TEHRAN - Iran’s new model of oil and gas contracts, known as Iran Petroleum Contract (IPC), was approved on Tuesday by the resistance economy committee, a top government economic advisory body headed by First-Vice President Es’haq Jahangiri.

The committee also comprises ministers of oil, defense, economy, and agriculture, as well as vice presidents for parliamentary and scientific affairs, and the president’s economic advisor, the Shana news agency reported.

However, the final draft for the contracts must still be approved by the cabinet of ministers.

In November 2015, Iran introduced IPC, which will replace buy-back contracts. It is expected to offer more flexible terms on oil price fluctuations and investment risks to make the sector more financially attractive. 

But some critics say the new model gives too many advantages to foreign companies.

On July 2, Supreme Leader Ayatollah Ali Khamenei said that no new oil and gas contracts will be awarded to international companies without necessary reforms.

“These contracts will not be signed unless the necessary reforms are implemented in the framework of national interests,” the Leader remarked.

The term “resistance economy,” as outlined by the Supreme Leader, calls on the government to secure the utilization of the country’s resources, struggle to promote a knowledge-based economy, take efforts to increase energy consumption efficiency, and finally, boost domestic production.

Deputy Oil Minister for International Affairs Amir-Hossein Zamaninia said on Sunday that Iran expects the signing of its first IPC within the next 3-4 months.

HJ/MA