The National Iranian Oil Company is in the final stages of signing three oil deals with the private sector under the terms of Iran Petroleum Contract, NIOC's managing director said.
"The deals, set to be finalized by the end of the current fiscal [ending March 20], are in line with NIOC's policy to outsource its activities to [the national and international] private firms," Ali Kardor was also quoted as saying by Shana on Saturday.
He was speaking at the Second Iran International Exploration and Production Congress and Exhibition, which opened in Tehran on Saturday and will run till Monday. Kardor noted that the private sector has had an acceptable progress in the sector, which could be of great help in developing oil and gas activities.
"Ten technical workgroups are making every effort to drive negotiations with the private companies forward," he said. The official said development of North Azadegan oil/gas field will be NIOC's first experience in outsourcing its activities. "Tenders will be held on the field's development project … Winners will sign contracts under IPC terms, which will go into force for a long-term period of 20 years."
IPC contracts are used to develop large-scale upstream projects, which has replaced a buyback model that dominated most oil and gas development projects in the past two decades. This would be a positive step in accelerating Iran's activities in joint oilfields with Iraq.
North Azadegan is part of a string of oilfields in the West Karoun block in the southern oil-rich Khuzestan Province near the border with Iraq.
Development plans for West Karun are aimed at expanding crude production by 700,000 barrels per day. West Karun fields are projected to produce 1 million barrels of oil per day in 2018. Kardor concluded that the oil sector is exhausted, implying the dire need to get help from the private sector.
Banking Constraints
According to Amirhossein Zamaninia, deputy oil minister for international affairs, Iran is grappling with banking challenges, though they have nothing to do with international sanctions that were removed after the implementation of Iran's nuclear agreement, known as the Joint Comprehensive Plan of Action in 2016.
"The country's age-old oil industry cannot thrive unless the constraints are removed," he said, adding that were it not for JCPOA, Iran would not be able to collect its crude revenues. The official added that importing much-needed oil and gas equipment to launch incomplete ventures is another major advantage of JCPOA.
"Iran's crude production is not proportionate with its in-place reserves due to political issues," he said.
Reportedly, Iran's in-place oil reserves are estimated at 800 billion barrels. Highlighting the role of private sector, Zamaninia noted that foreign investment and domestic funding complement each other and private enterprises can play a key role in helping the industry boom.
