The new model of Oil & gas field development contracts announced

The new model of Oil & gas field development contracts announced

Ali Kardor, the managing director of National Iranian Oil Co. (NIOC) declared: in the near future oil and gas fields’ development will be done based on 3 types of contracts including BuyBack, Iranian Petroleum Contracts (IPC) and Engineering, Procurement, Construction & financial (EPCF).

It is worth noting that 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, the National Iranian Oil Co. (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.

According to Ministry of Petroleum, Ali Kardor NIOC managing director, emphasized the importance of time and cost management in oil and gas projects and said: if the international projects don’t meet the time and cost index, they are considered as failure. He also declared: recently some of “Eni” managers, who are working in Iraq, have announced the total cost of drilling a rig, equivalent to 4,500 thousand dollars, However we spent 12,500 thousand dollars in West Karoon. Besides “Eni” performs drilling of a rig in 35 days while it takes us approximately 120 days. Therefore time and cost management are such important factors in oil and gas projects which we need to pay extra attention to, in order to reach the international levels.

Meanwhile Mohammad Reza Moqaddam, deputy petroleum minister for research and technology announced that 37 candidate companies have been evaluated for partnering foreign companies in developing oil and gas projects in the post-sanctions setting and the names of 8 of them have been confirmed, including: Petro Pars, Oil Industries’ Engineering & Construction (OIEC), Industrial Development and Renovation Organization of Iran (IDRO), Dana Energy, Petro Iran, Mapna Group, Khatam ul-Anbia Construction Headquarters and The Execution of Imam Khomeini’s Order (EIKO).

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