Iran unveiled its hotly anticipated new petroleum contracts to dozens of international oil companies in Tehran Saturday, and the first set of new tenders could be released by late January, a senior Iranian oil official said.
The two-day conference, that began Saturday, introduced some 52 projects, including 14 exploration and development blocks, along with major onshore and offshore fields such as South Azadegan and the North Pars gas field.
Iran introduced some $100 billion worth of upstream projects, but only a fraction of these will be offered in its first round of tenders, National Iranian Oil Company's Managing Director Rokneddin Javadi, who is also the deputy oil minister, said on the sidelines of the conference.
"I think we will offer around 18 exploration blocks and around 10 development projects, totally worth around $30 billion in the first round," Javadi said.
"It's just to tell the world how big the opportunity is for work in Iran. What we will offer in the first round will be based on the feedback we see from today's conference," he added.
The exact date when the tenders will be released would depend on feedback from international oil companies at the Tehran summit, he said. But he said he hoped to finalize the contracts by the end of next year.
The new Iran Petroleum Contract replaces the buy-back model first introduced in the 1990s.
Under the new model, developers and investors would get their profit from the production, unlike the buyback model that was based on an agreed interest in advance, he said.
The contract would also continue for longer, removing the need for a re-tender after a few years as production levels start to fall.
The launch of a new bidding round and contracts would also have a slightly new structure, he added.
"We are going to establish a new structure in NIOC -- under the supervision of the managing director -- for the tender procedure ... evaluation, negotiation until the contract. After signing the deal, the contract will be transferred to the executive companies," Javadi explained.
ATTRACTING GLOBAL INTEREST
Oil Minister Bijan Zanganeh said Saturday that he was not worried about the impact of low oil prices on investment in the new contracts and that he hoped to attract around $25 billion worth of foreign investment.
"These prices and even lower than these, because our oil production costs are low, will cause no problem with repayment on investments or profitability for foreign companies", he said, adding that the production cost in Iran was below $10/barrel for both onshore and offshore production.
As many as 153 international oil companies from across the globe attended the event. In particular, the oil ministry held meetings with France's Total, Azerbaijan's SOCAR, Russia's Lukoil and Malaysia's Petronas on Saturday on the sidelines of the conference.
"Total has had experience of working with Iran before the sanctions and it has expressed an interest in coming back for development projects as well as LNG projects," said Javadi.
US-based oil companies are still to return to Iran "but it's probable that US companies [will] come through the companies that have been registered outside the US and in Europe. There is no legal ban on such an approach. And until now, there is no legal ban either on participation of US companies in Iran's oil and gas sector," he said.
"For now, we have targeted an oil production increase of 2 million b/d, so that considering the oil output fall in the reservoirs, we reach 4.7 million b/d by the end of the 6th development plan [2016-2021]. And on top of it, comes 1 million b/d of condensates," Javadi said.
The Tehran conference will be followed by another event in London from February 22-24, where further details and projects are expected to be announced.
