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Iranian parliament approve signing $5 billion of oil contracts with private sector

Iran Materials 10 February 2014 15:10 (UTC +04:00)

Baku, Azerbaijan, Feb. 10

By Rahim Zamanov - Trend:

Iranian Parliament (Majlis) gave the green light to the oil ministry to sign $ 5 billion worth of contracts with the private sector, Iran's SHANA News Agency reported on Feb. 10.

The deals should be in the form of buy-back contracts.

According to SHANA, 143 MPs voted in favor, 21 against, and 12 abstained.

Iran also seeks to absorb more foreign investment in the oil and gas sector.

The Iranian Oil Minister Bijan Namdar Zanganeh ordered oil ministry officials in September to revise contracts in order to make them more attractive to foreign companies.

Iran is in dire need of money and financial resources and can't afford paying the expenses of giant projects in the energy sector, so it needs the money of domestic and foreign private companies to carryout the projects.

Iranian Mehr News Agency reported on Jan. 17 that Zanganeh has formally invited giants British oil companies, Shell and British Petroleum, to take part in the country's oil and gas projects.

Deputy Manager of National Iranian Oil Company, Ali Kardor, said on Feb. 2 that in the past eight years only $400,000 of foreign investment has been absorbed in Iran's oil sector.

"Iran's oil contracts lack variety," he said.

He went on to note that buyback contracts were popular in Iran when the oil prices were low.

Iran has the world's fourth-largest proved national reserves of oil - most of it cheap to produce - and is home to the biggest proved reserves of natural gas, some 18 percent of the global total.

Edited by C.N.

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