Wakeup Call for Oil Market

 

A change in approach by the administration of President Hassan Rouhani in global interactions is not limited to the nuclear issue. In parallel with nuclear talks with world powers, Iran’s energy diplomacy has also gained momentum.

A combination of nuclear and energy diplomacies would bring positive achievements for Iran and overshadow some economic transactions across the globe.

In light of these developments, Iran is looking for two objectives in the world oil market. First is to regain its share in the oil market and second is to stop the oil price fall.

Iran has made it clear that it would by no means ignore its share of the market and it will make every efforts to return to the market. Iran has called on the countries that replaced it during years of sanctions to cut their production and let it in.

Given the fact that Iran’s strategic policy has been to avoid oil price fall, some experts believe that insistence on regaining oil market share may cause fluctuations in the oil supply and demand and may further push prices down.

What Iran should do then? Iran does not want anything beyond its fights and the countries that have taken Iran’s share during this time should decide either to cut their production to let Iran into the market and preserve the market balance or to wait for a price fall following Iran’s strong return.

Iran is currently exporting 1 mb/d of oil. According to petroleum minister, Bijan Zangeneh, Iran’s output would grow 500,000 b/d shortly after the removal of sanctions. Six months after, Iran would have added 500,000 b/d more to its production.

If the countries that have replaced Iran in the market refuse to cut their production, Iran’s oil return may cause a price slump and the same countries would suffer losses. When Iran’s oil exports double, the country would not be harmed even if the prices are cut by half. But the countries that have increased their exports when Iran was under sanctions will face losses. Experts say these countries would not be able to tolerate these losses and they will have to cut their production.

OPEC is now facing a moment of truth. Preservation of market share is currently a strategic objective for this organization, but like any other body, there are always differences between the interests of an organization as a legal person and its members as natural persons. The fact is that all 12 OPEC member states should make efforts for the market equilibrium because a balanced price for oil would be a big achievement for all member states amid economic stability in the market.

No Nod Needed for Iran Oil Return

 

Oil market, which once experienced $100 a barrel price, is now dealing with $60. But there is still fear that the prices may fall to $40-45, which the market saw in January. In those days, 12 OPEC member states were expected to make a decision to revive the market in their 166^th ministerial meeting. However, OPEC decided to keep its production ceiling unchanged.

Saudi Arabia favored rollover more than other member states. Although some members expressed concern about further price fall and US shale oil strength, Riyadh refused to step back from its position.

Conditions have not changed much. Oil prices has somewhat recovered. The 167^th ministerial meeting was held while the 166^th meeting was still under debate by OPEC ministers.

Saudi Arabia, a tough opponent of OPEC production ceiling cut, does not seem to have changed its policy. After years of sanctions and reduced production, Iran – a traditional rival of Saudi Arabia – hopes to be able to raise its production and win a bigger share of the market in the near future.

To that effect, Iran’s petroleum minister, Bijan Zangeneh, called on OPEC member states to let Iran in.

 

Iran Writes to OPEC

 

Upon his arrival in Vienna to attend the 167^th ministerial meeting of OPEC, Zangeneh revealed that Iran has written a letter to its fellow OPEC members about its future status.

In the letter, Iran said it would raise its production to the pre-sanctions level as soon as the sanctions are lifted.

“In this letter, we have asked OPEC to take this issue into consideration in its decisions. In other words, if OPEC members want the prices to remain at the same level, we expect [them] to open the way for the entry of Iran’s oil,” said Zangeneh.

The Iranian minister said the country would not wait for anyone’s permission to raise its output.

Later in Vienna, Zangeneh told a meeting that Iran would immediately raise its exports by 500,000 b/d after sanctions are lifted.

“OPEC members should open more place for Iran’s oil barrels,” he said.

Zangeneh said Iran’s oil return to the market would be gradual, but would not take long.

“One month after the annulment of sanctions, we will supply 500,000 b/d more oil, which would reach 1 mb/d after 6 to 7 months,” he said.

“I’m sure that OPEC member states would accompany us and they would take into account Iran’s return because further oil supply by Iran would not leave any negative impact on the market,” said Zangeneh.

 

Saudi Arabia and Iran Return

 

Saudi oil minister, Ali al-Naimi, had travelled to Vienna to say that his country is fully happy with the market conditions. He made clear that Saudi Arabia is happy with the current supply and demand in the market and is not worried about the return of Iranian and Libyan oil to the market.

“You can see that I am not stressed, that I am happy,” he told reporters in the Austrian capital where OPEC is headquartered.

“When OPEC decided not to cut output in November, Saudi Arabia outlined its strategy to moderate runaway growth from high-cost non-OPEC suppliers, as well as stimulate global oil demand. Saudi Arabia seems to be on track to achieve these goals,” Barclays analysts said.

 

Russia and Output Hike

 

All OPEC challenges are not limited to production ceiling. Russia, a leading non-OPEC oil producer, has increased its production by 200,000 b/d in the past one year. According to the latest data released by Russian Energy Federation, the country’s production has exceeded 1.71 mb/d.

The increase in Russia’s oil output came after Russian Minister of Energy Alexander Novak called on OPEC members to agree on cutting production ceiling.

Novak’s remarks draw anger from OPEC Arab member states. Qatari energy minister and Kuwaiti oil minister came out in support of Saudi Arabia’s position and insisted on OPEC ceiling rollover in the 167^th ministerial meeting.

Iran, Iraq, Algeria, Ecuador and Venezuela openly called for a 1.5 mb/d production cut. But Saudi Arabia, United Arab Emirates, Kuwait and Qatar wanted the output ceiling to remain unchanged.

There were worries that insistence on the maintaining the current production ceiling would cause a fresh fall in oil prices in the world market.

Saudi Arabia, Qatar, UAE and Kuwait make up 17% of OPEC’s total production and these countries had made clear their position ahead of the 167^th ministerial meeting in Vienna.

A Reuters monthly survey showed that OPEC pumped a two and a half year high of 31.22 mb/d in May.

The boost put OPEC production further above its target of 30 mb/d, underlining the focus of top exporter Saudi Arabia and other key members on market share.

“OPEC continues to produce well above target, and also well above demand for its oil,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

OPEC Secretary-General Abdalla Salem El-Badri, speaking to reporters after the meeting, said he saw the oil market as “very positive”.

“The economy is growing, demand is growing. We see non-OPEC supply is not growing as in the past,‎" El-Badri said.

The success of Saudi Arabia and its allies in imposing their view on OPEC to roll over its output ceiling is no important victory for them. Many analysts believe that if oil price falls due to this decision, Saudi Arabia will be harmed more than Iran.

 

Loss for Saudi Arabia

 

Fereidoun Barkeshli, Iran’s former national representative to OPEC, said oil market conditions are unlikely to recover before the end of 2016. He noted that further oil price fall would inflict maximum loss on Saudi Arabia and minimum loss on Iran.

Noting that the oil price fall over the past seven to eight months has caused a loss of nearly $1 trillion on OPEC and other oil producers, he said: “The most loss has been inflicted on Saudi Arabia, the largest producer, and the least on Iran whose exports are limited.”

 

OPEC Concluding Statement

 

Following its 167^th ministerial meeting on June 5, OPEC released a statement. Excerpts from the statement are as follows:

• Agreeing on the importance of maintaining dialogue with other oil-producing countries, the Conference affirmed the technical meeting of oil and economic experts from both OPEC and Non-OPEC countries, held on 12th May 2015, in Vienna. The meeting had discussed, inter alia, oil market fundamentals and the global economy, with participants concluding that market stability remains a common objective for all producers, attainable through cooperative effort. Participants agreed to convene again before the end of the year.
• The Conference reviewed the oil market outlook, as presented by the Secretary General, in particular the demand and supply projections, and the outlook for the second half of 2015. The Conference noted that the global economic recovery had stabilized, albeit with growth at moderate levels. In the current year, GDP growth is projected at 3.3%, with this expected to be at a slightly higher level of 3.5% for 2016.
• Recording its continued concern over market volatility and the challenges faced by the global oil industry as a whole, the Conference observed, further, that the sharp decline in oil prices witnessed at the end of last year and the start of this year – caused by oversupply and speculation – had now abated, with prices moving slightly higher in recent months.
• In view of the foregoing, the Conference resolved to maintain the 30 mb/d ceiling and urged Member Countries to adhere to it.  Member Countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers.

                         

Oil Giants Ready to Return

 

OPEC ministerial meeting provided a chance for chief executives of oil giants to hold talks with Iran’s Zangeneh and discuss their possible return to Iran after the removal of sanctions.

The start of cooperation between Iran and oil giants necessitates the settlement of disputes about delayed payments and other issues.

After meeting Zangeneh, Lukoil’s CEO Vagit Alekperov told the Russian News Agency (TASS) in Vienna that Lukoil is interested in returning to Iran after sanctions are lifted.

He said: “We are currently exploring opportunities for entering Iran after sanctions are lifted. Lukoil discovered the Anaran field in Iran in its time. Certainly, we are interested in returning to that field.”

