The National Iranian Oil Company (NIOC) is using future purchase commitments in first-time manufacturing contracts to create a reliable market for technology-based products developed by new technology-based firms and strengthen domestic manufacturing capabilities.
Dadvash Hashemi-Golsefidi, director of manufacturing support and equipment procurement at NIOC, said consolidating equipment requirements is a key strategy to generate sustainable demand and enable manufacturers to plan the production and supply of equipment needed by the oil industry.
He said first-time manufacturing contracts use a standardized innovative manufacturing agreement that provides for future purchase commitments for newly developed technological products, subject to successful prototyping and obtaining the required approvals.
The mechanism effectively allows NIOC to guarantee purchases of part or all of its requirements from NTBFs, helping domestic manufacturers expand their capabilities in producing sophisticated, high-tech equipment, Hashemi-Golsefidi said.
He pointed to financial constraints facing some domestic manufacturers, noting that knowledge-based companies often lack the resources to establish production lines or manufacture prototypes on the required scale. The high risks associated with first-time production also make it difficult to attract investors.
Against this backdrop, he said, legal and contractual mechanisms for financing and creating markets for domestically developed products are essential.
Alongside future purchase commitments, NIOC is pursuing the use of legal provisions allowing advance payments of 50% or more under first-time manufacturing contracts. The company is also working with financing providers, including nongovernmental research and technology funds, to support domestic production.
Hashemi-Golsefidi said consolidating demand and ensuring predictable orders for selected products at the appropriate time could significantly strengthen domestic manufacturers, expand production capacity and ensure the timely supply of equipment required by NIOC.
Support for domestic manufacturing and NTBFs in the oil industry has been pursued in recent years through various contractual and legal mechanisms. First-time manufacturing contracts are designed to facilitate the design, production and commercialization of advanced products and equipment not previously manufactured in Iran.
The standardized Product Development Agreement (PDA) for innovative manufacturing of goods was issued Dec. 20, 2025. The framework is mandatory for the main and subsidiary companies affiliated with the Oil Ministry and serves as the basis for contracts covering the first-time domestic production of industrial equipment, goods and industrial chemical products.
The framework establishes clear contractual arrangements between oil companies and domestic manufacturers, defining the responsibilities of both parties, supporting prototyping and providing for product purchases following successful technical evaluations.
Legal provisions for financing and advance payments have also helped address some of the financial barriers preventing knowledge-based companies from entering industrial-scale production.