A gas flame is seen through a bus window in the South Pars gas field facilities in the southern Iranian port of Assaluyeh on the shore of the Gulf (file). Opec member Iran will announce new oil and gas contracts at conferences in Tehran and London on November 21-22 and February 22-24 respectively.

Reuters
Abu Dhabi

Iran will have to offer lucrative contracts terms to draw back international oil companies at a time when the oil industry is more focused on profitability as it gears up for a longer period of low oil prices, executives have said.
Iran said in September it had approved a draft of international oil and gas contracts to attract foreign investors and oil buyers once international sanctions are lifted but has not provided details so far.
The Opec member will announce new oil and gas contracts at conferences in Tehran and London on November 21-22 and February 22-24 respectively.
“It is not only questions of resources or opportunities, it is a question of profits,” Total’s chief executive Patrick Pouyanne told a conference in Abu Dhabi last week. “We will be well positioned to look at opportunities in gas, oil, petrochemicals and marketing. But all that is subject to good contractual conditions, so we will see.”
Pouyanne said Total was likely to attend the Tehran conference where the oil ministry will reveal the framework of the contracts.
Iran said the new ones would be a major improvement not only on the so-called buy-back contracts but also on those that neighbour Iraq offered to foreign oil companies in 2009-2010.
Oil majors have said they would return to Iran if it made big improvements to the pre-sanction buy-back contracts, which some foreign companies complain made them no money or even incurred losses.
“Today buy-back contracts would not attract anyone for the lack of oil price upside and reservoir upside,” Shell’s integrated gas director Maarten Wetselaar told a news briefing. “Iraq would today also struggle to get those contracts away.”
Oil companies operating in southern Iraq, such as Shell and Total, have often complained about the tough terms offered by Baghdad as well as security concerns and infrastructure constraints. “At the moment the industry is more constrained in financial resources rather than opportunity-constrained,” Wetselaar said, adding that this had been shown by some recent auctions in places such as Mexico generating tepid interest.
The sanctions have halved Iran’s oil exports to around 1.1mn bpd from a pre-2012 level of 2.5mn bpd. The loss of oil income has hampered investment in new development and the country has struggled to pay for equipment and services.
Iranian officials say they would be able to raise crude production by 500,000 bpd once sanctions are lifted next year, and another 500,000 bpd few months after that.
But many are sceptical saying Iran would need billions of dollars in investments and the know-how of foreign companies help to boost its production after years of under-investment.