Along with Norway’s Statoil, Lukoil was prospecting for oil in Iran’s Anaran block before it pulled out of the project due to the imposition of sanctions on Iran’s energy sector by the United States and the European Union. Lukoil reportedly suffered a $63 million loss after the withdrawal.

"We are highly optimistic and look forward to proactive working in Iran after removal of sanctions," Lukoil’s CEO said.

The French energy giant, Total, also said its return to Iran is achievable if sanctions are lifted and an agreement on the nuclear program is reached.

Total CEO Patrick Pouyanne said:  “We have a long history of working in Iran; we have developed some projects together,”

“We have history with Iran. I know that Total will be favorably received. But first, let's see what will happen on the political scene,” he added.

For his part, Ben van Beurden, chief executive officer of The Hague-based Shell, said: “Iran is a wonderful country with a fantastic resource base.”

“As soon as there is legitimate opportunity, we will be looking at Iran,” he added.

BP CEO Bob Dudley said the London-based company would be “very much” interested in investing in Iran when sanctions go. Still, with talks between the US and Iran over their nuclear dispute ongoing, any talk of deals remains premature, he said.

No Nod Needed for Iran Oil Return

 

Oil market, which once experienced $100 a barrel price, is now dealing with $60. But there is still fear that the prices may fall to $40-45, which the market saw in January. In those days, 12 OPEC member states were expected to make a decision to revive the market in their 166^th ministerial meeting. However, OPEC decided to keep its production ceiling unchanged.

Saudi Arabia favored rollover more than other member states. Although some members expressed concern about further price fall and US shale oil strength, Riyadh refused to step back from its position.

Conditions have not changed much. Oil prices has somewhat recovered. The 167^th ministerial meeting was held while the 166^th meeting was still under debate by OPEC ministers.

Saudi Arabia, a tough opponent of OPEC production ceiling cut, does not seem to have changed its policy. After years of sanctions and reduced production, Iran – a traditional rival of Saudi Arabia – hopes to be able to raise its production and win a bigger share of the market in the near future.

To that effect, Iran’s petroleum minister, Bijan Zangeneh, called on OPEC member states to let Iran in.

 

Iran Writes to OPEC

 

Upon his arrival in Vienna to attend the 167^th ministerial meeting of OPEC, Zangeneh revealed that Iran has written a letter to its fellow OPEC members about its future status.

In the letter, Iran said it would raise its production to the pre-sanctions level as soon as the sanctions are lifted.

“In this letter, we have asked OPEC to take this issue into consideration in its decisions. In other words, if OPEC members want the prices to remain at the same level, we expect [them] to open the way for the entry of Iran’s oil,” said Zangeneh.

The Iranian minister said the country would not wait for anyone’s permission to raise its output.

Later in Vienna, Zangeneh told a meeting that Iran would immediately raise its exports by 500,000 b/d after sanctions are lifted.

“OPEC members should open more place for Iran’s oil barrels,” he said.

Zangeneh said Iran’s oil return to the market would be gradual, but would not take long.

“One month after the annulment of sanctions, we will supply 500,000 b/d more oil, which would reach 1 mb/d after 6 to 7 months,” he said.

“I’m sure that OPEC member states would accompany us and they would take into account Iran’s return because further oil supply by Iran would not leave any negative impact on the market,” said Zangeneh.

 

Saudi Arabia and Iran Return

 

Saudi oil minister, Ali al-Naimi, had travelled to Vienna to say that his country is fully happy with the market conditions. He made clear that Saudi Arabia is happy with the current supply and demand in the market and is not worried about the return of Iranian and Libyan oil to the market.

“You can see that I am not stressed, that I am happy,” he told reporters in the Austrian capital where OPEC is headquartered.

“When OPEC decided not to cut output in November, Saudi Arabia outlined its strategy to moderate runaway growth from high-cost non-OPEC suppliers, as well as stimulate global oil demand. Saudi Arabia seems to be on track to achieve these goals,” Barclays analysts said.

 

Russia and Output Hike

 

All OPEC challenges are not limited to production ceiling. Russia, a leading non-OPEC oil producer, has increased its production by 200,000 b/d in the past one year. According to the latest data released by Russian Energy Federation, the country’s production has exceeded 1.71 mb/d.

The increase in Russia’s oil output came after Russian Minister of Energy Alexander Novak called on OPEC members to agree on cutting production ceiling.

Novak’s remarks draw anger from OPEC Arab member states. Qatari energy minister and Kuwaiti oil minister came out in support of Saudi Arabia’s position and insisted on OPEC ceiling rollover in the 167^th ministerial meeting.

Iran, Iraq, Algeria, Ecuador and Venezuela openly called for a 1.5 mb/d production cut. But Saudi Arabia, United Arab Emirates, Kuwait and Qatar wanted the output ceiling to remain unchanged.

There were worries that insistence on the maintaining the current production ceiling would cause a fresh fall in oil prices in the world market.

Saudi Arabia, Qatar, UAE and Kuwait make up 17% of OPEC’s total production and these countries had made clear their position ahead of the 167^th ministerial meeting in Vienna.

A Reuters monthly survey showed that OPEC pumped a two and a half year high of 31.22 mb/d in May.

The boost put OPEC production further above its target of 30 mb/d, underlining the focus of top exporter Saudi Arabia and other key members on market share.

“OPEC continues to produce well above target, and also well above demand for its oil,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.

OPEC Secretary-General Abdalla Salem El-Badri, speaking to reporters after the meeting, said he saw the oil market as “very positive”.

“The economy is growing, demand is growing. We see non-OPEC supply is not growing as in the past,‎" El-Badri said.

The success of Saudi Arabia and its allies in imposing their view on OPEC to roll over its output ceiling is no important victory for them. Many analysts believe that if oil price falls due to this decision, Saudi Arabia will be harmed more than Iran.

 

Loss for Saudi Arabia

 

Fereidoun Barkeshli, Iran’s former national representative to OPEC, said oil market conditions are unlikely to recover before the end of 2016. He noted that further oil price fall would inflict maximum loss on Saudi Arabia and minimum loss on Iran.

Noting that the oil price fall over the past seven to eight months has caused a loss of nearly $1 trillion on OPEC and other oil producers, he said: “The most loss has been inflicted on Saudi Arabia, the largest producer, and the least on Iran whose exports are limited.”

 

OPEC Concluding Statement

 

Following its 167^th ministerial meeting on June 5, OPEC released a statement. Excerpts from the statement are as follows:

• Agreeing on the importance of maintaining dialogue with other oil-producing countries, the Conference affirmed the technical meeting of oil and economic experts from both OPEC and Non-OPEC countries, held on 12th May 2015, in Vienna. The meeting had discussed, inter alia, oil market fundamentals and the global economy, with participants concluding that market stability remains a common objective for all producers, attainable through cooperative effort. Participants agreed to convene again before the end of the year.
• The Conference reviewed the oil market outlook, as presented by the Secretary General, in particular the demand and supply projections, and the outlook for the second half of 2015. The Conference noted that the global economic recovery had stabilized, albeit with growth at moderate levels. In the current year, GDP growth is projected at 3.3%, with this expected to be at a slightly higher level of 3.5% for 2016.
• Recording its continued concern over market volatility and the challenges faced by the global oil industry as a whole, the Conference observed, further, that the sharp decline in oil prices witnessed at the end of last year and the start of this year – caused by oversupply and speculation – had now abated, with prices moving slightly higher in recent months.
• In view of the foregoing, the Conference resolved to maintain the 30 mb/d ceiling and urged Member Countries to adhere to it.  Member Countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers.

                         

Oil Giants Ready to Return

 

OPEC ministerial meeting provided a chance for chief executives of oil giants to hold talks with Iran’s Zangeneh and discuss their possible return to Iran after the removal of sanctions.

The start of cooperation between Iran and oil giants necessitates the settlement of disputes about delayed payments and other issues.

After meeting Zangeneh, Lukoil’s CEO Vagit Alekperov told the Russian News Agency (TASS) in Vienna that Lukoil is interested in returning to Iran after sanctions are lifted.

He said: “We are currently exploring opportunities for entering Iran after sanctions are lifted. Lukoil discovered the Anaran field in Iran in its time. Certainly, we are interested in returning to that field.”

Along with Norway’s Statoil, Lukoil was prospecting for oil in Iran’s Anaran block before it pulled out of the project due to the imposition of sanctions on Iran’s energy sector by the United States and the European Union. Lukoil reportedly suffered a $63 million loss after the withdrawal.

"We are highly optimistic and look forward to proactive working in Iran after removal of sanctions," Lukoil’s CEO said.

The French energy giant, Total, also said its return to Iran is achievable if sanctions are lifted and an agreement on the nuclear program is reached.

Total CEO Patrick Pouyanne said:  “We have a long history of working in Iran; we have developed some projects together,”

“We have history with Iran. I know that Total will be favorably received. But first, let's see what will happen on the political scene,” he added.

For his part, Ben van Beurden, chief executive officer of The Hague-based Shell, said: “Iran is a wonderful country with a fantastic resource base.”

