Iran names 29 firms as bidders for exploration projects under new IPC

oilwell iranIran will start pumping crude oil from South Yaran oilfield by March 2017 with 10,000 bpd of output. (Image source: Eric Kounce/Wikimedia Commons)Iran has named 29 companies from more than a dozen countries as being allowed to bid for oil and gas projects using the new, less restrictive Iran Petroleum Contract (IPC) model, its Oil Ministry news website SHANA reported recently

According to Reuters, the list of pre-qualified firms included Shell, France’s Total, Italy’s Eni, Malaysia’s Petronas and Russia’s Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Iran hopes its new IPC, part of an effort to sweeten the terms it offers on oil development deals, will attract foreign investors and boost production after years of sanctions.

State-run National Iranian Oil Company (NIOC) signed the first oil output contract under the IPC model in October last year with an Iranian firm identified by the USA as part of a conglomerate controlled by Iran’s Supreme Leader Ali Khamenei.

The IPC model has been delayed several times due to opposition from hardline rivals of President Hassan Rouhani. It ends a buy-back system dating back more than 20 years under which Iran did not allow foreign firms to book reserves or take equity stakes in Iranian companies.

The new IPC has more flexible terms that take into account oil price fluctuations and investment risks, a senior Iranian oil official told Reuters in November.

Oil majors have said they would only go back to Iran if it makes major changes to the buy-back contracts, which companies such as France’s Total or Italy’s Eni said made them no money or even incurred losses.

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