The National Iranian Oil Company is planning to sign seven agreements on development of oilfields within the framework of Iran Petroleum Contract, the country's new model of contract for oil and gas projects, a senior NIOC official said.
"We are looking forward to signing the deals with a total value of $40 billion by mid-October," Gholamreza Manouchehri, deputy for development and engineering at NIOC, was also quoted as saying by Shana on Monday.
Three IPCs have so far been signed on development of five oilfields. The first was concluded with the French energy giant Total S.A. in July 2017 to develop Phase 11 of the South Pars Gas Field in the Persian Gulf.
The second accord was clinched in March with Russia's state-owned oil company Zarubezhneft for the development of Aban and West Paydar oilfields near Iran-Iraq border.
The third contract was signed between NIOC and a domestic firm, Pasargad Energy Development Company, to develop two oilfields, namely Jofeir and Sepehr in Khuzestan Province in line with policies to help expand domestic companies' exploration and production operations.
Manouchehri added that the seven prospective contracts will involve the development of 10 oilfields. However, he did not elaborate.
The new model of contract has been devised based on "soft diplomacy" by President Hassan Rouhani's administration to open up the energy sector and other key industries to foreign investment and technology.
Officials say the new contracts have more flexible terms that take into account global oil price fluctuations and investment risks.
IPC deals will be used to develop large-scale upstream projects, replacing a lackluster buyback model that dominated most oil and gas projects in the past two decades.
--- Other Development Plans
Manouchehri hoped that the deals will be finalized by the end of the current fiscal year (March 20, 2019).
NIOC also introduced 14 oil exploration blocks to Iranian and foreign companies in a meeting in Tehran on Monday. Three onshore blocks are located in the Persian Gulf and three offshore blocks are located in the northeast of the country.
Iran's petroleum sector has suffered from a protracted spell of underinvestment and lags behind neighbors in developing oil and gas fields. But the new model of oil contract can pave the way for plugging the technological hole in upstream projects.
--- $6b Investment in Production Recovery
The application of modern enhanced oil recovery techniques with the help of domestic contractors is high on NIOC's agenda, Manouchehri said.
"Some 35 plans valued at $6 billion have been devised with the aim of preserving and increasing the output by the National Iranian South Oil Company, Iranian Offshore Oil Company and Iranian Central Oil Fields Company," he said.
"The plans have been put out to tender and most deals will be concluded by the end of summer."
Experts believe producers should shore up the average oil recovery rate. A significant approach to reach the goal is the implementation of modern oil recovery methods in oilfields.
Research shows that enhanced oil recovery methods can increase production from a well to 75% of its in-place reservoirs.
The average rate of recovery from Iran's oilfields is around 25%, but it should reach 40%. In-place oil reserves are estimated to be 800 billion barrels.
The country aims to increase oil production to 4.05 million barrels per day and total gas output to 1.1 billion cubic meters per day this year.
