Iran prepares to unveil new oil contract

The conference, initially planned to be held in London, is expected to attract leading Iranian and foreign companies as well as economists, head of the Oil Contracts Revision Committee Mehdi Hosseini said.

“In the conference, activities of the oil industry will be presented in reports and the new oil model, the Iran Petroleum Contract (IPC), will be introduced in detail to domestic and foreign investors,” he said.

Last month, the government approved the new format which offers different stages of exploration, development and production to the contractors as an integrated package.

It is meant to help maximize Iran’s oil and gas production specifically in reserves that are shared with the neighboring countries, officials have said.

On Thursday, director of investment at the National Iranian Oil Company (NIOC) Ali Kardor said Tehran needs to invest $250 billion in its oil industry by 2025.

Between 2016 and 2025, there is need for $176 billion of investment in the upstream sector and another $77 billion in downstream spending, he said.
Kardor dubbed Iran as “the world’s cheapest country” for oil production.

“The finished cost of each oil barrel produced in Iran is about $5. This price tag doesn’t exceed $10 with the costliest of processes,” he said.
Low recovery costs are a key stimulant for many international oil companies which are discouraged by profit margins in shale, deepwater and tar sand developments because of declining oil prices.

Iran’s Minister of Petroleum Bijan Zangeneh sees pressure on oil prices to continue through 2016.
“Pressure on prices in 2016 will continue to remain at current levels. It is likely that the balance between supply and demand will happen from the second half of 2016 and then in 2017,” he said on Thursday.

/SR