Oil and Gas 360 quotes Global Energy Center Nonresident Senior Fellow Sara Vakhshouri on the new, long-term Iranian Petroleum Contracts (IPCs) that aim to restimulate the industry in Iran:
This new model offers an attractive option to companies looking for projects in the Middle East, Dr. Sara Vakhshouri, president of SVB Energy International and Senior Energy Fellow with the Atlantic Council Global Energy Center, told Oil & Gas 360®.
“It’s difficult to attract investment anywhere right now with low oil prices, but low production costs mean Iran is still competitive,” said Vakhshouri. “The IPCs are very similar to the contracts offered by Iraq’s central government, but without some of the security issues associated with groups like ISIS.”
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“NIOC hopes to increase the quality of work and protect its oil and gas reservoirs by engaging international companies for longer periods of time,” said Vakhshouri. “This will give the investors a more vested stake in the field and could create political advantages for the country, as investing companies would have long-term interest in Iran.”
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Another major concern for companies looking to invest in Iranian oil and gas fields are their options for arbitration should problems arise during the project. “Companies with bilateral agreements with Iran can go through international arbitration if problems arise,” said Vakhshouri. “Otherwise, they will need to go through the Iranian court system.”