Iran Revisits Hydrocarbon Contracts In Effort To Boost Output

13 Sep 2013 Issue: 56 / 37

One month into his second stint as Iran’s Minister of Petroleum, Bijan Namdar Zanganeh has revisited an earlier plan to reformulate the contracts it offers to foreign oil companies looking to invest in the country’s upstream. Indian state firms may be the first to be offered new PSAs.

Iran’s energy sector has been taking hits on multiple fronts since Western-led sanctions were implemented in early 2012 over its disputed nuclear program. Existing oil and gas projects have suffered repeated delays, while newer foreign-led ventures ran into difficulties and had to be cancelled.

But the implementation of a new generation of contracts – resembling the traditional production-sharing agreements (PSAs) – should “make the contracts more attractive to foreign companies,” the minister said, relative to the buy-back regime that Iran had previously favored. These would allow oil companies to get back what they invested in the project more quickly than in the case of buy-backs. (CONTINUED - 816 WORDS)