Iran’s domestic companies to undertake 60% of oil industry tasks
Tehran, Iran, November 29
By Mehdi Sepahvand -- Trend:
Iran's Oil Ministry is going to relegate 60 percent of the oil industry tasks to domestic companies, Oil Minister Bijan Zanganeh said.
Referring to the newly unveiled IPC (Iran petroleum contract) model, he said that although foreign investment is one gain to be achieved by the contracts, the foreign companies will have to choose Iranian partners, IRIB Channel 3 reported November 28.
Under the new contracts, the only thing that foreign companies will do is to manage and engineer and procure financial sources, he said.
Zanganeh added that the entire processes of buying equipment and services should be put up for tender under the supervision of the National Iranian Oil Company.
Therefore, the contracts are in no way related to or influenced by oil prices, he noted.
"The reason we have defined a period of 20 years for these contracts is that the foreign company in the meantime guarantees production with the condition that it will stand by our side throughout the tapping phase," he added.
"If the production of oil or gas is stopped for any reason, such as sanctions or any extraordinary condition, paying the contractor is halted completely until things get back to their normal situations. This is a basis and a strong point about this kind of contracts," the Iranian oil minister noted.
The IPC model is being introduced in anticipation of the removal of economic sanctions.
Iran's July 14 nuclear deal with world powers is expected to result in the removal of the sanctions by the yearend or at most in early 2016.