06-07-04
Like Indonesia, Iran's parliament (Majlis) is changing its laws in order to
entice foreign firms to participate more in its oil and gas development
projects.
Iran's new 2005-10 economic development plan will enable exploration companies
to develop the fields in which they strike oil and will favour companies
interested in finding new fields outside the oil-rich southwest. Under the new
plan National Iranian Oil Co. (NIOC) will not conduct new exploration work in
the southwest.
The new legislation also loosens Iran's restrictive "buy-back"
agreements, under which field developers are compensated with output before the
fields return to NIOC.
Few buy-backs have been concluded under the discouraging system. Kamal Daneshyar,
Head of the Majlis Energy Committee, said an ad hoc committee of Ministry of
Petroleum members, industrialists, and university professors will devise methods
to encourage more oil deals.
In the interim, companies from India, Malaysia, Spain, and Russia are bidding
to develop Iran's North Azadegan, Kushk, and Hosseinieh oil fields under a
buy-back scheme. Ali Akbar Vahidi Al-e Aqa, deputy head of Oil Engineering &
Development Co. was quoted as saying foreign companies must bid by the end of
September, when Tehran will select operators.
India's international firm ONGC Videsh Ltd. (OVL), New Delhi, likely will
receive a 20 % stake in Kushk and Hosseinieh fields on a nomination basis. Iran
would offer that share in these fields (about 60,000 bpd of crude oil) in
exchange for India's purchase of 5 mm tons of LNG from Tehran when it has LNG
export facilities in place.
Iran is seeking buyers for its Pars field gas and is planning three LNG
projects.
Rokneddin Javadi, managing director of National Iranian Gas Export Co., said
that an LNG project would take about 5 years but the company in February awarded
Total, Malaysia's national oil company Petronas, and NIOC a EUR 1.6 bn contract
for an LNG plant at South Pars. Finding buyers was expected to take 7-8 months.
Source: Oil & Gas Journal