Baku, Azerbaijan, Dec. 1
By Farhad Daneshvar - Trend:
Iran's new model of petroleum (IPC) will be successful to lure foreign investment, if Tehran manages to improve its bureaucratic and banking system, Director of Hydrocarbons, France, Mediterranean Energy Observatory (OME) Sohbet Karbuz told Trend Dec. 1.
Iran still has a long way to go to offer better conditions on numerous issues including bureaucracy, legal and regulatory framework, and banking system, he said.
Iran proposed its new model of oil and gas contracts called Iran's Petroleum Contracts (IPC) during a two-day conference held Nov 28-29 aimed at luring foreign investment to develop the country's ageing petroleum industry.
Meanwhile Petroleum Ministry offered about 50 oil and gas projects to be developed by foreign countries and the participation of local partners.
Sohbet Karbuz said that foreign companies will make investment decisions if they get a reasonable rate of return in not too distant future, in a relatively low risk and less painful operating environment.
For foreign companies the IPC is an important element but not the only determinant of their investment decision in Iran, Karbuz said.
According to the expert, in general, the new Iranian Petroleum Contract is surely important for Tehran because it will not only bring capital and technology but will also make Iranian companies to become partners with the foreign investors.
Karbuz believes that the new Iranian Petroleum Contract, which is also called the fourth generation oil contract, sounds like a mixture of a production sharing contract and a service contract which is why it is described as a hybrid contract.
Iran is increasing its gas export capacity amid the lifting of imposed sanctions against its ailing economic and industrial sectors.
Iran expects the sanctions to be lifted at the first of coming year, as it is adhering to the terms of a July nuclear deal clinched between Tehran and the World's six major powers.
According to the July deal sanctions against Tehran are expected to be lifted or suspended in return for scaling down Tehran's controversial nuclear program.
Although the oil and gas prices have hit the rock-bottom in the global markets, international investors are considering Iran's petroleum projects with hope for big profits.