It’s been an eventful week in oil. With reports from top producer Saudi Arabia showing record August production of 7.622 million barrels per day — weighing on market sentiment. And on the flip side, oil workers in Norway launching a strike involving a full 300 members that could halt production.
But the news was decidedly positive from one critical corner of the oil and gas world.
Crude sellers in this emerging producer got a lift from India. When that nation announced it will likely buy 6 million barrels of Iranian crude in order to fill a strategic petroleum reserve.
But the biggest news came from Iran’s parliament. Which said it has finally agreed on a long-awaited new model for foreign petroleum contracts in the country.
The oil and gas world has been eagerly awaiting this new contract model — which Iran’s lawmakers have been promising will offer more attractive terms for international developers in country.
But some last-minute rapids appeared in unveiling the contracts. With reports last month suggesting that parliamentary hardliners were opposing key measures of the contract reform such as ownership of in-ground reserves for foreign operators.
Those issues have apparently been resolved. But not without some discussion, with observers saying that several changes were made that “took into account the concerns of the critics and sympathizers of the establishment”.
That suggests some of the attractive aspects of the new contracts may have been dampened or removed completely. But the upside is that offering of oil and gas opportunities in the country can now proceed — with officials saying that $10 billion worth of contracts have now been readied for signing by March 20, 2017.
Managers with the National Iranian Oil Company said that the process will begin with the tender of three oil and gas fields — although they didn’t mention specific names aside from the South Azadegan field that’s been discussed previously. The tender for those fields is reportedly scheduled for October 14 to 21.
That gives us less than a month until the world will get its first look at the “new” Iran oilpatch. Watch for details on who will be bidding, and what the final terms will be for the new contracts.
Here’s to the start of something big,