Iran is signing the first unique IPC contract with Setad
On 4 October NIOC, National Iranian Oil Company, is going to sign a unique oil contract, which will be the first of its kind. The type of the contract is called IPC. NIOC will sign it with a local financial institution Setad. This was announced by Ali Cador, Head of the NIOC. One of the most powerful Setad structures is being controlled by the Supreme Leader of Iran and its spiritual leader Ayatollah Ali Khamenei.
An Iranian oil contract (IPC) is a basis of the country’s strategy, which aims to restore the oil production, bringing it to the target of 4 million barrels a day. This was a level of the Iranian production before the sanctions.
The use of this type of contracts has been delayed for several times. This happened due to the fact that the radical opponents of the Iranian President Hassan Rouhani were against any oil contracts that could destroy the buy-back scheme. This scheme prohibited the players from abroad to buy a share in the Iranian companies.
The news agency Fars is citing the Head of the NIOC Ali Cador: “Today the NIOC is signing an oil contract of the IPC model with Setad Ejraye Farman Emam (Setad) for the second phase of the Yaran field development as well as for the improved methods using of oil production from the field Kupal.”
According to the Iranian news agency Tasnim, IPC contracts are worth $ 2.5 billion.
In July the Iranian Leader Khamenei said that the country would not sign any IPC contract with international companies without carrying out adequate reforms.
According to Cador, neither President nor Minister of Iranian Oil Industry will sign a new type of contracts unless Khamenei endorses.
In the recent past major international oil companies voiced the conditions for returning to Iran: it was a significant reform of the system of buy-back contracts, which had been developed in the 1990s.