Iran to introduce new oil contracts in London

The Iranian Oil Ministry plans to hold a conference in London in March 2014 in order to introduce the revised version of its oil contracts, the head of the ministerial committee for oil contracts revision said. Mehdi Hosseini said the revision of oil contracts and removal of such obstacles as international sanctions are expected to persuade international oil companies to return to Iran’s energy sector. He said enhanced oil recovery and transfer of the state-of-the-art technology will constitute the most important parameters in revising the oil contracts. “We are benefitting from all experiences of the past in order to improve the structure of oil contracts while taking into account mutual benefits,” he added. Hosseini had earlier said that Iran is removing obstacles to investment in order to facilitate international investment in the country within the framework of national interest. He said Iran shifted from production sharing contracts (PSCs) to service contracts in 1974 when the country adopted a Petroleum Law. He added that six service contracts were signed before the 1979 Islamic Revolution, but none of them were executed. In 1987, Iran’s parliament revised the Petroleum Law and finally buy-back contracts were defined. Iran first signed buy-back deals in the 1990s when the country was still reeling from the destructive impacts of Iraqi war (1980-1988). Hosseini said buy-back deals brought Iran’s oil production capacity to more than four million barrels a day and attracted tens of billions of dollars of investment in the oil and gas sectors.