In addition to unveiling its new contract model at a conference in London slotted for December, according to Bloomberg Iran has also intends to advertise 45 oil and gas projects to international companies at the said conference.
The conference will last from December 14-16, announced Mehdi Hosseini, chairman of Iran’s oil contracts restructuring committee, and is part of Iran’s plans to up production to 5.7 m b/d.
“We consulted with almost all medium and major oil companies over our contractual contents and projects. And the feedbacks have been positive,” he said, adding that new contract is based on the “risk service contract” model. This resembles the production sharing framework, he explained, “but with different characteristics,” as the “international oil company, or the investing company, would be accepting certain risks in view of which it would be entitled to a portion of the oil thus produced. Or the reward of that risk is a share/portion of the oil.”
In this system foreign companies won’t be allowed to claim ownership of the country’s energy reserves, he added, noting that investments in Iran are still attractive since production costs are $8 to $10 a barrel. He also insisted that the “drop in prices from $100 a barrel to around $50 a barrel now is only in the short run”. In the long-run, “demand will rise and so will the prices.”
In related development Press TV reported Iran’s very first project under the new contract model, a $2.2 billion development plan for the Changuleh oilfield it shares with Iraq, meant to produce 50,000 b/d.
The field will be introduced at the London conference as well, although the investment partner has yet to be named.