OMV Awaits New Petroleum Contracts

EghtesadOnline: An executive at Austria's OMV says he is positive about the new model of contracts for Iran's upcoming oil and gas projects, but noted that the oil and gas major needs to learn more about the details of Iran Petroleum Contract.

News ID: ۷۷۶۰۸۹

10 May 2017

“The IPC model appears to meet OMV's expectations,” Walter Ondracek, OMV's head of assets for Middle East and Africa, was quoted as saying by Shana on the sidelines of the 22nd International Oil, Gas, Refining and Petrochemical Exhibition in Tehran on Tuesday.

“We are here to be part of Iran’s oil exploration and production projects. But to make a final decision, we need to understand more details about the oil contracts,” the official said.

The comment seemingly echoes a statement by OMV chief executive officer in 2016 that the prolonged process of finalizing the terms of IPC had made it difficult for new projects to start, Financial Tribune reported.

"This process is still ongoing, this is taking quite a long time... We have not yet defined a clean framework for the projects that are interesting for us," Seele said in August in an interview with Reuters.

"We can make an investment decision only when we really know what the framework and the conditions are." OMV signed a preliminary agreement with Iran's Dana Energy Co in January in Vienna for collaboration in upstream oil and gas sectors.

According to Ondracek, Iran’s oil industry has become a more competitive market in the post-sanctions era compared to a decade ago and before economic sanctions forced most international majors out of Iran.

OMV started operations in Iran in 2001 as the operator of the Mehr exploration block in the west of the country, but halted operations in 2006 due to sanctions, according to OMV's website.

The Vienna-based company actively resumed negotiations for a place in Iran after sanctions were removed in January 2016 following a historic agreement in 2015 on scaling back Tehran's nuclear activities in exchange for sanctions relief.

In May 2016, it signed a memorandum of understanding with the National Iranian Oil Company to study Cheshmeh Khosh and Band-e-Karkheh fields in the southern Khuzestan Province. It is also studying oil-rich regions in the Zagros area in western Iran.

OMV is one of the 29 companies approved by the NIOC to bid in its forthcoming oil and gas tenders.

The company is also in negotiations with the NIOC to sign a long-term oil export contract.

OMV imported 1 million barrels of Iranian crude in Sept., its first purchase since 2012.