Iran plans to invite international companies to bid for oilfield development rights in June, a government official said, as the Persian Gulf country seeks to revive its energy industry after years of crippling sanctions.
The Oil Ministry will solicit bids in a tender round starting June 21 and running for a month, state-run Islamic Republic News Agency reported Tuesday, citing Mehdi Hosseini, chairman of the ministry’s oil contracts revision committee. National Iranian Oil Co. is working on a model investment contract for any development agreements, he said.
Iran is rebuilding its oil and natural gas industries and restoring sales of crude after international sanctions were lifted in January. The country, which will meet other OPEC members this week in Vienna, is targeting an increase in production and exports to pre-sanctions levels. It refused to join other producers in a push to freeze output at a meeting in Doha in April.
Foreign companies have been awaiting details of the investment contracts and bidding rules since Iran in November identified about 70 oil and gas fields that it would offer. International conferences planned as early as 2014 never took place due to sanctions. Would-be investors may now hesitate to commit to Iran out of concern that the U.S. may toughen its policy toward the country after choosing a new president in November, according to Edward Bell, a commodities analyst at Emirates NBD PJSC in Dubai.
“There’s plenty of opportunity in Iran,” Bell said Tuesday by phone. “It’s been two years now that we’ve been waiting for these contracts. But regardless of how ready or not Iran is to accept investment, nobody is going to be dying to move into Iran until after the U.S. election.”
Iran needs about $185 billion in investment to upgrade its oil, gas and petrochemicals industries by 2020, the Oil Ministry’s news service Shana reported, citing Amir-Hossein Zamaninia, deputy oil minister in charge of commerce and international affairs.
Iran’s crude production rose to 3.38 million barrels a day in May, from 3.35 million in April, JBC Energy GmbH said Tuesday in an e-mailed report. The nation pumped 3.6 million barrels a day at the end of 2011, before the U.S. and European Union intensified their sanctions, according to data compiled by Bloomberg. Iran is currently the third-biggest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia and Iraq.