Iran said it’s received “positive” feedback from international oil companies on the new contracts being prepared for the return of foreign investors if and when nuclear sanctions are lifted.
“So far the feedback has been positive, we want a win-win contract so the foreigners can come,” Iran Oil Minister Bijan Namdar Zanganeh said in Vienna on Friday while attending a meeting of the Organization of Petroleum Exporting Countries.
Zanganeh has been the center of attention this week, meeting chief executive officers of companies including Royal Dutch Shell Plc, Eni SpA, Total SA and Lukoil OAO.
For the first time in years, European oil companies are openly declaring their interest in Iran in anticipation of a possible end to sanctions against the country over its nuclear program. Total CEO Patrick Pouyanne summarized the view of the European industry on Wednesday when he said: “We love Iran.”
U.S. oil companies, constrained by the history of American sanctions against Iran dating from the 1979 Islamic revolution, are more cautious, but ConocoPhillips said it would consider Iran if the conditions were right.
The European executives are walking a fine line, however, showing their interest in Iran while insisting that no negotiations are happening as long as the nuclear sanctions remain in place. Moreover, executives insisted that Iran needed to offer good terms, and warned they have other investment options, pointing to Mexico and Brazil.
Zanganeh said that he wanted foreign oil groups to help Iran to increase recovery from the country’s older fields.
“The most important thing is to have continuity from exploration to development,” he said, speaking in Farsi.
Tehran sees the return of foreign firms as the key to reviving its oil industry and a major benefit from a nuclear deal with the U.S. and other world powers.
Iran has circulated drafts of oil-contract terms, suggesting it’s expecting to seal an atomic deal soon. Oil executives who have seen partial drafts of the new terms said they are, in general, better than what Tehran offered in the 1990s and early 2000s.
While the previous contracts merely paid a set fee for the delivery of a project, the latest deals may give investors some share of a field’s production and allow companies to book more reserves on their balance sheets, people with knowledge of the matter have said.
Iran is planning to announce the contract at a road-show in London in September.
Iran needs $200 billion of investment in its oil industry, Zanganeh said last month. The Iranian minister said American companies would be welcomed back alongside the Europeans.
The Middle East country now pumps 2.8 million barrels a day, down from more than 4 million a decade ago due to the impact of sanctions on foreign investments. Iran, which holds the world’s fourth-largest oil reserves and the second-biggest gas cache, pumped a record of 6 million barrels in 1974.