mardi, mai 17, 2005

"Buyback deals not attractive": Iranian official

LONDON, May 17 (IranMania) - An oil industry official said that foreign companies are not interested in buyback deals.

Mostafa Khoi, managing director of PetroIran Company, said the buyback deals must be reformed to attract foreign investors.

“Foreign companies are more interested in joint ventures in order to be able to participate in the sales phase as well,“ he said, adding that buyback deals allow them only to participate in the construction stage.

He, however, said buyback deals are the only option under the present legal framework.

Iran said in November 2004 it will continue to conclude oil and gas deals in the buyback mode during the fourth development plan (2005-2010).

Under the law, long-term investments in hydrocarbon energy industries are banned, which is why the country needs to move towards short-term investments, including those conducted under buyback deals.

Iran uses buyback deals to develop its oil and gas fields under which the foreign investor does not hold equity, but recoups its spending and the profits involved once output starts.

The hydrocarbon resource-rich country is among few countries to use this mode.

Senior Oil Ministry official said earlier that buyback contract mode would not change despite plans to attract $100 bln worth of investments in the energy sector in the next decade, stressing, however, that the reforms proposed by some international oil companies would be considered in the future.

Seyyed Mehdi Mir-Moezzi, managing director of National Iranian Oil Company, said foreign companies will continue to sign buyback deals for oil and gas projects in Iran.

posted by Quidam @ 8:57 AM