Iran says oil deals not affected by Trump’s victory

Business Materials 20 December 2016 14:54 (UTC +04:00)

Baku, Azerbaijan, Dec. 20

By Emil Ilgar – Trend:

Donald Trump’s victory in US presidential election has not affected Iran’s oil deals with foreign companies, Oil Minister Bijan Namdar Zanganeh told IRNA Dec. 20.

“The future would show that Trump’s approach hasn’t affected Iran’s relations with foreign companies. We haven’t felt anything negative yet,” he said.

During his presidential campaign, Trump vowed that he will "tear up" the nuclear deal between Iran and P5+1 Group. In response to Trump’s statements, Iran’s Supreme Leader Ayatollah Ali Khamenei said that if the US tears the document, Iran will “burn it.”

The nuclear deal, achieved between Iran and P5+1 Group (the US, the UK, France, Russia, China plus Germany), was implemented in January 2016, lifting sanctions on Iran.

Touching upon the memorandums of understanding sealed with Total, BP, Royal Dutch Shell, Eni, Schlumberger and other companies during 2016, Zanganeh said that Iran’s first oil and gas contracts will be with those companies that have signed MoUs with it.

“We will start signing contracts in upstream oil and gas sector, based on newly designed contract model (Iran Petroleum Contract, or IPC) in the next three or four months,” he added.

Iran has signed about 15 MoUs with foreign companies in upstream oil and gas projects. IRNA says that signing several other MoUs is expected in 2017 as well.

Iran unveiled the generalities of IPC in November 2015, offering 49 oil and gas projects to foreigners. In the IPC model, Iran keeps sovereignty over its hydrocarbon reserves, but payment of all direct and indirect expenses, as well as finance and operation costs will be dependent on allocation of a portion (maximum 50 percent) of products or proceeds based on current day sale prices.

IPC will replace the old buy-back contracts. It is being advertised as a risk service contract which includes integrated exploration, development and production.

Iran says it needs $135 billion of investment to develop oil and gas sector by 2021, of which 80 percent is expected to be attracted from foreign companies.