AFP: Iran might for the first time offer production sharing contracts to develop its Caspian Sea oil fields, in a bid to attract foreign investors to a region with high exploration costs, a report said on Monday.
TEHRAN (AFP) — Iran might for the first time offer production sharing contracts to develop its Caspian Sea oil fields, in a bid to attract foreign investors to a region with high exploration costs, a report said on Monday.
The head of investment in the National Iranian Oil Company, Hojatollah Ghanimi Fard, said Iran could make the Caspian region exempt from buyback contracts, the Sarmayeh newspaper reported.
"If parliament and Iranian officials agree, Caspian projects could be done in the form of production sharing contracts because of their high costs," Ghanimi Fard said.
He added that the NIOC had discussed Caspian oil development with "the foreign activities branch of the Indian oil company and it has also had negotiations with the Chinese."
The report identified the Indian firm as the giant Oil and Natural Gas Corporation.
Iran is the number two producer in OPEC and the number four worldwide, but its ability to reach oil production targets has been hampered by a lack of international investment.
Iran's buyback system skirts around the constitution which prohibits foreign companies from taking equity stake in its oil and gas sector.
Instead, it enables foreign companies to explore and develop a project for a set time and at a fixed cost, after which they are paid by the government in oil or gas revenues at market prices.
Western governments have pressured firms to cut their ties with Iran over the country's controversial nuclear programme amid suspicions that it is aimed at producing an atomic weapon — a charge vehemently denied by Tehran.