Tehran Oil Show, a Watershed Event

 

Tehran’s 20^th international oil and gas show, held from May 6 to May 9 in the Iranian capital, turned out to be one of the most important economic exhibitions. In the past years, never had an oil show managed to attract so many oil firms.

Even at national level, the exhibition set a record. Demand for allotment of space in the fairground increased 40% from a year ago. That was unprecedented in the history of oil show.

Foreign companies started registering seven months before the oil show was scheduled to start.

Holding 11% of the world’s total oil and 18% of its natural gas reserves, Iran is definitely an energy giant in the world. However, due to international sanctions in recent years, foreign companies could not invest in Iran for fear of penalties.

This time, the Tehran oil show was held after an outline agreement was signed between Iran and six world powers, raising hopes for the removal of sanctions slapped on the Islamic Republic.

The outcome the nuclear talks changed the turn of events in Iran’s favor. After this round of talks, many investors in the world realized that they should envisage returning to Iran.

That is why the Tehran oil show hosted 600 foreign companies from 29 countries. Business delegates from Norway and Poland and representatives from Italy, China, Germany, United Arab Emirates, India, Turkey, Russia, France, Belgium, England, Singapore, Monaco, South Korea, Ukraine, Spain, Austria, Kazakhstan and Switzerland participated in the event.

On the last day of the exhibition, Massimo Orini, the sales director of Italy’s Seko, said a delegation from this company would soon visit Tehran.

Directors of companies from Germany and Britain said they would return to Iran for investment whether or not the sanctions are lifted. The foreign participants acknowledged they were overwhelmed with Iran’s oil and gas market.

In recent years, foreign companies mainly distanced themselves from Iran’s market, but the Tehran oil show made them think twice.

Investors are always waiting for a window of opportunity to step in Iran’s economic paradise. That is an undeniable fact.

Iran is much better than the Persian Gulf Arab states in terms of investment potentialities.

The 20^th Tehran Oil and Gas Show marked a turning point in the history of Iran’s energy sector and it will not be forgotten.

This turning point will soon redirect investments into Iran.

Demulsifier Technology Mastered

 

The technical knowhow for producing oil demulsifier in Ahvaz-Asmari oil center run by National Iranian South Oil Company (NISOC) has been mastered.

The technology was achieved by the chemical processing research group of the "Academic Jihad" of the University of Tehran.

This research group had signed a research agreement with the Department for Research and Technology of National Iranian Oil Company in 2012.

Demulsifiers, or emulsion breakers, are a class of specialty chemicals used to separate emulsions (e.g. water in oil). They are commonly used in the processing of crude oil, which is typically produced along with significant quantities of saline water. This water (and salt) must be removed from the crude oil prior to refining. If the majority of the water and salt are not removed, significant corrosion problems can occur in the refining process.

Reza Saqafi, manager of demulsifier technology indigenization project, said the lab-scale prototypes of oil demulsifiers have been already tested by the Iranian Offshore Oil Company (IOOC) in Kharg Island and NISOC in Ahvaz.

He said that 40 other oil regions in Iran need demulsifiers.

Demulsification is the breaking of a crude oil emulsion into oil and water phases.

A fast rate of separation, a low value of residual water in the crude oil, and a low value of oil in the disposal water are obviously desirable. Produced oil generally has to meet company and pipeline specifications. For example, the oil shipped from wet-crude handling facilities must not contain more than 0.2% basic sediment and water (BS&W) and 10 pounds of salt per thousand barrels of crude oil.

This standard depends on company and pipeline specifications. The salt is insoluble in oil and associated with residual water in the treated crude. Low BS&W and salt content is required to reduce corrosion and deposition of salts.

The primary concern in refineries is to remove inorganic salts from the crude oil before they cause corrosion or other detrimental effects in refinery equipment. The salts are removed by washing or desalting the crude oil with relatively fresh water.

Oilfield emulsions possess some kinetic stability which arises from the formation of interfacial films that encapsulate the water droplets. To separate this emulsion into oil and water, the interfacial film must be destroyed and the droplets made to coalesce.

 

Iran Petchem Exports Up 35%

 

Iran exported 35% more petrochemical products compared with a year ago during the first month of the current calendar year which started on March 21, chief customs officer of Pars Special Economic Energy Zone (PSEEZ) said.

Bamdad Rahimi said nearly two million tons of commodities including low-density and high-density polyethylene, gas condensates, propane, butane, benzene, paraxylene, granulated sulfur were exported for roughly $1.23 billion.

The exports were 35% higher year-on-year in terms of weight.

He said the petrochemical products were mainly exported to China, Japan, the United Arab Emirates, India, Indonesia, the Netherlands, Belgium, Spain, Turkey, Romania, Taiwan, Thailand, Malaysia, Vietnam and Afghanistan.

Gas condensate had a 45% share in weight and 40% share in value of the exported products.

He said that more than 860,000 tons of gas condensate, valued at nearly $496 million was exported via PSEEZ customs, up 2% year-on-year.

During the same period, more than one million tons of non-oil commodities valued more than $730 million was exported, showing 86% growth in weight and 50% growth in value.

Rahimi said with the inauguration of new phases of South Pars gas field, gas condensate production and exports from this massive reservoir would grow significantly.

South Pars is currently supplying more than 300 mcm/d of gas, which is half the country’s gas consumption.

In the current calendar year, 100 mcm/d of gas is expected to be added to the gas field’s output.

The remaining phases of South Pars would have been developed in two years.

 

OPEC Output Cut Unlikely

 

The Organization of the Petroleum Exporting Countries (OPEC) is unlikely to implement a production cut at its next meeting in June, a senior Iranian official said.

Asked if OPEC would cut output at the upcoming June 5 meeting, Iran's Deputy Minister of Petroleum Rokneddin Javadi told Reuters: "I don't think so."

 

Iran, along with Venezuela, has repeatedly called for OPEC to cut output to shore up low prices that have decreased MCs revenues.

Javadi's comments signal an admission that the group was unlikely to agree to a reduction, especially after its current strategy has succeeded in curbing non-OPEC output and allowed OPEC to regain market share.

OPEC, led by Saudi Arabia, decided at a meeting in November to maintain output and keep global markets amply supplied so that low prices would force high-cost US shale oil producers to cut production first.

Javadi indicated later that in June Iran is still likely to push for output reduction or cooperation on the right amount of oil to be delivered to the market.

The meeting could "reinforce cooperation among the members because OPEC is an organization that could make policies for oil price orientation," Javadi told reporters on the sidelines of the Asian Oil and Gas conference in Kuala Lumpur.

Iran hopes its crude oil exports will return to pre-sanctions levels within three months once a deal with major powers to lift an oil embargo is finalized, he said.

"We hope we can return to the export levels that we had before the sanctions," Javadi, who is also the managing director of the National Iranian Oil Company, told Reuters.

"Yes, around 2.5 (million barrels per day), " he said, adding that this could possibly be achieved in three to six months.

Iran currently has less than 10 million barrels of crude stored onboard tankers that could be released post-sanctions depending on market conditions, Javadi said.

He said Iran expected to claw back its lost market share in Asia and Europe.

"It depends on market situation and price level, but we will come back to the traditional trade that we had before," he said, adding that Asia could take more than 50 percent of Iran's exports.

Iran plans to hold a conference in London in September to attract investors for its exploration and production sector, Javadi said.

Javadi said he expected the oil price to rise to around $80 per barrel by the end of 2016.

"From a commercial point of view, the current prices should be sustained and increase gradually," he said.

Iran to Export Products to Italy via IME

 

A group of Italian businessmen visiting Iran have suggested that Iran export commodities to Italy through Iran mercantile exchange (IME).

Senior Italian trade officials have voiced Rome's enthusiasm to increase imports of Iran-made commodities using the capacities of Iran Mercantile Exchange (IME).

In a meeting between IME Managing Director Hossein Panahian and a high-ranking Italian trade delegation on Tuesday, the two sides stressed the need for Tehran and Rome to create conditions for enhancement of the level of trade interactions, Fars News Agency reported.

"The Italian delegation's visit to Iran has been based on accurate assessments and studies, which we have conducted over Iran's economic potentials," said the Director of Italy's International Commercial Cooperation Francesco Pensabene in the meeting.

"Iran once was the second trade partner for Italy, and we are resolved to expand our trade relations with Tehran due to new political developments which are underway. The IME can undoubtedly play a significant role in promoting Tehran-Rome cooperation level," he added.

The Italian delegation was led by Giorgio Giovanoli, the head of the seventh department of the Italy's Economic Development Ministry.

In the meeting, the two sides explored ways to expand cooperation between the IME and the Italian private sector trade institutions in the petrochemical, iron ore, cement, clinker, and metals industries sectors.

Siraf Construction to Start in June

 

Construction operations for Siraf refining project is planned to start in June, the managing director of Siraf Refineries Infrastructure Company said.

Ali-Reza Sadeq-Abadi said “cartography, hydrology and geotechnical operations have already been carried out.”

He said that a contractor has also chosen for preparing the ground. The contract was selected following a tender.

Sadeq-Abadi said the project has made good progress in purchasing license and designing.

“After designing the distillation unit as the heart of the project and gathering more data about the capacity of units we would be able to move to acquire license from foreign companies,” he said.

Iran is targeting Asia’s growing demand for refined oil products with a $2.8 billion project to add 480,000 barrels a day of processing capacity at the Siraf refinery on the Persian Gulf coast.

Private Iranian companies will use their own funds to build eight processing plants, each with a capacity of 60,000 barrels per day.

The Siraf complex is in the coastal city of Assaluyeh near the South Pars offshore gas field.     

Iran President Office Examining IPC

 

The presidential office is reviewing the draft of the new type of oil contracts Iran is preparing to tempt foreign companies back, a top official said.

“This type of contract will be submitted to the government for final approval,” the head of Oil Contracts Revision Committee at Petroleum Ministry, Mehdi Hosseini, said.

He said that the office of vice-president for legal affairs is currently reviewing different aspects of Iran Petroleum Contract (IPC).

Hosseini said “tens of upstream oil projects” are envisaged to be introduced under this new framework.

He added that the introduction of IPC “depends on the country’s political atmosphere.”

Attracting Foreign Investment, Upgrading Domestic Potential

 

Iran’s 20^th International Oil, Gas, Refining and Petrochemical Exhibition was held at Tehran’s International Permanent Fairground from May 6 to 9 with the participation of 2,000 domestic and foreign companies.

The inauguration was held in the presence of First Vice President Es’haq Jahangiri, Minister of Petroleum Bijan Zangeneh, senior officials of Ministry of Petroleum and other state organs, foreign guests and Iranian MPs.

In his address, Jahangiri underscored the need for the development of oil and gas fields Iran shares with neighboring countries and the development of newly discovered fields by benefiting from the financial and technical contribution of leading domestic and international companies.

“Production of 700,000 b/d of oil by starting production from West Karoun fields and benefiting from state-of-the-art technologies for enhancing oil recovery rate and renovating installations in the fields under development could pave the ground for further international interaction in terms of energy supply to the world and ensuring energy security,” he said.

“By benefiting from these principles, energy diplomacy elements and commitment to secure energy supply to the world, Iran’s petroleum industry should try its best to encourage technologically advanced countries and international investment organs to cooperate with Iran,” said Jahangiri.

He said investment in Iran’s oil and gas industries is expected to become highly attractive to foreign investors after a new type of oil contracts is unveiled.

Jahangiri said the start-up of Phase 12 of the giant offshore South Pars gas field was the largest industrial project in Iran’s history. He said Phase 12 increased Iran’s gas production by 125 mcm/d.

“South Pars alone holds 40% of Iran’s gas reserves, or more than 14.2 tcm of gas and 19 billion barrels of gas condensate. That is huge wealth which provides an opportunity to Iranian developers and their potential foreign partners. A huge wealth would be generated in the gas production chain and its conversion into petrochemicals,” he said.       

“In light of such cooperation, the next prioritized phases of South Pars will come on-stream on schedule and gas production from this field will exceed 800 mcm/d,” he added.

Jahangiri said the gas share of Iran’s energy mix will reach 70% after new phases of South Pars gas field come on-stream. He added that gas supply to impoverished regions and small villages will be completed in three months.

“Access to new gas export markets with priority for neighboring countries, increasing feedstock supply to petrochemical plants, followed by increased petrochemical exports and entry into LNG market for gas exports to remote markets are among other achievements of gas recovery from phases of South Pars,” he added.

Jahangiri said Iran is determined to bring its oil production capacity back to the pre-sanctions level shortly after a final nuclear agreement is signed to win back its position in the market.

“Given the existing capacities in Iran’s petroleum industry as well as technical and specialized potentialities, it is possible and it can also set another framework for international cooperation,” he added.

“By launching the first phase of Persian Gulf Star Refinery, Iran will become self-sufficient in gasoline production and it will have the chance for the first time to export gasoline to other markets,” said Jahangiri.

He said that the startup of Persian Gulf Star Refinery and distribution of its products, particularly euro-4 gasoline in Tehran and other big cities would be among the major steps in protecting the environment.

Jahangiri said Iran’s petroleum industry also plans to construct eight refineries each with a capacity of 60,000 b/d of gas condensate in Assaluyeh in southern Iran.

He said the government’s priorities include cooperation with high-profile organizations and companies as well as international companies with advanced technology. He noted that such cooperation would provide a chance for Iranian companies to become partner of big international companies.

Jahangiri said there are signals about the willingness of big companies and European companies to be present in Iran’s oil, gas and petrochemical industries.

He said Tehran Oil and Gas Show provided a venue to examine the possibility of cooperation based on capabilities and technologies.

Jahangiri expressed hope that after the end of sanctions, cooperation between Iranian and foreign companies would become fundamental and will make contribution to global energy supply.

 

 

 

Promoting Oil Show

 

Mohammad Naseri, executive director of the Oil Show, said plans are under way for promoting the Iranian oil and gas show across the world.

“In order to hold the 21^st exhibition in a better way, we’ve already started making plans,” he said.

“The 20^th International Oil, Gas Refining and Petrochemical exhibition is being held in Tehran while when it was first held in 1995, there were only two halls. Today, with this significant number of participants and this space, it is undoubtedly one of the largest international exhibitions in this sector,” said Naseri, who is also director of public relations at National Iranian Oil Company.

“On the one hand, the 20^th international oil show is a venue for showing off domestic capabilities in management, engineering, and manufacturing of equipment and commodities required by the petroleum industry, and on the other, it creates useful opportunities to get foreign assistance in developing this strategic industry,” he said.

“This exhibition will be an opportunity for a large number of contractors, companies, manufacturers of petroleum industry equipment, investors, managers as well as Iranian and foreign experts to inform beneficiaries of their extensive capabilities in different sectors related to the petroleum industry,” he added.

Naseri said 1,200 Iranian and 600 foreign companies from 39 countries attended the 20^th oil and gas show. He said that seven more countries participated in this year’s exhibition.

Naseri said the permanent secretariat of Tehran Oil and Gas Show will continue to update information on "www.iran-oilshow.ir "until next year’s exhibition.

He said that the data available on this website would help potential participants in the 21^st International Oil, Gas, Refining and Petrochemical Exhibition.

He said potential participants are invited to send their suggestions for more effectiveness of the show to the email available on this website so that next year’s exhibition would be held in a more desirable form.

“In order to remove obstacles in the way of prospective participants in the exhibition in the coming years, particularly foreign participants, proper mechanisms are being worked out,” said Naseri.

 

$70b Investment Needed

 

Zangeneh said projects worth $70 billion are under design or construction in the upstream and downstream oil sectors. He said that the private sector and foreign investors are instrumental in financing these projects.

He said that the construction of eight gas condensate treatment facilities is set to start, adding that he has made good on his last year’s promise for the construction of a broad-based treatment facility.

Zangeneh said construction of the three-billion-dollar Siraf refining park would start in June.

The minister also referred to the startup of five phases of South Pars gas field in the last calendar year, saying the Ministry of Petroleum’s promise of raising gas production capacity by 125 mcm/d was delivered.

Zangeneh said the startup of five phases of South Pars by Iranian engineers was a breakthrough.

He also said operations are continuing at an appropriate pace in West Karoun hydrocarbon fields in southwestern Iran.

Zangeneh touched upon the manufacturing of 10 domestically manufactured and widely used commodities, saying: “Wellhead equipment, downhole pumps, safety valves, casings, anti-combustion electromotors, rotary machinery, measurement equipment, steel alloys and intelligent pigs are to be manufactured by domestic companies.”

The minister said the agreement for the manufacturing of drilling bits has also been signed and the agreement for other items is to be signed by March 2016.

Zangeneh said the removal of sanctions would not mean that domestic manufacturing would be abandoned by the government.

He said that the removal of sanctions would provide a chance for the transfer of technology and developing an endogenous and productive economy.

Zangeneh said domestic manufacturing market would be guaranteed in case general contractor companies are established in the country and are supported.

The minister also announced IRR 60,000 billion investments in rural gas supply, saying domestic contractors could guarantee domestic market by benefiting from the capacities of domestic manufacturers.

 

Attracting Foreign Investment, Upgrading Domestic Potential

 

Iran’s 20^th International Oil, Gas, Refining and Petrochemical Exhibition was held at Tehran’s International Permanent Fairground from May 6 to 9 with the participation of 2,000 domestic and foreign companies.

The inauguration was held in the presence of First Vice President Es’haq Jahangiri, Minister of Petroleum Bijan Zangeneh, senior officials of Ministry of Petroleum and other state organs, foreign guests and Iranian MPs.

In his address, Jahangiri underscored the need for the development of oil and gas fields Iran shares with neighboring countries and the development of newly discovered fields by benefiting from the financial and technical contribution of leading domestic and international companies.

“Production of 700,000 b/d of oil by starting production from West Karoun fields and benefiting from state-of-the-art technologies for enhancing oil recovery rate and renovating installations in the fields under development could pave the ground for further international interaction in terms of energy supply to the world and ensuring energy security,” he said.

“By benefiting from these principles, energy diplomacy elements and commitment to secure energy supply to the world, Iran’s petroleum industry should try its best to encourage technologically advanced countries and international investment organs to cooperate with Iran,” said Jahangiri.

He said investment in Iran’s oil and gas industries is expected to become highly attractive to foreign investors after a new type of oil contracts is unveiled.

Jahangiri said the start-up of Phase 12 of the giant offshore South Pars gas field was the largest industrial project in Iran’s history. He said Phase 12 increased Iran’s gas production by 125 mcm/d.

“South Pars alone holds 40% of Iran’s gas reserves, or more than 14.2 tcm of gas and 19 billion barrels of gas condensate. That is huge wealth which provides an opportunity to Iranian developers and their potential foreign partners. A huge wealth would be generated in the gas production chain and its conversion into petrochemicals,” he said.       

“In light of such cooperation, the next prioritized phases of South Pars will come on-stream on schedule and gas production from this field will exceed 800 mcm/d,” he added.

Jahangiri said the gas share of Iran’s energy mix will reach 70% after new phases of South Pars gas field come on-stream. He added that gas supply to impoverished regions and small villages will be completed in three months.

“Access to new gas export markets with priority for neighboring countries, increasing feedstock supply to petrochemical plants, followed by increased petrochemical exports and entry into LNG market for gas exports to remote markets are among other achievements of gas recovery from phases of South Pars,” he added.

Jahangiri said Iran is determined to bring its oil production capacity back to the pre-sanctions level shortly after a final nuclear agreement is signed to win back its position in the market.

“Given the existing capacities in Iran’s petroleum industry as well as technical and specialized potentialities, it is possible and it can also set another framework for international cooperation,” he added.

“By launching the first phase of Persian Gulf Star Refinery, Iran will become self-sufficient in gasoline production and it will have the chance for the first time to export gasoline to other markets,” said Jahangiri.

He said that the startup of Persian Gulf Star Refinery and distribution of its products, particularly euro-4 gasoline in Tehran and other big cities would be among the major steps in protecting the environment.

Jahangiri said Iran’s petroleum industry also plans to construct eight refineries each with a capacity of 60,000 b/d of gas condensate in Assaluyeh in southern Iran.

He said the government’s priorities include cooperation with high-profile organizations and companies as well as international companies with advanced technology. He noted that such cooperation would provide a chance for Iranian companies to become partner of big international companies.

