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Iran signs deals to sell crude to European firms

Xinhua, June 12, 2016 Adjust font size:

Iran signed deals to sell crude oil to seven European companies, an Iranian oil official was quoted as saying by semi-official Mehr news agency on Sunday.

Long-term deals are signed with Saras SpA and Eni of Italy, Spain's Repsol, Hellenic Petroleum SA of Greece, France's Total, Switzerland's Vitol Group as well as Lukoil of Russia, executive director for international affairs at National Iranian Oil Company (NIOC) Mohsen Qamsari said.

"So far, agreements for the sale of nearly 700 thousand barrels per day (bpd) have been signed" with the European firms, Qamsari said, adding that the crude exports have been already started for the companies.

According to the report, Iran's oil exports has reached 2.1 million bpd, from some one million (bpd) during the sanction period over the past years, and it is planned to hit a total of 2.5 million bpd by the end of summer 2016.

The newly developed Iran Petroleum Contract (IPC) is one of the strategies Tehran has adopted to attract investment and upgrade the country's oil industry, Iranian Deputy Oil Minister for International Affairs Amir Hossein Zamaninia said earlier this month.

To this end, the country is drawing up plans to draw 185 billion dollars of investment in all sectors of the oil industry within a five-year period, Zamaninia said, adding that 85 billion dollars of the investment will go to the upstream sector of the industry.

Iran's IPC, if implemented, would help the country attract financing from Asian and European investors. The new contracts are replacing traditional Iranian "buy-back" contracts which are no longer attractive to foreign companies.

Under the contracts, NIOC will set up joint ventures for crude oil production with international companies which will be paid with a share of the output.

Iran and the world powers reached a nuclear deal last July, which was implemented in January and would enable the country to re-engage with energy firms of the world to develop its oil and gas fields. Endit