Focusing on the challenges and opportunities associated with upstream petroleum contracts, the Chief Executive Officer of the DACO Group emphasized the necessity of adhering to the officially approved and communicated provisions of Iran Petroleum Contract (IPC) agreements and removing implementation barriers affecting the development of the Azadegan shared oil field.
According to the Public Relations and International Affairs Department of the DACO Group, a meeting of Iranian Exploration and Production (E&P) companies was held on 30 June 2026 (9 Tir 1405), bringing together chief executive officers and representatives of companies operating in Iran's upstream oil sector. During the meeting, participants reviewed the latest progress of upstream development projects, examined the principal challenges and opportunities surrounding upstream petroleum contracts, and underscored the importance of establishing coherent engagement mechanisms with the National Iranian Oil Company (NIOC), while strengthening collective cooperation among the sector's key stakeholders.
Addressing the meeting, Mahmoud Aminnejad, Chief Executive Officer of the DACO Group, highlighted the structural complexity of IPC agreements, stating:
"The requirements and conditions governing IPC contracts are considerably more complex than those of other contractual models. Investors enter these projects with the objective of achieving sustainable economic returns. To that end, they establish corporate entities, increase capital, recruit specialized human resources, and fulfil all contractual prerequisites. However, during the implementation and operational phases, they may encounter unforeseen challenges and institutional frictions that complicate the execution of nationally significant development projects."
Referring to the Integrated Development Project of the Dasht-e Azadegan Shared Oil Field as a strategic national initiative, he added:
"The project's investors include some of the country's largest financial institutions, such as the National Development Fund of Iran, together with Tejarat Bank, Bank Mellat, and Bank Melli Iran, all of which provide substantial financial backing for the project's implementation. Financing, which has consistently been one of the most significant risks associated with upstream projects, has therefore been effectively addressed to a large extent. This project presents an important opportunity to demonstrate the economic viability and foreign exchange generation potential of large-scale domestic investment. Nevertheless, the current constraints may undermine the successful delivery of this nationally important project."
The DACO Group CEO further emphasized the importance of contractual and legal certainty in upstream development projects, noting:
"Despite the completion of all legal procedures and the official approval and notification of the IPC agreement, there are still instances where the contract itself appears not to be fully recognized. Proposals to amend contractual provisions, revise individual pages, or alter the contents of a legally approved and enforceable agreement raise significant legal and operational concerns. Once an IPC contract has been signed, formally approved, and officially communicated, all parties should regard the notified document as the definitive basis for implementation. Continued discussions concerning amendments or redrafting of contractual provisions create uncertainty for investors and may adversely affect both decision-making processes and project execution."
Also addressing the meeting, Mohammad Hossein Rahimi, Deputy Legal Affairs of the DACO Group, outlined the legal and operational dimensions of upstream petroleum contracts. He reviewed several of the existing challenges affecting the implementation of IPC agreements and stressed the importance of maintaining contractual stability and streamlining implementation requirements to accelerate the development of oil fields, particularly the Azadegan shared field.
Explaining practical examples of the existing implementation constraints, Rahimi stated:
"During the establishment of the Integrated Field Operator (IFO), we encountered numerous challenges. At the same time, the Operation and Maintenance (O&M) contract imposed certain restrictions, including a requirement to cooperate with one of the companies already operating in the Azadegan field. At one stage, proposals were even raised to define the legal identity and operational activities of the IFO within the framework of one of the existing companies active in the field. However, given the contractual obligations and legal considerations involved, this approach was not acceptable to us. This experience clearly demonstrates that, despite several years having passed since the design and official notification of the IPC framework, the contractual model has yet to achieve full institutional recognition and acceptance within the country's oil industry. In practice, it continues to face a degree of institutional and operational marginalization."
🌐Public Relations and International Affairs Department