By John Lee.
Bloomberg reports that Iran plans to offer international companies better oil contracts than Iraq, as it seeks long-term investment to revive its energy industry.
As Iran discusses limits to its nuclear program to remove Western sanctions against its financial and energy businesses, Mehdi Hosseini, of the Iranian oil ministry, said it is developing new hydrocarbon contracts that are “in line” with international practice and law, and that will offer more flexible terms than those used by Iraq. He added:
“We want oil companies to be involved in joint fields and high-risk fields … We are looking at longer-term commitments so that our own companies can learn alongside foreign companies …
Iran will give a preview of its new investor contract to a domestic audience in Tehran next week, and will introduce it at a conference in London in late June or early July. Hosseini commented:
“Any new model will have to be win-win for all parties involved … The new contract is our own type. We haven’t given it a name.”
Iran will resume negotiations with world powers over its nuclear activities on 18th February, after reaching a preliminary deal in November. The nation needs as much as $150 billion in investment over the next five years to develop its oil and gas, and Iranian officials expect most of the money to come from foreign companies.
But Abdul Mahdy Al-Ameedi, director of the Iraqi oil ministry’s licensing department, told Bloomberg:
“Iraq’s contracts are the best in the world in terms of making high national profits … The Iranians seek to copy our contracts and improve some terms by giving more privileges to companies to work in Iran. Nothing has happened so far, it’s just an idea.”
(Flag image via Shutterstock)