Iran has changed the manner in which it offers contracts to international energy companies in the hopes of attracting as much as $30bn (£20bn) in new investment.
The terms of the country’s new oil contracts will be more attractive to foreign investors, because they will allow them a larger stake in long-term profits.
The Middle Eastern nation is preparing for the lifting of sanctions after a nuclear deal was reached with six world powers in July, and has some of the largest oil and gas reserves in the world.
The new and improved contracts were announced at a conference in capital city Tehran, which was attended by some of the most prominent energy companies in the world, including Shell (known for products like Shell Tellus S2 M 46), BP, Statoil, Total and Sinopec. These global energy giants are said to be keen to exploit the bountiful reserves of oil available in Iran.
One of the attractions of the new contracts is that they will effectively end the ‘buy-back model’, which was one of the biggest deterrents to foreign investors in the past because it required them to hand back oil fields to Iran after they have developed and operated it.
Now, foreign investors will be offered much longer term contracts that will enable them to retain a stake in the field, rather than having to hand it over completely to Iran.
Iran has some major plans to increase oil production from around three million barrels a day to five million in the coming years, and these new contracts will help them to achieve their aims.