TEHRAN, Iran (Reuters) -- Iran's new oil and gas contracts will have flexible terms that take into account oil price fluctuations and investment risks, a senior Iranian official told Reuters Saturday. Iran is trying to lure back international oil companies to develop its vast oil and gas reserves once sanctions are lifted under a deal with world powers.
Iran will announce a new development contract model at conferences in Tehran Nov. 28-29 and in London in February.
"What we are offering is very flexible model of contracts, it is integrated exploration, development, production all those terms," said Mehdi Hosseini, head of Iran's oil and gas contracts restructuring. "The fee per barrel that is paid as profit to the company is flexible based on the risk which is considered ... Higher risk, higher reward, lower risk, lower reward," he said in an interview on the sidelines of a gas conference in Tehran. "Anything will be adjusted, depending on the different stages of the operations."
Iran will offer some 52 oil and gas projects, both brown- and greenfields, including around 20 for exploration, Hosseini said. The contracts last for 20 years and "in some special cases it could also be extended to 25 years," he said, excluding a period for exploration deals.
"We are offering some projects in the Caspian sea and also very low-risk areas in the Persian Gulf," he said.
Hosseini said there have been consultations with oil companies about the terms of new contracts where there will be no ceiling on capital expenditures, one of the main points raised by some oil companies as a disadvantage in buyback contracts Iran had offered in the past.
"Everything depends on the behavior of the fields, and the period of time. If things change, then they [oil companies] would have the chance annually in the annual work program and budget to revise the scope of the work, [which] may revise the cost. We are very open," Hosseini said.
At the contracts conference in Tehran, the details of the deals will be discussed further. The new deals would be awarded either through bidding rounds or direct negotiations, Hosseini said.
(Reporting by Rania El Gamal; editing by David Evans)