Sat Apr 29, 2017 9:19AM
Participants are seen at a conference to introduce Iran's new contract model in Tehran, Nov. 28, 2015. (Photo by IRNA)
Participants are seen at a conference to introduce Iran's new contract model in Tehran, Nov. 28, 2015. (Photo by IRNA)

A senior official expects Iran to sign its first contract under a new formula within a month, marking a turning point in months of anticipation as the country reopens its oil and gas sector to business.

Iran has named 29 international firms as being eligible to bid for oil and gas projects but they have been waiting for the country to finalize the new model, known as the Iran Petroleum Contract (IPC), before they move forward.

The new model has been the subject of repeated reviews amid fears that it might compromise Iran’s national interests at the expense of making business with the country more flexible.

"We expect that very soon, hopefully within a month we will have the first one to be signed," Fars news agency on Saturday quoted Deputy Petroleum Minister Rokneddin Javadi telling a conference in Paris.

Iran's Deputy Petroleum Minister Rokneddin Javadi

French oil major Total plans to invest in the South Azadegan oil field. It is also seeking investment in a $4 billion project in Iran's giant South Pars gas field after signing a preliminary deal last year.

The company became the first Western oil major to sign an energy agreement after the European Union and the United States eased sanctions as part of a nuclear accord with the Islamic Republic.

Critics of the new contract model have drawn parallels with Iran’s oil concessions to the UK under the 1901 D'Arcy Agreement which Iranians believe squandered their national wealth.

The IPC, described as a hybrid model, will replace the buy-back contract. It is being touted as a risk service contract which includes integrated exploration, development and production.

Iran has been working on the IPC for the past two years in order to lure investment to its oil and gas sector. Officials have said the duration of the contract is for 20 years. It includes the fee per barrel that is paid as profit to the companies.