Iran invites foreign bids for offshore gas field

The Iranian National Oil Company has placed four international tenders for the development of phases 19 to 22 of South Pars, the largest offshore field in the world.

Iran has divided the gas field, located on the Iran-Qatar border in the Gulf and shared by the two countries, into 25 phases.

The tenders' document said that the most-recent phases will supply 100 million cubic meters (3,500 million cubic feet) per day of natural gas for domestic consumption.

They are also expected to supply a minimum of two million tons of ethane gas a year for Iranian petrochemical use, 2.1 million tons of liquefied petroleum gas (LPG) per year and 160,000 barrels of gas condensate a day for export.

According to the tender documents, the contracts will be conducted on a buy-back basis.

Iran's constitution, hammered out after the 1979 Islamic revolution, puts oil and gas within the state sector and forbids concessionary basis or direct equity stake production-sharing agreements with foreign firms.

As an alternative, Iran had worked out the buy-back formula -- under which foreign companies are repaid development costs and given an agreed rate of return from initial production.

So far, only phases one to five are operational. Phases six to 10 are under construction by joint venture firms and the rest are in the negotiation phase.

Last month, Iran said that Anglo-Dutch energy giant Shell, France's Total and Spanish firm Repsol would "soon" sign contracts to develop phases 11 and 13.

Investment for each phase has been estimated at between 1.2 and 1.5 billion dollars.

Source

FAIR USE NOTICE

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.