Iranian Deputy Oil Minister for International Affairs Amir Hossein Zamaninia said the country is planning to attract $185 billion of foreign investment to boost oil, gas and petrochemicals industries by 2020.
In an interview with the Tasnim News Agency on Wednesday, Zamaninia said the implementation of Iran Petroleum Contract (IPC) is one of the many strategies Tehran has adopted to attract investment and upgrade the country’s oil industry.
He added the country is drawing up plans to draw $185 billion of new investment in all sectors of the oil industry within a 5-year period.
The Iranian deputy oil minister further said $85 billion of the investment will go to the upstream sector of the industry.
Iran cancelled an oil conference that was scheduled for February in London to unveil new terms for oil contracts.
The London conference had been planned to be held Feb. 22-24 following the termination of anti-Tehran sanctions after Iran’s landmark nuclear agreement with world powers came into force on January 16.
The IPC is planned to replace Iran’s buyback oil deals. Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.
But under the IPC, the National Iranian Oil Company (NIOC) will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.
Under the IPC, different stages of exploration, development and production will be offered to contractors as an integrated package, with the emphasis laid on enhanced and improved recovery.
Architects of the new contract say foreign companies can no longer dash out of their contractual obligations if sanctions are ever re-imposed on Iran. But critics cite numerous shortcomings which seriously plague the new formula.
More than 100 energy companies, including Britain’s BP, France’s Total, Italy’s Eni and Spain’s Repsol attended a conference in Tehran last November to hear about the IPC.