Tehran — Officials at the National Iranian Oil Company hope to launch new upstream contracts within the next six months after the government ratified a new upstream model contract Wednesday.
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Iran's cabinet signed off a new model oil contract, known as the Iran Petroleum Contract, in the hope it will attract much-needed international investment into the oil and gas sector after international sanctions on the country were lifted earlier this year.
"After the approval of the IPC by the cabinet, we will try to make the new model operational as a contract within six months," NIOC managing director, Ali Kardor, told state radio.
The new technical services contract replaces Iran's buyback formula, which it had been using for years, but has failed to attract investors looking for longer participation in a developed field or a greater interest.
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The approval covers the "general terms, structure and model of upstream oil and gas contracts", state-run Shana news agency reported.
This came after adopting a number of modifications following objections from parliament, where there is opposition over constitutional restrictions on ownership of natural resources.
The original version of the IPC was unveiled to oil companies in December with details of more than 50 projects for which Iran wants international partners.
More specific terms for each new contract, such as pricing and duration, will have to be approved separately by the oil ministry.
The new contracts will focus on two areas, "shared oil fields and those fields that require up-to-date technology to raise their recovery", Kardor said.
Oil minister Bijan Zanganeh said earlier this week that data sets have already been provided to a number of oil companies, mostly Asian and European, to prepare in advance of the tender launches.
Even with the new contract, whether Iran can attract the level of investment it is looking for -- somewhere around $500 billion -- will be the biggest question.
The OPEC member is targeting output of 4 million b/d next year.
The oil ministry told the producer group it produced 3.610 million b/d in June, according to latest data.
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