Iran’s new oil and gas contracts will have flexible terms that take into account oil price fluctuations and investment risks, Mehdi Hosseini, head of Iran’s oil and gas contracts restructuring committee told Reuters.
”What we are offering is very flexible model of contracts, it is integrated exploration, development, production all those terms,” Hosseini said.
”The fee per barrel that is paid as profit to the company is flexible based on the risk which is considered … Higher risk, higher reward, lower risk, lower reward,” he added.
“Anything will be adjusted, depending on the different stages of the operations…” he insisted.
The contracts last for 20 years, he explained, adding that “in some special cases it could also be extended to 25 years,” not including a period for exploration deals.
Hosseini said there have been consultations with oil companies about the terms of new contracts, which was why Iran had changed the original buy-back system and insured that there was no longer a ceiling on the capex.
“Everything depends on the behaviour of the fields, and the period of time. If things change then they (oil companies) would have the chance annually in the annual work programme and budget to revise the scope of the work, may revise the cost. We are very open,” he said.
According to Trade Arabia Iran will announce a new development contract model at conferences in Tehran on November 28-29 and in London in February.
Iran is planning to offer 52 oil and gas projects – both brown and green fields – with around 20 for exploration, offshore and onshore.
The new deals would be awarded either through bidding rounds or direct negotiations.