Iran Reschedules 1st IPC Tender

First IPC tender was scheduled to be held in mid-October.First IPC tender was scheduled to be held in mid-October.

The first tender of Iranian oilfields under the new model of contracts—Iran Petroleum Contract—will be held seven to 10 days later than initially planned, managing director of National Iranian Oil Company said on Wednesday.

“The first tender was scheduled to be held in mid-October, but following the delay in receiving the credentials of foreign companies for participation in tenders, the tender will be delayed by a week or 10 days,” Ali Kardor was also quoted as saying by ISNA.

Kardor added that international oil and gas firms interested in taking over Iranian projects have not submitted their documents to NIOC, which will materialize next week (October 1-7).

NIOC says it will vet foreign companies for operation in oil and gas projects under the IPC model as a more attractive replacement for lackluster buyback contracts that have been in place over the past two decades.

Underscoring that the first oilfield to be tendered is South Azadegan Oilfield, Kardor said no decision has so far been taken on next oil/gas fields.

According to Kardor, it depends on the bidding of participants in the first tender. Located 80 kilometers west of Ahvaz in oil-rich Khuzestan Province, the Azadegan joint field holds an estimated 33 billion barrels of oil in place. French energy firm Total S.A. and the China National Petroleum Corporation reportedly have shown strong interest in the sought-after oilfield.

  IPC Process

Tehran issued a list of some 50 oil and gas projects for development under the IPC framework last year. It hopes to sign two or three deals with multinationals by the yearend.

IPC has already got the backing of senior officials and organizations over the past several weeks following criticism of the contractual framework by the political opponents of the government. Under IPC, foreign contractors should partner with an Iranian firm in oil and gas development projects and share knowhow.

Mehrdad Emadi, a senior Iranian economist at the Betamatrix International Consultancy in London and former advisor to the EU, said in an interview with ILNA last week that Iran’s new oil contracts will help the country expand its footprint on the global energy map and work as a bulwark against international sanctions that can be snapped back.

“We should look at the new contracts as a transitional phase—from selling heavy crude to exporting products with higher value added. IPC will enhance our technical capability and create many jobs,” he said.

Emadi added that IPC will help turn foreign firms into Iran’s envoys in the international community.

“This will hedge us against potential restrictions because it will be against their interests, if sanctions are reimposed,” he said. Tehran aims to boost its combined crude oil and gas condensates production to 5.8 million bpd in five years. It is now pumping 3.85 million bpd, according to government data.