Jahangiri said there are signals about the willingness of big companies and European companies to be present in Iran’s oil, gas and petrochemical industries.

He said Tehran Oil and Gas Show provided a venue to examine the possibility of cooperation based on capabilities and technologies.

Jahangiri expressed hope that after the end of sanctions, cooperation between Iranian and foreign companies would become fundamental and will make contribution to global energy supply.

 

 

Promoting Oil Show

 

Mohammad Naseri, executive director of the Oil Show, said plans are under way for promoting the Iranian oil and gas show across the world.

“In order to hold the 21^st exhibition in a better way, we’ve already started making plans,” he said.

“The 20^th International Oil, Gas Refining and Petrochemical exhibition is being held in Tehran while when it was first held in 1995, there were only two halls. Today, with this significant number of participants and this space, it is undoubtedly one of the largest international exhibitions in this sector,” said Naseri, who is also director of public relations at National Iranian Oil Company.

“On the one hand, the 20^th international oil show is a venue for showing off domestic capabilities in management, engineering, and manufacturing of equipment and commodities required by the petroleum industry, and on the other, it creates useful opportunities to get foreign assistance in developing this strategic industry,” he said.

“This exhibition will be an opportunity for a large number of contractors, companies, manufacturers of petroleum industry equipment, investors, managers as well as Iranian and foreign experts to inform beneficiaries of their extensive capabilities in different sectors related to the petroleum industry,” he added.

Naseri said 1,200 Iranian and 600 foreign companies from 39 countries attended the 20^th oil and gas show. He said that seven more countries participated in this year’s exhibition.

Naseri said the permanent secretariat of Tehran Oil and Gas Show will continue to update information on "www.iran-oilshow.ir "until next year’s exhibition.

He said that the data available on this website would help potential participants in the 21^st International Oil, Gas, Refining and Petrochemical Exhibition.

He said potential participants are invited to send their suggestions for more effectiveness of the show to the email available on this website so that next year’s exhibition would be held in a more desirable form.

“In order to remove obstacles in the way of prospective participants in the exhibition in the coming years, particularly foreign participants, proper mechanisms are being worked out,” said Naseri.

 

$70b Investment Needed

 

Zangeneh said projects worth $70 billion are under design or construction in the upstream and downstream oil sectors. He said that the private sector and foreign investors are instrumental in financing these projects.

He said that the construction of eight gas condensate treatment facilities is set to start, adding that he has made good on his last year’s promise for the construction of a broad-based treatment facility.

Zangeneh said construction of the three-billion-dollar Siraf refining park would start in June.

The minister also referred to the startup of five phases of South Pars gas field in the last calendar year, saying the Ministry of Petroleum’s promise of raising gas production capacity by 125 mcm/d was delivered.

Zangeneh said the startup of five phases of South Pars by Iranian engineers was a breakthrough.

He also said operations are continuing at an appropriate pace in West Karoun hydrocarbon fields in southwestern Iran.

Zangeneh touched upon the manufacturing of 10 domestically manufactured and widely used commodities, saying: “Wellhead equipment, downhole pumps, safety valves, casings, anti-combustion electromotors, rotary machinery, measurement equipment, steel alloys and intelligent pigs are to be manufactured by domestic companies.”

The minister said the agreement for the manufacturing of drilling bits has also been signed and the agreement for other items is to be signed by March 2016.

Zangeneh said the removal of sanctions would not mean that domestic manufacturing would be abandoned by the government.

He said that the removal of sanctions would provide a chance for the transfer of technology and developing an endogenous and productive economy.

Zangeneh said domestic manufacturing market would be guaranteed in case general contractor companies are established in the country and are supported.

The minister also announced IRR 60,000 billion investments in rural gas supply, saying domestic contractors could guarantee domestic market by benefiting from the capacities of domestic manufacturers.

 

Openness to Foreign Investment

 

The first generation of buyback contracts in Iran’s petroleum industry attracted huge investment. However, they ceased to suit the taste of investors, particularly foreign companies, after they were revised and incorporated with amendments. On the other hand, the imposition of sanctions in recent years has rendered conditions difficult for investment in this sector.

Oil and gas fields have been developed by Iranian contractors during years of sanctions, but Iran’s petroleum industry needs state-of-the-art technology to grow. Moreover, neighboring countries like Qatar and Iraq are rapidly developing their oil and gas industry and Iran is required to go ahead at the same pace.

Given improvement in political relations between Iran and the West and hopes for the lifting of sanctions, Iran’s Ministry of Petroleum decided to reconsider oil contracts. The issue of a new format for oil contracts and planning to attract foreign investment into the petroleum industry emerged two years ago. To that effect, safeguarding national interests and oil reservoirs continue to top the agenda.

According to the new type of oil contracts, known as Iran Petroleum Contract (IPC), a joint oil reservoir whose data has been finalized is given to a foreign investor to recover oil under a specified plan. After the end of development process and the start of production from the field, the investor would be compensated by receiving the sum he has invested as well as an agreed percentage of margins (ranging between 15% and 20% per barrel of oil sold).

Iran’s Minister of Petroleum Bijan Zangeneh told a press conference on the sidelines of Tehran Oil and Gas Show that the IPC would largely benefit investors.

Regarding the introduction of IPC to the world, he said: “These contracts were examined by domestic and foreign experts in Iran since 2013 and they are now in the final stage to be submitted to the government for finalization.”

He said that the new model of contracts is tentatively planned to be introduced in September in London.

“In parallel with the introduction of this new model of Iran’s oil contracts, projects which are to be developed within the framework of this contract would be also introduced,” said Zangeneh.

“In these contracts, exploration, development and production are integrated and the investor can be ensured that he would gain good profit from the implementation of projects,” he added.

Zangeneh said the Organization of the Petroleum Exporting Countries (OPEC) would not block the adhesion of any new countries into this oil producer group. “There is no obstacle for new members to join. When OPEC accepts Angola, why not Russia whose production is 10 mb/d?” he said.

Zangeneh said Iran would “by no means” give up its share of the oil market after sanctions are lifted.

Regarding the development of oil fields in West Karoun region, which are mainly shared with Iraq, the minister said: “Despite the current difficult conditions and the sanctions, Iran’s Ministry of Petroleum is developing joint fields like South Pars gas field and West Karoun.”

He said Iran is making every effort for South Pars to produce gas at full capacity and bring West Karoun oil production to 700,000 b/d.

Zangeneh said there are low-pressure and high-pressure oil layers in West Karoun, adding that Ministry of Petroleum would try to benefit from the state-of-the-art technology and cooperate with foreign companies and Iranian universities for oil recovery.

Asked if the lifting of the sanctions would undermine the presence of domestic manufacturers and companies in the petroleum industry market, he said: “Now, Iran’s Ministry of Petroleum is in good communications with manufacturers in different production and commercial sectors, but it owes the private sector which would be reimbursed after the sanctions are lifted and the conditions are improved.”

He also refused either to deny or confirm a planned visit by a US oil delegation to Iran.

Regarding oil prices, Zangeneh said: “None of the (OPEC)’s members are happy with the prices following fluctuations. Our view is clear. Crude oil supply is more than demand and if political factors are not involved the prices will go up.”

He said China does not owe Iran any unconventional sum for oil, adding: “In oil transactions, the buyer of oil faces a short period of time for paying for the oil.”

“China’s oil debt to Iran stands at a conventional level and the oil money is paid as usual. India also owes us for oil, but we will get back the money after sanctions are lifted. The amount crosses seven billion Euros,” he added.

Asked about Ministry of Petroleum’s plans for more oil exports after sanctions are lifted, Zangeneh said: “The world oil market is an integrated one; therefore, all producers should think about Iran’s oil entry into this market because 60% of Iran’s oil exports have been removed from the market due to unfair sanctions. Oil producing countries should create space for Iran to enhance its oil exports.”

Asked if there has been any proposal for consensus among OPEC member states, he said: “I don’t think there is any proposal [on the production ceiling], but most OPEC members do not support the current trend.”

Zangeneh also said that the government’s Economic Council approved more than $70 billion for petroleum industry projects – development of oil and gas fields and optimization – in the last calendar year which ended on March 20.

 

700,000 b/d Output Hike

 

Tehran hosted its 20^th international oil and gas show in May with more than 1,800 Iranian and foreign companies showcasing their achievements at the International Permanent Fairground.

In this oil festival, manufacturers, contractors and consulting companies put their capabilities on exhibit.

On the sidelines of the 20^th International Oil, Gas, Refining and Petrochemical Exhibition, Iranian oil officials held press conferences to answer a wide range of questions about the latest developments with regards to Iran’s petroleum industry.

Since most oil fields in Iran are in the second half of their life cycle, all hope is pined on young fields in West Karoun region in southwestern Iran to help the country enhance its oil production capacity.

Iran plans to raise its oil production to more than 5 mb/d by the end of the sixth Five-Year Economic Development Plan (March 2015-March 2020).

Rokneddin Javadi, managing director of National Iranian Oil Company (NIOC), said Iran’s oil production capacity is forecast to experience 700,000 b/d hikes by March 2018, adding that his target would be achieved by investing $20 billion in West Karoun oil fields for buyback contracts.

Javadi said Iran’s crude oil storage on water is not in big volumes, adding: “Iran’s oil exports currently match data released by the Organization of the Petroleum Exporting Countries (OPEC).”

He said that NIOC seeks to reach 5 mb/d oil and 1 mb/d gas condensate output by March 2020.

 Javadi said Iran’s potential crude oil production capacity reached 3.8 mb/d in the last calendar year which ended on March 20. He added that Iran’s oil output capacity is expected to reach 3.96 mb/d by March 2016.

Javadi also said that 80 onshore and 40 offshore drilling rigs are operating in Iranian hydrocarbon fields.

“These 120 onshore and offshore fields are envisaged for developing offshore and onshore fields and we hope that financial obstacles would not cause any problems for the realization of this plan and reaching our production objectives,” he said.

For the new calendar year, 180 new wells are to be spudded and 256 wells are to be repaired in order to boost production.

To reach production target, Javadi said, some plans have been made. He referred to the development of West Karoun oil fields in southwestern Iran.

“The first phase of North Azadegan oil field, the rest of the first phase of Yadavaran field and parts of South Yaran field will reach production this calendar year,” said Javadi.

He expressed hope that production from West Karoun fields would go from the current 100,000 b/d to 250,000 b/d this year to March 2016.

Javadi said South Pars gas field is a priority of Ministry of Petroleum for investment and development. He said that the objective set for a 100-mcm/d increase in South Pars production was realized in the last calendar year.

Javadi said Phases 15&16 of South Pars are expected to become operational in the first half of the current calendar year and Phases 17&18 in the second half. Phases 19-21 are also to be completed to a great extent.

Javadi said South Pars is set to see another 100 mcm/d output hike this year.

Javadi said talks are under way for awarding some parts of Phase 11 of South Pars to MAPNA. “This company has announced that it is financially capable of operating some parts of Phase 11 of South Pars gas field,” he said, adding that the project would be finalized in the first half of the current calendar year.

Javadi said the most important plan pursued by NIOC this year is to finance oil projects, adding that $100 billion is earmarked for oil projects in the current calendar year.

He said the government’s Economic Council has so far approved the allocation of $65 billion for oil projects, while $15 billion more is being approved.

Javadi said the government and the parliament have already adopted approaches for financing oil projects, but the structure of relationships between Ministry of Petroleum and banks and other state organs is tough, complicated and time-consuming.

“In the last calendar year, $21 billion was envisaged for investment in oil, $5 of which was provided by domestic sources. This figure is $22 billion this year with no share for domestic sources,” he said.

“Given the global drop in oil prices and the difficulty of domestic finance, investment in oil is impossible,” he added.

Javadi said gas condensate production is to increase 150,000 b/d this year to reach 630,000 b/d.

“Last calendar year, plans were made for the country’s production capacity to catch up with the pre-sanctions market. To that effect, many fields were reexamined and tested,” he said. “Now, we can say with certainty that we would be able to reach the pre-sanctions level in a short period of time, i.e. three months,” he added.

Javadi said associated petroleum gas was auctioned off in the last calendar year. He said that nine companies submitted their proposals. “Technical assessments are over and we hope that the final decision would be made for three fields in National Iranian South Oil Company, Iran Central Oil Fields Company and Iranian Offshore Oil Company by June. One of these projects is related to South Pars,” he added.

Javadi said the South Pars no-flaring project would start this year so that the experience would be used for other phases of the giant reservoir.

He said another priority project for this year is the completion of exploration operations in the Caspian Sea. Javadi said exploration in some blocks has already been done, adding that Amir Kabir drilling rig would continue exploration after overhaul.

Javadi also said studies have started for the construction of a crude oil exports terminal in Jask.

“Studies have just started on this project and we hope that construction operations would begin next year,” he added.

Javadi said Jask terminal project would be operated by the government and the private sector. The terminal is envisaged to handle 1mb/d.

In response to a question about Iran’s crude oil production and storage on ships, Javadi said: “Our production is the same figure announced by OPEC. Of course, it may rise or fall sometimes. We don’t have much crude oil on ships.”

He also said that NIOC would negotiate and cooperate with any contractor and company that would be able to finance oil projects.

“Some of them have a good record and we doubtlessly choose in a better way, but the question is that these companies are not financially solid,” said Javadi.

Regarding the prospect of Iran’s liquefied natural gas (LNG) industry, he said: “Due to the sanctions, we face many problems in entering this market and that’s exactly why investments are halted. However we have some parallel plans under way for small and medium-size LNG deliveries.”

Asked what NIOC plans to do over oil swap, Javadi said: “We are ready to resume swap, but we face significant obstacles due to sanctions and restrictions.”

Regarding the minimum price for swap, he said: “We have first to see where the swap route would be. It’s impossible to set a price now.”

Javadi was also asked to explain about reports of Iran’s cancellation of planned gas exports to Europe. He said: “Given the gas price fall in Europe, this project may not be cost-effective. Meantime, single-product and LNG markets have grown and doubtlessly [pipeline] gas export project to Europe is no longer a priority, but we have not yet cancelled any talks.”

700,000 b/d Output Hike

 

Tehran hosted its 20^th international oil and gas show in May with more than 1,800 Iranian and foreign companies showcasing their achievements at the International Permanent Fairground.

In this oil festival, manufacturers, contractors and consulting companies put their capabilities on exhibit.

On the sidelines of the 20^th International Oil, Gas, Refining and Petrochemical Exhibition, Iranian oil officials held press conferences to answer a wide range of questions about the latest developments with regards to Iran’s petroleum industry.

Since most oil fields in Iran are in the second half of their life cycle, all hope is pined on young fields in West Karoun region in southwestern Iran to help the country enhance its oil production capacity.

Iran plans to raise its oil production to more than 5 mb/d by the end of the sixth Five-Year Economic Development Plan (March 2015-March 2020).

Rokneddin Javadi, managing director of National Iranian Oil Company (NIOC), said Iran’s oil production capacity is forecast to experience 700,000 b/d hikes by March 2018, adding that his target would be achieved by investing $20 billion in West Karoun oil fields for buyback contracts.

Javadi said Iran’s crude oil storage on water is not in big volumes, adding: “Iran’s oil exports currently match data released by the Organization of the Petroleum Exporting Countries (OPEC).”

He said that NIOC seeks to reach 5 mb/d oil and 1 mb/d gas condensate output by March 2020.

 Javadi said Iran’s potential crude oil production capacity reached 3.8 mb/d in the last calendar year which ended on March 20. He added that Iran’s oil output capacity is expected to reach 3.96 mb/d by March 2016.

Javadi also said that 80 onshore and 40 offshore drilling rigs are operating in Iranian hydrocarbon fields.

“These 120 onshore and offshore fields are envisaged for developing offshore and onshore fields and we hope that financial obstacles would not cause any problems for the realization of this plan and reaching our production objectives,” he said.

For the new calendar year, 180 new wells are to be spudded and 256 wells are to be repaired in order to boost production.

To reach production target, Javadi said, some plans have been made. He referred to the development of West Karoun oil fields in southwestern Iran.

“The first phase of North Azadegan oil field, the rest of the first phase of Yadavaran field and parts of South Yaran field will reach production this calendar year,” said Javadi.

He expressed hope that production from West Karoun fields would go from the current 100,000 b/d to 250,000 b/d this year to March 2016.

Javadi said South Pars gas field is a priority of Ministry of Petroleum for investment and development. He said that the objective set for a 100-mcm/d increase in South Pars production was realized in the last calendar year.

Javadi said Phases 15&16 of South Pars are expected to become operational in the first half of the current calendar year and Phases 17&18 in the second half. Phases 19-21 are also to be completed to a great extent.

Javadi said South Pars is set to see another 100 mcm/d output hike this year.

Javadi said talks are under way for awarding some parts of Phase 11 of South Pars to MAPNA. “This company has announced that it is financially capable of operating some parts of Phase 11 of South Pars gas field,” he said, adding that the project would be finalized in the first half of the current calendar year.

Javadi said the most important plan pursued by NIOC this year is to finance oil projects, adding that $100 billion is earmarked for oil projects in the current calendar year.

He said the government’s Economic Council has so far approved the allocation of $65 billion for oil projects, while $15 billion more is being approved.

Javadi said the government and the parliament have already adopted approaches for financing oil projects, but the structure of relationships between Ministry of Petroleum and banks and other state organs is tough, complicated and time-consuming.

“In the last calendar year, $21 billion was envisaged for investment in oil, $5 of which was provided by domestic sources. This figure is $22 billion this year with no share for domestic sources,” he said.

“Given the global drop in oil prices and the difficulty of domestic finance, investment in oil is impossible,” he added.

Javadi said gas condensate production is to increase 150,000 b/d this year to reach 630,000 b/d.

“Last calendar year, plans were made for the country’s production capacity to catch up with the pre-sanctions market. To that effect, many fields were reexamined and tested,” he said. “Now, we can say with certainty that we would be able to reach the pre-sanctions level in a short period of time, i.e. three months,” he added.

Javadi said associated petroleum gas was auctioned off in the last calendar year. He said that nine companies submitted their proposals. “Technical assessments are over and we hope that the final decision would be made for three fields in National Iranian South Oil Company, Iran Central Oil Fields Company and Iranian Offshore Oil Company by June. One of these projects is related to South Pars,” he added.

Javadi said the South Pars no-flaring project would start this year so that the experience would be used for other phases of the giant reservoir.

He said another priority project for this year is the completion of exploration operations in the Caspian Sea. Javadi said exploration in some blocks has already been done, adding that Amir Kabir drilling rig would continue exploration after overhaul.

Javadi also said studies have started for the construction of a crude oil exports terminal in Jask.

“Studies have just started on this project and we hope that construction operations would begin next year,” he added.

Javadi said Jask terminal project would be operated by the government and the private sector. The terminal is envisaged to handle 1mb/d.

In response to a question about Iran’s crude oil production and storage on ships, Javadi said: “Our production is the same figure announced by OPEC. Of course, it may rise or fall sometimes. We don’t have much crude oil on ships.”

He also said that NIOC would negotiate and cooperate with any contractor and company that would be able to finance oil projects.

“Some of them have a good record and we doubtlessly choose in a better way, but the question is that these companies are not financially solid,” said Javadi.

Regarding the prospect of Iran’s liquefied natural gas (LNG) industry, he said: “Due to the sanctions, we face many problems in entering this market and that’s exactly why investments are halted. However we have some parallel plans under way for small and medium-size LNG deliveries.”

Asked what NIOC plans to do over oil swap, Javadi said: “We are ready to resume swap, but we face significant obstacles due to sanctions and restrictions.”

Regarding the minimum price for swap, he said: “We have first to see where the swap route would be. It’s impossible to set a price now.”

Javadi was also asked to explain about reports of Iran’s cancellation of planned gas exports to Europe. He said: “Given the gas price fall in Europe, this project may not be cost-effective. Meantime, single-product and LNG markets have grown and doubtlessly [pipeline] gas export project to Europe is no longer a priority, but we have not yet cancelled any talks.”

Refining Cooperation with India, Brazil

 

Iran has saved several million liters of liquid fuel by feeding power plants with natural gas. Therefore, the country has now plans for exports.

Abbas Kazemi, Deputy Minister of Petroleum and managing director of National Iranian Oil Refining and Distribution Company (NIORDC), said a 120-mcm/d production hike from new phases of South Pars gas field is saving as much gasoil and fuel oil. He said that feeding power plants with gas provides a good chance for exporting gasoil.

