Iran plans reforms to oil industry

Iran, the second largest producer in the Organisation of the Petroleum Exporting Countries, is planning reform to make its oil projects more attractive to international energy groups.

Speaking before next week’s Opec meeting in Iran, Mohammad-Hadi Nejad-Hosseinian, deputy oil minister, said Iran was “improving” the buy-back scheme under which foreign companies can operate in the sector. “For instance, we may sign a contract for 25 years, with a rate of return that we agree at the beginning,” he said. Mr Nejad-Hosseinian said Iran was discussing ways of keeping foreign contractors involved once they have developed a field.

“During the operation, as a consultant they [could] work with us,” he said. “Maybe after two or three years the field needs new work, so they make proposals and they do investment again, and they are paid back the same rate of return.”