Approval of Five More Foreign Companies for the Development of Iran's Oil Fields

Iran has approved five more companies to participate in oil projects. Previously, the National Iranian Oil Company had approved a list of 29 foreign companies for the development of its oil fields based on a new model of oil contracts. Some of these companies, which had even signed contracts for studying or developing oil fields with Iran, were not included in the previous list. The names of these five companies, published on the official website of the National Iranian Oil Company, include the State Oil Company of Azerbaijan along with four Russian companies: Rosneft, Tatneft, Zarubezhneft, and Gazprom Neft. So far, Zarubezhneft has signed a cooperation contract with Iran for the study of the Aban and West Paydar fields, and Tatneft has signed a contract for the study of the Dehloran field. Gazprom Neft has also signed a contract with Iran for the study of two fields, Cheshmeh Khosh and Changuleh. Even before the lifting of nuclear sanctions in January 2016, Iran had introduced the general outlines of new oil contracts for the development of 49 oil and gas fields based on a new model known as 'IPC' during a conference in Tehran to foreign companies. However, due to internal opposition, particularly from conservatives, this new type of oil contract was revised, and the first tender for the development of oil fields is expected to be held in the coming days. None of the fields assigned for study to the Russian companies are prioritized in Iran's new oil contract tenders. Iran intends to tender the oil fields of West Karun, which are shared with Iraq, as soon as possible. The in-place oil reserves of these fields, including Azadegan (North and South), Yaran (North and South), and Yadavaran, are approximately 64 billion barrels. In this context, the specialized publication Platts reports that the number of foreign companies approved for entry into Iran's oil projects has now reached 34, but none of the newly approved Russian companies have commented on their approval or have been available for discussion. Iran states that it needs to attract $100 billion in oil and gas projects over the next five years, part of which must be invested through new oil contracts with foreign resources. Besides the West Karun oil fields, Iran has also prioritized the development of Phase 11 of South Pars. This phase is the only one among the 24 phases of South Pars that has not yet been developed. Last year, Iran signed a $4.8 billion memorandum of understanding with Total of France for its development, but with the coming to power of Donald Trump's administration and tougher U.S. positions against Iran, Total announced that it would postpone its decision to participate in Iranian projects. However, the memorandum of understanding does not have the guarantee of execution like a contract and is only a precursor to signing a contract. Zanganeh stated on Saturday, June 17, that the contract between Iran and Total for the development of Phase 11 of South Pars is in the final stages and will be signed before the end of the current administration. According to ISNA, he said that Iran and Total are finalizing discussions for signing the development contract for Phase 11 of South Pars, which is nearly in the finalization stage.