Iran to award new oil deals by next April

Iran says it expects to award the first batch of its new oil contracts by April 2017 thus retreating from an earlier announcement that the new awards could come as early as October 2016. 

Iran’s Deputy Petroleum Minister for International Affairs Amir-Hossein Zamaniniya has been quoted by the media as saying that the preliminary talks with foreign firms over a certain number of projects are underway.

However, Zamaniniya emphasized that the signing of new contracts will only take place before the end of the current Iranian calendar year (21 March 2017).

The official blamed the delay in approving the new format of contracts for the failure of foreign companies to approach Iran’s oil projects.

He emphasized that the falling oil prices had also created “difficult conditions” for investments in the oil industry at the global level.  He added that there is currently an intense rivalry over attracting new investments in this sector.

“Nevertheless, Iran’s oil projects are still attractive to international companies,” Zamaniniya said.

In early August, the cabinet of Iran’s President Hassan Rouhani approved the draft of the new format of Iran’s oil sector contracts.

Based on the new format of contracts, foreign companies will team up with Iranian partners for production of oil and gas from a list of targets that will be announced within the next months.

The projects will have different stages of exploration, development and production and the contractors will be remunerated with a share of the output.

Iran’s Petroleum Minister Bijan Zangeneh said in mid-June that the first deals through the new format of contracts will be awarded by October.

Zangeneh further emphasized that Iran expects the upcoming awards to help increase its crude production by 600,000 to 700,000 barrels a day over five years.