Speaking at a press conference with reporters from international news agencies on the latest updates about National Iranian Oil Company (NIOC)’s talks with foreign contractors and the revised model of oil contracts here in Tehran on Wednesday, Deputy Head of the National Iranian Oil Company (NIOC) for Development and Engineering Affairs Gholam-Reza Manouchehri said even for $40/b, it would be feasible for international oil companies to develop Iran’s oil fields.
He said NIOC and Ministry of Oil have been able to finalize the new scheme of upstream development contract model that is called IPC but it took almost one year to be finalized. “Fortunately it has been gratified by the parliament, too,” he said.
$200b of Finances for Iran Oil Projects
He said, “We need at least 200 billion dollars of investment within the next 10 years that means 100 billion dollars for the 6th development plan of the Islamic Republic of Iran. That would be the least investment we need.” As he said, nearly 40% of that money will be supplied by foreign investors.
“This new model of contracts is a great vehicle for foreign investment in Iran,” he added.
Manouchehri also said that Iran is the most attractive country for oil investments and that there are still a lot of places to be explored.
South Azadegan Apple of Investors’ Eyes
Asked by a Japanese reporter about NIOC’s preference to work with any special foreign company in development of top projects like the South Azadegan field development, he said, “South Azadegan is very huge and important. It might be the first tender of this round of tenders. We are sensitive that the tender is really competitive because many companies from the West and Asia would like to be in this project. We will have two packages: commercial and business model; and the technical model for long-term contracts [for developing the fields].”
“We are waiting to have the minimum requirement for this reservoir regarding the total accumulated production that we can ask for these 20 years and then go for a tender procedure and have the proposal from international companies. we do like that more than 3 consortia will attend this tender and it seems that we will have more than 3 real consortia to attend in this tender and it will be a real competition so no special chance for total or other companies. So they will have the same chance after finalization of technical and commercial dimensions of proposals.
“Even for $40/b would be feasible for development of oil fields in Iran. 50% of the value of products will be allocated to the contracts for the first years in order that the investment will be recovered. We understand this amount would be sufficient at least for oil fields’ development. This might sometimes be insufficient for gas fields for which 75% of the gas in the first years will be taken by the developer for covering the project’s capex,” he added.