Tehran’s leadership has promised a new, attractive investment model for oil contracts by September, to woo Western business back into Iran.
The pledge was made at the World Economic Forum meeting in Davos, Switzerland, yesterday.
According to the Financial Times, Iranian president Hassan Rouhani asked a group of oil majors to detail the conditions under which they would return to the country.
Iran has been under increasingly tight sanctions, led by the US and EU. However, a recent agreement, between Iran and six major powers, paved the way for some to be lifted, providing Tehran curbs its nuclear activities. Read more: Iranian opportunities beckon
On January 20, the EU agreed to suspend some economic sanctions against Iran as part of the deal. The decision included softening restrictions on trade in petrochemicals and precious metals, and on the provision of insurance for oil shipments, among other measures.
This has led to hope within the region, and more widely, that the country’s oil and gas rich reserves could be opened up to international firms again.
According to the US Energy Information Administration, Iran holds the world's fourth-largest proven oil reserves and the world's second-largest natural gas reserves.
BP’s 2013 Annual Statistical Review says that, at year-end 2012, Iran’s oil reserves were 157,000MM bbl, greater than Iraq's 150,000MM bbl. Its gas reserves were 33.6Trillion cu m, 18% of the world's total.
For western companies to return, how production agreements are structured would need to change, a move hinted at during Davos. The existing framework is a buyback system, which doesn’t offer long term investment incentives, Statoil's VP Middle East, Neri Askland told OE.
According to the Financial Times, Rouhani asked a number of oil majors to detail the conditions under which they would return to the country. The FT said BP, ENI, Shell, and Total were invited to a meeting with Rouhani at Davos.
Speaking at Davos, Iranian deputy oil minister, Mohammad Reza Moghaddam told Iran`s IRNA news agency that the country has about US$30 trillion of hydrocarbons remaining.