Iran Plans to Offer Better Oil Exploration Terms Than Iraq

From Bloomberg

By Golnar Motevalli, Ladane Nasseri and Anthony DiPaola

Iran will offer international companies better oil contracts than OPEC-rival Iraq as the Islamic republic seeks long-term investment to revive its energy industry, a government adviser said.

The fifth-largest Organization of Petroleum Exporting Countries member is discussing limits to its nuclear program to remove Western sanctions against its financial and energy businesses. Iran is developing new hydrocarbon contracts that are “in line” with international practice and law and will offer more flexible terms than those Iraq uses, said Mehdi Hosseini, who leads the oil ministry’s committee on the accords.

“They’ll need to reward partners with incentives for raising production or cutting costs,” said Robin Mills, who worked for Royal Dutch Shell Plc (RDSA) on some of the last Western contracts secured in Iran a decade ago. “Iran’s mature and smaller fields pose more risks for companies developing them, so Iran would have to offer better remuneration,” Mills, head of consulting at Manaar Energy Consulting and Project Management in Dubai, said by phone today.

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