Iran's Cabinet Approves New Oil-Field Contracts to Woo Western Investors
August 03 2016 - 8:40AM
Dow Jones News
Iran's government on Wednesday approved new oil-field contracts
designed to attract Western oil investors following the lifting of
sanctions in January, an oil-ministry spokeswoman said.
However, Iranian officials didn't disclose the terms of the new
contracts, which have long been awaited by international oil
companies that once worked there such as Total SA of France, Eni
SpA of Italy and the Anglo-Dutch firm Royal Dutch Shell PLC.
The spokeswoman also said the terms of the new deals would still
have to be approved by a parliamentary committee in charge of
reconciling new legislation with old, and signed off by the
assembly's speaker Ali Larijani.
The contracts have been at the center of a struggle between
President Hassan Rouhani, a relative moderate in Iran, and
conservative hard-liners opposed to foreign influence. Iran had
been working to revamp the terms, even before Western sanctions
over its nuclear program were lifted in January.
Mr. Rouhani's oil ministry proposed new contracts that would
allow foreign oil companies to at least recoup their costs and last
up to 20 years. The new deals were supposed to address concerns
with the pre-sanctions contracts, called "buybacks," which included
a fixed lump sum and, typically, a five-year deal.
After pressure from hard-liners in recent weeks, Iranian
officials have said that the contracts for working in some parts of
the country would continue to resemble the buyback deals of the
past.
Mr. Rouhani's cabinet approved an amended version of the
contracts on Wednesday, the oil ministry spokeswoman said.
Big oil companies have been hot and cold about returning to
Iran, expressing excitement about the country's oil riches but
skepticism over the terms of working there.
Iran has ramped up its production by over 800,000 barrels a day
since December, but the country needs to attract $130 billion in
its oil and gas fields to meet its goal of raising its oil
production capacity to 5.7 million barrels a day by the end of
2020.
Write to Benoit Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
August 03, 2016 08:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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