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Iran has made no major concession to French energy giant Total S.A. for developing Phase 11 of the giant South Pars Gas Field in the Persian Gulf. the deputy head of National Iranian Oil Company said.
`The newly-concluded agreement with Total is essentially a long-term service contract and the National Iranian Oil Company has made concerted efforts to strike a win-win deal. which will never grant ownership of domestic hydrocarbon reserves to the energy major.` Gholamreza Manouchehri was also quoted as saying by Shana on Sunday.
Denying claims that NIOC reached a compromise with the French energy major to attract the much-needed investment. Manouchehri said. `The new deal. which is within the framework of Iranian Petroleum Contract. is not vastly different from the previous buyback ones. except that it entails a longer period and assigns more responsibilities to contractors.`
Highlighting the great potential in Iran`s oil industry to attract foreign investments compared to other economic sectors. the official added that based on IPC terms. funding upstream development projects by multinationals is without state guarantees. so they do not add to Central Bank of Iran`s foreign debts. According to the official. such mega plans will not generate a return on investment unless the whole project goes on stream that is why no executive body needs to make any financial commitments.
Pointing to ongoing surveys on the country`s oil and gas deposits. Manouchehri said. `International oil giants have proved that Iran`s oil output can reach 7 million barrels a day in 10 years. up from the current 3 million bpd. Nonetheless. tapping into the reserves requires investments worth $200 billion. of which $150 billion should be financed by foreigners.`
Pointing to the fact that Phase 11 will be developed in two phases. he noted that the French giant does not need to inject all the funding. which will amount to $5 billion. all at once as the second phase begins after the gas reservoir registers a drop in pressure.
