NIOC to Act with Basket of 3 Contract Models

NIOC to Act with Basket of 3 Contract Models

  • TEHRAN, Aug 31 (Shana) – Managing Director of National Iranian Oil Company (NIOC) Ali Kardor says NIOC has a basket of contract models, including the new model of oil contracts, the buy-back and EPCF models.
  • Speaking to a press conference, Kardor said Iranian companies would undertake management of medium-sized and small fields and follow up on activities envisioned in the subject of the contract in partnership with foreign companies.

    He said large fields will be entrusted to foreign companies under new model of contracts and qualified Iranian companies will be active in the fields.

    He added that big fields will be offered based on the new model of oil contracts and the small and medium-sized fields in the form of new model of oil contracts and buy-back. “I predict three contracts within the framework of the new contracts will be signed by end of this year and through the contracts, about 10 billion dollars in capital will be absorbed.”

    The NIOC official said adoption of methods of enhanced oil recovery from reserves will be the priority of the new contracts and the rate of recovery of the reserves should not be less than 20 percent. The time space of the contract will be 20 years and confidential contract forms will be submitted to the Supreme National Security Council, he added.

    He said as employer, the NIOC will from the beginning to the end have strong presence along with sufficient supervision.

    He went on to say that once obtaining final approval for the new model of oil contracts, the list of foreign companies will be prepared and possibly by next week, a letter will be sent to the foreign companies based on rules so that they will announce their information.

    On transfer of technology per the new contract models, Kardor said the contract model considers three levels of technology transfer: The first level concerns transfer of technology in exploration, production and engineering of reserves, the second level being transfer of technology to Iranian oil servicing company and the third level being transfer of technology in construction of equipment.

    Somewhere in his remarks, Kardor said the NIOC has now concentrated its activities on development of joint fields in West Karoon and South Pars gas field, preservation of production in oil rich regions and to some extent development of joint fields in Persian Gulf.

    Touching other projects will to a large extent depend on securing necessary financial resources, he added.

    Kardor said maximizing gas production in South Pars and equal extraction of gas in the field with Qatar are among the goals ahead.

    Development of fields west of Karoon is the second priority of the NIOC in line with the Economy of Resistance, said the official.

    He said up to so far 52 contracts have been signed in connection with indigenizing manufacture of 10 groups of oil industry goods and by end of this year all the contracts for the 10 groups of items will be endorsed.

    He then focused on  increase in crude production and hoped that with 150,000 barrel increase in daily production of oil by end of this year or maximum end of the 11th government, oil production will reach as many as four million bpd.

    Asked whether the NIOC has a special policy and approach for increasing export of crude oil to the eastern market, he said no special focus is on eastern markets politically but as eastern states were major customers of Iranian oil during sanctions, such a norm will continue and of course, western states’ share will continue to increase and a balance will be in place between the eastern and western markets.

    He put average crude sale price of Iran since start of this year on March 20 at 40 dollars.

    On Iran-Iraq talks for export of Iraqi oil to Kurdistan region through Iranian territory, Kardor said Iraq has voiced interest in that concern and initial talks had been held for the purpose but details of the plan and its economic justification have not yet been studied.

    On export of gas to Oman, he said since volume of the intended gas is higher than Oman’s LNG capacity, gas is not to be exported through LNG.

    Asked about reason of growing engagement with Russians, Kardor said NIOC has not set any limit for cooperation with foreign companies, welcoming cooperation with all the companies owning technology.

    “Of course, it seems that Russians had already undertaken many projects in Latin America, Iraq and the like and now have turned to Iran more. Already Iran did not have any cooperation with Russian in the upstream sector and since Russian companies are well capable in the oil industry upstream sector, especially increasing extraction, it will be possible for Iran to use the capacity.

    Kardor said banking activities, financial coverage, creation of credit and preparation of resources by the Russian companies are among missing points in Russians’ activities in the oil industry upstream sector and in talks with Russians the topics were touched and they are trying to improve their financial coverage.

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