Iran to invite oil field development bids

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In a long-awaited initiative to encourage foreign company participation in its upstream projects, Iran plans to invite international companies to bid for oilfield development rights in June, the Islamic Republic News Agency (Irna) reported this morning.

The Oil Ministry will solicit bids in a tender round starting on 21 June and lasting one month, Irna reported chairman of the ministry’s oil contracts revision committee Mehdi Hosseini as saying.

A strong response is expected to the invitation, but analysts say this will be conditioned by the terms set out in model investment contracts being drafted by the National Iranian Oil Company(NIOC).

Iran is rebuilding its oil and natural gas industries and restoring sales of crude after international sanctions were lifted in January. It says it could lift crude oil exports to 2.2m barrels a day (b/d) by the end of summer. Crude oil production is estimated to have risen to 3.4m b/d in May.

Foreign companies have been awaiting details of the investment contracts and bidding rules since Iran in November identified about 70 oil and gas fields that it would offer.

Iran needs about $185 billion in investment to upgrade its oil, gas and petrochemicals industries by 2020, the Oil Ministry’s news service Shana reported, citing Amir-Hossein Zamaninia, deputy oil minister in charge of commerce and international affairs.