The Phase 4 and Phase 5 gas refineries are seen in Assalouyeh, 1,000 km (621 miles) south of Tehran, January 27, 2011. REUTERS/Caren Firouz

Iran cancelled a conference during which it had been due to reveal investment contracts to international oil firms signaling that political feuding is unsettling plans to recuperate its energy sector.

The conference, which had been postponed five times due to sanctions, was finally scheduled to be held in London on Feb 22-24.

Tehran said it Iranian delegates faced problems in obtaining British visas to go to the conference.

However, foreign oil executives say divided politics in Iran, where elections are supposed to be held later this month, seemed to explain the delay as the country strives for major investment after the lifting of international sanctions last month.

The sanctions have cost Iran billions and left it pressed to come up with a new approach urging foreign firms to revive its giant, old oilfields and develop new oil and gas projects through joint ventures with Iranian partners.
OPEC member, Iran is planning to increase crude production to pre-sanctions levels of four million barrels per day (bpd) and it desperately needs $200 billion in foreign money to reach the goal, thus new oil and gas contracts are a foundation stone of its plans.

Nevertheless, this time, internal bickering among Iranians over the structure of the oil and gas investments contracts seems to have prevented any announcement of the commercial terms.

“There are big internal clashes on the new contracts,” said a senior foreign oil executive. “The Iranians did not present us with a final contract until now, nothing was finally approved.”

The Iran Petroleum Contracts (IPCs) covering about 52 projects will offer flexible terms that bear in mind oil price instabilities and investment risks, Reuters reported in November citing a senior Iranian oil official.

BP, France’s Total, Italy’s Eni and Russia’s Lukoil were among 135 firms that attended a Tehran conference in November to learn about the IPCs.

Yet, executives anticipating the model of the contract were offered only data on the fields up for investment and some general presentations about what the new deals might look like.

“It was clear that this conference was only for a domestic audience. I do not think they even approved the contracts yet,” said another foreign oil executive who attended the November conference.

The deputy head of National Iranian Oil Co. said foreign companies would be invited in May to bid for new oil contracts.