IOOC Improves Contractual Transparency, Cuts Costs

IOOC Improves Contractual Transparency, Cuts CostsIOOC Improves Contractual Transparency, Cuts Costs

Transparency in contracts with domestic companies operating in the oil and gas industry cut the cost of domestic petroleum projects by 20% in fiscal 2017-2018 compared to the previous year, an official at the Iranian Offshore Oil Company (IOOC) said.

"Openness and transparency in tenders for domestic projects in the oil sector has boosted competition among Iranian companies and cut costs by 20%," Salman Khosravi, IOOC director for contractual affairs said, Mehr News Agency reported on Tuesday.

The projects range from construction and drilling to operational works and services associated with oil and gas projects.

"IOOC saved €120 million ($128 million) in costs of contracts year-on-year while improving the quality of services and products," Khosravi said.

In offshore-related contracts, the state-run IOOC, which is one of the biggest subsidiaries of the National Iranian Oil Company, reduced costs by $54 million year-on-year, Khosravi said.

"We overhauled the mechanism of awarding drilling contracts most of which are capital-intensive," the official said.

He added that most similar projects were awarded through tenders,  a major shift from a hazy and largely ineffective system in which nepotism prevailed and a tiny number of contractors would win the most rewarding contracts without scrutiny or competition.

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