Despite rich reserves Iran still harsh place to do business

Business Materials 1 December 2015 15:40 (UTC +04:00)

Baku, Azerbaijan, Dec.1

By Khalid Kazimov - Trend:

The new model of Iran's oil and gas contracts doesn't mean that Tehran offers a competitive investment environment, energy expert Gal Luft told Trend Dec.1.

Luft, a co-director of the Institute for the Analysis of Global Security (IAGS) a Washington based think tank, said that the new rules may be a significant step for Iran but from an investor's perspective they merely put Iran in par with the rest of the world.

In other words Iran is now catching up with other oil countries where private ownership over reserves is a common practice, Luft said.

"This doesn't mean that Iran offers a competitive investment environment. To the contrary, despite its rich reserves Iran is still a harsh place of doing business compared to other destinations," Gal Luft 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 aging petroleum industry.

Meanwhile Petroleum Ministry offered about 50 oil and gas projects to be developed by foreign countries and the participation of local partners.

Iran is increasing its gas export capacity in preparation for lifting 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.