The Iran-oil (4) (NIOC) will sign the first of its new oil and gas contracts (IPCs) with a domestic firm on Tuesday, its managing director said.

The signing of the first IPC tomorrow will intensify anticipation among international oil majors for long-awaited further contracts in the new format.

The Iran Petroleum Contract (IPC) is a cornerstone of the country’s plan to raise crude production to the pre-sanctions level of four million barrels per day (bpd).

The launch of the IPC has been postponed several times as hardline rivals of pragmatist President Hassan Rouhani resisted any deal that could end the so-called buy-back system, under which foreign firms were banned from owning stakes in Iranian companies.

“Tomorrow NIOC will sign a contract with Setad Ejraye Farman Emam under the IPC to develop the second phase of Yaran field, and EOR (enhanced oil recovery) and IOR (improved oil recovery) contracts for Koupal oil field,” managing director of NIOC, Ali Kardor was quoted as saying by Fars news agency.

Iran’s Tasnim news agency said the value of the new contracts is $2.5 billion.

Setad Ejraiye Farmane Hazrate Emam, or Setad, is one of the most powerful organizations in Iran that works directly under the command of Islamic Republics highest authority, Supreme Leader Ayatollah Ali Khamenei.

Khamenei said in July that no new oil and gas contract for international companies would be awarded without necessary reforms.

Kardor said both the president and the oil minister have made it clear that no IPC would be signed unless the Supreme Leader is happy with the new form of contracts.

Oil majors have said they would only go back to Iran if it made major changes to the buy-back contracts of the 1990s, which companies such as France’s Total or Italy’s Eni said made them no money or even incurred losses.

Source: www.reuters.com