Iran new oil contracts attractive to foreign companies: Analyst

Press TV has interviewed Manouchehr Takin, an international oil and energy consultant in London, to discuss the new contract model unveiled by Iran’s Ministry of Petroleum for investment in its oil and gas sector.

The following is a rough transcription of the interview.

Press TV: How do you feel about this move on the part of Iran? Is it positive?

Takin: Yes definitely. I would like to point out that Iran has been open to foreign investment since about 20 years ago when the Islamic Republic parliament or the Majlis, the Islamic Assembly, they accepted and made a model, the buy-back model and since then they have been also improving the buy-back model until the sanctions were imposed on Iran unfortunately.

So until the sanctions foreign companies have been operating in Iran under the rules and regulations which were attractive to them to some extent and also they were within the regulations and limitations or whatever of the Islamic Republic’s own constitution. It was really in the last four years that because of sanctions these companies withdraw and left. Now thanks God I think the nuclear agreement has been made and in the wake of that Iran has announced that it is opening and inviting companies back.

More importantly, as you just mentioned, Iran has modified and improved the old buy-back deal, it is called the Iran Petroleum Contract (IPC). The details are now being presented or have just been presented in Tehran in this conference and as it has been mentioned by Iranian authorities, the new model is more attractive to foreign investments. It provides longer-term commitment from both sides and therefore a better sort of more long-term looking to make sure that the resources are developed properly, not only now on a short-term basis but also considering the long-term conservation of the resources and so on which is good for the Iranian side rather than a short-term contract, a foreign company coming and investing and leaving.

So I think overall, from the soundings and comments made by the foreign companies, the CEOs of the majors and so on, they are also keen, they think this deal is better. Of course the details are being announced and as they say the devil is in the details. We have to wait until these are given and then the oil companies and analysts look at the individual terms and details and clauses and so on and then we could give a better verdict.

But my impression is that this is much more attractive and it is a positive type of model to attract foreign companies and as for the American companies Iran has never closed the doors to foreign oil companies from the United States to come. In fact the first deal that the Islamic Republic made after the Islamic Revolution was about 20 years ago under the buy-back model that the Iranian parliament, Majlis approved it first and the first agreement was made with ConocoPhillips, an American company.

So Iran has always been open to foreign investments including the US oil companies. It has been the US government policies and recently the sanctions and so on which have limited it. So hopefully after this nuclear deal, things are going back to normal for the foreign companies to come in.

Apparently there are no oil American companies now in the conference but hopefully they would also be coming in the future but that depends on the US government if they allow them or put pressure on American companies to participate in Iranian projects.

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