The initiatives come ahead of the 47th anniversary of Iran’s 1979
Islamic Revolution and during a year officially designated as “Investment for
Production.”
Under the administration of President Masoud Pezeshkian, the oil
ministry has prioritised wider participation by the private sector and
non-governmental investors, seeking to overcome long-standing financing
constraints in upstream and downstream projects.
New financial instruments for upstream projects
The National Iranian Oil Company (NIOC) has introduced new financing
instruments under a revised framework for upstream oil and gas contracts. These
include payment commitment certificates, crude oil delivery warrants and
commodity deposit certificates backed by crude oil and gas condensate.
The instruments are designed to lower financing costs, improve
liquidity and allow investors to use them as collateral in capital markets and
financial institutions. An integrated implementation guideline has already been
issued, and two companies are currently using the mechanisms to finance field
development projects.
Guarantee fund established
To enhance investor confidence, the oil ministry has set up an Oil
Industry Guarantee Fund with initial capital of 300 million euros, involving 20
partners including banks, exploration and production companies, the National
Development Fund and the Iran Energy Exchange.
The fund will operate independently to issue guarantees for oil sector
projects. Its statutes and partnership agreements have been approved, with
provisions in place to issue guarantees for shareholders.
Banks and PPPs brought in
NIOC has also invited banks and financial institutions to participate
in upstream projects under Article 12 of Iran’s law on financing production and
infrastructure. In this framework, Tejarat Bank has signed an agreement to
co-finance a processing project at the Ab-Teymour field, with implementation
already under way.
Public-private partnership (PPP) models are being used to expand
fast-track, skid-mounted processing facilities. Under contracts signed so far,
about 12% of Iran’s crude oil processing capacity will be handled by private
and non-governmental entities.
According to Amir Moghiseh, NIOC’s director of investment and business
development, first-phase PPP contracts cover processing capacity of 115,000
barrels per day across several fields. A second phase includes six contracts
for 315,000 barrels per day, valued at $1.67 billion, covering fields such as
Mansouri, Ab-Teymour, Ramshir and Karanj.
While conventional processing units can take up to three years to
build, skid-mounted facilities can be completed in less than two years,
significantly accelerating production, officials said.
Drilling fleet modernisation
The ministry is also targeting investment in drilling through a
guaranteed purchase model for rig services. NIOC has offered five-year
guaranteed contracts under a build-own-operate (BOO) framework to encourage
fleet renewal.
Contracts have been signed with six investors to supply 20 onshore
drilling rigs with 2,000-horsepower capacity, worth $768 million plus 28
trillion rials, according to NIOC planning data. In offshore drilling, five
rigs capable of operating in water depths of 350 feet or more are planned, with
two close to final contract signing.
Investment pipeline expanded
Other measures include publishing an investment opportunities booklet
outlining more than 200 projects worth $137 billion, holding talks on over 100
investment packages with private contractors, approving revised upstream
contract guidelines, and securing foreign-currency financing from the central
bank for priority economic projects.
Officials say the strategy goes beyond funding individual projects and
represents a broader shift in oil sector governance, aimed at transforming the
industry from a state-dominated sector into a more open and investment-friendly
hub for national production.