Iran Petroleum Contracts (IPCs)

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Iran Petroleum Contracts (IPCs)

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The Iranian upstream contractual framework: IPCs general terms and structure. After many upheavals, political oppositions and amendments, the general terms and structure of the Iranian upstream oil and gas contractual framework was ratified in September 2016, and the government subsequently announced it plans to hold the first round of tenders under this framework in November 2016.

Last updated on September 2016

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Since their initial launch in November 2015, and as a result of acute opposition by conservative groups to some of its terms, the contracts underwent numerous rounds of revisions and modifications which at some point were also demanded by the country’s Supreme Leader, Ayatollah Khamenei.


The general terms, as approved by the Cabinet under 3 Resolutions, involve many uncertainties over how exactly such terms could be embedded in a final draft contract in order to fulfil the objectives of both sides; i.e. enforcement of the state’s sovereign right and complete ownership of oil and gas reserves by the nation, transfer of technology and empowering the Iranian companies (demanded by the Iranian side) and a low-risk, profitable and stable operation in Iran (long-aspired by foreign companies).


While there seem to be a relatively long way to see the exact terms of IPCs, it is likely that the drafting and finalisation of such terms will take place through bi-lateral negotiations with the very first bidding parties. It is important, however, to remain reasonably optimistic that despite all the hurdles, a major step has been taken forward to both maximise the country’s massive potential and also address concerns of participating oil companies at the current dark days of international oil markets. Constructive contributions from experienced and competent experts from within and outside the government could facilitate the transition process for the Iranian oil industry from an underdeveloped, isolated sector to an advanced, dynamic and interactive one.