May 24 2004
The ceremonies were also attended by the Japanese ambassador to Iran, together with most high-ranking officials of the Iranian Ministry of Oil. The contract was viewed as a giant step in the development of Iran's oil, gas and petrochemical industry.
The contract will be executed by Japanese contractors (75%) and by Naftiran Intertrade Co Ltd, an affiliate of the National Iranian Oil Co (25%). Production will reach 260,000 barrels per day (b/d) within the next 92 months. Fifty-one per cent of the contract price will be spent on capital investments from Iranian domestic sources. This will inject about $1 billion into the Iranian economy in the coming years. Further, 1% of the contract price will be spent on training Iranian personnel and on technology transfers. The plans in this regard had already been agreed prior to the signing of the contract.
The initial output of Azadegan oilfield will be 50,000 b/d, starting in 2007. This volume will increase to 150,000 b/d in 2008 and will reach 200,000 b/d by 2012. All products of the field will be exported to Japan. Japan's oil imports in 2003 stood at 4.48 million b/d, and oil from the Azadegan oilfield will eventually provide some 6% of Japan's total oil imports.
The contract has a duration of 16 years, unlike previous buy-back contracts which lasted for seven to eight years. The contract is the second of its type executed in recent months: the first was signed by the National Iranian Oil Co and a consortium of Japanese companies, headed by Toyo, for the South Pars oilfield.
The Azadegan oilfield is located some 80 kilometres to the west of Ahwaz in Dasht-e-Azadegan.
The project is the largest inland upstream crude project of Iran since the
For further information on this topic please contact Behrooz Akhlaghi at International Law Office Dr Behrooz Akhlaghi and Associates by telephone (+98 21 873 21 38) or by fax (+98 21 873 41 29) or by email (email@example.com).
ILO provides online commentaries as specialist Legal Newsletters. Written in collaboration with over 500 of the world's leading experts and covering more than 100 jurisdictions, it delivers individually requested information via email to an influential global audience of law firm partners and international corporate counsel. Please click here to register for the service.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com.