NIOC: Contracts Not to Be Revoked by Sanctions Reversal, Govt. Change

TEHRAN, Aug 27 (Shana) – Director of the Legal Affairs Department at National Iranian Oil Company (NIOC), Ali-Akbar Mahrokhzad, says reversal of sanctions or government change will not revoke oil contracts.

Addressing a group of oil industry officials in a meeting, themed "New Model of Oil Contracts," Mahrokhzad said compilation of the rough copy of the new model of oil contracts is in final stages, and assured the audience that legal experts at the NIOC had been careful enough in compiling the details to protect national interests.

He said what had caused certain ambiguities and questions on the new model of oil contracts, had been generalities of the agreement and details of the final draft, which is in the compilation stage, and will clarify many of the existing ambiguities, which had at times been right.

He added that the contract is looked into from technical, legal and financial points of view. "Compilation of the new oil contracts is a right demand, envisioned in the 4th five-year Development Plan and consequently in Article 125 of the 5th five-year Plan."

Asked about the prospect of the contract in case of government change, he said, "When the two sides sign a contract, they are bound to fullfilment of the provisions of the contracts no matter in which government in it was signed. Hence, change of government will not have the least effect on implementation of the contracts."

"The subject of the contract, let's say production of product, is the aim of signing a contract and repayment to the investor (contractor) will be possible only when aims of the contract are met, said the official, adding that in other words, if a contractor leaves the work at any stage of working and before meeting all the objectives of the contract, there will be no repayment possible and production will be the main guarantor for repayment to the investor.

To another question on fate of the contracts in case of sanctions' snapback and cancellation of the Joint Comprehensive Plan of Action (JCPOA), Mahrokhzad said Article 14 of the cabinet approval envisions such conditions as cancellation, extraordinary conditions and so on, including sanctions.

Mahrokhzad said articles 36 and 37 of the JCPO emphasize that if the agreements are no longer implemented, they will not be retrospective and the contracts signed at the time of the JCPOA will be in effect./

News Code 267781

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