 50 years old by the Times Higher Education World University Rankings.

 

Financialtribune.com