“We are currently looking for markets to sell our surplus gasoil, kerosene, liquefied gas and fuel oil,” he said, adding that this is the first time Iran is facing surplus oil products.

Kazemi also referred to the third phase of Abadan oil refinery, saying a project for stabilizing the capacity of this refinery would be expedited by attracting $700 million in the first phase.

He said that the detailed plan of the project is expected to start this year, adding that Abadan refinery would offer high-quality products.

Kazemi said India and Brazil have volunteered to cooperate with Iran in building refineries adding: “To that effect, we are in talks for carrying out refinery optimization and development projects in those countries.”

“Brazil has shown inclination for the renovation of some of its refineries by NIORDC. India’s Assar refiner is another project. If talks are concluded, Iran will supply crude oil to these refineries,” he said.

Kazemi said the government has adopted a plan requiring oil refineries to undergo renovation in five years. He said this decision has been made by the government in order to balance the capital market and motivate the private sector.

“In some refineries, renovation plans have been started and we are currently trying to convince other refineries to implement quality projects,” he said.

“At Isfahan refinery, half of optimization projects have been carried out. In Lavan and Bandar Abbas oil refineries, the projects that had started earlier are under way. In case refining companies fail to carry out their quality projects they will face problems in their production security because fuel oil consumption is sharply falling in Iran as well as the world, and these refineries are required to minimize their fuel oil production,” Kazemi said.

He said that bunkering grew 25% in the last calendar year in Iran, adding: “We plan to boost bunkering this year.”

To that end, he said, discounts are being granted to the private sector. “Bunkering is a set of different operations. As far as this company (NIORDC) is concerned, we will try to accomplish our assignment in the most appropriate manner,” said Kazemi.

He said that fuel smuggling could be also curbed by conducting “fully-loaded gasoline tanker” operations.

15mt Petchem Output Hike

 

Iran’s economy is still in stagflation. The main objective pursued by Ministry of Petroleum is to avoid selling raw material.

Revenues from selling petrochemical products would spur job creation and production and would help drive the economy out of stagflation.

By completing some 60 petrochemical projects left half-complete under previous governments, Iran can raise its petrochemical production to 120 million tons a year.

Moreover, by investing $41 billion in 36 new projects, the country’s annual petrochemical output will go beyond 180 million tons.

Abbas Sha'ri-Moqaddam, Deputy Minister of Petroleum and managing director of National Petrochemical Company (NPC), said at Tehran Oil and Gas Show that Iran’s petrochemical sector needs $7.5 billion in investment in order to bring its production to 60 million tons a year.

He said NPC has drawn up a petrochemical roadmap in six volumes, adding that a major objective is to reach 60-million-ton production.

“So far only 45-million-ton target has been achieved and we are making efforts to bring this figure to 50 million tons and beyond,” he said, adding that this 15-million-ton output hike would require $7.5 billion in investment.

He said that the NPC is trying to reach this objective without getting any money and only by benefitting from feedstock promised by NIOC.

Referring to 67 half-finished petrochemical projects in Iran, Sha'ri-Moqaddam said: “These projects are 20% to 90% completed and their completion requires planning. Many of these units face no property, feedstock or investment problems and they are only waiting for hard currency.”

He said that some of these projects have been funded by China’s 2-3.6 billion euro finance, adding that 15 of these projects do not need any money.

“After examining production conditions, we concluded that methane would give nothing but fertilizer and methanol. Moreover, increasing methanol production would affect market prices. Therefore, we decided to produce propylene from methanol. To that effect, we devised 36 projects, 14 of which are GTP projects in the Persian Gulf coasts,” he added.

Referring to his recent meetings with European and Asian businessmen, Sha'ri-Moqaddam said: “These countries mainly announce their willingness and plans for presence in Iran’s market, but they say all these are subject to the removal of sanctions under a final [nuclear] deal.”

“We have nothing to worry about with regard to petrochemical feedstock from phases 12, 15&16 and 17&18 of South Pars, and NIOC has promised to deliver 700,000 to 800,000 tons of ethane we require, up to the end of summer. That would allow us to launch two phases of Kavian petrochemical plant and its branches in Lorestan, Mahabad and Kurdistan, which are currently waiting for fuel,” he said.

Sha'ri-Moqaddam said the government has issued the necessary directives to the ministries of petroleum, industry, mine and trade, and economy with regard to the price of petrochemical feedstock. He said the directives set the price for feedstock on the long-term.

He said that most foreign companies engaged in talks with Iran have raised questions about the price of petrochemical feedstock in Iran.

“Their first request was a price to be set for petrochemical feedstock for at least 10 years. Unfortunately, since such considerations have not been made, most [of foreign companies] become doubtful,” said Sha'ri-Moqaddam.

He added that many foreign companies have left Iran’s market due to the huge price differences with the US.

“An example was African Arya Sasol company which invested $8 billion in the US due to low-price feedstock and it sold its share in Iran’s market under US pressure,” he said.

 

Gas Supply to Power Plants

 

Over the past two years, with production hike at South Pars gas field, Iran has increased gas supply to power plants as part of its efforts to replace fuel oil with clean fuel for better air quality and economic benefits.

Hamid-Reza Araqi, Deputy Minister of Petroleum and managing director of National Iranian Gas Company (NIGC), told a press conference at Tehran Oil and Gas Show that nearly 50 bcm of gas was delivered to power plants in the last calendar year, up 15 bcm from the preceding year.

“With more gas supply to the power plants, the same amount of middle distillate fuel consumption was prevented. Besides saving $6 billion, it reduced air pollution and helped safeguard the environment,” he said.

Araqi said the equipment used for gas supply has been designed and manufactured fully by NIGC, adding: “The issue of self-sufficiency in commodity and using domestically manufactured equipment in order to support domestic manufacturers have always been among the priorities of this company.”

Regarding Iran’s plan for gas exports this calendar year, Araqi said: “Gas exports to Iraq will start with the delivery of 5 mcm/d to 7 mcm/d. We will also export 30 mcm/d of gas to Turkey.”

He also said Iran would continue to import 20 mcm/d to 40 mcm/d of gas from Turkmenistan.

Araqi said Iran holds 34 tcm of gas, requiring the country to seek to promote its status in global gas trade and bring its share from 1% to 10%.

He said NIGC delivered more than 15 bcm of gas to power plants, contributing to a better air quality.

Downstream Development

 

Mohammad-Hassan Peyvandi, deputy head of NPC, stressed the need for the development of technical knowledge of stem cells and knowledge-based fields for Iran’s petrochemical industries.

He said: “Pathology of development in downstream industries tops our agenda and we are looking for solutions to remove many of these obstacles.”

“Conversion and development of many of these products require state-of-the-art technology, and universities and Petrochemical Research and Technology Company (PRTC) can help us fill this void to a large extent,” he added.

Peyvandi said Iran should be doubling its petrochemical production capacity to 120 million tons in ten years.

“Propylene production is on our agenda and in case China’s finance is finalized the methanol production capacity will reach 24 million tons [in Iran]. This production capacity currently stands at 5 million tons, planned to be completed by 19 million tons from Kaveh petrochemical plant,” he said.

Peyvandi said methanol production hike would supply domestic needs and would also fill foreign markets, resulting in lower prices.

“The methanol market is already under pressure from Iran’s methanol production and the US shale gas. In the meantime, Asian markets are flooded with LNG whose transfer costs are high,” he said, adding that many LNG carrying vessels are sailing through Panama Canal at the destination of Asian markets.

“NPC supports attraction of fresh foreign investment and is ready for cooperation with investors,” he said.

Peyvandi said Iran is currently producing below one million tons of propylene, adding that the output is expected to reach 5.5 million tons next calendar year.

“In the past years, the feedstock was spent on two spots for the production of propylene. One was about the West Ethylene Pipeline and another one Arya Sasol project. In both projects, the necessary ethane for the projects was consumed and we couldn’t achieve a balance in production, but we know that we have got a golden opportunity to convert methanol to propylene,” he said.

Gas Pipeline to Europe

 

Iran, a major holder of gas reserves in the world, has always been an option for energy supply to Europe. However, in recent years, as relations have turned sour between Iran and the West, the Western governments have sought in vain to disregard Iran’s position as a secure source of gas.

Azizollah Ramezani, director for international affairs of NIGC, said gas exports via pipeline to Europe would be economical until 4,000 kilometers of distance.”

“The route envisaged for entry into the European Union (EU) is 2,500 to 3,000 kilometers long. Therefore, NIGC has still the chance to deliver gas to Europe via pipeline and supply part of Europe’s required gas. The EU’s LNG consumption stands at 2,300 mcm a year and it consumes as much energy,” he said.

Ramezani said the EU currently derives 22% to 23% of its energy from natural gas. Meantime, a deepening crisis between Russia and Europe has forced the 28-nation European bloc to look for alternatives to diversity its gas sources.

The EU is looking for new options to receive gas and Iran is one of the potential suppliers of gas to Europe on the long-term.

Iran is estimated to have still gas for 120 years, while some suppliers of gas to Europe will run out of this clean source of energy in 20 to 30 years.

Europeans have been talking about receiving gas from Iran and they are now waiting for political conditions to improve.

Post-Sanctions Activities

 

International sanctions against Iran have both served and harmed Iran’s petroleum industry. It’s a question of half-full and half-empty glass.

The half-empty is restrictions and the half-full is the self-reliance of industrialists and manufacturers. In other words, under the shadow of these sanctions Iranians have made significant progress over the past decade.

Iranian companies are ready to compete with foreign firms which have expressed readiness to return to Iran in case the sanctions are lifted.

Emad Hosseini, deputy minister of petroleum for engineering affairs, told reporters at Tehran Oil and Gas Show that Minister of Petroleum Bijan Zangeneh has been seriously concerned with the activity of domestic companies after international sanctions are lifted.

“Meetings have been held to that effect in order to conduct necessary studies and make plans about anxieties of Iranian companies with regard to projects,” he said.

“After the removal of the sanctions, the atmosphere will be specific and we have to enter this environment with planning. If not, irregularity in tasks would cause many problems for us,” he added.

Hosseini said dispute settlement boards are also being established to deal with discrepancies between contractors and outsourcers.

“The establishment of these committees may not completely remove concerns of both sides, but it could be a solution for averting problems and differences,” he said.

“These committees will be subject to legal considerations and executive orders and we will try our best to minimize the differences in order to reduce judicial cases involving contractors and outsourcers,” he added.

Hosseini said more than 50% of industrial equipment in Iran belongs to the century-old petroleum industry, adding that this equipment is either corroded or is closed to being eroded.

Another important measure, he said, is the application of value engineering. “It involves time, quality and pace of work in projects. We should take these issues into consideration in important and prioritized projects particularly in joint fields,” he said.

Value engineering (VE) is systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost.

Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.

Hosseini also announced the Administration of Supervision on the Assessment of Implementation of Projects in Joint fields.

“After the establishment of this administration, the projects have been prioritized based on assessment,” he said.

Hosseini said that prioritization of the projects would focus attention on the main projects to come on-stream on schedule.

He also referred to anxieties of some domestic companies over possible presence of foreign companies in Iran after the lifting of the sanctions, saying: “Definitely, we will not allow the slightest problem to be created for domestic companies. We have considered this issue even in the new model of oil contracts to oblige foreign companies to buy equipment from domestic manufacturers.”

 

Asia, Iran Oil Priority

 

Before the international sanctions were toughened against Iran’s petroleum industry, Iran used to export 2.5 mb/d of crude oil. Now, this figure has fallen to around 1 mb/d due to sanctions and oil price slump.

Mohsen Qamsari, director for international affairs at NIOC, told a press conference at Tehran Oil and Gas Show that Iran wants P 5+1 to consider “authorizing purchase of Iran’s oil” instead of “authorizing sale of Iran’s oil.”

“Iran’s crude oil has been slapped with sanctions for years, but it is the purchase of Iran’s crude oil which is facing sanctions because we have no problem with selling this commodity,” he said. “Every time oil buyers want to purchase Iran’s crude oil they face restriction and embargo by Western countries.”

Qamsari said Iran is currently selling more than 1 mb/d of oil to a few number of refiners authorized to buy oil from Iran.

Asked about Iran’s priority in oil sale after the sanctions are lifted, he said: “The Asian market is Iran’s top priority due to its proximity. As before the sanctions, 62% of Iran’s oil was being exported to Asia, if the sanctions are lifted, this quota will be observed.”       

Qamsari said talks were held with several Western buyers of Iran’s oil during the oil show in Tehran. “We were in contact and talks with all Western buyers [of our oil] even during the sanctions and they are ready to buy Iran’s oil immediately after the sanctions are lifted,” he said.

Asked how much Iran would be able to sell oil if the sanctions are lifted, Qamsari said: “The market conditions have changed significantly compared with three years ago. But we will be able to increase Iran’s oil sale by up to 500,000 b/d, but more than that is impossible and takes time. Moreover, we have also to assess the market conditions.”

He also said that Iran owes European oil companies no debt. “At present, we owe no oil debt to any European company. Our last debt was to Italy’s Eni, which we have settled.”

Qamsari said Greece, Italy and Royal Dutch Shell owe Iran more than $4 billion for oil, adding they would reimburse Iran immediately after the removal of sanctions.

Regarding cooperation with the private sector, he said: “We can have two types of cooperation with the private sector; one is the restitution of Iran’s petrodollars. In this regard, the private sector can facilitate the restitution through barter chain. Second is that the private sector should make efforts to win toeholds in markets across the world.”

“The role the NIOC International Affairs Department could play is that we would supply crude oil to these [private] companies for distribution across the globe,” he added.

Qamsari said the crude oil price is being managed by certain governments “but I do not want to give the impression that we are talking about Iran’s rivals.”

“If you look at the economic factors in 2014 you will see that no specific changes have occurred in the economic growth of countries. For example, the US’s economic growth rate was 2% in the late 2014 when we saw oil prices fall in world markets. This year, the US economic growth has risen only 0.2% while oil prices have gained $10. Therefore, there is no connection between oil price and the economic growth of countries,” Qamsari said.

Asked about his forecasts for oil price in 2015, he said: “As the market shows, I don’t think the oil price would go above $70 a barrel.”

 

National Turbine

 

Recently, a domestically manufactured turbine was installed on a gas pressure booster station. Ali-Reza Gharibi, managing director of Iran Gas Engineering and Development Company, said the national turbine was installed on Dahaq pressure booster station on Iran Gas Trunkline IV (IGAT IV). The pressure booster station was launched in February after three turbines were installed.

Gharibi also said Iran has put IGAT XI project on hold due to financial shortages. “The company is facing a big volume of projects and more than $10 billion in credit is needed for carrying out all these projects. But this company’s approach is to move based on priorities,” he said.

Gharibi said the construction of IGAT VI and gas pipeline to Sistan Balouchestan province in southeastern Iran would need more than $4 billion in credit.

Pigging of gas pipelines for sustainable gas transmission is handled by NIGC. In the last calendar year, more than 140 kilometers of IGAT I and IGAT II was repaired and replaced in order to boost the pressure.

Regarding the possibility of gas exports to Europe via pipeline, Gharibi said: “The IGAT IX, which is long 1,800 kilometers and stretches from Assaluyeh to Bazargan for exports, tops the agenda of this company.”

He said that design and engineering are over for the project and the necessary equipment is planned to be supplied.

Regarding IGAT VII, Gharibi said: “This trunkline is tasked with supplying gas to different provinces like Fars, Hormuzgan, Kerman and Sistan Balouchestan.”

He added that the big volume of gas transmitted by IGAT VII “enables us to count on this trunkline in case of delay in exports.”

Gharibi said Chabahar Port in southeastern Iran would become a petrochemical hub under the sixth Five-Year Economic Development Plan (March 2015-March 2020).

“In case Pakistan voices readiness to receive gas from Iran, we will be able to install gas pressure booster stations on IGAT VII and export gas,” he said.

Gharibi said 17 petrochemical plants would be established after Chabahar petrochemical hub comes on-stream.

Regarding the contribution of Russia to Iran’s gas industry, he said: “Many talks were held with the Russians and even two preliminary agreements were signed for the implementation of gas pipelines, but the agreement was not finalized due to the escalation of regional tensions.”

He said preparations are under way for IGAT VI for gas exports to Iraq, adding: “We are ready to export gas to Iraq, but we have to wait for the result of negotiations between the International Department of Ministry of Petroleum and Iraqi parties.”

Gharibi also referred to talks held with petrochemical plants with regard to the delivery of gas to petrochemical plants in Chabahar hub, saying: “Petrochemical plants are in talks with NIGC about gas supply and cooperation.”

“But Iran Gas Engineering and Development Company has already chosen contractor and we hope that we would be able to start up gas supply to petrochemical plants in one month,” he added.

Gharibi said consumption of more gas than other oil products like gasoil and kerosene has both economic benefits and environmental advantages.

To that effect, he added, NIGC supplied 15 mcm of clean fuel to power plants last calendar year.

Seven-million-meter Drilling

 

Following the victory of Iran’s Islamic Revolution in 1979, all foreign oil companies left Iran. At that time, many foreign experts imagined that Iran’s petroleum industry, particularly drilling, would be terminated. But the establishment of National Iranian Drilling Company (NIDC) and employment of Iranian manpower helped Iran’s drilling industry to break records set by foreign companies in this sector.

Mohammad-Reza Takayedi, deputy head of NIDC, told a press conference at Tehran Oil and Gas Show that the company has so far drilled more than seven million meters of wells (more than 3,200 oil and gas wells) since 1979.

He said that NIDC’s drilling rig count would exceed 70 (both offshore and onshore) this year.

“This company has so far met 50% of its commitments in Yaran and South Azadegan fields,” Takayedi said.

He dismissed rumors of “dumping” in tender bids held for drilling in the country, saying that NIDC would soon bid for the second phase of drilling in West Karoun for spudding 350 oil wells.

He said that more than 14 drillings owned by NIDC are already operating in Yaran and South Azadegan fields.

He highlighted the capability of Iranian manufacturing companies in building rigs, saying: “Now, more than 70% of the equipment needed in this sector is supplied domestically. For example, for more than three years, this company has been using topdrive manufactured by domestic companies in its drilling systems without facing any problems.”

He said that NIDC has signed agreements with oil companies operating in Basra and Erbil of Iraq, adding that the company will be seriously following up on these projects in the new calendar year.

Takayedi said foreign companies are likely to come to work with Iran’s drilling industry in case a nuclear agreement is reached between Iran and P 5+1.

“For that purpose, NIDC has been improving the quantity and quality of training provided to its manpower and has been boosting the efficiency of its drilling systems over the past two years,” he said.

Iran and the P5+1 countries – the US, Britain, France, Russia, China and Germany – have been negotiating to reach a comprehensive agreement over Iran’s peaceful nuclear activities, and have set June 30 as the deadline for the conclusion of the deal.

The sides reached mutual understanding on the parameters of the Joint Comprehensive Plan of Action (JCPOA) – as the potential deal is called – in the Swiss city of Lausanne on April 2.

6bcf/d Gas Output

 

Ali-Akbar Shabanpour, managing director of Pars Oil and Gas Company, told a news conference at the oil show that the seven prioritized phases of South Pars gas field would be producing 6 bcf/d of gas by March 2016.

“Prioritization of the incomplete phases of South Pars improved working conditions and we could make good progress by concentrating on the projects,” he said.

Shabanpour said Phase 12 of South Pars (equivalent of three phases) came on-stream last year and phases 15&16 and 17&18 are to become operational in the current calendar year.

He said that output from phases 15&16 and 17&18 would reach 36 mcm/d, while phases 19-21 of the giant reservoir would provide 100 mcm/d of gas. He noted that these phases supplied 125 mcm/d of gas during last winter.

“Production plans are under way in phases 15&16 of South Pars without any problems. But we are behind schedule in drilling in phases 17&18. We hope that these delays would be compensated for in the coming months,” said Shabanpour.

He said that the rated capacity of the seven prioritized phases and start of production in phases 19-21 of South Pars, the country’s gas production capacity will increase by more than 80 mcm/d. He added that the country’s gas output will rise by 200 mcm/d in the current and next calendar year.

Shabanpour said Phase 11 of South Pars is set to be awarded to domestic companies. He said the contract for drilling wells in Phase 11 is to be signed with domestic companies in June.

