Tuesday, 21 June 2016

Global oil industry cautious ahead of Iran's landmark licence round

- Projects on ice awaiting crucial petroleum contract
International oil & gas companies remain cautious ahead of the recent announcement of a licencing round later this month, says international law firm Pinsent Masons.
International oil companies are gearing up for the licence round expected to be launched on 21 June. The bidding process is expected to grant international companies access to Iran's natural resources for the first time since onerous trade sanctions were lifted earlier this year.
But energy experts say efforts to kick-start exploration and production in Iran could be stymied due to the delay in finalising the new model contract outlining vital terms of investment and returns for O&G projects.
O&G expert at Pinsent Masons Niazi Kabalan, said: "It is possible that the licensing round might focus on investment in existing infrastructure upgrades, and defer the grant of new exploration and production rights until the model IPC is finalised’’.
"There is still an appetite to invest in Iran across many parts of the oil and gas community," says Niazi Kabalan. "While the licence round signals support for overseas investment, the lack of clear terms means plans may well be put on ice for the short term. The model petroleum contract must be finalised if Iran truly wants to realise its global ambitions."