TEHRAN, Aug 25: Iran’s revised oil and gas development contracts offer more incentives to foreign firms and Turkey’s reservations about the deals reflect an initial lack of knowledge, the Iranian oil minister said on Monday.

A Turkish Energy Ministry source said last week Turkey would not sign a natural gas accord with Iran until changes acceptable to global investors were made to “buy-back” deals, which are often criticised by foreign firms.

The gas deal was expected to have been signed when President Mahmoud Ahmadinejad visited Turkey earlier in August.

“The Oil Ministry’s international agreements have made good progress. The modification of the buy-back contracts provides more incentives for foreign companies to participate in Iranian projects,” Oil Minister Gholamhossein Nozari said.

He did not give details.

“The Turks were not informed about the culture of the buy-back contracts. But with the negotiations that took place there (in Turkey), they were told the price ceiling of the contract is determined after carrying out tenders,” he said.

His comments were made to journalists, according to the Oil Ministry’s news website SHANA.

Turkey and Iran last year signed a preliminary accord on joint gas production and export under which Iranian gas would be exported to Europe through Turkey and Turkey would produce 20.4 billion cubic metres of natural gas in the South Pars gas field.

The United States, which is seeking to isolate Iran in a row over Tehran’s nuclear ambitions, has opposed the deal.

The Turkish ministry source said the proposed buy-back system created “serious risks” for Turkey in terms of pricing.

Turkey wants to buy gas directly from the fields and wants Iran to give a guarantee on contributing towards investments.

Under such buy-backs, firms generally hand over operations of fields to Iran after development and receive payment from oil or gas production for a few years to cover their investment.—Reuters