Lukoil is ready to re-enter Iran and is hopeful that the necessary laws will be in place soon, with the terms of the International Petroleum Contracts, or IPCs, likely to be unveiled by October, Chief Executive Vagit Alekperov said Thursday.

Iran could also pass a law allowing foreign companies to invest in Iranian projects by the end of the year, the CEO of Russia's second biggest producer added on the sidelines of the St. Petersburg International Economic Forum. However, Alekperov was quick to point out that until the law is passed no concrete steps would be taken.

"Based on the latest meetings I had in Vienna during OPEC, it is around September or October this year. It is mostly agreed on, according to my information, but there are minor details left. But as a rule, those details are always where the problems hide," the Lukoil CEO said. Alekperov met with Iran's oil minister Bijan Zanganeh on June 2.

"We are working on studying Iran, there are territories that are attractive to us, there is preliminary agreement. But Iran today has no law allowing investors to invest in Iran's territory. It has been discussed for nearly three years now, we hope it will be passed at the end of this year, so that we could evaluate it and start working on it," Alekperov said. It is the key law for investors to gain access to Iran's oil fields.

Lukoil, which had been a key player in Iran before international sanctions were imposed, has yet to return, unlike some of the other key oil companies such as Total which quickly struck up a deal this year to take Iranian crude.

ANARAN INTEREST

"We have two memoranda on zones of interests that we're analyzing. At this point we're just analyzing the data. Of course we are interested in returning to the Anaran project that we used to work on with Statoil," Alekperov said.

Lukoil worked at Iran's gigantic onshore Anaran Block along with Norway's Statoil prior to international sanctions imposed on Tehran over its nuclear program.

Alekperov cautioned that the terms had to be right to allow Lukoil to re-invest.

"We have not seen the conditions yet. But the previous buy-back conditions would be unacceptable today because they don't stimulate investors and don't allow them to take the acceptable risk we've always allowed ourselves under production sharing contracts or joint ventures." He didn't name specific fields of interest.

"We today consider exploration projects and projects that require rehabilitation. Those that have been launched but haven't reached the planned production level. We are capable of investing today to increase those projects' [flow]," Alekperov added.

Iran plans fewer than 20 projects as part of the first tenders for the IPC. It has said in the past that it will have its IPC ready and approved in June to soon put out the tenders.

Zanganeh stressed it was very lucrative for international energy companies such as Total, Lukoil and Eni to invest in Iran. "Oil [production] in our region is very low. In Iran, it costs a maximum of $10/b."

"First we announce the fields and ask companies to come forward and [declare] their interests in any of those fields. We evaluate the companies regarding their technological and financial capabilities and then we put the tender documents at their disposal," Zanganeh said earlier this month.

By Platts