50 fields up for tender in advance of OPEC’s November 30 meeting

Iran’s national oil company said Monday that it has offered 50 oil and gas fields to international bidders in the Islamic Republic’s first attempt at attracting foreign investment to its oil and gas industry since the end of international sanctions. Iran’s Oil Ministry announced said 29 of the fields would be oil and 21 would be gas-weighted, reports ABC News.

The ministry said foreign companies should submit their applications by November 19, and that successful companies would be announced on December 7. Priority will be given to foreign companies with which Iran shares border fields. The country has 28 joint offshore and onshore gas and oil fields with neighboring countries.

The first field up for tender will be the South Azadegan oil field, which companies will be able to bid on as early as November 19, with National Iranian Oil Company awarding the contract by early 2017, according to Reuters. After South Azadegan, NIOC will tender one field month by month.

Iran Looks for International Partners in 50 Fields as OPEC Looks to Cap Production

Map of Iran: courtesy of NewsBase Ltd.

Some analyst are concerned that the Iranian Petroleum Contracts (IPCs) will not be enough to attract the $150 billion in foreign investment Iran hopes to raise, citing more attractive contracts in Iraq, but Iranian Vice President Eshaq Jahangiri said there are benefits specific to investing in Iran as well.

“Some countries are run by tribes, Iran is different than that,” Jahangiri said at an oil conference in Tehran, alluding to security concerns in neighboring OPEC member Iraq. “Even if Iran’s contracts are not as attractive as others signed in neighboring countries, Iran has its own advantages.”

Iran looking to increase production as OPEC discusses a production cap

Iran has been pushing production back toward the 4 MMBOPD mark since the lifting of international sanctions. OPEC’s third-largest producer pumped about 3.67 MMBOPD in September, according to secondary sources cited by OPEC, but it will likely need foreign investment to reach pre-sanctions levels.

Increases in Iran’s production come as OPEC discusses capping production between 32.5 and 33.0 MMBOPD. Deputy Oil Minister Amir Hossein Zamaninia told reporters the agreement was a “small step, but in the right direction,” a positive sign from Iran after a production freeze agreement fell apart earlier this year when the country refused to hold production below pre-sanctions levels.

Iran is one of a handful of OPEC member which have begun to question the numbers OPEC publishes each month, however. NIOC Managing Director Ali Kardor said Monday the country is pumping 3.89 MMBOPD, about 2.2 MMBOPD more than OPEC’s official estimates. Iraq and Venezuela have also criticized the data, reports Bloomberg.

With just six weeks left until the group hopes to finalize a concrete production quota at its November meeting, disagreement over how much each member is currently producing could prove to be a sticking point.

“If nothing concrete emerges on production control, the market will lose patience, with the risk of an end-year price bloodbath,” said PVM Group CEO David Hufton.

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