Oil Ministry officials from Tehran to meet executives from European oil companies and industry experts in London early next year to present the terms upon which they will be invited back.
Iran is stepping up its engagement with European oil companies ahead of inviting them back to the country amid signs that a recent deal over its nuclear program could see economic sanctions lifted next year.
It is understood that Oil Ministry officials from Tehran will meet executives from European oil companies and industry experts in London early next year to present the terms upon which they will be invited back. European majors such as Royal Dutch Shell, Total and ENI were all involved in Iran before tighter sanctions targeting oil production were introduced a few years ago, and all are thought to be monitoring the situation closely.
The roadshow will involve discussions over the nature of contracts that the Islamic Republic is willing to offer in return for investment to drill new wells.
Previously, Iran has dealt with foreign companies through “buybacks”. According to sources, the meetings in London will allow Iran to present the findings of a review of these contractual terms.
Buybacks, which involved international oil companies investing billions of pounds upfront to develop projects in return for a pre-agreed share in the sale of any oil and gas produced, were unpopular with investors because of the poor returns and risks associated with Iran.
An Iranian Oil Ministry official declined to comment on the London talks when contacted by The Telegraph.
Oil industry experts are already factoring in Iran’s return to the international fold after the partial nuclear deal achieved in Geneva last month. Iran could easily pump an additional 800,000 barrels a day of crude, equal to about 75pc of total UK production from the whole North Sea, which could force down world oil prices.
Iran’s government shook up the country’s state-run oil industry earlier this year, restoring former minister Bijan Zanganeh to head the Oil Ministry.
“The big change is that the Iranians have again been able to talk with the [companies],” said Cornelia Meyer, an independent energy expert and chairman of MRL Corporation. “For oil companies it’s good, but it depends on the terms.”
However, European oil executives remain extremely cautious due to the remaining sanctions, with several companies declining to comment on whether their managements will meet the Iranians in London. The U.S. government has said that it will continue vigorously to enforce sanctions that restrict oil companies from working in the country.
Before sanctions were imposed to limit Iran’s oil industry, the republic was the second largest producer in the Organization of Petroleum Exporting Countries. According to official figures, it holds approximately 9pc of world oil reserves and the second largest stocks of natural gas, estimated to be in the region of 812m cubic feet.