16 facts about Iran Petroleum Contract, details of offered fields

By Dalga Khatinoglu

During last month Tehran hosted 137 companies from 45 countries for a two-day conference, during which legal generalities of Iran's new model of oil and gas contract (Iran Petroleum Contract, or IPC) were introduced. More details about the contracts will be unveiled at a conference likely to be held in London in February 2016.

The legal generalities of the IPC show that it covers a package for all exploration, development, and production stages in many of the fields. Moreover, the parties will hold a stake in the output for more than two decades.

The Iranian Oil Ministry will announce details about the terms and conditions of each oil and gas field within related tenders for foreign companies.

Here are 16 facts about 21 gas and 29 oil fields, proposed for foreigners to take part in them, based on the IPC:

1 - Iran has offered 50 hydrocarbon fields, including 21 gas fields, of which 6 are offshore gas fields.

2- Eight of total 29 oil fields are offshore ones.

3 - Among offshore gas fields, none of them are developed, while only two onshore fields have been developed relatively and the remained 13 fields are totally undeveloped.

4-Among 29 oil fields, 3 offshore and 9 onshore fields are undeveloped, the remaining fields are active.

5 - The total reserves of offered gas fields are 226 trillion cubic standard feet (tcsf), sharing about 19.1% of the country's total gas reserves.

6- The total oil reserves of offered fields is 210 billion stock tank barrels, of which 77 billion stock tank oil-initially-in-place (STOIIP) are offshore field reserves.

7 - Although the number of onshore gas fields are 2.5 times more than offshore ones, but they only holds 66 tcsf reserves, 2.4 times less than offshore fields.

8- Coming to oil reserves, onshore fields hold about 34 percent of total oil reserves offered to foreigners within the framework of IPC.

9 - Developing gas fields would add more than 111,000 barrels per day of gas condensate to Iran's oil production level.

10- It's estimated that developing oil fields will add 200 mcm/d (7 bcf/d) of associated gas to the country's gas production.

11- Developing gas reserves to add about 13.4 billion cubic feet per day (Or about 380 mcm/d) to the country's gas production.

12- It is not clear how much crude oil would be added to the country's output. The recovery rate of the fields is also uncertain.

13- It seems Iran has focused on Caspian Sea seriously for the first time, introducing a field (Sardar-e Jangal) and three blocks to be explored and developed.

14- The country's priority is developing cross-border or joint fields with neighbors.

15- The foreign contractor has to choose an Iranian partner to establish a join venture to develop a project.

16- Petroleum costs and the fee shall be paid to contractor out of the maximum 50 percent of the revenues generated from the field.

Dalga Khatinoglu is an expert on Iran's energy sector and head of Trend Agency's Iran news service