“As soon as there is legitimate opportunity, we will be looking at Iran,” he added.

BP CEO Bob Dudley said the London-based company would be “very much” interested in investing in Iran when sanctions go. Still, with talks between the US and Iran over their nuclear dispute ongoing, any talk of deals remains premature, he said.

Siraf to End Crude Sales

 

Last February, Iran’s petroleum minister Bijan Zangeneh announced that the ground would be broken for the construction of eight gas condensate refineries in the coming months. That promise has now come true. The construction of the mini-refineries, known under Siraf project, has started.

On June 8, the ancient Siraf Port in the southern province of Bushehr, saw start of ground-breaking operations for the Siraf refining project which is aimed at putting an end to the crude sale of gas condensate, generation of value-added, job creation and guaranteeing maximum output from the supergiant offshore South Pars gas field which is being only operated by Iran and Qatar.

This article reviews the inauguration of one of the most important oil projects in Iran in the past months.

The ancient port of Siraf is one of the oldest in Bushehr province. It has a specific architecture. It used to house more than 300,000 people following different religions and cults.

Siraf used to be one of the most prosperous regions in Iran. It maintained massive business with Rome and Greece in Europe, Madagascar in Africa and China in Asia during the Sassanid and Islamic periods.

Potteries adorned with motifs, fabrics and jewelries, gypsum architecture, rooms decorated with artworks and two-storey or three-storey buildings are reminiscent of the ancient times. A deadly earthquake, which was followed by seven days of aftershocks, flattened the structures there in 367 AH.

Today, this port is set to restore its reputation by contributing to an increase in Iran’s refining capacity.

 

Siraf Refining Project

 

Siraf refining facilities are to be constructed on 300 ha of land in Pars II zone (Kangan) between development phases 13 and 19 of South Pars gas field in southern Iran. The total capacity of the refineries in this complex amounts to 480,000 b/d of gas condensate. In the first phase, Siraf plant is designed to produce 24,800 b/d of liquefied gas, 128,000 b/d of light naphtha, 147,600 b/d of heavy naphtha, 29,600 b/d of jet fuel and 149,600 b/d of gasoil.

The infrastructure in this project is to be completed in eight months. After that, construction of eight refineries, each with a capacity of 60,000 b/d, will start.

Each of eight companies working for Siraf project is committed to providing $300 million in equity, but they are not obliged to pay a lump sum. As the project makes progress, they would have to pay. This refinery would supply 70% of the feedstock needed for running petrochemical plants.

Namvaran, Gostaresh Energy Pasargad, Sazeh Nargan Falkon, Tapiko, Tanavob, Sata, Petro Farayand and Energy Amin Kasra are the companies involved in the construction of the eight gas condensate refineries.

The entire project is being financed and operated by the private sector. It is the first time Article 44 of the Construction, which stipulates privatization, is being implemented.

 

Start of Construction

 

Iran’s first vice president, Es’haq Jahangiri, told the inauguration of Siraf refining facilities construction that this project is one of macro-economic projects under way by Iran’s Ministry of Petroleum.

“One of the symbols of these economic policies is participation of people, which has been fully observed in this project. After the launch of his complex, one-third of its shares would be traded over-the-counter. The private sector is willing to enter this arena,” he said.

 

Selling Siraf Products

 

Addressing the ceremony, Zangeneh said: “We will continue the development of oil refineries in Jask [Port]. This is the first time that there has been subscription for the allocation of feedstock to refineries. The most qualified have been selected in terms of management and finance. Efforts will be made for the allocation of feedstock to petrochemicals through subscription.”

The minister said that the construction of Siraf refineries would not last over two years, adding that the operation will be accelerated if Iran’s economic conditions improve.

Noting that Iran’s policy is to stop crude sale of gas condensate, Zangeneh said: “By constructing these refineries, we would no longer export gas condensates, whose production would reach 1 mb/d after the completion of South Pars phases.”

“We will no longer have any problem for selling the petroleum products of these refineries. Even if these projects are operated by banks they would still be economical because the rate of return on investment would be 26%,” said the minister.

 

OTC Trading

 

Director of incorporated planning at National Iranian Oil Refining and Distribution Company (NIORDC), Shahaboddin Metaji, said 35% of the shares of Siraf refining project would be traded over the counter.

“Siraf refining project showed that people’s meager capitals could be used for the development of the petroleum industry,” he said.

Metaji said Siraf is the best option for avoiding the waste of gas condensates whose production is not controlled.

He said financial contributors to Siraf project are committed to trading at least 35% of the shares of the project off-exchange, for one year after its launch.

 

Largest Refining Project

 

Ali-Reza Sadeq-Abadi, managing director of Siraf Refining Infrastructure Company, said in the inauguration ceremony that investment in Siraf gas condensate refineries will return in nearly three years.

He said the 480,000-b/d gas condensate refineries are being financed by the private sector.

“There is a massive demand market for liquefied gas; therefore, marketing of the products supplied by this gas field would be easy,” he said.

Sadeq-Abadi said the Asian market is producing around 2.5 mb/d of gas condensate, 1 mb/d of which is exported and the rest is transformed into different products.

He said the project was divided into eight refineries, each costing $300 billion, in order to facilitate the finance.

 

Public Participation

 

The construction of eight Siraf gas refineries is a manifestation of participation of the private sector in Iran’s petroleum industry. There are major concerns about the project with finance being the most important one.

Metaji said National Development Fund of Iran (NDFI), Iran’s rainy day kitty awash with petrodollars, is expected to provide 70% of costs needed for this project.

He noted that Iran’s Ministry of Petroleum bears no responsibility with regard to the finance of these refineries.

7-Point Plan for Iran-Turkmenistan Trade

 

More than a century has passed since oil was discovered in Iran, but Iran’s petroleum industry depended on foreign companies for its basic needs until recently. Few people thought that 37 years after the victory of the Islamic Revolution, Iran’s petroleum industry would become self-sufficient in many sectors particularly manufacturing of equipment and commodities while looking for chances in regional and global markets for exporting technical and engineering services.

One of policies pursued by Iran’s Ministry of Petroleum is providing support for export of commodities, as well as technical and engineering services. The ministry has made planning to that effect.

In order to get familiar with the details of these plans, Iran Petroleum has conducted an interview with Mohammad-Taqi Amanpour, who advises Minister of Petroleum Bijan Zangeneh on export of commodities and technical and engineering services.

 

Q: Would you please tell us about the policies of Iran’s Ministry of Petroleum with regards to export of commodities and technical and engineering services?

A: At present, export of commodities and engineering services is of high significance to Iran’s petroleum ministry. This ministry insists on benefiting from national capabilities in regional markets. That would be possible only by planning through identification of target markets. Iran’s petroleum ministry intends to conduct studies to identify potentialities for investment in oil and gas projects in the region and the world.

 

Q: You have apparently started with Turkmenistan’s oil and gas market. Why?

A: That is right, because Turkmenistan is rich in natural gas and oil; therefore, we have chosen it as our first target market. Iran is buying $2 billion to $3 billion of gas from this country. As two friendly and brotherly countries, Iran and Turkmenistan favor expansion of bilateral relations and it is possible for Iran to purchase up to $5 billion of gas from Turkmenistan every year. During a recent visit to this country by Iran’s president [Hassan Rouhani], Iran and Turkmenistan agreed to enhance the level of their cooperation. In addition to buying gas, Iran would also provide engineering services and commodities to Turkmenistan and will contribute to the implementation of projects in this country.

 

Q: What are Iranian petroleum ministry’s plans for exporting technical and engineering services?

A: Iran’s petroleum ministry has drawn up a comprehensive 7-point plan to facilitate export of commodities and engineering services to Turkmenistan. One of these points is that Iranian companies would be introduced to bid for projects in this country. Currently, a $30 billion package of innovative commodities and projects including refineries, power plants and petrochemical plants has been submitted to Turkmenistan. Iran is able to construct all of them. Iran’s petroleum ministry has expressed its support for Iranian companies to get involved in these projects in Turkmenistan and 70 Iranian companies have been introduced. Some Iranian companies have already won bids and are in the process of signing lucrative deals. The second point is about supporting businessmen and intermediaries who are being paid for exporting commodities and handling trading activities but they cannot transfer in this money. This group of investors is supported through barter trade. The third point is about supplying commodities to Turkmenistan through a third party. Based on this, an Iranian company receives these commodities from a third country and in case it commits to exporting Iranian products instead, it could benefit from the support of petroleum ministry.

Turkmenistan has other partners than Iran; therefore, the fourth point would require Iran, Turkmenistan and a third country to reach understanding. Based on this understanding, an Iranian company will finance a project in a third country and then Turkmenistan will charge the third country the equivalent of this investment while Iran would pay for costs. But Iran would not pay in cash to a third country and an Iranian company would be dispatched to this country to handle the process of exports. The fifth plan is that instead of exporting some items to Turkmenistan, we would help this country manufacture its required items and a domestic company would help establish relevant factories in that country.

