Majlis endorses new oil contract

Majlis has given the go-ahead to the government to put a new oil contract model into effect, the Ministry of Petroleum’s Shana news agency reported on Saturday.

The new formula, which has drawn criticism from some politicians and experts, was reviewed by a parliamentary panel but not voted by lawmakers.   

“After examining the new contract model, the parliament board on the conformity of government bills with laws declared it not in contradiction with the upstream rules,” Shana quoted MP Asadollah Qareh-Khani as saying.

Parliament speaker Ali Larijani, however, communicated the advice of critics and those familiar with the matter about the contract to the government, said the lawmaker who is also the spokesman of parliament’s energy commission.

The new oil contract model has been modified several times to satisfy those who say it has serious flaws.

“The government, in its third draft, took into account the concerns of the critics and sympathizers of the establishment; and the board on conformity declared the new oil contract in compliance with upstream rules,” Qareh-Khani said. 

The new Iran Petroleum Contract (IPC), described as a hybrid model, will replace the buy-back contract. It is being touted as a risk service contract which includes integrated exploration, development and production.

Deputy Petroleum Minister Ali Kardor said in remarks published on Saturday that some $10 billion of oil and gas contracts have been prepared for signing before the end of the current Iranian year on March 20, 2017.

SS