Head of Iran’s oil and gas contracts restructuring committee Mehdi Hosseini
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Iran’s new oil and gas contracts will have flexible terms that take into account oil price fluctuations and investment risks, head of Iran’s oil and gas contracts restructuring committee Mehdi Hosseini, told Reuters in 21 November.
”What we are offering is very flexible model of contracts, it is integrated exploration, development, production all those terms,” Hosseini was quoted by Reuters as saying. ”The fee per barrel that is paid as profit to the company is flexible based on the risk which is considered … Higher risk, higher reward, lower risk, lower reward,” he said in an interview on the sidelines of a gas conference in Tehran. “Anything will be adjusted, depending on the different stages of the operations…”
Iran will offer 52 oil and gas projects – both brown and green fields – including around 20 for exploration, Hosseni was reported by Reuters as saying.
The contracts last for 20 years and though this could be extended to 25 years.
“We are offering some projects in the Caspian Sea and also very low-risk areas in the Persian Gulf,” Reuters quoted Hosseini as saying.
Hosseini said there have been consultations with oil companies about the terms of new contracts where there will be no ceiling on capital expenditure. This was of the main points raised by oil companies as a disadvantage in buy-back contracts Iran had previously offered.
“Everything depends on the behaviour of the fields, and the period of time. If things change then they (oil companies) would have the chance annually in the annual work program and budget to revise the scope of the work, may revise the cost. We are very open,” he said.
The new deals would be awarded either through bidding rounds or direct negotiations, Hosseini was reported as saying.