IPC to make other countries' economies dependent on Iran

Business Materials 25 August 2016 14:48 (UTC +04:00)

Baku, Azerbaijan, Aug. 25

By Emil Ilgar – Trend:

The IPCs (Iran Petroleum Contract) will make the economies of other countries dependent on Iran, said Iran's Oil Minister Bijan Namdar Zanganeh.

Zanganeh added that the new types of oil contracts would improve the security of country, IRNA reported Aug.25.

Iran has introduced new the oil contract model, called Iran Petroleum Contract, or IPC last December. It offers 50 upstream oil and gas projects for foreign partners on new, more attractive terms than the previous buyback contracts.

Iran has planned $185 billion worth of oil and gas projects by 2021 and hopes to attract foreign investments by using IPCs.

Zanganeh said that currently Iran's oil in-situ reserves stand at 830 billion barrels and the country needs to improve the oil recovery rate to extract more oil from these reserves.

Based on the current 23-25 percent oil recovery rate of Iran's fields, the country's recoverable oil reserves stand at 159 billion barrels, but Iran hopes to increase this index by cooperation with foreign companies.

Despite the old contracts, IPC allows foreign companies to sign long-term contracts with Iran (20-25 years) and receive a percentage of produced oil as long as the field is active. It would encourage the foreign company to increase the field's recovery rate to receive more oil in the long term.