TEHRAN, Nov. 11 (UPI) -- Cabinet ministers in Iranian President Hassan Rouhani's administration said they endorsed the terms of new oil contracts for a post-sanctions era.
Under the terms of the deal, the National Iranian Oil Company will establish joint ventures with its foreign counterparts, who will be paid with a share of any production. Previous terms gave energy companies a predetermined price for production volumes.
Tehran hosts an international energy conference in late November to present the terms to potential investors.
"A wide welcome is expected for the Tehran conference," Husseini said.
Ali Kardor, deputy managing director at the National Iranian Oil Co., said the energy sector needs at least $250 billion in new investments. While crude oil prices are forcing most energy companies to cut back on spending, Kardor said, "Iran has the cheapest oil produced in the world."
The Organization of Petroleum Exporting Countries, of which Iran is a member, said the Islamic republic is expected to start up dozens of oil and gas projects, worth an estimated $185 billion, by the end of the year. Sanctions, easing as a result of a July nuclear agreement with world powers, have nevertheless starved Iran's energy sector of much-needed new investments.
The International Monetary Fund said Iran's economy is facing "severe structural challenges," with postponed investment decisions dragging on growth.
Iran said it could add another 500,000 barrels of oil per day to the international market after sanctions are lifted.