Azernews.Az

By Gunay Hasanova

Iranian President Hassan Rouhani has ordered creation of a committee to monitor the implementation of a new model of oil contracts.

The Committee will be headed by Mohammed Faruzade, ex-Chief of Staff of the Revolutionary Guards (IRGC), IRNA News Agency reported on November 28.

The Committee will monitor the implementation of the new oil contracts with foreign companies, proposed by the Ministry of Oil.

The contracts were designed specifically to increase the attractiveness of Iranian oil projects for foreign investors. Iran was engaged in the development of a new model of oil contracts, also known as Iran Petroleum Contract (IPC) for the past 3 years.

The IPC is considered to be a cornerstone of the country's plan to raise crude production to the pre-sanctions level of four million barrels per day. The contract will allow foreign companies to resume their operations in Iran, following years of sanctions that have profoundly affected Iran's energy sector, restrained its production and export of oil and gas.

Under the IPC, different stages of exploration, development, and production will be offered to contractors as an integrated package, with the emphasis laid on enhanced and improved recovery.

Iran signed the first agreement based on IPC on October 4. The 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.

Before sanctions were ratcheted up in 2012, Iran was producing over 4 million barrels of oil per day. When those sanctions were lifted in early 2016, production in the country went from 2.8 mbd up to 3.5 mpd.

The country seeks to achieve the level of 4.8 million barrels per day by 2021.

Tehran currently needs some $200 billion of foreign investments for developing its upstream, midstream and downstream oil and gas projects. The bulk of the new investments is planned to be attracted through IPCs.

Iran has 27 oil and gas reserves which it jointly shares with its neighbors. The shared fields roughly account for 30 percent of the country’s gas reserves as well as 20 percent of its oil reserves.

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Gunay Hasanova is AzerNews’ staff journalist, follow her on Twitter: @gunhasanova

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