Russians Get First Glimpse of IPC

The National Iranian Oil Company made an exclusive presentation of the new model of oil and gas contracts to a 35-member delegation of Russian energy companies in Tehran on Thursday, said the company’s director for engineering and development.

“A group of Russian oil and gas companies who had expressed interest in more information about the terms and conditions of Iran Petroleum Contract traveled to Iran for the one-day presentation (on Thursday),” Gholamreza Manouchehri was quoted as saying by Shana.

IPC is an upgrade to the unappealing buyback model that was used as the primary framework to develop most oil and gas projects in Iran over two decades. Details of what IPC entails have not been made public so far.

The government of President Hassan Rouhani devised IPC to attract major international companies to develop the key energy sector hurt by years of financial and trade restrictions.

The Russian team, made up of top executives from Lukoil, Gazprom, Rosneft, Gazprom Neft, Zarubezhneft and Tatneft, was briefed on some of the financial and legal aspects of IPC as well as the rate of extraction at the oil and gas fields.

Representatives from the Chamber of Commerce and Industry of the Russian Federation were also present.

Stressing that such meetings contribute to expanding bilateral ties in the petroleum industry, Manouchehri added, “Russia, as a strategic partner and a nation with over 10 million barrels of daily oil production, has made very good progress in enhanced oil recovery (EOR) and improved oil recovery (IOR) technology, which can help Iran increase output from its oilfields.”

“Iran has signed memoranda of understanding with some Russian oil and gas companies, namely Lukoil, Zarubezhneft and Tatneft, which we hope will turn into contracts soon,” Manouchehri said.   

Russia’s second-biggest oil producer, Lukoil, sealed an exploration agreement worth $6 million with the NIOC in January.

As per the terms of the contract, Lukoil is tasked with identifying hydrocarbon reserves and assessing subsurface geological structures in West Karun oil block in the southern Khuzestan Province.

Vagit Alekperov, Lukoil’s managing director, told Sputnik in October that his company plans to sign agreements with Iran in the fall of 2017 to develop Ab Teymour and Mansouri oilfields.

In July, NIOC and Zarubezhneft signed a nondisclosure agreement as part of a deal that will allow the Russian state-run oil company to conduct studies to develop two of Iran’s joint oilfields with Iraq, Aban and West Paydar oilfields.

According to Manouchehri, the two companies are in talks for boosting extraction from the two oilfields.

It reportedly targets the development plan of Changuleh Oilfield in Ilam Province.

Ali Kardor, head of the state-owned NIOC, said in October that Tatneft and NIOC had signed a preliminary agreement to cooperate in development of the Dehloran oilfield in Ilam.

The development project includes major maintenance on old oil wells, drilling new wells as well as construction of new desalination units and living quarters. Kardor also said there is the possibility of Tatneft cooperating with Iranian companies to manufacture equipment for the oil sector.