Azernews.Az

By Nigar Abbasova

The Islamic Republic of Iran, which was engaged in the development Iran Petroleum Contract (IPC) for the past 3 years, has signed its first new model contract with the domestic company.

Iran’s Oil Ministry signed a $2.2 billion worth agreement with Tadbiri Energy Group, affiliated with the Execution of Imam Khomeini's Order Company (EIKO), which will be responsible for increasing the recovery rate of three fields (Yaran, Kupal and Marun) within a short period of time.

The agreement, which followed implementation of the Joint Comprehensive Plan of Action (JCPOA), was inked at the presence of Iran’s Oil Minister Bijan Zanganeh, chairman of board of directors of POGIDC Gholamhossein Nozari and President of the Headquarters for Execution of Imam Khomeini's Order (EIKO) Mohammad Mokhber.

Zanganeh said the ministry welcomes cooperation with all companies that can help to boost Iran's output, mentioning that Iran will sign more IPC contracts by March 2017. The details, however, have not yet been revealed.

The country, which needs foreign investment to develop its fields, has been trying to set favorable terms on oil development contracts to attract foreign investors deterred by years of sanctions. Oil majors said they would go back to Iran should it made major changes to the buy-back contracts that envisaged a prohibition for foreign companies to create reserves or acquire share in authorized capital Moreover, the system provided for the payment of only a fixed price for extracted hydrocarbons.

The Iran Petroleum Contract (IPC) is a cornerstone of the country’s plan to raise crude production improves its energy industry, which was seriously deteriorated during the sanctions period.

NIOC earlier announced that Iranian companies active in exploration and production areas are now allowed to take charge of small and medium-sized fields, as well as to seek assistance from foreign firms if case of necessity.

Meanwhile, NIOC’s Managing Director Ali Kardor earlier told IRNA that OPEC member had already reached the level of 4 million barrels per day, adding that Iran's crude oil production capacity must reach 5.2 to 5.7 million bpd in the future.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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