IranMania.com: Delays in buyback deals, Shell will be fined: “…Iran will fine the oil giant Shell for the delay in implementing projects to develop Soroush and Norouz oilfields.” (ShellNews.net) 28 Dec 04
Tuesday, December 28, 2004 - ©2004 IranMania.com
LONDON, Dec 28 (IranMania) - A senior Oil Ministry official admitted that some 20-30% of the buy-back deals are implemented with delay.
Seyyed Mehdi Mir-Moezzi, managing director of National Iranian Oil Company (NIOC), told ILNA, however, that delay in oil and gas projects is not unusual.
"Still we refuse to pay a portion of money mentioned in the contract as penalty if the contractors fail to meet the time schedule," he said, stressing that Iran will fine the oil giant Shell for the delay in implementing projects to develop Soroush and Norouz oilfields.
Iran said in November it will continue to conclude oil and gas deals in the buyback mode during the fourth development plan (2005-2010).
Abolhassan Khamoushi, managing director of the Oil Development Engineering Company, told ILNA that buyback contracts will be used as long as the contractors agree to sign such deals.
"At present, buyback is the only contract mode that can be used in projects to develop oil and gas fields," he said, stressing that the Iranian oil and gas industry considers buyback as a short-term foreign investment.
As per 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.