Iran to Unveil $40b Oil Projects
Iran is poised to present $40 billion oil projects during a conference scheduled for early next year in London, a deputy head of National Iranian Oil Company said.
“Forty or fifty projects, worth $40 billion, are to be unveiled when Iran Petroleum Contract (IPC), the new framework of oil contracts, is to be introduced to foreign investors in London,” Moshtaq-Ali Gowhari said.
He said some of these projects are associated with the development of the remaining phases of the giant South Pars gas field, as well as other onshore and offshore reservoirs.
There are also projects about exploration and development of new fields, he added.
Gowhari said NIOC is benefitting from domestic resources for financing 40 to 50 percent of its projects. He added that this percentage has reached 70 in some years.
“Energy Fund, banking facilities and credits, bonds in IRR and hard currencies, National Development Fund of Iran, buyback, finance, refinance and a wide spectrum of financial instruments are currently being used by NIOC for financing projects,” he said.
Gowhari said Iran has spent $120.7 billion in the upstream oil sector over the past ten years, while $200 billion should have been invested in this sector.
He said $18 billion was planned to be provided for financing upstream oil projects during the first eight months of the current calendar year, but only $7.5 billion has been provided.
Gowhari said the upstream oil sector is expected to receive $22 billion next calendar year.
Iran is poised to introduce a new model of oil contracts, known as IPC to replace “buy-back” contracts which are no longer attractive to foreign companies.
Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.
But under the IPC, NIOC will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.
Iran to Raise Annual Gas Output 44bcm
Iran’s Petroleum Minister Bijan Namdar Zangeneh has said that the country’s gas production will be 44 bcm higher next calendar year starting in March.
“A 120-mcm gas production hike up to the end of the current [calendar] year means that next [calendar] year, we will have 44 bcm more gas,” Zangeneh said.
He added that extra gas production will replace liquid fuel in the country.
“We follow up on important petroleum industry issues like gas production capacity enhancement and fuel supply to power plants on a regular daily basis,” he said.
Zangeneh added that it was not possible to supply 12 billion liters of diesel fuel to power plants this year.
“Currently, 600 mcm/d of gas is being delivered to NIGC,” he said, adding that Iran’s gas production capacity has increased 100 mcm year-on-year.
“Within three years, as gas production increases, fuel supply to industries with gasoil and fuel and fuel delivery to small cities and villages will decline and gas will replace it,” he said.
Special Oil/Gas Zone Envisaged in Khuzestan
The secretary of Committee for Development of Technology and Renovation of Oil, Gas and Coal of Iran has announced the planned establishment of special oil and gas zone in the southwestern province of Khuzestan.
“Despite a great deal of strategic capacities in Khuzestan and the century-old history of oil and gas in this province, the ground is more prepared than ever for the presence of foreign companies in these industries,” said Jaafar Towifqi.
He said that Khuzestan special oil and gas zone project is currently under study, calling on National Iranian South Oil Company (NISOC) to support Khuzestan’s Association of Oil, Gas and Petrochemical Industries Manufacturers and Committee for Development of Technology and Renovation of Oil, Gas and Coal of Iran to that effect.
NIGC Gas Feeding Up 11bcm
National Iranian Gas Company’s supply of gas to national trunklines during the first eight months of the current calendar year was 11 bcm higher year-on-year, an NIGC official said.
“During the first months of this year, this company processed 103.743 bcm of gas and delivered it to national trunklines. It was up 11 bcm compared with last year,” Abdol-Hossein Samari said. Iranian calendar year starts on March 21.
During the same eight-month period, NIGC also produced more than 16.7 bcm of gas condensate, up 15.573 bcm from a year ago.
Samari said South Pars, Khangiran and Ilam refineries produced 607,000 tons of sulfur during the eight-month period, adding that sulfur production reached 639,000 tons.
Iran Oil Exports to Rise If Sanctions Lifted
A senior Iranian official has said that the easing of sanctions against the Islamic Republic will help Iran boost its oil exports.
“In case sanctions are lifted, Iran will be able to reach a proper figure for exports in two to three months,” Mohsen Qamsari, director for international affairs of National Iranian Oil Company, said.
“Of course we cannot reach the previous figures quickly because other countries have taken Iran’s seat in the market,” he added.
He said that Iran has been in touch with European oil buyers despite tough sanctions against the country.
“Contracts with Iran’s former oil buyers continued even after sanctions. These contracts were not like before, but they still continue,” said Qamsari.
He said that Iran and its European customers are exchanging views and reviewing the market conditions.
Qamsari also said that Iran has not discussed any further oil sales to its Asian buyers provided that the Western governments would lift sanctions against Iran’s energy sector.