Conference Introducing Iran's New Oil Contract Postponed in London

The conference to unveil a new type of oil contract designed by Iran for foreign companies has been postponed to next year after several delays. This two-day conference, titled 'Iran's Oil and Gas After Sanctions,' was scheduled to take place on December 14 of this year in London, aiming to introduce a new oil and gas contract that Iran claims is more attractive than previous contracts known as 'buy-back' agreements. Initially, the details of this contract were to be revealed in May 2014 in London, but it was postponed to March 2015. Iran then announced that the conference would take place in the summer of 2015, and finally, the date of December 14 was set. Now, Bijan Zangeneh, Iran's Minister of Oil, states that before the London conference, another conference will be held in Tehran, and companies that miss the opportunity to attend the Tehran conference can learn about Iran's new oil contract at the London conference. Zangeneh, in an interview with Shana news agency on Saturday, October 26, mentioned that the new oil contracts will be introduced to foreign investors in Tehran in November, stating, 'In the conference held in Tehran, projects that will be developed under this contract will be introduced to investors.' He added, 'Companies that miss the Tehran meeting can attend the London meeting.' In this context, Reuters reported on Thursday, October 2, citing sources in Tehran, that Iran is waiting for the lifting of Western sanctions to unveil the new oil contract, and the London conference has been postponed to February 22, 2016. The report adds that international oil companies are keenly awaiting the unveiling of Iran's new contract; a country that is the third-largest oil producer in OPEC and holds the fourth-largest oil reserves and the largest gas reserves in the world. Iran and six world powers reached a comprehensive nuclear agreement on July 14, paving the way for the lifting of sanctions against Iran. Sanctions are expected to be lifted in early next year. Western sanctions, which began in the first half of 2012, have reduced Iran's oil production by up to one million barrels per day, bringing it down to 2.7 million barrels. Iran has announced that it will introduce 45 new oil projects to foreign companies at the London conference, and the new oil contract is said to be 'more attractive' than the old contracts. Seyed Mahdi Hosseini, head of the Oil Contracts Revision Committee, told Bloomberg in August that with the introduction of the new type of oil contract and 45 projects, 'Iran hopes to increase its crude oil production to five million and seven hundred thousand barrels per day.' Iran states that it needs $185 billion in investment for the development of its oil and gas projects over the next five years. Some international companies, such as Total of France and Eni of Italy, say that the old type of Iran's contracts known as 'buy-back' are no longer attractive to them, and they see not only no profit in these contracts but also the possibility of loss. Iran has not yet published the details of its new contract, although some characteristics and conditions of this contract have been sporadically announced by Iranian officials. However, the Iranian Ministry of Oil claims that the new contract is competitive with 'production-sharing' contracts that are common in the region. A production-sharing contract is a type of contract where the foreign company takes ownership of part of the oil and gas reserves of the fields, but unlike regional countries like Iraq, according to Iranian laws, granting ownership rights of the fields to foreigners is illegal.