Iran unveiled a new model of oil and gas contracts aimed at attracting up to US$30 billion in foreign investment in a conference attended by some of the world’s leading upstream companies such as BP, Shell, Total, Statoil and Sinopec.
The new Iran Petroleum Contract will replace the previous buyback model regulations, in which contractors paid to develop and operate an oil field before returning it to Iranian authorities.
The new rules, released Saturday in Tehran, will allow foreign companies more lucrative longer-term contracts and, significantly foreign companies can retain a stake in the field.
"The contract models introduced today are not perfect or ideal, but an effective and responsive model for both sides," Oil Minister Bijan Namdar Zanganeh said.
"To continue to play a role (as a major oil supplier), we hope to enjoy working with reputable international oil companies under a win-win situation," he added.
Zaganeh also revealed that Iran had "no objection to or problem with the participation of U.S. companies" despite no U.S. oil and gas firms attending the meeting.
The news was welcomed by many international oil companies who see investment opportunity in Iran after it was announced earlier this year that UN will lift its trade sanctions against the nation.
An oil and gas official at Western Oil said that Iran is “moving in the right direction” while Stephane Michel, Total’s head of exploration and production in the Middle East confirmed the company’s desire to re-enter the country’s oil and gas sector.
“We are interested to come back to Iran when the sanctions are lifted and if the contracts are interesting. We have worked in this country for a long time, so we know specific fields on which we’ve worked,” Michel said.
Iran has significant oil and gas reserves and according to OPEC boasts 15.8 percent of the world’s natural gas.
Once the trade sanctions are lifted, Iran is looking to sell a further 500,000 barrels of oil a day and plans to boost total oil output capacity to 5.7 million barrels a day by the end of 2020. This will be a stark rise from current production rates. In Ocober of this year Iran produced 2.7 million barrels.VIDEO: Gas Exporters Summit Meets in Iran