TEHRAN (Dispatches) -- Iran plans to issue tenders to develop its oil fields this summer as the government is expected to approve a new model oil contract designed to attract investors "in a short amount of time,” Minister of Petroleum Bijan Zangeneh said.
Iran will initially seek development of fields along its border, including the South Azadegan deposit near Iraq, ISNA news agency cited an interview with Zangeneh. Tenders will also be issued for exploration, it said.
"One of the most important challenges is to benefit from several joint fields,” Zangeneh said.
Iran needs to increase the amount of oil it can produce from fields and "for this we need technology and management more than finances and this is why we have drafted new contracts."
Iran was the second-biggest producer in the Organization of Petroleum Exporting Countries until sanctions were intensified against the country in 2012.
Since sanctions eased in January, production recovered to pre-sanctions levels of 3.6 million barrels a day in April and maintained that level in May, the Paris-based International Energy Agency estimates.
Rights to develop between 10 to 15 oil and natural gas deposits will be offered in a first tender round that could be held during the Iranian month ending July 21, Zangeneh said. Priorities for development also include Phase 11 of the offshore South Pars natural gas field, as well as oil deposits in that reservoir and the separate Farzad gas field, Zangeneh said, according to ISNA.
Iran’s efforts to attract more than $100 billion in investment in its oil and gas industry have faced delays caused by sanctions and the lack of a contract model. An international conference originally planned for 2014 to unveil the contracts was postponed at least three times. National Iranian Oil Co. hosted companies in Tehran in November to announce the tender process. At the time, Zangeneh and the NIOC predicted the first contracts would be signed in the first half of this year.
This month, Zangeneh said in an interview with Iranian weekly magazine Seda that the contracts still need some work and that he expected the first deals to be signed within the next few months.
In his interview with ISNA, Zangeneh said a final draft for the contracts will be approved by the government shortly after some amendments to appease both critics and foreign companies.
"Some of the critics were accusing us of treason. We could not have a discussion with them. The other group had raised some issues on the model of these contracts and we held meetings with them,” Zangeneh said.
In the interview with ISNA, Zangeneh reiterated his target that Iran will produce 4.8 million barrels a day of crude oil and 1 million barrels a day of condensate over the next five years.
The country can profit from oil prices as low as $7 a barrel since its cost of producing crude is so low, Zangeneh said. Brent crude, the international benchmark, traded at $47.70 a barrel on Monday.
Indonesia to Sign First Upstream Deal
Indonesia's state energy company Pertamina will sign a deal to purchase a stake in an oil and gas block in Iran within a week, an official at Indonesia's energy ministry said on Monday.
A deal would be Indonesia's first investment in Iran's upstream oil sector. Last month Pertamina inked a deal to purchase 600,000 tonnes of liquefied petroleum gas from state-owned marketer National Iranian Oil Co.
"The government to government agreement is done, so now (we're) following up with a company to company (deal)," Oil and Gas Director General Wiratmaja Puja told reporters, noting that a deal was expected before the end of the Muslim fasting month. The fasting month of Ramadan is expected to end on July 5.