The official said that pressure decline in newly drilled wells would be normal one year after startup. He added that the pressure decline would be remedied by acidizing operations in the wells. Shabanpour said wells in phases 15&16 are now being acidized.

He said National Development Fund of Iran (NDFI) is to be tapped for the development of Phases 20-24 and Phase 13 of South Pars.

Shabanpour added that talks have started with Central Bank of Iran (CBI) as well as an agent bank for financing Phase 13.

He said $18 billion has been allocated to the South Pars projects and $4.8 billion is to be allocated to joint fields.

Regarding the possibility of benefitting from foreign companies in South Pars projects after the removal of sanctions, Shabanpour said: “Currently in the second priority projects of South Pars, except for Phase 14, we have seen more than 75% progress. In the past years, we have made this achievement without needing foreign companies. But it does not mean that we would not benefit from the state-of-the-art technology of foreign companies.”

 

470mcm Gas

 

Shabanpour said production from South Pars gas field would reach 470 mcm by March 2016. He said that reaching this amount of production would reduce differences between Iran and Qatar. South Pars is jointly operated by Iran and Qatar.

He also said that more than IRR 20 trillion worth of bonds is to be published for South Pars.

Shabanpour also said that talks have been held with foreign companies for accelerating construction of 10 platforms in phases 13, 22-24 and 17&18.

The huge offshore field covers an area of 9,700 square kilometers, 3,700 square kilometers of which is in Iran’s territorial waters in the Persian Gulf. The remaining 6,000 square kilometers is situated in Qatar’s territorial waters.

The field is estimated to contain a significant amount of natural gas, accounting for about eight percent of the world’s reserves, and approximately 18 billion barrels of condensate.

Iran Oil Festival Achievements

 

Exhibitions are held across the globe to showcase industrial achievements of countries. Putting industrial potential on exhibit would stimulate the sense of competitiveness among manufacturers.

Oil industry is no exception to this rule. Tehran’s 20^th Oil, Gas, Refining and Petrochemical Exhibition provided a good chance for showcasing the potentialities of domestic industries and domestically developed technologies. The exhibition was an opportunity for foreign countries to get to know about Iran’s industrial achievements in view of interaction in the future.

Of course an outstanding feature of the 20^th International Oil, Gas, Refining and Petrochemical Exhibition in Tehran was rivalry between foreign companies for presence in Iran’s petroleum industry. The reason for such rivalry could be improvement in Iran’s international position.

Tehran hosted its annual four-day Oil and Gas Show from May 6 to 9. It might be premature to make an assessment of this exhibition now, but Iranian companies unveiled their latest scientific and technical achievements in order to benefit from this oil festival as much as they could. Other achievements of this exhibition included signature of MOUs and contracts.

 

Oil Jetties Overhaul

 

Iran Oil Terminals Company (IOTC) and Iranian Offshore Engineering and Construction Company (IOEC) signed a memorandum of understanding for overhauling and reconstruction of oil jetties, and procuring and building single-point moorings (SPM). According to this MOU, reconstruction of jetties as well as supply and construction of SPMs was assigned to IOEC. IOTC has so far overhauled 500 SPMs and has managed to master technology for manufacturing these moorings. That is a breakthrough for this company.

Implementation of this MOU would facilitate work at oil terminals where SPMs are key instruments.

 

Commodity Supply for South Pars

 

South Pars Gas Complex (SPGC) signed a contract worth IRR 87 billion with four Iranian companies for commodity and equipment supply. Procurement of commodities by domestic companies would cut costs by around 40%.

SPGC signed a contract with Chamku for the procurement of 1,200-kw anti-explosive electro-engine, a contract with Vira for the supply of spare parts for centrifugal pumps, with Gohar Saram for the purchase of molecular sieve and with Nitel Pars for the purchase of molecular sieve.

 

Iran Product Unveiled

 

An Iranian company active in producing industrial oil unveiled its product under trademark “Lashto Oil” during the Oil Show to be supplied on the market.

Marjan Jan-Mohammadi, sales manager at Mahd Ravankaran Tiba said this new product could compete with imported ones.

She said until recently, the company used to supply products required for oil manufacturing, adding that it has started producing industrial oil.

“This new product competes with foreign brands in terms of quality and is on the same wavelength as Iranian products in terms of price,” she added.

Jan-Mohammadi said Lashto oil, which is hitting markets, would resolve problems pertaining to the use of industrial oil.

 

Steel Slabs

 

On the third day of the exhibition on May 8, an agreement was signed between Khuzestan Oxin Steel Company and Iran Oil Terminals Company for the procurement of steel slabs.

The manufacturing of steel slabs to be used in oil storage tanks is very important and Iranian companies have fortunately resolved this problem. Now, all domestically manufactured slabs could be used in the construction of storage tanks. With the manufacturing of these slabs, there would no longer be any halt in crude oil storage facility construction.

The signature of this contract would meet IOTC needs and also prepare the ground for cooperation for using domestically manufactured slabs in the refining and petrochemical industries.

Khuzestan Oxin Steel Company is one of the five companies in the world manufacturing steel labs.

This company is the first one in the Middle East that supplies fully domestically manufactured steel slabs. The raw materials for these slabs are supplied by Khuzestan Steel Company.

 

Steam Turbine

 

A steam turbine manufactured by an Iranian company was unveiled during the exhibition. Currently, a few countries in the world are able to manufacture this type of turbine, and its indigenization by Nasb Niroo Company is indicative of the capabilities of this company at a time the country was under tough international sanctions.

Nasb Niroo is the first manufacturer of steam turbines in Iran. It has so far produced and launched more than 45 steam turbines for refining and petrochemical units including Abadan refinery, Persian Gulf Star Refinery and Razi Petrochemical Plant.

The products of this company include back pressure turbines, and single-story and multi-story back condensers which are Fy, Ty and Sy turbines.

 

Crude Oil Desalting

 

The technical knowhow for crude oil electrostatic desalting at a capacity of 20 b/d was unveiled during the Oil Show. The crude oil extracted from underground reservoirs is often mixed with unwanted materials like water and minerals, which all cause erosion.

Desalting units are incorporated with sophisticated technology due to the effective parameters of this process. The pilot of this technical savvy has been tested for different categories of crude oil. The three-month test yielded positive results.

 

RIPI Strategic Document

 

A strategic document was drawn up for the Research Institute of Petroleum Industry (RIPI) with regard to its 2025 Vision Plan in the upstream, downstream, environment and energy sectors.

According to this strategy, the RIPI would no longer be a mere research body and it would conduct projects for the petroleum industry on the scene. RIPI resolves all challenges of this industry and it provides valuable services to the petroleum industry. The strategic planning is based on the three principles of planning management, technology and logistics. The document is designed to serve upstream, downstream, environment and energy departments of RIPI.

 

Agricultural Sulfur

 

The technical savvy for the production of agricultural sulfur was unveiled. This technology is aimed at boosting the productivity of farmlands and the use of sulfur. Agricultural sulfur such as bentonite sulfur and micronutrients have been tested in different regions of Iran, showing the high productivity of ground for the growth of plants. This product is able to largely boost the production of wheat and maize.

 

RIPI 4-Language Portals

 

The portals of upstream, energy and environment departments of RIPI, which are aimed at introducing the achievements of these departments, were unveiled on the final day of the exhibition.

The portals provide detailed explanations about RIPI and its departments, and also provide information on research projects, services and products, opportunities of cooperation, technical savvy, patients and industrial solutions.

The portal is available in four languages – English, Persian, Russian and Arabic.

 

Augmented Reality Software

 

The first augmented reality software for the industry was unveiled during the exhibition. Petropars Company has developed this interactive software for the first time in Iran and the world for the oil and gas sectors.

By installing this software, one can have a general view of Phase 12 of South Pars, the giant gas reservoir jointly operated by Iran and Qatar.

Augmented reality (AR) is a live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data. It is related to a more general concept called mediated reality, in which a view of reality is modified (possibly even diminished rather than augmented), by a computer. As a result, the technology functions by enhancing one’s current perception of reality. By contrast, virtual reality replaces the real world with a simulated one. Augmentation is conventionally in real-time and in semantic context with environmental elements, such as sports scores on TV during a match. With the help of advanced AR technology (e.g. adding computer vision and object recognition) the information about the surrounding real world of the user becomes interactive and digitally manipulable. Artificial information about the environment and its objects can be overlaid on the real world.

 

Oil Storage Tanks in Kharg

 

On the sidelines of the Oil and Gas Show, Iran’s Minister of Petroleum Bijan Zangeneh instructed his staff to construct four storage tanks each with a capacity of one million barrels in Kharg oil terminal. Construction of these storage facilities would allow more oil storage and would also give a good bargaining chip in international interaction and in communications with foreign customers.

Each storage tank would weigh 3,500 tons.  The total project is envisaged to cost IRR 334 billion plus $4.19 million.

 

Gas Aphron Microbubbles

 

RIPI experts have managed to indigenize the development of gas aphron microbubbles, breaking the monopoly of foreign companies.

This state-of-the-art technology, which is mainly used in drilling fluid operations in oil and gas wells, is designed to serve low-pressure and fractured reservoirs.

Colloidal gas aphron (CGA) based drilling fluids, because of their non-coalescing nature, excellent capability in minimizing deep invasion, and also behaving like a flexible bridging material, are indicated for drilling permeable and fractured formations.

Their unique feature is to form a solid free, tough, and elastic internal bridge in pore networks or fractures to minimize deep invasion by means of air microbubbles, which can be removed easily during the initial stage of production.

CGA based fluids combine certain surfactants and polymers to create the system of microbubbles. Surfactant is used to produce the surface tension to contain the aphron as it is formed, build the multilayer bubble wall, and create interfacial tension to form a non-bonding network capable of bridging openings in permeable and fractured formations. Polymer is used as viscosifier and aphron stabilizer. The surface activity and aggregation behavior of the surfactant affects the stability and also other physico-chemical properties of generated microbubbles. Therefore, selection of a suitable surfactant is important for the generation of microbubbles with the desired rheological and filtration properties.

 

1^st Upstream Knowledge-Based Company

 

On the final day of the exhibition, RIPI signed an agreement with Geranmehr Sepehr Commercial Company for the establishment of the first knowledge-based company in the upstream sector. This agreement was signed for cooperation in the formation of subsidiaries and conducting research projects. 

Europeans Waiting for Iran Sanctions Relief

 

We are in Hall No. 44 at Tehran Oil and Gas Show. This hall is among those housing foreign companies attending the 20^th International Oil, Gas, Refining and Petrochemical Exhibition.

Other booths are overshadowed by this hall. Russia’s gas giant Gazprom attended the oil show after years of absence. It indicates the Russians’ willingness to return to Iran’s petroleum industry after the removal of sanctions.

More than 10 Spanish companies attended the exhibition. Iran-Germany joint chamber of commerce was also there.

Hall No. 38 also houses foreign companies. The interesting point in this hall is the large number of European flags near the booths. One can easily see the flags of Britain, Portugal, Italy, France, Belgium, the Netherlands, Turkey and Poland.

There were also Chinese companies, but they were not as many as they were in the previous years.

The 20^th International Oil, Gas, Refining and Petrochemical Exhibition was held in Tehran with European companies attending massively. The reason for this massive presence of Europeans was the improvement in political relations between Iran and the West in light of long-sought nuclear deal between Iran and P5+1.

Most representatives of foreign companies believed that Tehran Oil and Gas Show is among the top five such exhibitions in the world.

Iran Petroleum briefly reviews the presence of foreign companies in the exhibition.

 

Italians More Present Than Ever

 

Italian companies used to attend Tehran Oil and Gas Show in large numbers. This year, again they participated in larger numbers.

FCE, an Italian marketing company, took part in the event. Fabio Casiraghi, chief executive of FCE, have always negotiated the presence of Italian companies in the exhibition.

He told Iran Petroleum that Tehran Oil and Gas Show is among the most important exhibitions in the energy sector in the world. He said this exhibition is among the top three in the world in terms of number of participants and visitors.

Casiraghi said the difference between Iran’s oil show and others held across the world pertains to the large number of professional visitors and the presence of end users of petroleum industry equipment and parts.

He said that around 20 Italian companies attended Tehran Oil and Gas Show last year, adding that the number of Italians has doubled this year.

Casiraghi said Italian companies either participated directly or were represented at Tehran Oil Show.

He said that FCE has been instrumental in encouraging Italian companies to participate at Tehran Oil and Gas Show, adding that it made great contribution to introducing this exhibition to the Italian companies.

Casiraghi said the European countries have realized that they could not boycott a country like Iran.

“The approach of the new Iranian administration for improving political conditions has so far been appropriate and we are convinced that more foreign companies will attend next year’s exhibition after sanctions are lifted,” he said.

He said Italy is among the leading countries in terms of access to technical knowhow for manufacturing equipment and parts for the petroleum industry.

Casiraghi said the Italian companies that attended the oil and gas show are active in manufacturing valves, pumps, compressors, safety equipment, instruments and fire extinguishing tools.

In his view, Iran enjoys a strategically important position in the world as it is the second largest gas producer and the fourth largest oil producer in the world. He said that these advantages encourage foreign countries to invest in Iran.

CIMCO was another Italian company exhibiting itself at the oil and gas show. This company supplies petroleum industry equipment to its customers.

Achille Pesce, sales manager of CIMCO, said this company is attending Tehran Oil and Gas Show for the first time.

He said that CIMCO is a consortium of several Italian companies manufacturing equipment for oil operations.

Pesce said CIMCO has already had indirect cooperation with Iran.

He expressed hope that the sanctions would be lifted on Iran, adding that it will return to Iran as soon as the sanctions against the country are removed.

Pesce said Iran’s petroleum industry is more attractive than other oil producers in the Middle East for investment. “Italian companies are much interested in activity in Iran’s petroleum industry and Italy is able to make a great contribution to the growth and progress of this industry in Iran,” he added.

Pesce said Iran can make plans in order to sell petroleum products instead of crude oil and make more gains.

He said CIMCO is ready to carry out joint venture projects with Iranian companies in Iraq and Pakistan.

Another Italian company at the oil show was VRV which makes shell and tube pipes, safety valves, pressure tanks and petrochemical reactors.

Andrea Macrellino, sales director of VRV, said the company is participating in the oil show for the first time.

Macrellino said VRV participated at the oil show in order to explore opportunities for cooperation with Iran.

He said Iran’s petroleum industry offers myriads chances for cooperation, adding that the Europeans are willing to invest in Iran.

Referring to indirect cooperation between VRV and Iran’s petroleum industry during the sanctions, Macrellino said this company has so far manufactured processing systems for a number of petrochemical projects in Iran.

He said hopes are soaring for the removal of international sanctions imposed on Iran in order to facilitate presence in Iran’s oil sector. He said European countries are expected to invest in Iran after sanctions removal.

Italy was also represented by SIAD, a company manufacturing compressors. Cristina Ceresoli, sales director of SIAD, said this company is experiencing its first ever presence at Tehran Oil and Gas Show.

“This exhibition is a very good and high-profile exhibition and this year we are witnessing the presence of many Italian companies,” she said.

“I’ve already attended many oil shows in the world, but I think this one is among the biggest oil shows,” she added.

Ceresoli said there are many opportunities for cooperation in this exhibition and presence in Iran’s petroleum industry is attractive for Italian companies.

She said SIAD attended the exhibition in order to make plans for its future sale of products and transfer of technology to Iran.

 

 

Spain Pavilion

 

Like Italy, Spain had its own pavilion at the Oil and Gas Show. Fluidex along with 10 of its subsidiaries had occupied most booths in the pavilion.

The company’s project manager said Fluidex is a consortium of 90 Spanish companies, adding that the company serves oil and gas among other sectors.

“Fluidex has regularly attended Iran Oil and Gas Show since 1999 and this year it is present with 10 of its subsidiaries,” he said.

He said Tehran Oil and Gas Show is the most important in the Middle East, adding that Iran’s petroleum industry is the best place for the activities of Spanish companies.

He said Fluidex has been present in Iran’s petroleum industry for more than two decades.

“Some Spanish companies were active in Iran’s petroleum industry before the imposition of sanctions. After the sanctions were slapped, they stopped their activities and the lifting of the sanctions could result in the resumption

  of activity of Spanish companies,” he added.

He said that some Spanish companies were directly or indirectly cooperating with Iran’s oil industry even during the sanctions.

Fluidex has no agent in Iran, he said, adding that some subsidiaries have also established offices and some others are considering opening offices.

“As the political atmosphere improves and the sanctions are hoped to be lifted, the Spanish companies that work directly under the supervision of the Spanish government will be able to work in Iran’s petroleum industry,” he said.

 

The French See Iran Market as Positive

 

For the first time, French companies attended a pavilion at Tehran Oil and Gas Show.

Business France occupied a large booth at the French pavilion. Agnès Hagyak, oil and gas trade project manager of Business France said the French company is tasked with exploring opportunities for cooperation.

She said it was the first time Business France was attending Tehran Oil and Gas Show, adding that the company will again participate next year.

“Business France came to the exhibition in order to sketch out a perspective for investment to the French companies,” said Hagyak.

She said six out of the 16 French companies attending the oil show were first-time participants. “Other French companies have already attended the exhibition as visitors,” she added.

Hagyak said Iran’s petroleum industry offers many opportunities for investment, adding that the French companies that left Iran due to the sanctions are now willing to return to the country.

“Last year, we witnessed the presence of European countries at Iran Oil and Gas Show and that convinced us to participate in this exhibition this year,” she said.

“There is currently a positive view among French companies for presence in Iran’s market. Iran’s petroleum industry can specially count on the French companies for the procurement of equipment and providing services in the oil and gas sectors,” said Hagyak.

 

Gazprom Back

 

The presence of Russian companies was significant at this year’s exhibition especially because Russia’s gas giant Gazprom attended a large booth after several years of absence. That indicates the importance of Iran’s petroleum industry projects for the Russians.

Another Russian company present in the exhibition was Baltgen. This company is active in manufacturing power supply and thermoelectric generators. Vladimir Baukin, director of Baltgen, said the Russian company is attending Tehran Oil and Gas Show for the first time.

He said that Tehran Oil and Gas Show is among the top professional ones in the world.

He said Baltgen decided to participate in the show in order to find reliable Iranian partners for future cooperation.

“Baltgen has so far had no cooperation with Iran and is interested in starting its activity in Iran’s petroleum industry in the near future,” he added.

Baukin said Baltgen delivers its products to Pakistan and Bangladesh.

Noting that Baltgen welcomes proposals for serious cooperation with Iranian companies, he said: “Over the past 20 years, the products we have manufactured have been imported by Iran from the US at much higher prices. Baltgen is selling them at half the price charged by the US.”

“Since this is the first time this company is participating at Tehran Oil and Gas Show, it is not yet well known among Iranian companies. If there is a chance for cooperation with Iran’s petroleum industry, the company would open a representative office in Iran,” said Baukin.

 

Iran-Netherlands Cooperation

 

A number of Dutch companies were actively present at the oil show. Deep Blue was among them. Gerhard Klaumunzer, sales director of Deep Blue, said Tehran Oil and Gas Show is one of the largest in the world.

He said that Deep Blue, a leading manufacturer of centrifuge pumps, has a long record of supplying petroleum industry equipment to Iran.

Klaumunzer expressed hope for the removal of sanctions on Iran, saying an important event coinciding with this year’s exhibition is efforts undertaken by Iran and the West for clinching a nuclear deal. He said that a nuclear deal between Iran and global powers would enhance the level of cooperation between European companies and Iran.

Klaumunzer said Deep Blue has so far manufactured more than 2,000 pumps to Iran’s petroleum industry, adding that some of these pumps are being used in phases 12, 20 and 21 of South Pars gas field as well as in Tehran oil refinery.

He said that Iran has submitted cooperation proposals to Deep Blue, adding that his company is reviewing the proposals.

Deep Blue has offices in the US, United Arab Emirates (UAE) and China, he said, adding that Deep Blue is willing to cooperate with Iranian companies.

Klaumunzer said Deep Blue has been attending Tehran Oil and Gas Show since 2007.

“By attending this exhibition we realized that the quality of equipment and cooperation with good brands in the world are prioritized for Iran’s petroleum industry,” he said.

