Tehran leaves door open for US oil companies

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TEHRAN

Iran’s oil industry is open to U.S.-based companies, Iranian Oil Minister Bijan Zangeneh said in a press conference Saturday.

Iran is not against the presence of the U.S. energy companies in the country’s oil industry, Zangeneh said at an event introducing of new Iran Petroleum Contracts (IPC).

The new oil contract model IPC aims to set up joint ventures for production of crude oil and natural gas with international iil companies.

After the sanctions on Iran are removed, Tehran hopes to attract investment from all over the world for its domestic industry, especially into its energy sector, by also introducing a new oil contract model, the IPC.

Iran, which holds the second largest natural gas reserves and the fourth largest oil resources in the world, aims to boost its energy market following a July-deal with world powers to remove sanctions in return for curbing its nuclear activities.

Iran and the world powers P5+1 group inked a final nuclear deal on July 14 that envisages the curbing of Iran’s nuclear research program in return for the lifting of sanctions on the country.

The U.S. and EU countries imposed a series of sanctions on Iran in the last three years. By abiding with the nuclear deal, Iran hopes to have the sanctions removed as soon as possible, to begin foreign investment flow into the country in order to revive its economy.

The IPC is expected to replace the obsolete buy-back model, and provide production-sharing to foreign oil companies.

In Iran’s current buy-back model, an international oil company provides the investment, equipment and technology for a fixed price in exchange of oil and gas it will produce from fields. Iran, through its national oil company, gains operation rights of the field when the company’s contract expires.

In this model, the foreign oil companies cannot own any shares in the hydrocarbon reserves of the country; they can only receive a defined profit margin from what they produce.

“We act according to our existing agreement and will export the highest level of gas to the extent permitted by the deal. We cannot send extra gas during winter because of high domestic needs,” Zangeneh said after a question about a potential increase in Iran’s natural gas export volume should Russia decrease its gas exports to Turkey,

On Tuesday, two Turkish F-16 fighter jets on an aerial patrol intercepted a Russian warplane within engagement rules when it intruded into Turkish airspace on the Turkey-Syria border.

The intruding aircraft was warned about the violation 10 times within five minutes before it was shot down.

The Russian Defense Ministry confirmed that its Russian SU-24 fighter jet had been shot down. It crashed in the Syrian region of Bayirbucak close to Yayladagi district of Turkey’s southern Hatay province.

NATO confirmed the accuracy of information shared by Turkey about the violation.

It was not the first time Russian fighter jets had violated Turkish airspace. In early October, Russian warplanes breached Turkish airspace. Russian officials apologized and pledged that no such incident would be repeated. Turkey had also renewed its warning on engagement rules, including a military response against violations of Turkish airspace.

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