TEHRAN, Nov. 21 (Shana) – Iranian oil and gas sectors are very much attractive to foreign investors because of low cast of production, a senior expert said on Monday.
Speaking to Shana, Mahdi Asali added that Iran's oil and gas sector is very much attractive to the foreign companies in compare other investment opportunities in Iran.
After execution of the new models of oil contracts in the post-Joint Comprehensive Plan Of Action era, the attitude of many foreign and domestic investors towards investment in Iran has changed, the expert added.
He referred to low cost of oil and gas production in Iran in compare to other countries and said Iranian oil and gas investment projects are very much attractive.
There are also other elements in the Iranian economy that are effective in absorbing foreign investment and the new models of petroleum contracts can not make a miracle happen in case of absorb of investment, Asali added.
He urged decrease of investment risk in Iran to encourage foreign companies to attend the Iranian projects.
Pointing to developments in the world of energy particularly raise of renewable energies, the official said Iran has no much time to develop its oil and gas industry.
Foreign companies can help Iran not only in the upstream sector but also in the downstream and gas sectors, the expert said.
He noted that foreign investors can help Iran to raise both production and export of the petrochemical and oil products abroad.
The lifting of sanctions marked the beginning of a new era for Iran's upstream industry. The lifting of sanctions marked by Implementation Day paved the way for Iran to target a return to pre-sanctions levels of production and exports at 3.8 mb/d and 2.2 mb/d respectively.
The Iran Petroleum Contract includes payments in kind and a floating remuneration fee linked to oil prices, making this service contract more like a PSC. There has been more interactivity and flexibility created with 20 to 25-year contracts, joint ventures with Iranian companies, and shared risk.
Above all, the IPC addresses weaknesses of the previous buy-back contracts. The new terms are more competitive with no ceiling for cost recovery and a floating remuneration fee per boe based on oil price, exposing investors to upside oil price risk. The model will allow priority or riskier projects to be rewarded with higher returns. Exploration terms have also been made more attractive.