The sixth plan is about making preparations for Turkmenistan’s investment in some industries in Iran. For example, we may ask this country to invest in an Iranian tire manufacturing company and boost its production capacity in exchange for tires or building a liquefied natural gas (LNG) plant.

The seventh point, known as joint exports, requires joint projects to be defined between Iran and Turkmenistan in the oil and gas, as well as electricity generation sectors, and oil and gas and electricity would be exported from these two countries to across the globe.

These seven points have been designed and they are being followed up on. They can turn bilateral cooperation to multilateral cooperation. In line with these points, Iran has proposed projects to Turkmenistan and relevant talks are under way now. These plans could be implemented both during and after the sanctions. Other ministries could also benefit from these programs for exporting commodities to other countries.

 

Q: In addition to Turkmenistan, does Iran’s petroleum ministry envisage any other regional countries for presence in their oil and gas projects and export of technical and engineering service?

A: There are currently plans under way for presence in Iraq’s market. A large number of Iranian companies are also active in Iraq, but unfortunately due to the fall in oil price, Iraq has seen its financial resources decline. Moreover, due to lack of security in this country some Iranian companies are reluctant to be present in Iraq. However, the Iranian and Iraqi governments are much willing for cooperation, and Iran can help this friendly country in many oil and gas projects.

For a strong presence in world markets, we need to have a good knowledge of them and Iran’s petroleum ministry has no intention of entering foreign markets without having any knowledge of them. For this reason, some groups at universities and scientific centers have been assigned the task of identifying and reviewing global markets.

This ministry is also working a new mechanism for activity in oil, gas and petrochemical projects overseas and it intends to create a market for itself. The office of commodity and engineering services exports at petroleum ministry is not seeking to eliminate traditional methods of presence in foreign markets like contribution to oil and gas industrial projects in other countries. It only seeks innovation in a bid to create market for Iranian companies. Iran’s petroleum ministry is a leading body with regard to supporting commodities and engineering services and it welcomes cooperation with all reputed foreign companies.

 

Q: Having made necessary plans for the presence of Iranian companies in projects in other countries, which measures should be taken for the strong presence of these companies in oil projects?

A: As you know, after victory of Islamic Revolution in Iran, certain measures have been undertaken for transferring technology from abroad for manufacturing components and equipment in compliance with API standards and establishing consulting engineering companies. The ground is now paved for Iranian companies to attract financial resources from inside or outside the country and participate in petroleum industry projects. Therefore, domestic companies are expected to be able to define themselves projects besides contributing to these projects. Iranian companies should be equipped with state-of-the-art technology for presence in projects like construction of refineries and development of oil and gas fields. This important objective could be achieved through transfer of technology from abroad or development of technical knowhow. However, Iran’s private sector is not fully professional; therefore, holding companies should take shape to manufacture components and equipment and a technology company should assemble these components to develop the main product. Holding companies are needed to be set up so that employers would be happy with manufactured items and progress of projects. Formation of these holdings requires knowledge, self-belief, capital and influence, which are all emerging in Iran.

 

Q: What are the requirements for Iranian companies to be present in regional markets?

A: Private companies in Iran should follow technical and professional, scientific and specialized training courses in order to upgrade their knowledge. Financial engineering is another important category which covers a group of branches of science and brings credit to the companies. Management is also important for these companies. They need to know the market environment in order to manage the market effectively, win a good share of the market and develop a new market. Domestic companies should be able to develop knowhow in order to be able to manage their money supply and human resources and benefit from these potentialities in regional and global markets.

 

Q: Now let’s talk about domestic manufacturing. Have the imposition of sanctions against the petroleum industry and the refusal of foreign companies to sell equipment and components to Iran forced the country to focus on domestic manufacturing?

A: No. Domestic manufacturing did not stem merely from the imposition of sanctions. Many Iranian companies turned to manufacturing after the victory of Islamic revolution. Over the past 36 years, good measures have been taken for progress in domestic manufacturing. Until recently, Iran faced restrictions for importing thick slabs due to the sanctions. Once we dreamt of manufacturing thick slabs in the country. Now Ahvaz Oxin factory is producing these slabs and the manufacturing of these slabs is clearing the way for the manufacturing of pipelines in the country. Currently, many pipelines needed for the petroleum industry are supplied domestically.

 

Q: Which categories of pipelines can Iran manufacture for petroleum industry?

A: Iran is able to manufacture metallic pipelines, polyethylene and composite pipelines. Currently, Iran can manufacture more than four million tons of metal pipes which are largely used in the oil and gas industries. An Iranian company is currently manufacturing GRP pipelines and is among the leading companies in the world. This company has one plant in Iran and another one in Turkey. The quality of products of this company is increasing every day. Alloyed seamless pipes are not currently manufactured in Iran and three Iranian factories have volunteered to produce them. Projects have been defined to that effect.

 

Q: Where does Iran stand in terms of manufacturing industrial valves?

A: Today, many companies in the country are capable of manufacturing valves in compliance with API standards. Only globe valves may not be produced in the country. However, the necessary measures are under way for their manufacturing. Until several years ago, we were unable to manufacture some wellhead valves like Christmas tree, but now, several Iranian companies are producing these valves for up to 15,000 psi pressure. Domestic manufacturing of these components is a breakthrough for Iran’s petroleum industry.

 

Q: As you know, drilling rig is a key equipment of petroleum industry. What’s your assessment of the activities of Iranian companies for building rigs?

A: In the past, building rigs was unimaginable for us. But today, under the aegis of support by Iran’s petroleum ministry, University of Science and Technology and several private companies have made good progress in building rigs and its components. Some time ago, Iran’s Tieco and a Norwegian company jointly produced top drive. Another important piece of equipment in drilling rig is mud pump which is being currently manufactured by some Iranian companies. Also during a period of time, a domestic company was suggested to repair a number of pump trucks owned by National Iranian Drilling Company and this knowledge-based company announced its ability to manufacture pump trucks.

Therefore, Iran is able to build top drive, derrick, and mud pump and pump truck. Over the past five years, many measures have been undertaken for building the major components of onshore and offshore rigs.

In the section of jackets and oil platforms, Iran Marine Industrial Company and Iranian Offshore Engineering and Construction Company (IOEC) are among competent companies and Iran has reached self-sufficiency in this sector. Iran is able to build crane-mounted vessels.

 

Q: Where do we stand with regard to pump, turbine and electro-engine manufacturing?

A: Today, there are many Iranian companies capable of manufacturing pumps for oil and gas pipelines and refining processes. Except for some wellhead and downhole pumps, other pumps are manufactured domestically. Moreover, Ministry of Petroleum has made good investment in turbine manufacturing. Oil Turbo Compressor Company (OTC) is now able to build 25-megawatt turbines. Once it was not possible to repair turbines in the country and this equipment was sent abroad for reparation, but now many of these components of turbines like blade and rotor are manufactured in the country and the necessary measures are under way for other components. Regarding electroengine manufacturing, in addition to Jamco, other Iranian companies are also active in this arena. A private company is also able to manufacture electroengine below 4 megawatts.

 

Q: You highlighted good points, but given the extent of petroleum industry and its daily growing needs, there is still equipment towards which domestic manufacturers are needed to be directed. What do you think of that?

A: Many pieces of equipment and components needed in the petroleum industry are manufactured domestically and only 10 groups of commodities are not produced in the country. Ministry of Petroleum has listed this group of commodities and equipment including drilling bits, wellhead and downhole pumps, alloyed seamless pipes, turbines and anti-explosive electroengines. The petroleum industry will reach self-sufficiency in many sectors after manufacturing most of these pieces of equipment. Only these 10 groups of petroleum industry items are imported and we are not now able to build them, but necessary planning has been made for their manufacturing.

 

Q: Is Iran’s Ministry of Petroleum only seeking to meet domestic needs through domestic manufacturing or it is holding an eye on regional or world markets, too?

A: Ministry of Petroleum has always made it clear to domestic manufacturers that the objective behind the manufacturing of equipment and components should not be limited to supplying petroleum industry needs, but also these companies should prepare the necessary infrastructure for entry into regional and global markets. This objective is achievable because many pieces of equipment and components manufactured domestically can rival foreign prototypes in terms of price and quality. Regulations should be drawn up in the country for supporting domestic manufacturing companies. These supports may include procuring low-cost raw materials for manufacturing companies, providing them with necessary technology, offering insurance, banking and customs services, awards, formation of consortiums and avoiding unhealthy competition between manufacturing companies.

 

Q: What has been the policy of Iran’s new administration for exporting domestically manufactured parts and equipment?

A: The Supreme Council of Exports has been established in the country to support exporters. It is headed by the first vice-president. The minister of industry, mine and trade is the vice-chair of the council. In its first meeting in the current calendar year, the council authorized the establishment of an office for export of commodities and engineering services and the responsibility of exporting products and engineering services was assigned to deputy minister. This council is fully aware of the problems of exports and is determined to continue support for Iranian manufacturing companies.

