Iran to invite international tenders for 17 oil and gas projects

Feb 14, 2001 01:00 AM

The Iranian Oil Ministry has decided to invite international tenders for 17 oil and gas projects in the next few months on a buyback basis. Iran's Deputy Oil Minister Hojjatollah Ghanimifard was quoted as saying that the projects include those in the South Pars gas field in the Persian Gulf.
Buyback is not a type of investment, but means for providing financial requirements, Ghanimifard said. Under Iran's buyback program, foreign firms receive crude as compensation and profit in return for investing in projects under a formula that denies them a direct equity stake.
Last November, the Majlis (parliament) Energy and Oil Commission said it would examine buyback deals signed with foreign entities for fear of probable fraud, the agency reported. The review would cover all buyback deals signed between Iran and foreign investors since the Islamic revolution in 1979.

Iran's conservatives had voiced concern over the oil buyback program, for fear that increasing foreign investment might lead to sell out the country's most valuable resources to the West. But Iran's State Expediency Council, the highest arbitrative body empowered to settle disputes between the parliament and the Guardians Council, gave final green light to the government for embarking on buyback and similar deals with foreign firms.
Buyback deals began in the mid-1990s in a bid to help the government skirt constitutional bans on foreign ventures and attract much-needed capital to revamp the aging energy sector, which was badly damaged by the war against Iraq in the 1980s and the US sanctions.
Iran has the second largest natural gas and the third largest oil reserves in the world. And oil is Iran's economic backbone.

Source: Xinhua
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