Speaking at a specialized meeting of exploration and production companies on Tuesday, on the sidelines of the "Transformation in Investment and Development in Iran’s Oil and Gas Upstream" event, Hamid Bovard highlighted the importance of structural reforms in the industry’s operational methods.

“A promising path has begun, and today we are witnessing one of the most important meetings to move toward a brighter future,” he said.

Noting that each oil field has unique conditions, Bovard stressed that customized contracts can be designed, particularly for certain offshore fields and special areas in the Persian Gulf, where conditions vary.

The deputy oil minister also pointed to improved financial conditions for oil project investments, calling the recent decision to set project profit rates based on the National Development Fund rate plus 2% an “unprecedented step” in Iran’s oil industry history that could attract more investors.

Bovard emphasized leveraging idle capital, estimating around $90 billion in available liquidity. “We are ready to direct these resources toward oil industry projects by offering returns higher than bank rates, creating significant added value for the country. This marks the beginning of a transformation in the oil industry,” he said.

 Steps toward oil contract reforms 

Jafar Hosseini, head of the Exploration and Production Companies Association, addressed challenges in lengthy contract processes, stating that complexity and back-and-forth negotiations have been major obstacles for domestic and foreign firms. With recent support, five key areas requiring redesign and simplification have been identified.

He stressed the need to shorten negotiation times, especially for project managers, adding that faster economic decisions and timely payments would boost foreign partners’ trust and reduce project risks.

Hosseini outlined three key steps for improvement:

1. Reducing negotiation time 

2. Streamlining contract finalization 

3. Accelerating payment processes 

He noted that these measures, supported by specialized organizations and the First Vice President’s follow-up, are now being implemented after approvals dating back to 2016.

Hosseini praised transformative government managers and expressed hope for significantly shorter contract timelines, reduced operational risks, and faster project execution next year.

 Transparency in oil field tenders 

Mohammad-Sadeq Karimi, head of the Plan and Budget Organization’s Energy Affairs, emphasized transparency in oil field tenders under the new Economic Council approach. “Previously, tender processes lacked standardization, causing delays across multiple agencies. The redesigned process has cut review and approval times while increasing transparency.”

He highlighted efforts to make oil contracts more economically attractive, including increasing investors’ share in project economics to incentivize participation.

Karimi also noted improved coordination among the Oil Ministry, Plan and Budget Organization (PBO), and other decision-making bodies. A new approach allows simultaneous review of special procedural requirements to streamline processes within a single entity like the PBO.

Regarding domestic capacity utilization, Karimi said the Economic Council has, in certain cases, permitted foreign expertise to prevent development delays while adhering to the "maximum use of domestic capacity" law.

On investment repayments, he said the 1404 budget initially excluded field development repayments but aims to provide more flexibility in financing and repayments as conditions improve.