7-Point Plan for Iran-Turkmenistan Trade

 

More than a century has passed since oil was discovered in Iran, but Iran’s petroleum industry depended on foreign companies for its basic needs until recently. Few people thought that 37 years after the victory of the Islamic Revolution, Iran’s petroleum industry would become self-sufficient in many sectors particularly manufacturing of equipment and commodities while looking for chances in regional and global markets for exporting technical and engineering services.

One of policies pursued by Iran’s Ministry of Petroleum is providing support for export of commodities, as well as technical and engineering services. The ministry has made planning to that effect.

In order to get familiar with the details of these plans, Iran Petroleum has conducted an interview with Mohammad-Taqi Amanpour, who advises Minister of Petroleum Bijan Zangeneh on export of commodities and technical and engineering services.

 

Q: Would you please tell us about the policies of Iran’s Ministry of Petroleum with regards to export of commodities and technical and engineering services?

A: At present, export of commodities and engineering services is of high significance to Iran’s petroleum ministry. This ministry insists on benefiting from national capabilities in regional markets. That would be possible only by planning through identification of target markets. Iran’s petroleum ministry intends to conduct studies to identify potentialities for investment in oil and gas projects in the region and the world.

 

Q: You have apparently started with Turkmenistan’s oil and gas market. Why?

A: That is right, because Turkmenistan is rich in natural gas and oil; therefore, we have chosen it as our first target market. Iran is buying $2 billion to $3 billion of gas from this country. As two friendly and brotherly countries, Iran and Turkmenistan favor expansion of bilateral relations and it is possible for Iran to purchase up to $5 billion of gas from Turkmenistan every year. During a recent visit to this country by Iran’s president [Hassan Rouhani], Iran and Turkmenistan agreed to enhance the level of their cooperation. In addition to buying gas, Iran would also provide engineering services and commodities to Turkmenistan and will contribute to the implementation of projects in this country.

 

Q: What are Iranian petroleum ministry’s plans for exporting technical and engineering services?

A: Iran’s petroleum ministry has drawn up a comprehensive 7-point plan to facilitate export of commodities and engineering services to Turkmenistan. One of these points is that Iranian companies would be introduced to bid for projects in this country. Currently, a $30 billion package of innovative commodities and projects including refineries, power plants and petrochemical plants has been submitted to Turkmenistan. Iran is able to construct all of them. Iran’s petroleum ministry has expressed its support for Iranian companies to get involved in these projects in Turkmenistan and 70 Iranian companies have been introduced. Some Iranian companies have already won bids and are in the process of signing lucrative deals. The second point is about supporting businessmen and intermediaries who are being paid for exporting commodities and handling trading activities but they cannot transfer in this money. This group of investors is supported through barter trade. The third point is about supplying commodities to Turkmenistan through a third party. Based on this, an Iranian company receives these commodities from a third country and in case it commits to exporting Iranian products instead, it could benefit from the support of petroleum ministry.

Turkmenistan has other partners than Iran; therefore, the fourth point would require Iran, Turkmenistan and a third country to reach understanding. Based on this understanding, an Iranian company will finance a project in a third country and then Turkmenistan will charge the third country the equivalent of this investment while Iran would pay for costs. But Iran would not pay in cash to a third country and an Iranian company would be dispatched to this country to handle the process of exports. The fifth plan is that instead of exporting some items to Turkmenistan, we would help this country manufacture its required items and a domestic company would help establish relevant factories in that country.

The sixth plan is about making preparations for Turkmenistan’s investment in some industries in Iran. For example, we may ask this country to invest in an Iranian tire manufacturing company and boost its production capacity in exchange for tires or building a liquefied natural gas (LNG) plant.

The seventh point, known as joint exports, requires joint projects to be defined between Iran and Turkmenistan in the oil and gas, as well as electricity generation sectors, and oil and gas and electricity would be exported from these two countries to across the globe.

These seven points have been designed and they are being followed up on. They can turn bilateral cooperation to multilateral cooperation. In line with these points, Iran has proposed projects to Turkmenistan and relevant talks are under way now. These plans could be implemented both during and after the sanctions. Other ministries could also benefit from these programs for exporting commodities to other countries.

 

Q: In addition to Turkmenistan, does Iran’s petroleum ministry envisage any other regional countries for presence in their oil and gas projects and export of technical and engineering service?

A: There are currently plans under way for presence in Iraq’s market. A large number of Iranian companies are also active in Iraq, but unfortunately due to the fall in oil price, Iraq has seen its financial resources decline. Moreover, due to lack of security in this country some Iranian companies are reluctant to be present in Iraq. However, the Iranian and Iraqi governments are much willing for cooperation, and Iran can help this friendly country in many oil and gas projects.

For a strong presence in world markets, we need to have a good knowledge of them and Iran’s petroleum ministry has no intention of entering foreign markets without having any knowledge of them. For this reason, some groups at universities and scientific centers have been assigned the task of identifying and reviewing global markets.

This ministry is also working a new mechanism for activity in oil, gas and petrochemical projects overseas and it intends to create a market for itself. The office of commodity and engineering services exports at petroleum ministry is not seeking to eliminate traditional methods of presence in foreign markets like contribution to oil and gas industrial projects in other countries. It only seeks innovation in a bid to create market for Iranian companies. Iran’s petroleum ministry is a leading body with regard to supporting commodities and engineering services and it welcomes cooperation with all reputed foreign companies.

 

Q: Having made necessary plans for the presence of Iranian companies in projects in other countries, which measures should be taken for the strong presence of these companies in oil projects?

A: As you know, after victory of Islamic Revolution in Iran, certain measures have been undertaken for transferring technology from abroad for manufacturing components and equipment in compliance with API standards and establishing consulting engineering companies. The ground is now paved for Iranian companies to attract financial resources from inside or outside the country and participate in petroleum industry projects. Therefore, domestic companies are expected to be able to define themselves projects besides contributing to these projects. Iranian companies should be equipped with state-of-the-art technology for presence in projects like construction of refineries and development of oil and gas fields. This important objective could be achieved through transfer of technology from abroad or development of technical knowhow. However, Iran’s private sector is not fully professional; therefore, holding companies should take shape to manufacture components and equipment and a technology company should assemble these components to develop the main product. Holding companies are needed to be set up so that employers would be happy with manufactured items and progress of projects. Formation of these holdings requires knowledge, self-belief, capital and influence, which are all emerging in Iran.

 

Q: What are the requirements for Iranian companies to be present in regional markets?

A: Private companies in Iran should follow technical and professional, scientific and specialized training courses in order to upgrade their knowledge. Financial engineering is another important category which covers a group of branches of science and brings credit to the companies. Management is also important for these companies. They need to know the market environment in order to manage the market effectively, win a good share of the market and develop a new market. Domestic companies should be able to develop knowhow in order to be able to manage their money supply and human resources and benefit from these potentialities in regional and global markets.

 

Q: Now let’s talk about domestic manufacturing. Have the imposition of sanctions against the petroleum industry and the refusal of foreign companies to sell equipment and components to Iran forced the country to focus on domestic manufacturing?

A: No. Domestic manufacturing did not stem merely from the imposition of sanctions. Many Iranian companies turned to manufacturing after the victory of Islamic revolution. Over the past 36 years, good measures have been taken for progress in domestic manufacturing. Until recently, Iran faced restrictions for importing thick slabs due to the sanctions. Once we dreamt of manufacturing thick slabs in the country. Now Ahvaz Oxin factory is producing these slabs and the manufacturing of these slabs is clearing the way for the manufacturing of pipelines in the country. Currently, many pipelines needed for the petroleum industry are supplied domestically.

 

Q: Which categories of pipelines can Iran manufacture for petroleum industry?

A: Iran is able to manufacture metallic pipelines, polyethylene and composite pipelines. Currently, Iran can manufacture more than four million tons of metal pipes which are largely used in the oil and gas industries. An Iranian company is currently manufacturing GRP pipelines and is among the leading companies in the world. This company has one plant in Iran and another one in Turkey. The quality of products of this company is increasing every day. Alloyed seamless pipes are not currently manufactured in Iran and three Iranian factories have volunteered to produce them. Projects have been defined to that effect.

 

Q: Where does Iran stand in terms of manufacturing industrial valves?

A: Today, many companies in the country are capable of manufacturing valves in compliance with API standards. Only globe valves may not be produced in the country. However, the necessary measures are under way for their manufacturing. Until several years ago, we were unable to manufacture some wellhead valves like Christmas tree, but now, several Iranian companies are producing these valves for up to 15,000 psi pressure. Domestic manufacturing of these components is a breakthrough for Iran’s petroleum industry.

 

Q: As you know, drilling rig is a key equipment of petroleum industry. What’s your assessment of the activities of Iranian companies for building rigs?

A: In the past, building rigs was unimaginable for us. But today, under the aegis of support by Iran’s petroleum ministry, University of Science and Technology and several private companies have made good progress in building rigs and its components. Some time ago, Iran’s Tieco and a Norwegian company jointly produced top drive. Another important piece of equipment in drilling rig is mud pump which is being currently manufactured by some Iranian companies. Also during a period of time, a domestic company was suggested to repair a number of pump trucks owned by National Iranian Drilling Company and this knowledge-based company announced its ability to manufacture pump trucks.