 

Lausanne Agreement

 

In addition to several German companies, Iran-Germany Chamber of Commerce was significantly present in this year’s oil show.

Last year, Iran-Germany Chamber of Commerce was represented at the oil show only by three companies. This year, following an outline nuclear agreement reached between Iran and six world powers in the Swiss city of Lausanne, 11 top German companies came to Tehran as there is growing hope for the removal of the sanctions.

An official with Iran-Germany Chamber of Commerce said only two German companies had decided to attend the Oil Show before the signature of Lausanne agreement. But after Iran and six powers reached understanding for a final deal, nine more companies expressed their intention to attend the event.

He referred to Linde, Ag, Jockel Gmbh, Seepex, Anko and Febc as German companies present in the exhibition.

Moreover, several German companies attended the exhibition independently. Flottweg, which manufactures systems for mechanical solid-liquid separation, showcased its achievements. These separators are widely used in the petroleum industry, particularly in drilling. Stefan Markus Gnosa, sales director of Flottweg, referred to the century-old history of this company, saying: “Flottweg has been attending the oil show for 10 consecutive years and has long-term plans for presence in Iran.”

He said that Flottweg designs systems for companies after receiving their data.

Gnosa expressed hope that the removal of sanctions on Iran would prepare the ground for Flottweg to operate oil projects in Iran.

He expressed content with Flottweg’s presence at Tehran oil show, saying the company is capable of providing services to Iranian companies. He also said that the German company would hire Iranian manpower after starting work in Iran.

 

China Interested in Iran Market

 

Like previous years, Chinese companies attended the oil show. Supcon was one of numerous Chinese companies present at the international event. Ken Tu, director of Supcon’s overseas cooperation and development department, said the company is experiencing its sixth presence at the Tehran oil show.

He said the oil show provides a good chance for companies manufacturing oil equipment to showcase their products.

Ken said Supcon has been manufacturing control systems in China for 20 years, adding: “This Company was cooperating with Iran’s petroleum industry during sanctions and is willing to continue this cooperation after sanctions, too.”

He said Supcon has been present in Yadavaran field and has received proposals from Iranian companies for future cooperation.

Wu Jiang, vice-general manager of Gongtong which manufactures oil and gas processing and control systems, said this company is experiencing its first presence at Tehran Oil and Gas Show.

He said Iran’s petroleum industry is very big and attractive and Gongtong is ready for cooperation with Iranian companies.

Wu said Tehran Oil and Gas Show is much bigger than other energy exhibitions held across the globe, adding that better relations between Iran and the West have convinced many countries to attend.

 

UAE Looks for Presence

 

The United Arab Emirates (UAE) was represented by only DENA. Paul Hendricks, business development manager of DENA, said the company is attending the exhibition for the first time.

“The Iran show enjoys high credibility in the world and DENA attended this exhibition in order to explore Iranian petroleum industry’s potentialities.

Highlighting the capability of this company with regard to pipeline inspection, Hendricks said Iran’s petroleum industry currently needs high-quality services and that DENA is willing to cooperate with Iranian oil companies.

He said DENA received several proposals for cooperation from Iranian companies during the exhibition.

 

Singapore’s 1^st Presence

 

Singapore was among countries represented by a single company at the Tehran Oil and Gas Show.

Shawn Si, technical director of EEME, said this company experienced its first-ever presence at Iran’s international oil exhibition.

Compared with other energy exhibitions, Tehran Oil and Gas Show enjoys higher quality.

He said EEME manufactures safety valves and pressure relief valves, adding that this company is participating in this exhibition in order to explore the potentialities of Iran’s petroleum industry and identify marketing opportunities.

Shawn said EEME will definitely start its activities in Iran after the removal of international sanctions, and will cooperate with Iranian companies.

Europeans Waiting for Iran Sanctions Relief

 

We are in Hall No. 44 at Tehran Oil and Gas Show. This hall is among those housing foreign companies attending the 20^th International Oil, Gas, Refining and Petrochemical Exhibition.

Other booths are overshadowed by this hall. Russia’s gas giant Gazprom attended the oil show after years of absence. It indicates the Russians’ willingness to return to Iran’s petroleum industry after the removal of sanctions.

More than 10 Spanish companies attended the exhibition. Iran-Germany joint chamber of commerce was also there.

Hall No. 38 also houses foreign companies. The interesting point in this hall is the large number of European flags near the booths. One can easily see the flags of Britain, Portugal, Italy, France, Belgium, the Netherlands, Turkey and Poland.

There were also Chinese companies, but they were not as many as they were in the previous years.

The 20^th International Oil, Gas, Refining and Petrochemical Exhibition was held in Tehran with European companies attending massively. The reason for this massive presence of Europeans was the improvement in political relations between Iran and the West in light of long-sought nuclear deal between Iran and P5+1.

Most representatives of foreign companies believed that Tehran Oil and Gas Show is among the top five such exhibitions in the world.

Iran Petroleum briefly reviews the presence of foreign companies in the exhibition.

 

Italians More Present Than Ever

 

Italian companies used to attend Tehran Oil and Gas Show in large numbers. This year, again they participated in larger numbers.

FCE, an Italian marketing company, took part in the event. Fabio Casiraghi, chief executive of FCE, have always negotiated the presence of Italian companies in the exhibition.

He told Iran Petroleum that Tehran Oil and Gas Show is among the most important exhibitions in the energy sector in the world. He said this exhibition is among the top three in the world in terms of number of participants and visitors.

Casiraghi said the difference between Iran’s oil show and others held across the world pertains to the large number of professional visitors and the presence of end users of petroleum industry equipment and parts.

He said that around 20 Italian companies attended Tehran Oil and Gas Show last year, adding that the number of Italians has doubled this year.

Casiraghi said Italian companies either participated directly or were represented at Tehran Oil Show.

He said that FCE has been instrumental in encouraging Italian companies to participate at Tehran Oil and Gas Show, adding that it made great contribution to introducing this exhibition to the Italian companies.

Casiraghi said the European countries have realized that they could not boycott a country like Iran.

“The approach of the new Iranian administration for improving political conditions has so far been appropriate and we are convinced that more foreign companies will attend next year’s exhibition after sanctions are lifted,” he said.

He said Italy is among the leading countries in terms of access to technical knowhow for manufacturing equipment and parts for the petroleum industry.

Casiraghi said the Italian companies that attended the oil and gas show are active in manufacturing valves, pumps, compressors, safety equipment, instruments and fire extinguishing tools.

In his view, Iran enjoys a strategically important position in the world as it is the second largest gas producer and the fourth largest oil producer in the world. He said that these advantages encourage foreign countries to invest in Iran.

CIMCO was another Italian company exhibiting itself at the oil and gas show. This company supplies petroleum industry equipment to its customers.

Achille Pesce, sales manager of CIMCO, said this company is attending Tehran Oil and Gas Show for the first time.

He said that CIMCO is a consortium of several Italian companies manufacturing equipment for oil operations.

Pesce said CIMCO has already had indirect cooperation with Iran.

He expressed hope that the sanctions would be lifted on Iran, adding that it will return to Iran as soon as the sanctions against the country are removed.

Pesce said Iran’s petroleum industry is more attractive than other oil producers in the Middle East for investment. “Italian companies are much interested in activity in Iran’s petroleum industry and Italy is able to make a great contribution to the growth and progress of this industry in Iran,” he added.

Pesce said Iran can make plans in order to sell petroleum products instead of crude oil and make more gains.

He said CIMCO is ready to carry out joint venture projects with Iranian companies in Iraq and Pakistan.

Another Italian company at the oil show was VRV which makes shell and tube pipes, safety valves, pressure tanks and petrochemical reactors.

Andrea Macrellino, sales director of VRV, said the company is participating in the oil show for the first time.

Macrellino said VRV participated at the oil show in order to explore opportunities for cooperation with Iran.

He said Iran’s petroleum industry offers myriads chances for cooperation, adding that the Europeans are willing to invest in Iran.

Referring to indirect cooperation between VRV and Iran’s petroleum industry during the sanctions, Macrellino said this company has so far manufactured processing systems for a number of petrochemical projects in Iran.

He said hopes are soaring for the removal of international sanctions imposed on Iran in order to facilitate presence in Iran’s oil sector. He said European countries are expected to invest in Iran after sanctions removal.

Italy was also represented by SIAD, a company manufacturing compressors. Cristina Ceresoli, sales director of SIAD, said this company is experiencing its first ever presence at Tehran Oil and Gas Show.

“This exhibition is a very good and high-profile exhibition and this year we are witnessing the presence of many Italian companies,” she said.

“I’ve already attended many oil shows in the world, but I think this one is among the biggest oil shows,” she added.

Ceresoli said there are many opportunities for cooperation in this exhibition and presence in Iran’s petroleum industry is attractive for Italian companies.

She said SIAD attended the exhibition in order to make plans for its future sale of products and transfer of technology to Iran.

 

 

Spain Pavilion

 

Like Italy, Spain had its own pavilion at the Oil and Gas Show. Fluidex along with 10 of its subsidiaries had occupied most booths in the pavilion.

The company’s project manager said Fluidex is a consortium of 90 Spanish companies, adding that the company serves oil and gas among other sectors.

“Fluidex has regularly attended Iran Oil and Gas Show since 1999 and this year it is present with 10 of its subsidiaries,” he said.

He said Tehran Oil and Gas Show is the most important in the Middle East, adding that Iran’s petroleum industry is the best place for the activities of Spanish companies.

He said Fluidex has been present in Iran’s petroleum industry for more than two decades.

“Some Spanish companies were active in Iran’s petroleum industry before the imposition of sanctions. After the sanctions were slapped, they stopped their activities and the lifting of the sanctions could result in the resumption

  of activity of Spanish companies,” he added.

He said that some Spanish companies were directly or indirectly cooperating with Iran’s oil industry even during the sanctions.

Fluidex has no agent in Iran, he said, adding that some subsidiaries have also established offices and some others are considering opening offices.

“As the political atmosphere improves and the sanctions are hoped to be lifted, the Spanish companies that work directly under the supervision of the Spanish government will be able to work in Iran’s petroleum industry,” he said.

 

The French See Iran Market as Positive

 

For the first time, French companies attended a pavilion at Tehran Oil and Gas Show.

Business France occupied a large booth at the French pavilion. Agnès Hagyak, oil and gas trade project manager of Business France said the French company is tasked with exploring opportunities for cooperation.

She said it was the first time Business France was attending Tehran Oil and Gas Show, adding that the company will again participate next year.

“Business France came to the exhibition in order to sketch out a perspective for investment to the French companies,” said Hagyak.

She said six out of the 16 French companies attending the oil show were first-time participants. “Other French companies have already attended the exhibition as visitors,” she added.

Hagyak said Iran’s petroleum industry offers many opportunities for investment, adding that the French companies that left Iran due to the sanctions are now willing to return to the country.

“Last year, we witnessed the presence of European countries at Iran Oil and Gas Show and that convinced us to participate in this exhibition this year,” she said.

“There is currently a positive view among French companies for presence in Iran’s market. Iran’s petroleum industry can specially count on the French companies for the procurement of equipment and providing services in the oil and gas sectors,” said Hagyak.

 

Gazprom Back

 

The presence of Russian companies was significant at this year’s exhibition especially because Russia’s gas giant Gazprom attended a large booth after several years of absence. That indicates the importance of Iran’s petroleum industry projects for the Russians.

Another Russian company present in the exhibition was Baltgen. This company is active in manufacturing power supply and thermoelectric generators. Vladimir Baukin, director of Baltgen, said the Russian company is attending Tehran Oil and Gas Show for the first time.

He said that Tehran Oil and Gas Show is among the top professional ones in the world.

He said Baltgen decided to participate in the show in order to find reliable Iranian partners for future cooperation.

“Baltgen has so far had no cooperation with Iran and is interested in starting its activity in Iran’s petroleum industry in the near future,” he added.

Baukin said Baltgen delivers its products to Pakistan and Bangladesh.

Noting that Baltgen welcomes proposals for serious cooperation with Iranian companies, he said: “Over the past 20 years, the products we have manufactured have been imported by Iran from the US at much higher prices. Baltgen is selling them at half the price charged by the US.”

“Since this is the first time this company is participating at Tehran Oil and Gas Show, it is not yet well known among Iranian companies. If there is a chance for cooperation with Iran’s petroleum industry, the company would open a representative office in Iran,” said Baukin.

 

Iran-Netherlands Cooperation

 

A number of Dutch companies were actively present at the oil show. Deep Blue was among them. Gerhard Klaumunzer, sales director of Deep Blue, said Tehran Oil and Gas Show is one of the largest in the world.

He said that Deep Blue, a leading manufacturer of centrifuge pumps, has a long record of supplying petroleum industry equipment to Iran.

Klaumunzer expressed hope for the removal of sanctions on Iran, saying an important event coinciding with this year’s exhibition is efforts undertaken by Iran and the West for clinching a nuclear deal. He said that a nuclear deal between Iran and global powers would enhance the level of cooperation between European companies and Iran.

Klaumunzer said Deep Blue has so far manufactured more than 2,000 pumps to Iran’s petroleum industry, adding that some of these pumps are being used in phases 12, 20 and 21 of South Pars gas field as well as in Tehran oil refinery.

He said that Iran has submitted cooperation proposals to Deep Blue, adding that his company is reviewing the proposals.

Deep Blue has offices in the US, United Arab Emirates (UAE) and China, he said, adding that Deep Blue is willing to cooperate with Iranian companies.

Klaumunzer said Deep Blue has been attending Tehran Oil and Gas Show since 2007.

“By attending this exhibition we realized that the quality of equipment and cooperation with good brands in the world are prioritized for Iran’s petroleum industry,” he said.

 

Lausanne Agreement

 

In addition to several German companies, Iran-Germany Chamber of Commerce was significantly present in this year’s oil show.

Last year, Iran-Germany Chamber of Commerce was represented at the oil show only by three companies. This year, following an outline nuclear agreement reached between Iran and six world powers in the Swiss city of Lausanne, 11 top German companies came to Tehran as there is growing hope for the removal of the sanctions.

An official with Iran-Germany Chamber of Commerce said only two German companies had decided to attend the Oil Show before the signature of Lausanne agreement. But after Iran and six powers reached understanding for a final deal, nine more companies expressed their intention to attend the event.

He referred to Linde, Ag, Jockel Gmbh, Seepex, Anko and Febc as German companies present in the exhibition.

Moreover, several German companies attended the exhibition independently. Flottweg, which manufactures systems for mechanical solid-liquid separation, showcased its achievements. These separators are widely used in the petroleum industry, particularly in drilling. Stefan Markus Gnosa, sales director of Flottweg, referred to the century-old history of this company, saying: “Flottweg has been attending the oil show for 10 consecutive years and has long-term plans for presence in Iran.”

He said that Flottweg designs systems for companies after receiving their data.

Gnosa expressed hope that the removal of sanctions on Iran would prepare the ground for Flottweg to operate oil projects in Iran.

He expressed content with Flottweg’s presence at Tehran oil show, saying the company is capable of providing services to Iranian companies. He also said that the German company would hire Iranian manpower after starting work in Iran.

 

China Interested in Iran Market

 

Like previous years, Chinese companies attended the oil show. Supcon was one of numerous Chinese companies present at the international event. Ken Tu, director of Supcon’s overseas cooperation and development department, said the company is experiencing its sixth presence at the Tehran oil show.

He said the oil show provides a good chance for companies manufacturing oil equipment to showcase their products.

Ken said Supcon has been manufacturing control systems in China for 20 years, adding: “This Company was cooperating with Iran’s petroleum industry during sanctions and is willing to continue this cooperation after sanctions, too.”

He said Supcon has been present in Yadavaran field and has received proposals from Iranian companies for future cooperation.

Wu Jiang, vice-general manager of Gongtong which manufactures oil and gas processing and control systems, said this company is experiencing its first presence at Tehran Oil and Gas Show.

He said Iran’s petroleum industry is very big and attractive and Gongtong is ready for cooperation with Iranian companies.

Wu said Tehran Oil and Gas Show is much bigger than other energy exhibitions held across the globe, adding that better relations between Iran and the West have convinced many countries to attend.

 

UAE Looks for Presence

 

The United Arab Emirates (UAE) was represented by only DENA. Paul Hendricks, business development manager of DENA, said the company is attending the exhibition for the first time.

“The Iran show enjoys high credibility in the world and DENA attended this exhibition in order to explore Iranian petroleum industry’s potentialities.

Highlighting the capability of this company with regard to pipeline inspection, Hendricks said Iran’s petroleum industry currently needs high-quality services and that DENA is willing to cooperate with Iranian oil companies.

He said DENA received several proposals for cooperation from Iranian companies during the exhibition.

 

Singapore’s 1^st Presence

 

Singapore was among countries represented by a single company at the Tehran Oil and Gas Show.

Shawn Si, technical director of EEME, said this company experienced its first-ever presence at Iran’s international oil exhibition.

Compared with other energy exhibitions, Tehran Oil and Gas Show enjoys higher quality.

He said EEME manufactures safety valves and pressure relief valves, adding that this company is participating in this exhibition in order to explore the potentialities of Iran’s petroleum industry and identify marketing opportunities.

Shawn said EEME will definitely start its activities in Iran after the removal of international sanctions, and will cooperate with Iranian companies.

Tehran Oil Show Benefits for OPEC

 

By Hamid-Reza Shakeri-Rad

 

In 2010 when Iran was hosting an event marking the 50^th anniversary of the establishment of the Organization of the Petroleum Exporting Countries (OPEC), Iran’s then minister of petroleum and other decision-makers at Iran’s Ministry of Petroleum proposed to OPEC Secretary General Abdalla Salem El-Badri to organize a booth for the 12-nation oil producer group every year at Tehran’s international Oil and Gas Show.

The proposal by Iranian officials was aimed at familiarizing people, university students and Iran’s scientific sector further with OPEC activities, its member states and Iran’s status within OPEC.

El-Badri accepted the proposal and OPEC has since attended Tehran’s International Oil, Gas, Refining and Petrochemical Exhibition.

This year, following a request made to the OPEC secretary general by Iran, the organization attended the 20^th oil and gas show.

Among those representing OPEC was Jerry Haylins, the editor of the OPEC Bulletin magazine.

Iran Petroleum conducted an interview with Haylins. The full text of the interview is as follows:

 

Q: First of all, what do you think of Tehran’s Oil and Gas Show?

A: I am well aware of the significance of this exhibition for Iran. I am sure that Iran would enter a new phase after sanctions are lifted on the country. Then, the upcoming exhibitions in the following years would be much more important for Iran. Once the sanctions are lifted, Iran would be able to attract more foreign investment for its oil and gas industries. Having attended the 20^th show, I feel that Iran’s international oil and gas show is growing into one of the biggest shows of its kind in the world. I understand that it is already the largest oil show in the Middle East.

After the sanctions are lifted, I am sure more foreign companies will rush to this exhibition. Then, Iran has to think about housing so many foreign companies here.

 

Q: How could OPEC Secretariat benefit from presence in Iran’s international oil and gas show?

A: As I said in response to your previous question, this exhibition is of high significance for Iran which is a leading OPEC member state. Other OPEC member states would be able to showcase their capabilities by attending Iran’s oil and gas show. In my view, holding such exhibitions is highly significant for OPEC member states. For example, I saw companies from the United Arab Emirates here and other companies from Iran’s fellow OPEC member states. If other OPEC member states hold such exhibitions, there would be a greater awareness in these countries about OPEC’s involvement in the oil, gas and petrochemical industries. Therefore, we can see that holding such exhibitions would strengthen OPEC’s relationships among OPEC member states.

 

Q: Does OPEC have any plans for presence in the next rounds of this exhibition?

A: If we are invited by Iran I am sure we will do all that we can to attend this exhibition in order to provide services to OPEC member states and familiarize them with activities under way in OPEC. It is regrettable that some people in OPEC member states have little idea of what OPEC is about and may even not know that Iran is an OPEC member state. Therefore, attending such oil and gas shows gives us the chance to share our information with these people. OPEC is also keen to gather more data about the activities and plans of pre-sanctions and post-sanctions Iran’s petroleum industry. We want to know of Iran’s plans for the next round of this show. I personally managed to gather a lot of valuable information by attending meetings at the exhibition and talking to visitors. I will write down my findings which will be published in the OPEC Bulletin.

