Budget Amendment Targets Oil Investment

Budget Amendment Targets Oil InvestmentBudget Amendment Targets Oil Investment

Articles 15 and 16 of the 2014-2015 national budget law are to be ratified by parliament. They are designed to remove obstacles in production, ease restrictions on oil industry investments, and make Note 2 (G) more comprehensive, said a member of Parliament, Shana reported.

Amendments to the articles are likely to further facilitate oil industry investments.  These include investments through build-operate-transfer (BOT) contracts, buy-back agreements, and other practices authorized by the Note 2(G) of this year's national budget law, said Hamid-Reza Fouladgar.

Note 2(G) establishes the investment framework for the oil ministry, allowing it to invest up to $100 billion in oil and gas projects via BOT, finance-build-operate-transfer, finance-build-operate, design-build turnkey contracts, and the partnership of the state-private sector.

Articles 15 and 16 are almost identical to the Note 2(G) of this year's budget law.

"The bill will be submitted to the parliament by mid November, before the submission of the next year's budget," Fouladgar said.

Following the evaluation of the next year's budget, Hamed Ghader-Marzi, another Parliamentarian, told Shana that the budget encourages plans and proposals that encourage investment opportunities in the oil industry.

Noting that during the past year activities in the joint fields have multiplied, Ghader-Marzi said: "Development of the joint fields is a shared concern for all members of parliament."

"We will promote investment in the joint fields, because it is a matter of national interest," he noted.

Referring to the government's policy in the energy sector, Ghader-Marzi said in diplomatic terms the atmosphere has ameliorated this year, and efforts are being made to improve the economy and facilitate investment in the oil sector.

Exports of one million barrels of oil, 297,000 barrels of gas condensates, and the delivery 120,000 barrels of feed stocks for the petrochemical sector have been stipulated in this year's budget.

The parliament, via the budget, authorized the oil ministry to allocate $5 billion worth of contracts to the private sector, approve foreign currency loans for private investors to operate upstream oil and gas projects, invest up to $100 billion in the oil and gas industry, and supply crude oil to refineries with the 95 percent base price (FOB) of Persian Gulf.