By Adam Schreck and Nasser Karimi
TEHRAN, Iran -- Iran said Sunday it plans to introduce a new generation of oil contracts by June that promise to be more attractive to foreign investors.
The nation is seeking to significantly boost production, in the event that international sanctions, which have hobbled its vital energy industry, are lifted.
The new terms being developed signal the OPEC member's eagerness to attract outside expertise and capital, and are a response to oil and gas companies' frustration with earlier terms that they felt offered little reward.
Mahdi Hosseini, head of the contract revision committee in the Petroleum Ministry, told reporters that the new terms are being designed for a post-sanction era and aimed to better align Tehran's needs with the interests of international investors. He said officials were seeking a "win-win" setup that would better balance companies' risks with rewards.
Iran currently allows foreign oil companies to operate under what are known as "buybacks," which Hosseini acknowledged have drawn complaints about cost from oil companies.
Under that system, the contractor pays to develop a given oil field in exchange for a pre-agreed rate of return over a certain period of time. Once work is done, the contractor transfers operation of the field to Iran and typically does not have a long-term stake in the fields.
Iran began revising the contract terms in October. Hosseini said the new model aims to ensure long-term cooperation with outside investors, and that the committee has consulted international companies on the new version of the contract.
Iran needs $150 billion in investment for its energy sector over the next five years, he said.