 

Q: How does OPEC view Iran’s oil and gas show?

A: OPEC envisages having a strong presence here every year. We hope to be able to have a more significant booth next year in order to be represented by more officials. In other words, we will try to make OPEC’s presence in Iran’s oil show more effective.

 

Q: What are OPEC public relations’ plans for more communications between the public relations offices of member states?

A: Over the past few years, the OPEC Secretariat has held a series of public relations workshops. So far, two rounds have been held. All member states were invited to attend so that contacts would be established between the OPEC Secretariat and the public relations departments of member states. In this way, OPEC member states hope to gain more information about the activities of OPEC and at the same time provide the Secretariat with more data about their petroleum industries. That would certainly help strengthen relations between OPEC member states and the Secretariat. That is very important to OPEC. The workshops are planned to continue in the future.

 

Q: The number of European companies attending this year’s show has increased. What do you think of that?

A: In my view, the European companies’ warm welcome for this year’s exhibition is natural. These companies are mainly commercial ones and Iran enjoys a vast market. The European companies are well aware that the time has come for the removal of sanctions on Iran after 12 years. To that effect, they are trying to provide the necessary infrastructure for cooperation with Iran through communicating with Iranian companies. I am sure that Iran is attractive to European companies. Some of the European companies participated in the Tehran oil and show even when Iran was under sanctions. I believe that the number of European companies willing to invest in Iran would increase whether or not the sanctions are lifted, because they plan to increase their trading. It is not about political activities, and Iran is a big market for them.

 

Venezuela, Big Loser of Oil Price Slump

 

By Shuaib Bahman

 

Venezuela is one of the largest holders of hydrocarbon reserves in the world. It is the 13^th producer of oil and the 10^th exporter of oil across the globe. Venezuela has long been a top supplier of oil to the United States.

Despite its huge oil reserves, Venezuela has seen its oil production fall gradually over the past two decades.

Venezuela’s budget depends fully on oil sales. In other words, the political power and influence of the Venezuelan governments depends on energy more than anything else and no government in this Latin American country could survive without dependence on oil windfalls.

The sharp fall in oil prices since last year has given rise to numerous negative consequences for oil producing countries, but Venezuela, which sits atop the world’s largest oil reserves, seems to be the main loser.

In this article, we review oil reserves in Venezuela, its oil exports and the impacts of oil price fall on the country’s political, social and economic conditions in order to elucidate consequences of oil price fall for the Venezuelan society and economy.

 

H/C Reserves

 

Venezuela contains the largest proven oil reserves in South and Latin Americas. The oil reserves in this country went from 59 billion barrels in 1989 to 76.6 billion barrels in 1999 and to 172.3 billion barrels in 2009. In other words, Venezuela’s crude oil reserves more than trebled from 1989 to 2009. Now Venezuela makes up 12.9% of proven oil reserves in the world and 20% of oil reserves of member states of the Organization of the Petroleum Exporting Countries (OPEC).

According to the US Energy Information Administration (EIA), Venezuela is the first holder of proven oil reserves in the world and among OPEC’s 12 member states. Venezuela’s proven oil reserves were estimated at 297.6 billion barrels in 2013 and its oil supply was announced at 2,490 b/d in 2012.

In 2010, Venezuela left behind Saudi Arabia to become the largest holder of proven oil reserves in the world. However, Venezuela’s annual production is much lower than Saudi’s. The 2014 oil revenues of Venezuela’s state-run oil firm PDVSA fell 7.6% year-on-year to $105.3 billion due to the oil price fall. PDVSA’s revenues totaled $128.4 billion in 2013, down 4.4% year-on-year.

This fall in revenues come at a time Venezuela is not enjoying favorable conditions in the infrastructure and its petroleum industry. According to existing standards, Venezuela’s crude oil is heavy and contains too much sulfur, better known as salty oil. Venezuela’s oil is concentrated in Maracaibo which sits on half of the country’s oil. Many oil extraction and production centers in this country are decrepit and they need reparation and maintenance. The Venezuelan government needs to spend around $3 billion on these installations in a bid to avoid a 25% fall in the country’s oil production. Venezuela’s crude oil exports have fallen by more than 40% since 1997 due to low investment. Under such circumstances, oil price fall has been of no help to the Venezuelan oil industry and has even brought about serious challenges for its government.

 

Challenges and Efforts

 

According to figures by the International Monetary Fund (IMF) and another statistics center, Venezuela needs oil price to sell at $117 a barrel to head off budget deficit. In case the oil prices keep falling, Venezuela – already reeling from deep-seated economic problems – will face numerous social and economic traumas. In fact, Caracas is suffering heavy budget deficit and its problems will grow in case oil prices keep falling.

Venezuela depends on revenues from crude oil sales for 96% of its hard currency revenues. Oil price fall has complicated the Venezuelan government’s problems with regard to curbing high inflation and confronting heavy food and medication shortages. According to figures released by the Venezuelan government in December 2014, the inflation rate in this country rose to 63% during the 12 months ending in November.

In early 2014, many companies in Venezuela had to stop production or slow down their activities due to shortage of hard currency. In January that year, many airlines like Air Canada and American Airlines suspended their activities in Venezuela due to the Venezuelan government’s attempt to limit access to the US dollar. In September 2014, Standard &Poors reduced Venezuela’s credit rating and labeled its economy as vulnerable. In February 2015, doctors at Caracas teaching hospital stopped surgery operations due to lack of equipment. It came at a time 3,000 needed to undergo surgery.

Venezuela started 2015 with severe foodstuff shortages as the government was distributing foodstuff under military protection. That is why Venezuela demanded that OPEC cut its production after oil prices fell sharply. The Venezuelan government announced that it would be ready to reduce production along with others should OPEC agree on curbing its production ceiling. But this proposal was turned down by the Persian Gulf Arab states, particularly Saudi Arabia. Venezuelan President Nicolas Maduro visited oil producing countries like Iran, Saudi Arabia, Qatar and Algeria in a bid to prevent prices from falling further. But this attempt ended in failure. Neither OPEC ministerial meeting nor Maduro’s visit could keep the prices from dropping.

Venezuela’s economy heavily depends on petrodollars. Add to this, periodic problems like inflation and accumulation of foreign debts. The Venezuelan government, facing financial hardships, seriously needs high oil prices in order to pay its debts and finance its social projects. Meantime, the Venezuelan government is facing pressure by domestic opposition and some big powers like the US. The opposition accuses the Caracas government of demagoguery and following populism. For their parts, big powers favor the removal of the Maduro government and restoration of a pro-West government to safeguard the US’s interests. Under such circumstances, oil price fall would pose a challenge to the government’s economic and welfare policies and ratchet up the pressure on Maduro. That is why there are rumors that the oil price decline is a plot designed in order to ramp up political pressure on oil producing countries which are in conflict with the US.

 

Chavez Oil Legacy

 

Since Hugo Chavez came to power in 1998 in Venezuela, relations between Caracas and Washington turned sour due to his anti-imperialist and anti-US policies. What affected these relations was Chavez’s oil policy. In the first half of the 20^th century, the US oil companies invested heavily in Venezuela’s oil wells. But Chavez completed the 1970s oil policy of nationalization of oil and gas in Venezuela.

Chavez expelled big oil companies like ExxonMobil and ConocoPhillips from Venezuela and nationalized more than 1,000 companies. That is why US oil companies completely pulled out of Venezuela.

After Maduro succeeded Chavez, he announced that Venezuela’s oil policy would not change. Therefore, it would be no surprise for the Venezuelans to see the US and Saudi Arabia might have cut the oil prices on purpose in order to punish Venezuela.

After his visit to Russia and five OPEC member states, including Iran, Saudi Arabia and Algeria, the Venezuelan president announced that Russia, the Islamic Republic of Iran and Venezuela are among countries facing US politically-motivated pressure over oil prices.

The US remains the largest importer of oil from Venezuela. The US refineries have been built off the Gulf of Mexico in order to process semi-heavy and heavy sour oil, and they have naturally to receive oil from Venezuela for processing. In 2011, the US imported on average 950,000 b/d of oil from Venezuela. This amount of oil makes up 40% of Venezuela’s oil exports. Moreover, the US imports 185,000 b/d of oil from the Caribbean region, which is counted in Venezuela’s exports. Therefore, oil price cut implies that the US is paying less to Venezuela for oil imports and that benefits Washington.

By increasing shale oil production and cooperating with Saudi Arabia for holding oil prices low, the US can on the one hand purchase cheap oil and on the other hand put pressure on countries opposing the White House policies.

The persistence of these pressures would have political and economic benefits, while it would once again pave the way for oil companies to enter Venezuela because big companies are currently unwilling to invest in Venezuela’s petroleum industry amid low oil prices. Meantime, Venezuela’s petroleum industry is decrepit and it desperately needs reconstruction and incorporation of state-of-the-art technology. The oil extracted in Venezuela is heavy and its extraction costs around $40 a barrel. That is why it is not attractive enough to investors. Therefore, oil price cut and the unwillingness of Chinese, Indian and Russian companies to invest in Venezuela at the present circumstances would prove a good chance for US oil companies to make their way into Venezuela.

 

Bleak Prospects

 

For countries depending on oil as the main source of revenue, oil price decline is potentially a catastrophe. The conditions for Venezuela are to a great extent more complicated than for other oil producing countries. On the one hand, this country has failed to manage its economic conditions in recent years, while on the other it is facing pressure from domestic opposition.

Venezuela is exporting 1.2 mb/d of oil, estimated to earn it less than $20 billion in revenue. At the same time, Venezuela is importing $77 billion worth of products. Such a huge distance between Venezuela’s petrodollars and imports is indicative of a major economic ailment posing a serious challenge to the government.

Venezuela holds the largest proven oil reserves in the world and is one of OPEC’s longtime member states, but due to its low oil production it has seen its influence diminish within OPEC and in international markets in recent years.

The US continues to exert political pressure on Venezuela, while the Americans have become a sort of rival for Caracas by extracting shale oil. That would lessen the US’s dependence on Venezuela’s oil and provide Washington with an instrument to apply more radical policies against Maduro’s Leftist government.

However, oil price fall could be also a chance for the Caracas government to reconsider its policies about subsidized oil. That would bring about a fall in Maduro’s popularity, but Venezuela would be able to accumulate enough capital to avert a possible collapse of its stock market.

ExxonMobil Finds Oil in Deepwater Off Guyana

 

Exxon Mobil Corp. has made a significant oil discovery on the Stabroek block about 120 mi (193 km) offshore Guyana.

The well was drilled by ExxonMobil affiliate, Esso Exploration and Production Guyana Ltd., and encountered more than 295 ft (90 m) of high-quality oil-bearing sandstone reservoirs. It was safely drilled to 17,825 ft (5,433 m) in 5,719 ft (1,743 m) of water.

The Stabroek block is 6.6 million acres (26,800 sq km).

“I am encouraged by the results of the first well on the Stabroek block,” said Stephen M. Greenlee, president of ExxonMobil Exploration Co. “Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block.”

Angola Offshore Project Under Way

 

Cobalt International Energy expects to achieve formal sanction by year-end for its Cameia development project in block 21 offshore Angola.

Currently the Cameia #4 well is being drilled, and development drilling will likely continue until early 2016. Cobalt anticipates start-up in 2018.

The company continues to focus on optimizing the Cameia production facility and subsea infrastructure design and costs to take advantage of favorable prices in the current market downturn.

Its current FPSO design is a nominal 75,000-b/d facility, with a likely production capacity of more than 80,000 b/d early in the field’s life. Cobalt re-affirms that the project economics remain sound.

Shell to Continue Norway Oil Field Development

 

Petroleum Safety Authority (PSA) Norway has approved A/S Norske Shell’s request to extend the lifespan of the Draugen complex in the Norwegian Sea.

Draugen is an oil field around 150 km (93 mi) north of Kristiansand. Production began in October 1993 via a fixed concrete platform with an integrated deck. Shell has also developed various fields in the area via subsea wells tied back to the platform.

PSA only sanctioned a continuation until the expiry of the production license in March 2023, although Shell believes there are grounds for a further extension.

Additionally, PSA has sanctioned use of the semisubmersible Deepsea Atlantic to drill two production wells for Statoil at Gullfaks Sør in the Tampen area of the northern Norwegian North Sea.

Gullfaks Sør has been developed using subsea well templates tied back to Gullfaks A and C to the north via subsea pipelines. Production started in 1998.

New Gas Find in East India

 

ONGC has notched two hydrocarbon discoveries offshore India’s east coast.

In the deepwater Krishna Godvari basin, the company drilled well KG-DWN-98/2-M-4 25 km offshore to a depth of 3,246 m (10,650 ft).

Based on subsurface geological, MDT/Mini DST and electro-log data, the well established six hydrocarbon-bearing zones with net pay of 78 m (256 ft). The objective in the interval 2,900-2,908 m (9,514-9,541 ft) tested conventionally flowed oil at 3,160 b/d and gas at more than 3 MMcm/d.

The discovery has opened a new up area for exploration and appraisal, ONGC claimed.

Australia New Oil Well Operational

 

Cue Energy says the Maari MR7A development well is onstream offshore New Zealand, at an initial production rate of 1,500-2,000 b/d of oil.

The optimal rate will be determined after several weeks of production history, based on reservoir management considerations.

Total output from the OMV-operated Maari field is now around 15,000 b/d.

MR7A is producing from the Moki formation reservoir unit. It was drilled horizontally from the Maari wellhead platform to a TD of 4,220 m (13,845 ft), of which 920 m (3,018 m) was completed in good-quality reservoir section, according to log data.

Norway, Western Europe's Top Gas Supplier

 

Norway has overtaken Russia as Western Europe's top gas supplier, data from state firms shows, indicating the European Union's drive to reduce its dependence on Russian energy is bearing fruit.

The sharp drop in oil prices has been another factor, as Norway offers more flexible pricing and big buyers held off buying from Russia in the hope the fall in crude price levels would eventually filter through to Russian gas.

Norway exported 29.2 bcm to Western Europe in the first quarter of this year, figures from Norwegian state operator Gassco show, while Russia sold 20.29 bcm, according to data from Gazprom's regulatory filing and Gazprom officials.

The data showed the trend began in the final quarter of 2014 when Western Europe bought 29.5 billion bcm from Norway and 19.8 bcm from Russia, according to Gassco and Gazprom, respectively.

Exports to EU members in Eastern Europe are not included in the data.

It was the first time Norwegian exports have convincingly overtaken Russia's since a brief period in 2012.

The European Union has been striving to reduce its dependence on Russian imports and buy more from Norway and other gas producers, mindful of Russia's dispute with Ukraine, the biggest transit route for Russian exports to the EU.

Some EU firms have held off from buying Russian gas this year in the hope oil-indexed prices will drop later in the year, while Norwegian capacity has been boosted by the end of an outage at Troll, which produces around 30 percent of the Scandinavian country's gas.

West Azeri Platform Undergoes Maintenance

 

British oil major BP has suspended operations at West Azeri, one of its platforms in the Caspian Sea, for planned maintenance, Tamam Bayatly, a spokeswoman for BP Azerbaijan, told Reuters.

Operations are suspended for 22 days, she added.

"This is a routine, planned program and is part of normal operations," Bayatly said, adding exports would continue according to the schedule.

She said the work would maintain the ability of the platform to produce in a safe, reliable and environmentally sound way.

Oil output from the main Azeri, Chirag and Guneshli (ACG) oilfields operated by BP, which account for most of Azerbaijan's output, rose to 8 million tonnes in the first quarter of 2015 from 7.9 million in the same period last year, BP said last week.

Daily oil production at the ACG fields rose to an average 661,000 barrels per day (bpd) from 645,800 bpd a year ago.

Azerbaijan said total crude oil and condensate production in Azerbaijan rose to 14.2 million tonnes in the first four months of 2015 from 13.6 million a year earlier, driven by rising oil output at the ACG fields.

Obama Urges to Block Arctic Oil Drilling

 

A group of 18 mostly Democratic US senators urged the Obama administration to stop Royal Dutch Shell's preparations for oil exploration in the Arctic, saying the region has a severely limited capacity to respond to accidents.

The senators, from both coasts and several Midwestern states, sent a letter to Interior Secretary Sally Jewell, urging her to retire Arctic leases in the Chukchi Sea.

Jewell's department earlier this month conditionally approved Shell's exploration plan in the Arctic. The move means the company is likely to return to the Chukchi Sea this summer for the first time since a mishap-filled drilling season in 2012.

When Shell lost control of a drilling rig that year it "put numerous lives at risk, including those of the Coast Guard crews" and those of 18 people on the rig, the letter said. The appeal was spearheaded by Senator Jeff Merkley of Oregon and the letter was signed by other liberals, including Dick Durbin of Illinois and Bernie Sanders of Vermont, an independent.

Dubai Offers to Buy Dragon Oil

 

Dubai's Emirates National Oil Company (Enoc) has made a potential offer for Dragon oil valuing the business at £3.6 bn.

The company has proposed paying 735p per share for the 46pc of the company that it doesn’t already own.

Saif al-Falasi, chief executive of Dragon Oil said: “We believe the proposal is full and fair and provides an excellent opportunity for Dragon Oil’s shareholders to realize significant value today. There is great uncertainty in the sector and we believe, as a long term and supportive shareholder, that Dragon Oil has achieved as much as is possible through its existing upstream strategy.”

The offer follows an initial proposal for the company that was tabled in March when Enoc said its interest reflected a premium to Dragon’s closing share price of 509p at that time.

“Dragon Oil stands to benefit significantly from being part of the integrated platform that ENOC offers. To that end, we want to ensure that all of Dragon Oil’s shareholders have the opportunity to evaluate the proposal on its merits,” said Mr.

Turkish Stream Gas Deliveries to Start in 2016

 

Russia and Turkey have signed an agreement on operational commissioning and for gas deliveries via the Turkish Stream to commence in December 2016, said head of Gazprom Aleksey Miller.

The agreement was signed by Miller and Turkish Minister of Energy and Natural Resources Taner Yildiz.

Construction of the pipeline was agreed between the two in 2014, and the stream is slated to travel from Russia, transit through Turkey, and stop at the Greek border, giving Russia access to the southern European market. The pipeline will have an annual capacity of 63 bcm  (2.22 tcf/yr). It will replace the South Stream, which was suspended over the EU’s stance on Russia.

Gazprom then signed an agreement with China’s CNPC to supply 30 bcm (1 tcf) of gas annually via the western route. The pipeline is part of a number of Gazprom-China deals worth an estimated $400 billion over the next 10 years. The bigger pipeline is Power of Siberia line, which is projected to supply 38 bcm (1.3 tcf) of gas annually over a 30-year period beginning in 2018, according to Forbes.

India Lured by Siberia Oil Exploration

 

Indian companies plan to increase their investment in a bid to expand their presence in the oil and gas sector in western Siberia’s Tomsk Region. Such investments would also revive the local economy and restore services.

Indian public and private companies are considering investments in various oil and gas production sites in the Tomsk region of Siberia, Pundi Srinivasan Raghavan, India’s Ambassador to Russia, told Tomsk information agency NIA Tomsk.

“Today we are considering all possibilities of cooperation. This includes investments in production facilities, cooperation in the field of liquefied natural gas, medium and large projects, said Raghavan. “ONGC (Oil & Natural Gas Corporation), which has bought Imperial Energy, is currently in talks with Gazprom and Rosneft to expand cooperation. Another of our companies, Oil India Limited (OIL), which has also made investments in the Tomsk region, is interested in expanding the investment. Of course, if there are still some opportunities in the Tomsk region, our companies will be happy to use them, especially because they are already present there,” Raghavan said.

The Indian government fully supports the efforts of Indian companies to gain resources in the oil and gas sector, because India is seeking energy security for development, Raghavan said.

Renewed Presence in Oil Swap Market

 

Iran’s petroleum minister, Bijan Zangeneh, paid due attention to swap operations during his previous tenure which ended in 2005.

After taking office in August 2013 to serve in the administration of President Hassan Rouhani, Zangeneh once more underscored the resumption of swap operations.

“No talks have been held about swap, but instructions will be drawn up to activate swap,” the minister said recently of oil swap with Turkmenistan and other Caspian Sea littoral states.

Mahmoud Astaneh, advisor to the minister of petroleum, recently said talks have started for the resumption of crude oil swap.

“The new Iranian administration has many priorities in the energy sector. One of them is developing oil swap despite all impediments in the way,” he said.

Although it is very difficult to gain back lost customers in light of serious rivalry in the region, development of swap would upgrade Iran’s national interests in the economic sector at a time the country is facing financial shortages.

In the 1990s, after the collapse of the Union of Soviet Socialist Republics (USSR) and the independence of Central Asian republics, oil swap with Iran become important. In order to develop their economies, these breakaway republics desperately needed to export oil, but they were short of facilities to deliver their oil to consumers in Europe, Asia and America. In 1996, an agreement was signed between Iran and Kazakhstan for swapping oil.

Swap oil operations in Iran started in 1996 within the framework of two plans. In that year, an agreement was signed between Iran and Kazakhstan. Under the agreement, 30,000 barrels of oil were transferred from Kazakhstan Port to Neka Port before being delivered to customers in Iran’s southern ports.

For three years, swap operations were being handled by private entities involved in the oil sector. Swap had just started and there were numerous problems like transportation and pricing.

To tackle these challenges, Iran’s Ministry of Petroleum decided in 1999 to assign swap to Naftiran Intertrade Company (NICO). All Iranian and foreign swappers had to sign agreement with NICO which was now in charge of oil swap in Iran.

Vitol, British Petroleum (BP), LITASCO SA (Lukoil International Trading & Supply Company), Dragon Oil and Petro Khazar were among companies involved in swap operations.

The breakaway republics of former Soviet Union faced a good chance for economic interaction. Due to its unique position, Iran was supposed to become the energy hub in the region. Nearly 4 percent of Iran’s oil and gas reserves lies in the Caspian Sea.

At that time, each ton of crude oil was 7 to 8 barrels, the swap price of which was $10. The then minister of petroleum cut it to $5, but the swappers did not agree and said such a low price would earn them nothing. This time, the minister did not accept the swappers’ argument and ordered a halt to the swap operations.

Due to the erroneous and inexpert decision of some senior petroleum industry managers, swap operations have been halted at Iran’s northern waters via Neka Terminal. In this regard, one should not ignore exertion of political pressure by the US in order to isolate Iran’s route and blunt Iran’s clout with other countries, particularly northern neighbors, and persuade them to use four other routes stretching from Baku, the capital of the Republic of Azerbaijan, despite the profitability and economic justification of Iran’s route.

However, the most important reason behind the halt to swap operations from Neka oil terminal was a decision by then oil policymakers to stop swap due to its low profitability in order to safeguard national interests.

After Iran pulled out of oil swap operations, Turkey replaced it. This country is now becoming a regional hub and is making efforts to gain control over Shah Deniz gas pipeline stretching from Azerbaijan.

 

Swap Profits for Iran

 

Oil swap operations had many advantages for Iran, the most important of which was profitability for National Iranian Oil Company (NIOC) and NICO.

According to official data, the revenue from swap operations from 1999 to 2009 was around $259 million.

The geographical position of Iran provided a chance for Iran’s northern neighbors to supply crude oil to Iran through northern ports to be consumed in Iranian refineries. In return, Iran delivered oil to southern neighbors through southern ports under the agreement between those two countries. Iran was paid for swapping.

Another advantage of swap project was that Iran received crude oil of better quality than that of its northern neighbors. The API gravity of crude oil swapped by Iran was around 33. If we consider at least 30 cents for each API number, the difference in the value of crude oil delivered to Iran from north and the crude oil produced in Iran was around $220 million.

Another advantage of oil swap by Iran was that the country did not need to transport oil from south to north. Most oil-rich regions are located in southern Iran and oil has to be transferred to refineries located in Northern provinces through Tehran-Tabriz pipeline. Such a transfer faces security and environmental threats. But the swap operations resolved this problem as the crude oil received in northern ports was consumed there and it fed Tehran and Tabriz refineries.

If we consider the crude oil transit fee at 40 cents per 320 kilometers, since 245 million barrels of crude oil have been swapped and the distance between Iran’s south to Tehran refinery is 1,000 kilometers and the distance between Iran’s southern ports to Tabriz refinery is 1,500 kilometers, around $400 million has been saved.

Moreover, the swap project provided the possibility of using Iran’s south-north trunkline for gasoil transfer during winter. Jobs were also created in northern Iran and Neka Port hired many employees and workers.

The swap project left northern neighbors dependent on Iran and provided Iran with a political lever. Apart from its economic aspects, the transfer of crude oil supplied by northern neighbors via Iran was indicative of the safety and security of Iran route, foreign companies’ trust in Iran and international credit for the country.

Under swap project, Caspian Sea oil producers (Russia, Kazakhstan and Turkmenistan) transferred their oil on tanker to Neka Port in northern Iran. Iran transferred this oil to Tehran and Tabriz refineries to be processed for domestic consumption. Then, the same amount of oil received from northern neighbors was supplied to other countries from Kharg Island in the Persian Gulf.

Europe Petchem Firms Eye Iran

 

Iran’s petrochemical industry is a secure and appropriate place for investment due to the strategic infrastructure in the country.

In light of a positive political atmosphere prevailing over Iran and inclination by different countries for presence in this industry, petrochemical sector is registering a breakthrough for Iran. International financers will be able to finance petrochemical projects in Iran in order to accelerate the development of this industry.

Iran’s petrochemical industry encompasses a wide spectrum of activities today. By investment in the petrochemical industry and developing petrochemical projects, this sector could be hoped to realize its 2025 objective, which is the top spot in the region in terms of value of petrochemicals. To reach this objective, it is necessary to make comprehensive and all-out plan in order to overcome challenges and obstacles.

As a new political environment is emerging in Iran, a number of European countries have expressed their readiness for a new presence in Iran’s petrochemical industry.

Completion of incomplete petrochemical projects in Iran needs at least $7 billion in annual investment. Since China’s finance has failed to fund development projects in recent years, Europeans are taking advantage of the opportunity to finance projects in Iran. To that effect, over the past two months representatives of leading companies from Germany, France, Italy and Russia have held meetings with Iranian officials to voice their readiness for investment in Iran’s petrochemical sector.

The managing director of National Petrochemical Company (NPC), Abbas Sha'ri-Moqaddam, has confirmed preliminary talks with Europeans for post-sanctions era.

“Iran’s petrochemical industry is ready to cooperate with major companies in this industry in the post-sanctions period. To that effect, several European countries that were earlier present in our country have voiced readiness for return,” he said.

“A large number of countries have so far shown inclination for a new presence in the petrochemical industry. If the sanctions are lifted we would benefit from investment and technology of these countries in development projects,” he added.

Sha'ri-Moqaddam said: “We hope that after a final agreement and the end of sanctions, we would be able to acquire sophisticated technology and processes which we were denied due to the sanctions and also attract foreign investment in order to realize our objective for growth in the petrochemical sector.”

He said that preparations are being made for using empty capacities of petrochemical industry and accomplishing prioritized projects of this industry through attracting foreign investment and creating joint cooperation between Iran’s private sector and foreign investors for a fresh jump in this industry.

 

Readiness for Investment

 

Mohammad-Hassan Peyvandi, deputy managing director of NPC, said Iran is open to attract fresh investment in its petrochemical sector.

He told Iran Petroleum that Iran’s petrochemical industry would be able to finance its projects through domestic banks even if international sanctions are not lifted. He said the NPC has never defaulted on its payments to banks.

Peyvandi expressed hope that Iran's petrochemical sector would be able to reach 120-million-ton production capacity. He said: “Production of propylene is among our most important plans and in case China’s finance is finalized, methanol production capacity will reach 24 million tons in the coming years. This production capacity stands currently at 5 million tons which would be completed by 19 million tons of methanol from Kaveh petrochemical plant.”

Peyvandi said methanol production hike would supply domestic needs and would also fill foreign markets, resulting in lower prices.

“The methanol market is already under pressure from Iran’s methanol production and the US shale gas. In the meantime, Asian markets are flooded with LNG whose transfer costs are high,” he said, adding that many LNG carrying vessels are sailing through Panama Canal at the destination of Asian markets.

“NPC supports attraction of fresh foreign investment and is ready for cooperation with investors,” he said.

 

German, French Businessmen in Tehran

 

The representatives of technologically advanced countries in the petrochemical sector have increased their visits to Tehran in recent months. Recently, two high-ranking delegations from Germany and France visited Iran and discussed investment in Iran’s petrochemical sector after the removal of sanctions under a nuclear deal that is hoped to be reached between Iran and P5+1 in the coming months.

A European expert said consulting and investment companies have concluded their studies about investment in petrochemical development projects, adding that everyone is waiting for the sanctions to be lifted on Iran.

He said that renewed presence in Iran would be a great advantage for the technologically advanced countries. He said that both Iran and European countries would benefit from such cooperation.

The expert said that European companies can help provide Iran with catalyst and state-of-the-art technology applied to the petrochemical sector. He said such cooperation would finally enhance production by Iran’s petrochemical plants.

 

Asians Ready to Grab Iran Petchem

 

Due to its attractiveness, Iran’s petrochemical industry has lured both Europeans and Asians. China, India and South Korea are vying with powerful Europeans for presence in Iran. Last year, Chinese firms financed four petrochemical projects in Iran and they are seeking more presence.

The Indians are seriously following up on efforts to presence in Iran’s new petrochemical hub of Chabahar in southeastern Iran. Due to its strategic position, Chabahar will be able to export products to India at minimum costs.

Energy experts believe that India would become a top exporter of petrochemicals in the near future. However, this country is facing feedstock shortage; therefore, it needs to feed its downstream industries with Iranian feedstock.

Two Indian companies producing chemical fertilizers have established a joint company and are now looking for an Iranian partner to build a urea plant in Chabahar.

The most important advantage of Iran’s petrochemical industry for investment is its access to feedstock – natural gas, ethane, naphtha and gas condensate – in large quantities and at competitive prices.

Iran’s gas processing and transmission capacity currently stands at around 600 mcm/d which would soon reach 1,000 mcm/d. Moreover, access to ethane as feedstock for petrochemical plants would be instrumental in strengthening Iran’s position as a producer of petrochemicals.

Energy experts believe that investment in Iran’s petrochemical industry would be secure and lucrative due to high value-added generation. However, weaknesses should be identified and new plans should be made.

The important point which should be taken into consideration is that the geography of petrochemical plants in Iran would guarantee profitable investment in this sector. Whereas reaching a final nuclear deal between Iran and P5+1 seems more and more likely, a growing interest is seen on the part of foreign investors to return to Iran.

Making maximum use of petrochemical industry’s potentialities is one of strategies envisaged in the sixth five-year economic development plan that would complete the value chain. For that purpose, private and foreign investors should be involved more than before in these projects.

One has to take into account that huge gas reserves, easy access to water resources in southern coasts and proximity to maritime transport routes are among advantages making Iran attractive for investors in the petrochemical industry.

Iran’s petrochemical production capacity is forecast to reach 180 million tons a year in ten years in case the necessary finance is provided. If this output target is reached, Iran would become the top producer of petrochemicals in the Middle East.

Nearly 60 projects abandoned under the previous governments are planned to be completed, bringing the country’s annual petrochemical production capacity to 120 million tons.

Implementation of 36 new projects, which require $41 billion in investment, would raise the annual production capacity beyond 180 million tons.

IOEC Eyes Asian Championship

 

Teams active in different sports in Iran often start from scratch. They may need several years in order to promote their position and win championship. But such a thing would happen if no specific problem comes up on the way.

The futsal team of Iranian Offshore Engineering Construction (IOEC) managed to make progress rapidly. Relying on efficient managers and qualified players, IOEC futsal team neared championship in the Pro League.

Coached by Vahid Shamsaei, a legend of futsal in Iran and Asia, the IOEC futsal team will have too much to say in the future.

 

About IOEC

 

IOEC is a subsidiary of Iran’s Ministry of Petroleum. The company is tasked with engineering operations, purchase, manufacturing and installation of oil platforms in the South Pars gas field. As much as this company fares well in its own job, its futsal team has been pushed to bold relief.

The IOEC futsal started work in 2012. Correct management and recruitment of young and motivated players pushed the team to the Pro League.

After one year of playing in the Pro League, the IOEC futsal team ranked tenth. That was a good start. It was a positive event for the IOEC futsal team to have managed to preserve its status.

 

On Road to Happiness

 

Before the start of the 2014-2015 season of Futsal Pro League veteran directors at IOEC and particularly IOEC managing director Gholam-Reza Manouchehri chose to go a difficult way.

Manouchehri, who was also named advisor to Minister of Petroleum Bijan Zangeneh, was largely motivated to handle the issue. He made a two-year plan for the IOEC and he finally saw the result. In the first move, Vahid Shamsaei was named as head coach. The two-year plan was drafted so that the IOEC futsal team would be among the top four. Then, it would run for championship in the second year. But the IOEC team became champion in the first year.

 

Recruitment of Youths

 

One of the outstanding features of the IOEC futsal team in its last season was its hiring of young and ambitious players. After Vahid Shamsaei was named head coach, everyone expected him to recruit veteran players, but he only picked Mostafa Nazari from among veteran players and he selected the rest of his team from among young players.

After playing 26 Pro League games, the IOEC futsal team managed to win in 14 matches, drew in 9 matches and lost in three matches. In the end, it scored 51 to become the champion. It was important for the IOEC futsal team to have outdone powerful teams like Guiti-Pasand, Mansouri and Dabiri.

 

Future

 

The IOEC team has just started. During its three years of activity, it has become the champion of Iran Pro League. But for Vahid Shamsaei, the more important tournament is Asian games.

Iran’s central city of Isfahan is expected to host the Asian futsal championship games. Now, the IOEC futsal team is poised to win the championship title in these games.

Shamsaei, known as the leading goal scorer of futsal in Asia, is also leading Iran’s national futsal team. He is experienced enough for the post.

 

Interview

 

In football and futsal, big players may not become qualified coaches, but Shamsaei is an exception. He has already recorded 392 goals for Iran’s national futsal team.

Shamsaei, 39, is ambitious. He is determined to make his wishes come true for Iran’s futsal.

He shares his views in an interview as follows:

 

Q: Nobody imagined that the IOEC futsal team could reach the championship title in its first year of presence in the Pro League. But it happened. What do you think?

A: Thanks to God! We have to offer our gratitude to Mr. Manouchehri who spared no efforts for managing the IOEC futsal team. He is a sports fan and has set ambitious goals for the IOEC. Whatever he had promised to provide for the IOEC club was made available. The hall was appropriate and the players were qualified. Everything was okay.

 

Q: Did you imagine winning the championship title in the first year of your presence?

A: The fact is that we never sought championship, but we won the title by making efforts. In the middle of the way, we realized that we could dream of championship by stepping up our efforts.

 

Q: You’re supposed to compete in Asian championship games. Which plans have you envisaged for that purpose?

A: I led Mahan Steel futsal team to championship in Asia and now I’m hopeful to repeat it for IOEC in Isfahan. We have had good plans and several more qualified players are to join us. I hope we would be strongly present in order to defend the name of Iran. The IOEC is representing Iran in Asia and we should view it as our national team. I hope that we would be viewed as Iran’s national team so that we could reach the results we desire.

 

Q: How optimistic are you about winning the Asian championship title?

A: To be honest, I’m very hopeful to win this title. In recent years, Iran’s futsal has failed to be successful at national level, but we should prove that Iran is the best team in Asia. The Asian championship games provide the best chance for proving this capability.

 

Q: You’re also the head coach of Iran’s national futsal team. Does it cause any problems for you in exercising your job?

A: First of all, I should say that my major concern is the success of IOEC futsal team. I will by no means abandon my team at this sensitive juncture. However, I agreed to be the head coach of Iran’s national futsal team upon the request of officials for helping this team. You saw that I held joint training sessions with the IOEC to avert any problem for the team. I will undoubtedly do my utmost for the success of IOEC. Meantime, it would be a great honor for me to work with Iran’s national futsal team. I owe the national team for whatever I have. That is why I responded positively to this proposal.

 

Q: Will you remain head coach and player next year again?

A: The fact is that I had a good season last year, but I need to examine my conditions for the future. If I see that I would be able to help the team I will also play for the team. But if I conclude that my presence would harm I would only be the coach.

Oil Gushed in Iran 107 Years Ago

 

One hundred and seven years have passed since oil gushed out of a 338-meter well in Masjed Soleyman in southwestern Iran. The oil discovery became a turning point for political and economic changes in Iran.

On May 26, 1901, Iran woke up to oil gush following five years of search operations by William Knox D’Arcy of Britain.

The discovery of oil, which in the following years was given the title of black gold, resulted in major developments for Iran and the Middle East. Oil never lost its value and its influence on different countries was never blunted. Oil even helped Iran’s train of development and progress to wake up from hibernation and urn again.

It was proven to everyone that southern Iran was a birthplace of civilization in the Middle East.

Oil exploration in Masjed Soleyman turned this city into the oil capital of Iran and the Middle East. This important product opened a new and brilliant chapter in Iran’s progress trend.

A review of the history of oil exploration in Iran would bring everyone to the conclusion that Iran deserves the title of having been a pioneer of development and progress.

In 1900, D’Arcy agreed to fund a search for oil and minerals in Persia. Negotiations with the Mozaffar al-Din Shah Qajar began in 1901 and with the offer of £20,000 for a sixty-year concession to explore for oil was secured in May covering 480,000 square miles (1,200,000 km2).

The concession stipulated that William D'Arcy would have the oil rights to the entire country except for five provinces in Northern Iran. In exchange, the Iranian government was given 16% of the oil company's annual profits, an agreement that would haunt the Iranians up until the late 20th century.

After the D'Arcy concession the British became much more concerned with the stability of Iran because of their reliance on the country's vast oil reserves.

 

A drilling team under George B. Reynolds was sent to Persia and began to search. In 1903 a company was formed and D'Arcy had to spend over £500,000 to cover the costs.

False hopes were raised in 1904 and D'Arcy was forced to find further financial support, with the Burmah Oil Company Ltd. agreeing to put up to £100,000 into the venture in return for much of the stock.

Fed up with access to no oil, D’Arcy had apparently sent a telegraph to Reynolds demanding that he stop drilling. Reynolds received the telegraph, but was still hopeful and ignored the message. 

Drilling in southern Persia at Shardin continued until 1907 when the search was switched to Masjed Soleyman in a place named "Maidan-i-Naftun".

Drilling began at one site in January 1908 and at another nearby in March. By April with no success the venture was close to collapse and D'Arcy almost bankrupt, but on 16 May there were encouraging signs and on 26 May at 1,180 feet (360 m) they struck oil.

In April 1909 D'Arcy was made a director of the newly founded Anglo-Persian Oil Company (APOC) which would later become British Petroleum. By 1911 APOC had run a pipeline from the find to a refinery at Abadan. In 1912 the Mount Morgan Company was listed in London and D'Arcy was made chairman of that board.

That was a good sign for an experienced oil hand like Reynolds. At 4 in the morning, the drill reached 1,180 feet below the desert and struck oil. A huge gusher shot 75 feet into the air.

The site was so remote that it took five days before D'Arcy got word by telegram in England. "If this is true," he replied, "all our troubles are over." It was indeed true, and more wells hit oil elsewhere in Persia, including a huge one in September.

This event was the first discovery of oil in the Middle East. It changed the social and economic life of Masjed Soleyman and Iran. The well supplied 36,000 liters a day of oil. Later on, 300 more wells were drilled in this city.

Masjed Soleyman, an ancient city, became a modern and prosperous place. Its population grew and new housing was built for oil service employees and workers. APOC first established a water desalination facility to carry water from Karoun River to the city. Water pipelines were also laid out for the residents of Masjed Soleyman. A railway was also built stretching as far away as a village near the city of Shoushtar.

Masjed Soleyman was no longer a remote region. It was a big city and many people living in nearby villages moved to the city. Water and electricity network was completed and urban wastewater treatment system was launched. Garbage collection became regular and bus transport system was established. A big sports stadium was constructed and Masjed Soleyman became a city different from other cities.

The concession for extracting and producing oil and bitumen across Iran (except for the five provinces of Azarbaijan, Guilan, Mazandaran, Gorgan and Khorassan) was granted to D’Arcy in 1280 for 60 years.

Since the first years of oil exploration in Iran, foreigners cast a covetous eye on Iran’s underground resources and they tried to seize on any chance to win oil concessions from Iran.

