Iran adopts "buy-back" scheme to develop its oil and gas fields

Aug 08, 1999 02:00 AM

Iran has succeeded in adopting "buy-back" scheme to develop its oil and gas fields, and break sanctions imposed by the United States.
"Tehran's pragmatist energy policy is succeeding, further neutralising American efforts to undermine Iran's economy," said an official with the NIOC.
Hojjatollah Ghanimifard, NIOC director for international affairs, was quoted by local press as saying that Iran is currently accepting tenders for the implementation of the phases 4-8 of the giant South Pars gas field in the Persian Gulf. The project attracted many foreign companies and the deadline for the tender is set on September 1, he said.
This world's largest gas field lies 100 km off Iran's southern coast and has a reserve of about 8 tcm of gas. The whole project includes 10 drilling sites, two offshore platforms and two lines of gas pipes of 105 km.
The "buy-back" scheme, also known as "service contract," promises contractors certain shares of oil and gas to compensate their initial investments in exploration and development. It is regarded by Iran as one of the best methods to conclude energy deals, especially when the country is short of hard currency.
The scheme's first application was with France' Total in developing Sirri A and E oil fields in the Persian Gulf. With Total's investment of $ 600 mm, the field came on stream last autumn with a production capacity of more than 50,000 bpd.
Ghanimifard said many foreign companies showed interest in exploration. If a foreign company wins a tender, makes an investment and succeeds in finding oil or gas, then project development will be put on another tender, he explained. "The company involved can get the new development phase if its conditions are equal with those of the best bidder," he added.

He also said that Iran has nominated Hussein Kazempour Ardabili, top advisor to the oil minister, as its candidate for the post of the next secretary-general of the OPEC.
Ardabili is also Iran's governor at OPEC and an advisor to Iran's foreign minister. Saudi Arabia, on the other hand, has nominated its governor at OPEC Soleiman al-Herbish as its candidate.
A final decision is expected at the next OPEC oil ministers' meeting in September.

Source: Xinhua via Newspage
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