Therefore, Iran is able to build top drive, derrick, and mud pump and pump truck. Over the past five years, many measures have been undertaken for building the major components of onshore and offshore rigs.

In the section of jackets and oil platforms, Iran Marine Industrial Company and Iranian Offshore Engineering and Construction Company (IOEC) are among competent companies and Iran has reached self-sufficiency in this sector. Iran is able to build crane-mounted vessels.

 

Q: Where do we stand with regard to pump, turbine and electro-engine manufacturing?

A: Today, there are many Iranian companies capable of manufacturing pumps for oil and gas pipelines and refining processes. Except for some wellhead and downhole pumps, other pumps are manufactured domestically. Moreover, Ministry of Petroleum has made good investment in turbine manufacturing. Oil Turbo Compressor Company (OTC) is now able to build 25-megawatt turbines. Once it was not possible to repair turbines in the country and this equipment was sent abroad for reparation, but now many of these components of turbines like blade and rotor are manufactured in the country and the necessary measures are under way for other components. Regarding electroengine manufacturing, in addition to Jamco, other Iranian companies are also active in this arena. A private company is also able to manufacture electroengine below 4 megawatts.

 

Q: You highlighted good points, but given the extent of petroleum industry and its daily growing needs, there is still equipment towards which domestic manufacturers are needed to be directed. What do you think of that?

A: Many pieces of equipment and components needed in the petroleum industry are manufactured domestically and only 10 groups of commodities are not produced in the country. Ministry of Petroleum has listed this group of commodities and equipment including drilling bits, wellhead and downhole pumps, alloyed seamless pipes, turbines and anti-explosive electroengines. The petroleum industry will reach self-sufficiency in many sectors after manufacturing most of these pieces of equipment. Only these 10 groups of petroleum industry items are imported and we are not now able to build them, but necessary planning has been made for their manufacturing.

 

Q: Is Iran’s Ministry of Petroleum only seeking to meet domestic needs through domestic manufacturing or it is holding an eye on regional or world markets, too?

A: Ministry of Petroleum has always made it clear to domestic manufacturers that the objective behind the manufacturing of equipment and components should not be limited to supplying petroleum industry needs, but also these companies should prepare the necessary infrastructure for entry into regional and global markets. This objective is achievable because many pieces of equipment and components manufactured domestically can rival foreign prototypes in terms of price and quality. Regulations should be drawn up in the country for supporting domestic manufacturing companies. These supports may include procuring low-cost raw materials for manufacturing companies, providing them with necessary technology, offering insurance, banking and customs services, awards, formation of consortiums and avoiding unhealthy competition between manufacturing companies.

 

Q: What has been the policy of Iran’s new administration for exporting domestically manufactured parts and equipment?

A: The Supreme Council of Exports has been established in the country to support exporters. It is headed by the first vice-president. The minister of industry, mine and trade is the vice-chair of the council. In its first meeting in the current calendar year, the council authorized the establishment of an office for export of commodities and engineering services and the responsibility of exporting products and engineering services was assigned to deputy minister. This council is fully aware of the problems of exports and is determined to continue support for Iranian manufacturing companies.

 

7-Point Plan for Iran-Turkmenistan Trade

 

More than a century has passed since oil was discovered in Iran, but Iran’s petroleum industry depended on foreign companies for its basic needs until recently. Few people thought that 37 years after the victory of the Islamic Revolution, Iran’s petroleum industry would become self-sufficient in many sectors particularly manufacturing of equipment and commodities while looking for chances in regional and global markets for exporting technical and engineering services.

One of policies pursued by Iran’s Ministry of Petroleum is providing support for export of commodities, as well as technical and engineering services. The ministry has made planning to that effect.

In order to get familiar with the details of these plans, Iran Petroleum has conducted an interview with Mohammad-Taqi Amanpour, who advises Minister of Petroleum Bijan Zangeneh on export of commodities and technical and engineering services.

 

Q: Would you please tell us about the policies of Iran’s Ministry of Petroleum with regards to export of commodities and technical and engineering services?

A: At present, export of commodities and engineering services is of high significance to Iran’s petroleum ministry. This ministry insists on benefiting from national capabilities in regional markets. That would be possible only by planning through identification of target markets. Iran’s petroleum ministry intends to conduct studies to identify potentialities for investment in oil and gas projects in the region and the world.

 

Q: You have apparently started with Turkmenistan’s oil and gas market. Why?

A: That is right, because Turkmenistan is rich in natural gas and oil; therefore, we have chosen it as our first target market. Iran is buying $2 billion to $3 billion of gas from this country. As two friendly and brotherly countries, Iran and Turkmenistan favor expansion of bilateral relations and it is possible for Iran to purchase up to $5 billion of gas from Turkmenistan every year. During a recent visit to this country by Iran’s president [Hassan Rouhani], Iran and Turkmenistan agreed to enhance the level of their cooperation. In addition to buying gas, Iran would also provide engineering services and commodities to Turkmenistan and will contribute to the implementation of projects in this country.

 

Q: What are Iranian petroleum ministry’s plans for exporting technical and engineering services?

A: Iran’s petroleum ministry has drawn up a comprehensive 7-point plan to facilitate export of commodities and engineering services to Turkmenistan. One of these points is that Iranian companies would be introduced to bid for projects in this country. Currently, a $30 billion package of innovative commodities and projects including refineries, power plants and petrochemical plants has been submitted to Turkmenistan. Iran is able to construct all of them. Iran’s petroleum ministry has expressed its support for Iranian companies to get involved in these projects in Turkmenistan and 70 Iranian companies have been introduced. Some Iranian companies have already won bids and are in the process of signing lucrative deals. The second point is about supporting businessmen and intermediaries who are being paid for exporting commodities and handling trading activities but they cannot transfer in this money. This group of investors is supported through barter trade. The third point is about supplying commodities to Turkmenistan through a third party. Based on this, an Iranian company receives these commodities from a third country and in case it commits to exporting Iranian products instead, it could benefit from the support of petroleum ministry.

Turkmenistan has other partners than Iran; therefore, the fourth point would require Iran, Turkmenistan and a third country to reach understanding. Based on this understanding, an Iranian company will finance a project in a third country and then Turkmenistan will charge the third country the equivalent of this investment while Iran would pay for costs. But Iran would not pay in cash to a third country and an Iranian company would be dispatched to this country to handle the process of exports. The fifth plan is that instead of exporting some items to Turkmenistan, we would help this country manufacture its required items and a domestic company would help establish relevant factories in that country.

The sixth plan is about making preparations for Turkmenistan’s investment in some industries in Iran. For example, we may ask this country to invest in an Iranian tire manufacturing company and boost its production capacity in exchange for tires or building a liquefied natural gas (LNG) plant.

The seventh point, known as joint exports, requires joint projects to be defined between Iran and Turkmenistan in the oil and gas, as well as electricity generation sectors, and oil and gas and electricity would be exported from these two countries to across the globe.

These seven points have been designed and they are being followed up on. They can turn bilateral cooperation to multilateral cooperation. In line with these points, Iran has proposed projects to Turkmenistan and relevant talks are under way now. These plans could be implemented both during and after the sanctions. Other ministries could also benefit from these programs for exporting commodities to other countries.

 

Q: In addition to Turkmenistan, does Iran’s petroleum ministry envisage any other regional countries for presence in their oil and gas projects and export of technical and engineering service?

A: There are currently plans under way for presence in Iraq’s market. A large number of Iranian companies are also active in Iraq, but unfortunately due to the fall in oil price, Iraq has seen its financial resources decline. Moreover, due to lack of security in this country some Iranian companies are reluctant to be present in Iraq. However, the Iranian and Iraqi governments are much willing for cooperation, and Iran can help this friendly country in many oil and gas projects.

For a strong presence in world markets, we need to have a good knowledge of them and Iran’s petroleum ministry has no intention of entering foreign markets without having any knowledge of them. For this reason, some groups at universities and scientific centers have been assigned the task of identifying and reviewing global markets.

This ministry is also working a new mechanism for activity in oil, gas and petrochemical projects overseas and it intends to create a market for itself. The office of commodity and engineering services exports at petroleum ministry is not seeking to eliminate traditional methods of presence in foreign markets like contribution to oil and gas industrial projects in other countries. It only seeks innovation in a bid to create market for Iranian companies. Iran’s petroleum ministry is a leading body with regard to supporting commodities and engineering services and it welcomes cooperation with all reputed foreign companies.

 

Q: Having made necessary plans for the presence of Iranian companies in projects in other countries, which measures should be taken for the strong presence of these companies in oil projects?

A: As you know, after victory of Islamic Revolution in Iran, certain measures have been undertaken for transferring technology from abroad for manufacturing components and equipment in compliance with API standards and establishing consulting engineering companies. The ground is now paved for Iranian companies to attract financial resources from inside or outside the country and participate in petroleum industry projects. Therefore, domestic companies are expected to be able to define themselves projects besides contributing to these projects. Iranian companies should be equipped with state-of-the-art technology for presence in projects like construction of refineries and development of oil and gas fields. This important objective could be achieved through transfer of technology from abroad or development of technical knowhow. However, Iran’s private sector is not fully professional; therefore, holding companies should take shape to manufacture components and equipment and a technology company should assemble these components to develop the main product. Holding companies are needed to be set up so that employers would be happy with manufactured items and progress of projects. Formation of these holdings requires knowledge, self-belief, capital and influence, which are all emerging in Iran.

