Iran’s Vice President Eshaq Jahangiri has issued an executive order for the Petroleum Ministry to start using the new Iran Petroleum Contract (IPC) model that was ratified by the cabinet earlier this month.

The launch of the IPC has been delayed by political opposition from hard-line conservative factions in parliament who say the terms give too much away to overseas companies.

The Petroleum Ministry’s Shana news agency reported that the framework has been endorsed by MPs.

Last week Petroleum Minister Bijan Zanganeh said the IPC needed minor amendments but that the final draft would not need the approval of parliament. Jahangiri’s executive order now paves the way for the launch of tenders under the IPC model.

Mohsen Qamsari, director of international affairs at State-owned National Iranian Oil Company (NIOC), said that Iran is in dire need of foreign investments for maximum recovery from its oil and gas fields.

NIOC needs at least $100bn in foreign finance to carry out the projects it requires for oil and gas industry development.

For the initial tenders under the IPC model, the Petroleum Ministry will focus on fields which Iran shares with its neighbours, which are largely less developed on the Iranian side.

“The damage incurred on Iran from every day of not developing its joint oil and gas fields is irreparable for the country’s oil industry,” Qamsari was quoted by Shana as saying.

“Presence of foreign investors for promoting Iran’s oil and gas projects financially is a necessity for the country,” he said. “Foreign investments will not only prevent diminishing production from oil and gas fields, but help develop underground reserves.”

The IPC was created to replace the buy-back contracts introduced in the 1990s, which have largely proved unsuccessful both in terms of profits for IOCs and in hitting deadlines for oil and gas field developments.

The key changes to the contracting model: longer contract terms to a maximum of 20 years from the start of development; foreign investor can be involved in operating fields during production; remuneration fee is set at a dollar-per-barrel amount linked to market prices to incentivise production efficiency; incentives for higher-risk fields and enhanced oil recovery (EOR) projects; and incentives for the transfer of technology.

Due to political opposition, the IPC is only expected to apply to shared fields with the majority of fields to be offered on the buy-back model or engineering, procurement, construction and finance (EPCF) contracts.