The new Iran Petroleum Contract (IPC) model will be unveiled in February as scheduled, irrespective of the extension of the nuclear talks, the head of the Oil Contracts Revision Committee (OCRC) said.
The extension of the talks do not have any bearing on the London seminar and the unveiling of the IPC, Shana news agency quoted Seyed Mehdi Hosseini as saying Tuesday. The IPC is to be displayed for the first time in London, from Feb. 23 to 25, 2015, "if the sanctions are removed," he had said earlier in November.
Iranian officials, including Hosseini, had said the seminar initially scheduled for November was postponed in line with the nuclear talks, explaining the negotiations "directly impact on investment opportunities." The extension of the nuclear talks on Monday caused concern that the seminar would be postponed once again.
"International conditions are receptive of such developments, and Iran has no plans to postpone the seminar," Hosseini said.
Deputy oil minister Mansour Moazzami, said Sunday in an interview with ISNA that the conditions required to unveil the IPC are "much better than a year ago, however, it is not the appropriate time yet."
Sanctions made it difficult for Iran to import the required technology, or attract the much-needed investment in the oil and gas industry. Hence, the IPC was drafted to attract competent companies. The new contract aims to attract foreign capital, services, know-how and technology, integrate the exploration, development, and production phases, and reduce the investment risks by offering more flexibility in investment costs.
Unlike the current buy-back regime, there will be no specified rate of return on invested capital. Both the NIOC and the contractor will estimate the rate, and once consensus over the rate of return is reached, investment will begin.
Introduction of the IPC marks a turning point in the way that the oil and gas industry can acquire the much needed know-how and technologies to develop oil and gas fields.
It needs to be ratified by the Council of Ministers, but does not need to win the endorsement of parliament.
Negotiations between Iran and the P5+1 over Tehran’s nuclear program were extended late Monday until next June in the hope that the broad outlines of a deal can be agreed within three months. Tehran will still have access to $700 million per month by way of sanctions relief.
The country could boost output by 700,000 barrels a day within two months if international sanctions were lifted, Oil Minister Zanganeh told reporters at the OPEC meeting in Vienna, in June.