 

Q: What are the requirements for Iranian companies to be present in regional markets?

A: Private companies in Iran should follow technical and professional, scientific and specialized training courses in order to upgrade their knowledge. Financial engineering is another important category which covers a group of branches of science and brings credit to the companies. Management is also important for these companies. They need to know the market environment in order to manage the market effectively, win a good share of the market and develop a new market. Domestic companies should be able to develop knowhow in order to be able to manage their money supply and human resources and benefit from these potentialities in regional and global markets.

 

Q: Now let’s talk about domestic manufacturing. Have the imposition of sanctions against the petroleum industry and the refusal of foreign companies to sell equipment and components to Iran forced the country to focus on domestic manufacturing?

A: No. Domestic manufacturing did not stem merely from the imposition of sanctions. Many Iranian companies turned to manufacturing after the victory of Islamic revolution. Over the past 36 years, good measures have been taken for progress in domestic manufacturing. Until recently, Iran faced restrictions for importing thick slabs due to the sanctions. Once we dreamt of manufacturing thick slabs in the country. Now Ahvaz Oxin factory is producing these slabs and the manufacturing of these slabs is clearing the way for the manufacturing of pipelines in the country. Currently, many pipelines needed for the petroleum industry are supplied domestically.

 

Q: Which categories of pipelines can Iran manufacture for petroleum industry?

A: Iran is able to manufacture metallic pipelines, polyethylene and composite pipelines. Currently, Iran can manufacture more than four million tons of metal pipes which are largely used in the oil and gas industries. An Iranian company is currently manufacturing GRP pipelines and is among the leading companies in the world. This company has one plant in Iran and another one in Turkey. The quality of products of this company is increasing every day. Alloyed seamless pipes are not currently manufactured in Iran and three Iranian factories have volunteered to produce them. Projects have been defined to that effect.

 

Q: Where does Iran stand in terms of manufacturing industrial valves?

A: Today, many companies in the country are capable of manufacturing valves in compliance with API standards. Only globe valves may not be produced in the country. However, the necessary measures are under way for their manufacturing. Until several years ago, we were unable to manufacture some wellhead valves like Christmas tree, but now, several Iranian companies are producing these valves for up to 15,000 psi pressure. Domestic manufacturing of these components is a breakthrough for Iran’s petroleum industry.

 

Q: As you know, drilling rig is a key equipment of petroleum industry. What’s your assessment of the activities of Iranian companies for building rigs?

A: In the past, building rigs was unimaginable for us. But today, under the aegis of support by Iran’s petroleum ministry, University of Science and Technology and several private companies have made good progress in building rigs and its components. Some time ago, Iran’s Tieco and a Norwegian company jointly produced top drive. Another important piece of equipment in drilling rig is mud pump which is being currently manufactured by some Iranian companies. Also during a period of time, a domestic company was suggested to repair a number of pump trucks owned by National Iranian Drilling Company and this knowledge-based company announced its ability to manufacture pump trucks.

Therefore, Iran is able to build top drive, derrick, and mud pump and pump truck. Over the past five years, many measures have been undertaken for building the major components of onshore and offshore rigs.

In the section of jackets and oil platforms, Iran Marine Industrial Company and Iranian Offshore Engineering and Construction Company (IOEC) are among competent companies and Iran has reached self-sufficiency in this sector. Iran is able to build crane-mounted vessels.

 

Q: Where do we stand with regard to pump, turbine and electro-engine manufacturing?

A: Today, there are many Iranian companies capable of manufacturing pumps for oil and gas pipelines and refining processes. Except for some wellhead and downhole pumps, other pumps are manufactured domestically. Moreover, Ministry of Petroleum has made good investment in turbine manufacturing. Oil Turbo Compressor Company (OTC) is now able to build 25-megawatt turbines. Once it was not possible to repair turbines in the country and this equipment was sent abroad for reparation, but now many of these components of turbines like blade and rotor are manufactured in the country and the necessary measures are under way for other components. Regarding electroengine manufacturing, in addition to Jamco, other Iranian companies are also active in this arena. A private company is also able to manufacture electroengine below 4 megawatts.

 

Q: You highlighted good points, but given the extent of petroleum industry and its daily growing needs, there is still equipment towards which domestic manufacturers are needed to be directed. What do you think of that?

A: Many pieces of equipment and components needed in the petroleum industry are manufactured domestically and only 10 groups of commodities are not produced in the country. Ministry of Petroleum has listed this group of commodities and equipment including drilling bits, wellhead and downhole pumps, alloyed seamless pipes, turbines and anti-explosive electroengines. The petroleum industry will reach self-sufficiency in many sectors after manufacturing most of these pieces of equipment. Only these 10 groups of petroleum industry items are imported and we are not now able to build them, but necessary planning has been made for their manufacturing.

 

Q: Is Iran’s Ministry of Petroleum only seeking to meet domestic needs through domestic manufacturing or it is holding an eye on regional or world markets, too?

A: Ministry of Petroleum has always made it clear to domestic manufacturers that the objective behind the manufacturing of equipment and components should not be limited to supplying petroleum industry needs, but also these companies should prepare the necessary infrastructure for entry into regional and global markets. This objective is achievable because many pieces of equipment and components manufactured domestically can rival foreign prototypes in terms of price and quality. Regulations should be drawn up in the country for supporting domestic manufacturing companies. These supports may include procuring low-cost raw materials for manufacturing companies, providing them with necessary technology, offering insurance, banking and customs services, awards, formation of consortiums and avoiding unhealthy competition between manufacturing companies.

 

Q: What has been the policy of Iran’s new administration for exporting domestically manufactured parts and equipment?

A: The Supreme Council of Exports has been established in the country to support exporters. It is headed by the first vice-president. The minister of industry, mine and trade is the vice-chair of the council. In its first meeting in the current calendar year, the council authorized the establishment of an office for export of commodities and engineering services and the responsibility of exporting products and engineering services was assigned to deputy minister. This council is fully aware of the problems of exports and is determined to continue support for Iranian manufacturing companies.

 

Bahregan Sells Oil Despite Sanctions

 

By Mohammad Afshin

 

The Iranian Offshore Oil Company (IOOC), a subsidiary of National Iranian Oil Company (NIOC), is among the biggest offshore producers of oil. IOOC is tasked with recovery from oil and gas fields off Persian Gulf and the Sea of Oman. The main regions operated by IOOC in the Persian Gulf include Bahregan, Kharg, Siri, Lavan, Kish and Qeshm oil centers.

Bahregan Oil Center (BOC) is among Iran’s important oil regions. It covers Bahregansar, Hendijan, Soroush and Norouz oil fields.

Here we offer a general review of oil activities in BOC:

 

Bahregansar & Hendijan Fields

 

Bahregansar oil field is located 56 kilometers west of Bahregan region. Bahregansar platform was bombarded many times by Iraqi warplanes during years of imposed war (1980-1988).

After the end of the war, the necessary arrangements were made for the reconstruction of the field and renovation of offshore and onshore installations. The new installations were launched in 1989.

Bahregansar is the first and the oldest oil platform in the Persian Gulf to have been administered by Iranian engineers following the 1979 Islamic Revolution. The new Bahregansar platform is an advanced one which has been designed and constructed by Iranians. It is now operating alongside the older platform. Hendijan field is located 55 kilometers west of Bahregan region. It has 9 wells on its satellite platforms.

 

Norouz Field

 

Norouz oil field, which was almost destroyed during the imposed war, is in BOC. At the beginning, it had 14 active wells. After the end of the imposed war, onshore and offshore installations were reconstructed and the development and renovation of Norouz was planned within the framework of a buyback contract which involved drilling of 17 new horizontal wells, a production platform, a well platform and a living quarter platform.

The old Norouz oil platform is among the old platforms in the Persian Gulf. The new platform was built in cooperation with Shell several years ago. Iranian engineers are currently taking care of this new platform.

Ali-Reza Afrasiabi, director of Norouz platform, said crude oil recovery from Norouz field started more than five decades ago.

“In the past, oil from the old Norouz field used to be carried to Bahregan through pipeline. But after development, we no longer had any production in the old Norouz and it continued until Shell left,” he said.

“After Shell left, it was felt that the level of production could increase and that is why we reopened some of wells in the old Norouz and currently four wells from old Norouz are producing 7,000 to 8,000 b/d of oil,” he added.

Afrasiabi said 35 people are present in each working shift in Norouz platform, adding that most of them had received training by Shell. He added that IOOC has in recent years provided training for the staff.

He also touched on the difficult conditions the platform experienced after Shell left, saying: “Reparation of fire water pumps was one of major measures handled by Iranians. Moreover, gas compressors were launched and flaring of associated gas was prevented.”

