Iran’s Oil Ministry has unveiled a new model for oil development deals, in a bid to attract international oil companies (IOCs) back to its energy sector.

Under the new integrated petroleum contract (IPC), Iran will offer 25-year contracts to allow IOCs to operate oil and gas fields over the long term.

The system replaces the unpopular buy-back system, under which foreign companies were required to leave a project after its completion, before being paid from the oil revenues.

“In the new deals, different stages of the petroleum industry [such as exploration, development and production] are awarded in an integrated manner,” Medhi Hosseini, who led the committee that revised the contracts, was quoted as saying by the ministry’s Shana news service.

“We must try to persuade foreign firms to enter high-risk zones of the petroleum industry,” he added.

Hosseini, who was appointed by Oil Minister Bijan Namdar Zanganeh, said buy-back contracts are one-sided and favour only the state, adding that they are no longer attractive for IOCs.  However, ownership of reservoirs will not be transferred to foreign companies.

“Under the new deals, Iranian experts work [together] with foreign investor companies in order to get familiar with the state-of-the-art technology,” said Hosseini, adding that a 1 per cent rise in enhanced oil recovery (EOR) would generate $500bn in revenues.

The Oil Ministry plans to host a conference in London in July to outline the terms of the new contracts to IOCs, which have shown interest in re-entering Iran after the interim nuclear deal was signed in November.

The Islamic Republic, which has the world’s fourth-largest crude reserves, has seen a significant drop in production and exports since new US and EU sanctions against its energy sector were introduced in 2011 and 2012.

Key projects such as the development of the giant South Pars offshore field have faced long-term delays amid the exit of overseas energy groups such as France’s Total and China National Petroleum Corporation.