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EghtesadOnline: Iran said it expects the first awards of a much-awaited new format of its oil sector contracts to happen within the next 3-4 months.

Amir Hossein Zamaninia, Iran’s deputy petroleum minister for international affairs, said that the new format of contracts – known as Iran Petroleum Contract (IPC) – will be finalized with the next two months, ISNA reports.

He said the priority for the country as per the upcoming IPC awards will be the development of joint fields.  The official also emphasized that a special attention will be paid in the new contracts on increasing the recovery rate of the fields.

Iran has 27 oil and gas reserves which it jointly shares with its neighbors.  The shared fields roughly account for 30 percent of the country’s gas reserves as well as 20 percent of its oil reserves. 

The IPC – which was introduced to international investors in 2015 – is replacing buyback deals. Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.

But under the IPC, NIOC will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.

Under the IPC, different stages of exploration, development and production will be offered to contractors as an integrated package, with the emphasis laid on enhanced and improved recovery.

Iran’s Petroleum Minister Bijan Zanganeh had earlier announced that the country needs as much as $200 billion in investments to revamp its oil industry.  He emphasized that the bulk of the new investments are planned to be attracted through IPCs.

Amir Hossein Zamaninia IPC