An Iranian deputy minister of petroleum has said that administration of Hassan Rouhani welcomes Japanese and European firms’ investment in Iran’s oil industry.
Speaking to Yomiuri Shimbun, Ali Majedi said that the administration of Iranian President Hassan Rouhani plans to expand involvement by Japanese and European firms in the country’s oil and natural gas development projects.
To encourage their entry, Iran will make a sweeping review of its contractual procedures and consider increasing the share of profits that go to foreign investors, said Ali Majedi, an Iranian deputy oil minister for international affairs and trade. The move is set to mark a turning point for Iran’s global trade policy amid rising expectations for the relaxation of economic sanctions now that the country has reached a first-phase agreement with the United States and other countries on its nuclear development, observers said.
According to the deputy oil minister and other Iranian government officials, Rouhani directed the Ministry of Petroleum after taking office in August to establish a committee for revision of crude oil contracts consisting of officials from the ministry, the National Iranian Oil Company and external organizations.
“The current system is fraught with problems,” the deputy oil minister said. “Changes are necessary to make contracts more attractive to foreign capital.
” He said he has already contacted more than 10 major oil companies in the United States and Europe, plus one Japanese firm. Under the current standards, the term of contract is set at three to five years and the Iranian government takes most of the profits.
A plan that would extend the contract term to about 10 years and significantly increase the profit share of participating foreign companies is under study. In connection with projects to develop new oil and natural gas fields in southern Iran and the Caspian Sea, which are thought to have massive reserves of fossil fuel, the country is studying a contract system that would allow for a greater share of profits.
Majedi encouraged the participation of Japanese firms, saying, “Japan’s reputation and experience will go far in Iran.” He also raised the issue of renewed involvement in the Azadegan oil field project, from which Japan withdrew in 2010. Japan imported about 11 million kiloliters of crude oil from Iran last year, down sharply from about 28.77 million kiloliters in 2008, due to economic sanctions.
