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Iran’s new oil contract model shelved

Iran’s new oil contract model shelved

TEHRAN: An Iranian lawmaker said a new format of the country’s oil contracts, known as Iran Petroleum Contract (IPC), has been laid aside, saying flaws in the model began to show sooner than what the MPs thought. “The new model of oil contracts has been shelved after ratification, and no contract has been signed under these new models,” member of the parliament’s energy commission, Hedayatollah Khademi, told Tasnim on Tuesday. He explained that the foreign companies that have come to Iran for business negotiations have only signed memoranda of understanding which are non-binding for both sides.

Highlighting the flaws in the IPC, Khademi said ineffectiveness of the model began to show earlier than expected. As the MPs have said, IPC does not specify whether the foreign companies are committed to keep working with Iran after the removal of the anti-Iran sanctions, he noted. The shortcomings of the new model became obvious following comments by the Total oil company’s chief executive, the lawmaker deplored.

On Thursday, February 9, chief executive of French oil major Total said the company plans to make a final investment decision on a $2 billion gas project in Iran by the summer, but the decision hinges on the renewal of US sanctions waivers. Patrick Pouyanne said South Pars 11 will be among a couple of projects to be approved by the company to start by the summer, if nothing is modified regarding the sanctions. Total was the first Western energy company to sign a major deal with Tehran since the lifting of anti-Iran sanctions under the Joint Comprehensive Plan of Action (JCPOA), a nuclear agreement between Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany).