Iran has awarded the second phase of an oil field development project to China National Petroleum Corporation International (CNPCI), a top official says.

Abdol-Reza Haji Hosseinnejad, managing director of Petroleum Engineering and Development Company (PEDEC), said CNPCI has agreed to develop the second phase of North Azadegan oil field which Iran shares with neighboring Iraq.

“We have reached agreement with the Chinese for the second phase [of North Azadegan] and CNPCI has agreed to produce 25,000 b/d in the second phase,” he said.

North Azadegan, whose first development phase is also being operated by CNPCI, is forecast to be producing 75,000 b/d in September.

Last year, Iran terminated a contract with CNPCI for the development of South Azadegan oil field after the Chinese company failed to fulfill its obligations.

Haji Hosseinnejad said National Iranian Oil Company (NIOC) is currently operating South Azadegan, adding, “For this project, 320,000 b/d output is envisaged in the first phase and would reach 600,000 b/d in the second phase, but we have not yet started the second phase.”

He said that North Azadegan is being developed under a buyback deal with CNPCI.

Haji Hosseinnejad also said that foreign companies are waiting for the introduction of Iran’s new model of contracts and the lifting of international sanctions to invest in Iran.

“We have announced to [foreign] companies that we can draft agreements and postpone their finalization to after the lifting of the sanctions and they have accepted,” he said.

“Of course, some of these companies are waiting for the lifting of sanctions and the introduction of IPC contract in the London conference” planned for September, he added.

A petroleum ministry committee has been modifying the terms of oil contracts in order to sweeten them for foreign companies. The new model, known as Iran Petroleum Contract (IPC), is replacing buyback deals.

Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.

But under the IPC, National Iranian Oil Company (NIOC) will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.

Experts from Iran and the P5+1 group of countries – the US, Russia, Germany, France, Britain and China – are currently in New York to try to work out a draft agreement over the Islamic Republic’s nuclear program. According to reports, the negotiations are planned to resume in the Austrian capital, Vienna, on May 12.

Source: Press TV