After the annulment of the D’Arcy concession, the Additional Gass-Golshaian Agreement was signed for exploration and extraction of oil by British oil companies in Iran. This agreement drew fierce opposition from a group of parliamentarians and religious scholars particularly Ayatollah Kashani. 

All these events finally resulted in the nationalization of petroleum industry in Iran in 1951.

More than one century after the start of flow of oil from wells in Masjed Soleyman, Iran’s three-color flag is flying there and the train of national progress is running ahead rapidly.

 

Iran’s Oil-Rich South

 

Southern regions in Iran are rich in oil. Following oil gush from the Middle East’s first oil well in Masjed Soleyman, southern oil-rich regions in Iran have been the center of development of state-of-the-art technologies for oil and gas extraction and production.

Masjed Soleyman’s first oil well started producing 500 b/d oil in 1911. That year is known as the start of Iran’s petroleum industry.

After the discovery of oil in Masjed Soleyman, oil exploration operations started in other regions. Haftkel, Aghajari, Ahvaz, Binak, Bibi Hakimieh, Maroun and Karanj, Parsi and Rag Sefid were other oil-rich regions to be explored in the following years.

All these fields along with facilities, plants and pipelines needed for production processing and transfer of oil to domestic refineries and export terminals are now under authority of National Iranian South Oil Company (NISOC).

Up to the 1970s, all exploration and production operations were concentrated under Exploration and Extraction Corporation. This company was established in Masjed Soleyman and was tasked with planning and financing oil recovery and development of oil fields and technical installations.

In the early 1970s, oil and gas production picked up speed and more exploration and drilling operations were required. Iran Oil Services Company was then established as a contractor cooperating with National Iranian Oil Company. Iran Oil Services Company was in charge of all exploration activities, planning drilling operations, installing pipelines, studying fields, making plans for enhanced recovery and making budgeting estimates.

Along with this company, Non-Industrial Operations Company was in charge of non-industrial activities related to oil production.

After the victory in 1979 of the Islamic Revolution and the expropriation of foreign contracts; exploration, drilling and production operations were all assigned to Iranian oil service workers. A strategic center for logistics was moved from Abadan to Ahvaz.

NIOC established a directorate for oil-rich regions after the revolution and the start of the imposed war in 1980.

After the end of the war in 1988, the directorate was renamed Directorate of Onshore Production and its activities expanded to across the country. Finally in 2000, NISOC was established to deal with oil exploration and extraction in southern oil-rich regions.

Running more than 50 hydrocarbon fields in small and large sizes, NISOC covers an area of 400,000 square kilometers stretching from Bushehr to Khuzestan provinces. NISOC accounts for more than 80% of Iran’s crude oil production. Massive oil fields like Asmari, Gachsaran, Maroun, Karanj and Parsi are among them.

Over recent years, Iran’s Ministry of Petroleum has revived studies for the development of oil and gas reservoirs in the south of the country.

Guilan; Rain Never Stops Falling

 

Guilan is a province in northern Iran. It sprawls on more than 14,000 square kilometers. Mount Alborz protects Guilan like a wall in the west and in the south. That is why this Northern Province has moderate climatic conditions with quite high humidity.

Guilan is considered as the most humid region in Iran with its annual precipitation at more than 2,000 millimeters.

Besides wonderful woods, more than 40 rivers flow across the province. The most important one is Sefidroud (literally meaning white river).

Guilan has also productive farmlands. The main products supplied by this province are rice, tea, olive, citrus, silk, dairy, meat, chicken, fish, caviar, jam and delicious cookies.

Guilan is one of the most beautiful regions in Iran. Every year, it hosts a large number of Iranian and foreign visitors. Beautiful jungles, evergreen countryside, Caspian Sea coasts and Anzali lagoon are among outstanding features of this province. Tens of historic, religious and recreational centers are flooded by visitors in all season across the year.

In its previous issues, Iran Petroleum reviewed Guilan province and its tourist attractions. But the province has so many attractions. In this issue, we intend to review tourist attractions in the cities of Rasht, Lahijan and Anzali in this province.

 

Rural Heritage Museum

 

Rural museums are a subset of open air museum reflecting the rural civilization and culture in a natural environment. These museums form through transferring the real scale buildings in a location similar to the primary place.

Guilan Rural Heritage Museum is under construction in a 263 ha land, in Saravan forest park located on km 18 of Rasht-Tehran road. The idea of establishing the museum was formed after June 1991 Guilan earthquake in which the destruction of the traditional buildings was intensified. The primary phase of the project was completed in 2002.

The architecture section of the Museum is a collection of some 150 year old buildings. The objective of the Museum is not just transferring the rural buildings but is preservation of local culture, construction techniques and unwritten knowledge living in villages of Guilan.

This collection, besides the rural architecture of different regions of the province, other cultural elements of life and work tools, food, costumes, etc would be exhibited.

 

House of Mirza Kouchak Khan

 

Miza Kouchak Khan Jangali, whose real name was Younes Ostad Saraei, was a military commander during the Constitutional Revolution. He also led what was known as the Jungle Movement. Mirza Kouchak Khan rose up against violation of Iran’s territorial integrity and independence by foreign governments following the Constitutional Revolution.

Mirza Kouchak Khan fought the ruling regime from 1909 to his death in 1921. The house of this combatant has become a visiting place in the city of Rasht.

The house, which was facing destruction, was given to the Rasht Municipality in 2001. The reconstruction of the current house started in 2002.

The two-storey house sprawls on 300 square meters. Each storey has four rooms, one veranda and two staircases.

The ground floor is an exhibition of books recounting the history of Guilan and the Jungle Movement. The first floor is where Mirza Kouchak Khan’s family used to live.

Photos of Mirza Kouchak Khan as well as documents about the Jungle Movement’s struggles are pasted over walls.

 

Lahijan Pond

 

In the eastern section of the city of Lahijan and down a green summit covered with box trees is located a large pond measuring 17 in area and four meters deep. The pond used to be a water reservoir for irrigating paddy fields. The pond was fed with water streaming from the mountain.

In the middle of the pond lies a beautiful island earlier known as Mian Poshteh. The island is connected to the southern part of the pond through a long cement bridge. The pond is nearly 2 kilometers long. The pool was built at the order of Shah Abbas Safavid. He had also erected a towering palace in the island. He stayed there when he visited Lahijan. Nothing has remained of the palace.

The pond attracts tourists.

 

Tomb of Sheikh Zahed Guilani

 

The tomb of Sheikh Zahed Guilani dates back to the late 9^th century AH. It is located in Sheikhanour village near Lahijan.

In the tomb, is laid to rest Sheikh Tajoddin Ibrahim, better known as Sheikh Zahed Guilani. He was one of the great sufis and one of mentors of Sheikh Safioddin Ardebili.

The tomb, which has a turquoise dome, is surrounded by paddy and tea fields and woods.

The ceiling of the mausoleum has gypsum decorations adorned with colorful tiles. There is no inscription showing the builder of the mausoleum. However, some attribute it to Mehdi Bashakjani.

The only inscription available in this edifice is engraved on the ancient box placed on the tomb. It is dated 832 AH, most likely the year the tomb was built. The architecture of the edifice could belong to the 8^th or 9^th century AH.

The mausoleum was registered as national heritage in 1968.

 

Anzali Lagoon

 

Anzali Lagoon is a coastal lagoon, in the Caspian Sea near Bandar-e Anzali, in the northern Iranian province of Guilan. The lagoon divides Bandar-e Anzali into two parts, and is home to both the Selke Wildlife Refuge and the Siahkesheem Marsh.

Although the lagoon suffers pollution, it is known as a good place for bird watching.

The lagoon's water ranges from fresh near the tributary streams to brackish near the mouth into the harbor and the sea. Studies indicate that in the 19^th and early 20^th centuries that the lagoon had a much higher salinity.

The lagoon has decreased in size since the 1930s to less than a quarter of its former extent.

However, in the last ten years (As of 2007) water salinity has increased both by the rise of the level of the Caspian Sea which has caused greater interchange of waters, and due to greater salt transport in incoming "fresh" water due to increased upstream irrigation.

Guilan; Rain Never Stops Falling

 

Guilan is a province in northern Iran. It sprawls on more than 14,000 square kilometers. Mount Alborz protects Guilan like a wall in the west and in the south. That is why this Northern Province has moderate climatic conditions with quite high humidity.

Guilan is considered as the most humid region in Iran with its annual precipitation at more than 2,000 millimeters.

Besides wonderful woods, more than 40 rivers flow across the province. The most important one is Sefidroud (literally meaning white river).

Guilan has also productive farmlands. The main products supplied by this province are rice, tea, olive, citrus, silk, dairy, meat, chicken, fish, caviar, jam and delicious cookies.

Guilan is one of the most beautiful regions in Iran. Every year, it hosts a large number of Iranian and foreign visitors. Beautiful jungles, evergreen countryside, Caspian Sea coasts and Anzali lagoon are among outstanding features of this province. Tens of historic, religious and recreational centers are flooded by visitors in all season across the year.

In its previous issues, Iran Petroleum reviewed Guilan province and its tourist attractions. But the province has so many attractions. In this issue, we intend to review tourist attractions in the cities of Rasht, Lahijan and Anzali in this province.

 

Rural Heritage Museum

 

Rural museums are a subset of open air museum reflecting the rural civilization and culture in a natural environment. These museums form through transferring the real scale buildings in a location similar to the primary place.

Guilan Rural Heritage Museum is under construction in a 263 ha land, in Saravan forest park located on km 18 of Rasht-Tehran road. The idea of establishing the museum was formed after June 1991 Guilan earthquake in which the destruction of the traditional buildings was intensified. The primary phase of the project was completed in 2002.

The architecture section of the Museum is a collection of some 150 year old buildings. The objective of the Museum is not just transferring the rural buildings but is preservation of local culture, construction techniques and unwritten knowledge living in villages of Guilan.

This collection, besides the rural architecture of different regions of the province, other cultural elements of life and work tools, food, costumes, etc would be exhibited.

 

House of Mirza Kouchak Khan

 

Miza Kouchak Khan Jangali, whose real name was Younes Ostad Saraei, was a military commander during the Constitutional Revolution. He also led what was known as the Jungle Movement. Mirza Kouchak Khan rose up against violation of Iran’s territorial integrity and independence by foreign governments following the Constitutional Revolution.

Mirza Kouchak Khan fought the ruling regime from 1909 to his death in 1921. The house of this combatant has become a visiting place in the city of Rasht.

The house, which was facing destruction, was given to the Rasht Municipality in 2001. The reconstruction of the current house started in 2002.

The two-storey house sprawls on 300 square meters. Each storey has four rooms, one veranda and two staircases.

The ground floor is an exhibition of books recounting the history of Guilan and the Jungle Movement. The first floor is where Mirza Kouchak Khan’s family used to live.

Photos of Mirza Kouchak Khan as well as documents about the Jungle Movement’s struggles are pasted over walls.

 

Lahijan Pond

 

In the eastern section of the city of Lahijan and down a green summit covered with box trees is located a large pond measuring 17 in area and four meters deep. The pond used to be a water reservoir for irrigating paddy fields. The pond was fed with water streaming from the mountain.

In the middle of the pond lies a beautiful island earlier known as Mian Poshteh. The island is connected to the southern part of the pond through a long cement bridge. The pond is nearly 2 kilometers long. The pool was built at the order of Shah Abbas Safavid. He had also erected a towering palace in the island. He stayed there when he visited Lahijan. Nothing has remained of the palace.

The pond attracts tourists.

 

Tomb of Sheikh Zahed Guilani

 

The tomb of Sheikh Zahed Guilani dates back to the late 9^th century AH. It is located in Sheikhanour village near Lahijan.

In the tomb, is laid to rest Sheikh Tajoddin Ibrahim, better known as Sheikh Zahed Guilani. He was one of the great sufis and one of mentors of Sheikh Safioddin Ardebili.

The tomb, which has a turquoise dome, is surrounded by paddy and tea fields and woods.

The ceiling of the mausoleum has gypsum decorations adorned with colorful tiles. There is no inscription showing the builder of the mausoleum. However, some attribute it to Mehdi Bashakjani.

The only inscription available in this edifice is engraved on the ancient box placed on the tomb. It is dated 832 AH, most likely the year the tomb was built. The architecture of the edifice could belong to the 8^th or 9^th century AH.

The mausoleum was registered as national heritage in 1968.

 

Anzali Lagoon

 

Anzali Lagoon is a coastal lagoon, in the Caspian Sea near Bandar-e Anzali, in the northern Iranian province of Guilan. The lagoon divides Bandar-e Anzali into two parts, and is home to both the Selke Wildlife Refuge and the Siahkesheem Marsh.

Although the lagoon suffers pollution, it is known as a good place for bird watching.

The lagoon's water ranges from fresh near the tributary streams to brackish near the mouth into the harbor and the sea. Studies indicate that in the 19^th and early 20^th centuries that the lagoon had a much higher salinity.

The lagoon has decreased in size since the 1930s to less than a quarter of its former extent.

However, in the last ten years (As of 2007) water salinity has increased both by the rise of the level of the Caspian Sea which has caused greater interchange of waters, and due to greater salt transport in incoming "fresh" water due to increased upstream irrigation.

 

Guilan; Rain Never Stops Falling

 

Guilan is a province in northern Iran. It sprawls on more than 14,000 square kilometers. Mount Alborz protects Guilan like a wall in the west and in the south. That is why this Northern Province has moderate climatic conditions with quite high humidity.

Guilan is considered as the most humid region in Iran with its annual precipitation at more than 2,000 millimeters.

Besides wonderful woods, more than 40 rivers flow across the province. The most important one is Sefidroud (literally meaning white river).

Guilan has also productive farmlands. The main products supplied by this province are rice, tea, olive, citrus, silk, dairy, meat, chicken, fish, caviar, jam and delicious cookies.

Guilan is one of the most beautiful regions in Iran. Every year, it hosts a large number of Iranian and foreign visitors. Beautiful jungles, evergreen countryside, Caspian Sea coasts and Anzali lagoon are among outstanding features of this province. Tens of historic, religious and recreational centers are flooded by visitors in all season across the year.

In its previous issues, Iran Petroleum reviewed Guilan province and its tourist attractions. But the province has so many attractions. In this issue, we intend to review tourist attractions in the cities of Rasht, Lahijan and Anzali in this province.

 

Rural Heritage Museum

 

Rural museums are a subset of open air museum reflecting the rural civilization and culture in a natural environment. These museums form through transferring the real scale buildings in a location similar to the primary place.

Guilan Rural Heritage Museum is under construction in a 263 ha land, in Saravan forest park located on km 18 of Rasht-Tehran road. The idea of establishing the museum was formed after June 1991 Guilan earthquake in which the destruction of the traditional buildings was intensified. The primary phase of the project was completed in 2002.

The architecture section of the Museum is a collection of some 150 year old buildings. The objective of the Museum is not just transferring the rural buildings but is preservation of local culture, construction techniques and unwritten knowledge living in villages of Guilan.

This collection, besides the rural architecture of different regions of the province, other cultural elements of life and work tools, food, costumes, etc would be exhibited.

 

House of Mirza Kouchak Khan

 

Miza Kouchak Khan Jangali, whose real name was Younes Ostad Saraei, was a military commander during the Constitutional Revolution. He also led what was known as the Jungle Movement. Mirza Kouchak Khan rose up against violation of Iran’s territorial integrity and independence by foreign governments following the Constitutional Revolution.

Mirza Kouchak Khan fought the ruling regime from 1909 to his death in 1921. The house of this combatant has become a visiting place in the city of Rasht.

The house, which was facing destruction, was given to the Rasht Municipality in 2001. The reconstruction of the current house started in 2002.

The two-storey house sprawls on 300 square meters. Each storey has four rooms, one veranda and two staircases.

The ground floor is an exhibition of books recounting the history of Guilan and the Jungle Movement. The first floor is where Mirza Kouchak Khan’s family used to live.

Photos of Mirza Kouchak Khan as well as documents about the Jungle Movement’s struggles are pasted over walls.

 

Lahijan Pond

 

In the eastern section of the city of Lahijan and down a green summit covered with box trees is located a large pond measuring 17 in area and four meters deep. The pond used to be a water reservoir for irrigating paddy fields. The pond was fed with water streaming from the mountain.

In the middle of the pond lies a beautiful island earlier known as Mian Poshteh. The island is connected to the southern part of the pond through a long cement bridge. The pond is nearly 2 kilometers long. The pool was built at the order of Shah Abbas Safavid. He had also erected a towering palace in the island. He stayed there when he visited Lahijan. Nothing has remained of the palace.

The pond attracts tourists.

 

Tomb of Sheikh Zahed Guilani

 

The tomb of Sheikh Zahed Guilani dates back to the late 9^th century AH. It is located in Sheikhanour village near Lahijan.

In the tomb, is laid to rest Sheikh Tajoddin Ibrahim, better known as Sheikh Zahed Guilani. He was one of the great sufis and one of mentors of Sheikh Safioddin Ardebili.

The tomb, which has a turquoise dome, is surrounded by paddy and tea fields and woods.

The ceiling of the mausoleum has gypsum decorations adorned with colorful tiles. There is no inscription showing the builder of the mausoleum. However, some attribute it to Mehdi Bashakjani.

The only inscription available in this edifice is engraved on the ancient box placed on the tomb. It is dated 832 AH, most likely the year the tomb was built. The architecture of the edifice could belong to the 8^th or 9^th century AH.

The mausoleum was registered as national heritage in 1968.

 

Anzali Lagoon

 

Anzali Lagoon is a coastal lagoon, in the Caspian Sea near Bandar-e Anzali, in the northern Iranian province of Guilan. The lagoon divides Bandar-e Anzali into two parts, and is home to both the Selke Wildlife Refuge and the Siahkesheem Marsh.

Although the lagoon suffers pollution, it is known as a good place for bird watching.

The lagoon's water ranges from fresh near the tributary streams to brackish near the mouth into the harbor and the sea. Studies indicate that in the 19^th and early 20^th centuries that the lagoon had a much higher salinity.

The lagoon has decreased in size since the 1930s to less than a quarter of its former extent.

However, in the last ten years (As of 2007) water salinity has increased both by the rise of the level of the Caspian Sea which has caused greater interchange of waters, and due to greater salt transport in incoming "fresh" water due to increased upstream irrigation.

 

2bl Fuel Oil Product Distribution

 

Due to its natural, historic and tourist attractions, Guilan province welcomes a large number of Iranian and foreign tourists and passengers every year. The proximity of Guilan to border provinces explains why so many trucks and buses cross this province. Therefore, fuel supply in this province is an important issue. The main activity of people in Guilan province is agriculture which also requires fuel.

The Guilan branch of National Iranian Oil Products Distribution Company (NIOPDC) was established in 1953 with the objective of distributing oil products across this province. The company’s office is located in Rasht, the provincial capital city of Guilan.

This company is currently receiving different oil products (kerosene, gasoil and gasoline) through Rey-Qazvin-Rasht pipeline to be stored in Rasht. It also receives jet fuel, fuel oil, premium gasoline and solvents through tankers from Rey oil depot.

Fardin Charaji, director of the Guilan branch of NIOPDC, said the oil products received every year totals two billion liters. The products are distributed through nine districts (Central, Lahijan, Anzali, Roudbar, Roudsar, Astara, Fouman, Talesh and Some’eh Sara) at NIOPDC-designated posts, gas and CNG stations.

“Given the strategic position of Rasht oil depot, fuel supply to Guilan’s neighboring cities including Ardebil, Khalkhal, Chalous, Ramsar, Tonekabon and Zanjan are guaranteed from here,” he said.

Charaji said gasoline consumption in the Guilan province stood at 1.3 mcm in the last calendar year to March. He added that kerosene consumption was 260,000 mcm, gasoline consumption stood at 522,759 mcm, gasoil consumption at power plants at 482,489 mcm and fuel oil at 215,000 mcm.

The official also said that consumption of petroleum products reached 79.203 liters during the first two weeks of Iran’s New Year, the period when people travel to north.

Charaji also said that 157,600 liters of gasoline, 23,378 liters of kerosene, 103,000 liters of gasoil and 1,522 liters of fuel oil were consumed during the first two months of the new Iranian year. Iran’s calendar year starts on March 21.