Iran signed the first oil deal using a new contract model

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National Iranian Oil Co (NIOC) announced Wednesday signing a 20-year contract with Persia Oil and Gas Industry Development Company to increase production at three oil fields - Kupal, Marun and Yaran in the southwestern Khuzestan province - by 75,000 barrels per day to 260,000 barrels per day. The deal, worth about $2.2 billion, became the first one signed using a new Iran Petroleum Contract (IPC).

“Today, the main concepts of the contract are being signed as heads of agreement. We decided to use this method to save time and accelerate the work. The Persian company is now starting to carry out the studies,” oil minister Bijan Zanganeh said at the signing ceremony. “One of the objectives of the new model of contracts is to make exploration and production companies because we don't have them in our country. Foreign companies cannot sign any deal unless it works with an E&P company.”

The three oil fields, mentioned in the contract, contain a total of 14.5 billion barrels of crude oil, but only 2.5 billion of them are now exploitable. As NIOC managing director Ali Kardor explained before signing the deal, the fields need development and new technology.