Azernews.Az

By Kamila Aliyeva

The Islamic Republic of Iran, in a bid to regain its lost positions in the world energy market, uses all possible tools and relies much on new model of oil contracts.

The new contracts designed by Ministry of Petroleum and known as Iran Petroleum Contract (IPC), became the main tool to improve energy sector and increase the attractiveness of oil projects for foreign investors.

Iran expects to sign its first oil deal under the new IPC model in the near future, a senior Iranian official said on April 27, Reuters reported.

"We expect that very soon, hopefully within a month we will have the first one to be signed," Deputy Oil Minister Rokneddin Javadi told a conference in Paris.

In January, Iran said 29 companies from more than a dozen countries were allowed to bid for oil and gas projects under the IPC, which Tehran hopes will boost production after years of sanctions.

But the IPC model has been delayed several times due to opposition from hardline rivals of President Hassan Rouhani.

Besides, the investors have some doubts due to the position of Trump’s administration towards Tehran. U.S. President Donald Trump has long been known as a main critic of Iran’s policy and nuclear deal.

The IPC model 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.

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 have said made them no money or even incurred losses.

The IPC has more flexible terms that take into account oil price fluctuations and investment risks.

Earlier, Iranian Oil Minister Bijan Namdar Zangane said that in the coming years, on the basis of IPC, it is expected to attract foreign investments in the amount of $20-30 billion.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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