There were some foreign speakers at the international Conference on Optimization of Upstream Oil and Gas Contracts was held in Tehran July 10-11. Professor Anna Aabø, lecturer Stavanger Offshore Technical College, was one of them. She said Iran, which is rich in oil and gas, has the chance to get the required capital through new contracts. She, however, noted that Iran has to keep up with international developments regarding this industry.
The following is the full text of exclusive interview of Iran Petroleum with Professor Aabø:
Q: Ms. Aabø! Have you reviewed IPC (Iran Petroleum Contract) draft?
A: I’ve not been into details of these contracts, but I know what they are about.
Q: What do you think of them?
A: I think that it would be very important to revise the framework of these contracts. In my view, it is very important to take into consideration conducting research, applying technology and defining responsibility of implementation of project in these contracts. This issue will be of high significance in the long run because Iran enjoys all necessary resources. Iran’s educated population is significant. It seems that Iran’s political conditions have improved and it is very important for signing contracts with mutually satisfactory conditions. I think that the conditions of each contract must be looked into independently. A contract has always two parties. We have to identify our strong points in order to attend talks with strong background.
Q: What do you think of the framework of IPC contracts? Which points must be taken into consideration in these contracts?
A: I think there are many points which must be taken into consideration. Transparency and predictability of conditions of contracts are very important for foreign companies. It is very important for foreign companies to be assured that their activities will continue in the future. In other words, the Iranian party must formulate a contract regime which will be transparent and devoid of any corruption so that foreign companies can envisage a future for their activities in Iran.
Q: Which points do you propose to be included in the IPC to become attractive for the foreign side?
A: All points I mentioned here must be taken into account. Furthermore, it must be noted that a contract requires accuracy and precision in text. All details must be studied carefully because you will be affected by its provisions in the future. Oil and gas are long-term business contracts and huge investments are made in these sectors for the recovery of oil and gas for many years. Therefore, industrial and political stability as well as the predictability of conditions are very important. Of course I cannot speak very clearly about this issue because I have to review this framework with more precision. But as far as I know this framework is a good starting point for Iran’s oil contracts.
Q: To what extent do you think this new framework will help Iran succeed in implementing new projects?
A: That’s a very difficult question. There is tight competition in the market while oil prices have declined. As we see in the North Sea and in Norwegian coastal zones, only the best projects can attract investors. However, I believe that Iran enjoys the necessary potential for stabilizing IPC contracts and get the required investment for its projects.
Q: Have you been involved in the drafting of oil contracts in Norway?
A: No, I wasn’t involved in the drafting of the contracts, but I’ve been active within the framework of oil contracts. I have worked for the Norwegian governments and its national oil company. For years I have been engaged in technology and innovation. I have fully studied whatever which is related to rules and regulations in the contracts.
Q: Do you have any experience of contribution to oil contracts in your country? I mean documented experiences.
A: Norway has a long history of contribution to the drafting of contracts and regulations in other countries. We have our own experiences, but we cannot apply them to those your country. Norway ties to find the best method for safeguarding its own assets. For instance, our industry is based on innovation and technology, which create domestic market for us and facilitate export to world markets. I think that all these points must be incorporated into IPC. Generally speaking, I believe the IPC framework provides good conditions for investment.
By Shiva Saeedi
Iran Petroleum
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