Iran’s cabinet has approved a draft of the Iran Petroleum Contract (IPC), and the proposal is now waiting for parliamentary approval. The first contract is not expected before 2017.
The parliament is expected to pass the IPC as it has also been approved by Iran’s Resistance Economy Command Headquarters – a body close to the country’s supreme leader, Ali Khamenei. GGA understands the IPC will offer agreements lasting up to 25 years and will integrate the exploration, development and production phases – a big improvement from the old buyback model, which offered 5-7 years in the first phase and a combined 8-12 years in the next two phases. It will have a flexible rate of return for IOCs depending on the complexity and risk factor of individual projects.
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