He said 40 mcf/d of gas used to be flared when Shell was present, adding that this figure has now fallen below 8 mcf/d.

 

Soroush Field

 

One of the largest platforms in the world in terms of crude oil processing is Soroush oil platform in Soroush field. Known to be among the most advanced platforms in the world, it is located some 110 kilometers from Bahregan region.

Soroush field was bombarded during the Iraqi war and its oil production was halted due to damage inflicted by Iraqi fighter jets. In March 2000, a buyback contract was signed for the development and renovation of this field. The development project involved drilling of 10 horizontal production wells, two wells for injecting contaminated water into the reservoir, two well platforms, one production platform, one living quarter platform and a floating crude oil storage and export system with a capacity of 2.2 mb/d. This project became operational in March 2002.

Hamid-Reza Barzouki, deputy head of Soroush platform, said the crude oil in this field is ultra-heavy oil which could be processed by certain refineries.

“The refineries that could use this oil would produce valuable products,” he said.

He said Iran is exporting five types of crude oil from Soroush, Forouzan and Norouz fields.

“During the time of sanctions, the sale of Soroush and Norouz crude oil did not fall due to its reputation in the world,” he added.

Barzouki said the unique features of Soroush and Norouz oil have had big advantages for Iran’s crude oil sales.

Barzouki said Soroush is among few centers where no flaring is under way, adding that Soroush platform exports its oil and gas.

He said heavy crude oil desalting is a difficult job, adding: “In other platforms, oil is extracted and processed before being sent offshore for desalting, but in Soroush, all this is done altogether.”

“When this platform was launched and Shell delivered the project to us, it had not managed to resolve some important issues including desalting. They picked a group of consultants for this purpose, but they failed again. Finally, they left Iran due to political reasons,” said Barzouki.

“Over this time, our own forces changed the plans and formulae and finally managed to resolve the desalting challenge in Soroush and Norouz oil fields. Several months after Shell’s departure, Iranian specialists resolved this problem,” he added.

 

Drilling New Wells

 

Mohammad-Ali Rahimieh, head of BOC, said from among Hendijan, Bahregansar, Soroush and Norouz fields, the oil produced from Hendijan and Bahregansar are blended to be sent to onshore facilities for processing and storage.

He also said that the oil produced by Soroush and Norouz fields is exported after being processed.

“The quality of oil produced in these four fields is such that it has always its own customers and even during the time of sanctions, the sale of oil from these fields has not been disrupted at all,” he added.

Rahimieh aid plans have been under way for increased production. He said that new wells expected to be drilled in all four fields.

“In any oil field producing oil, decline will naturally occur and drilling of new wells or repairing oil wells in order to prevent natural increase or decrease in production will happen,” he said.

Rahimieh added that new wells are currently being drilled by two drilling rigs in Hendijan and Bahregansar regions.

 

Hendijan Field and Two Platforms

 

Rahimieh said a number of wells are expected to be drilled in Hendijan field, adding: “Two platforms are currently under construction by ISOICO in Bandar Abbas Yard. It is being done in parallel with the drilling of wells.”

“In the place where wellhead platform 7 should be installed, a jacket is being installed, but no topside has yet been installed,” he said. “In this region, 7 wells have been drilled and all of them are producing. One of the best IOOC wells is located in this region.”

Rahimieh said: “In wellhead platform 8, two wells have been spudded and there is plan for the drilling of several wells. The jacket has been installed, but no topdrive is installed.”

 

Oil Delivery from Azadegan to Bahregan

 

Rahimieh said oil produced in Azadegan field is planned to be carried to Bahregan via pipeline, adding: “In Bahregan, four three-million-barrel facilities have been constructed and installed, two of which have a 1-million-barrel capacity and two others are 500,000-barrel capacity.”

He said that these facilities are being used because they have been constructed ahead of schedule.

“But as soon as Azadegan’s oil reaches Bahregan, these facilities will be used for storing Azadegan oil,” said Rahimieh.

 

Domestic Manufacturing

 

Rahimieh said the period of sanctions was the start of move towards domestic manufacturing of equipment and parts required in the petroleum industry.

“Due to the imposition of sanctions against Iran’s petroleum industry, many foreign companies refused to sell us equipment and parts,” he added.

He said that the sanctions resulted in trust in domestic manufacturing companies. Rahimieh said pumps and its components are currently being manufactured by Iranian companies in Ahvaz, Isfahan and Tehran. He said all this equipment is of high quality and that electroengines required in the petroleum industry are supplied by a company based in the city of Mashhad.

He said that domestic companies boosted their manufacturing capabilities due to support provided for them, adding that most equipment could be procured domestically.

Rahimieh said Iran still depends partly on foreign companies for turbines, expressing hope that Iran would become self-reliant with the help of domestic companies.

 

Renovation of Platforms

 

Rahimieh underscored the necessity of reconstructing and renovating oil platforms, saying: “In the Persian Gulf region, due to high humidity, maintenance of oil platforms is of high significance and ignoring the platforms would cause corrosion. Platforms in Bahregan oil center are no exception.”

He said that tender bids are to be offered for painting old platforms in Norouz and Bahregansar, adding that renovation of two wells in Soroush platform is also to be put to tender.

 

Tough Job on Oil Platforms

 

Referring to the difficulty of work on oil platforms, Rahimieh said: “In some of oil platforms, there are many stairs and the staff have to go them up and down several times a day. On the long-term, that would harm their knee joints.”

He said he has worked on oil platforms for 12 years, adding: “Walking on iron is harmful and those working on oil platforms will suffer physical damage.”

 

Persian Gulf SFU

 

Rahimieh said Persian Gulf Floating Oil Storage Unit (FSU) is the largest terminal built in the world, adding that heavy crude is extracted from Soroush and Norouz oil fields before being processed and exported through by this FSU. He said that there are 21 storage tanks in this FSU.

He said this FSU was built by a South Korean company. He added: “The Korean company manufacturing the FSU has so far met all its obligations and there is only one problem with the metering system of this vessel. After its reparation, it should be endorsed by the Export Supervision Office.”

“At present, the problem with the metering system does not cause any disruption in exports and after this system is launched, measurements will be done inside the Persian Gulf FSU,” said Rahimieh.

Regarding Sourena FSU, he said: “At present, no oil is loaded on Sourena and Persian Gulf FSU has already replaced it.”

He said Sourena will be either overhauled or auctioned off.

 

6mb Oil Sale in 4 Months

 

The 2.2-million-barrel floating oil storage unit (FSU), dubbed the Persian Gulf, came on stream in Soroush oil region early this year.

The FSU has the capacity to take in some 200,000 barrels per day of heavy crude oil produced in Iran’s offshore oil fields of Soroush and Nowruz.

The floating terminal has a length of 337 meters, a width of 60 meters and a height of 33 meters.

The construction of FSU was over in 2011 and was installed after arriving at Iran’s waters. The launch of the FSU was delayed for two years due to restrictions imposed on Iran by the United States and the European Union. However, the FSU was launched following a series of complicated and tough operations by Iranian and Korean experts. The FSU is equipped with advanced fire extinguishing system and sophisticated systems dealing with H2S.

Since its inauguration, no life-threatening incidents have been reported on this FSU. This advanced FSU can accommodate 80 people and most of its functions are done automatically. Training of Iranian experts and specialists and indigenization of advanced FSUs are the most important achievements of the construction, installation and operation of Persian Gulf FSU for Iran’s petroleum industry.

Moreover, increased production from Soroush and Norouz oil fields, higher precision in oil export metering with the help of new advanced systems, using the most advanced storage unit, high safety and avoiding environment pollution of the Persian Gulf are among the most important measures undertaken by Iranian engineers for the first time in the country.

Mehdi Amir-Khosravi, deputy head of Persian Gulf FSU, said the contract for the construction of Persian Gulf FSU was signed with South Korea’s Samsung in 2008.

“After its construction, the FSU was moved to this region. Now nearly four months after its inauguration, 12 loadings have been done there,” he said.

Amir-Khosravi said 6 million barrels of oil have so far been exported from Soroush and Norouz fields. He said 3.1 million barrels of oil from Soroush and 2.9 million barrels from Norouz have been delivered to Chinese, Japanese and Indian oil tankers.

He said the storage capacity of this FSU was 2.2 million barrels, adding that Soroush and Norouz oil is stored separately in the storage unit to be delivered to customers based on their desired oil grade.

Amir-Khosravi said the storage tanks in the FSU could be replaced, adding: “After oil export, storage tanks are washed so that the residues are erased off and it becomes clear that there is no more oil inside.”

He noted that oil export from Persian Gulf FSU has so far not seen any delay or any other problem.

“Since the date of exports and its beginning are registered, any delay by vendor or buyer, except for delays stemming from bad weather conditions, would be punishable by cash fine,” said Amir-Khosravi.

Noting that Soroush and Norouz oil has certain properties and that certain refineries can process it he said: “It would be difficult to find an alternative for this oil.”

“For these refineries, buyers will have to purchase Soroush and Norouz oil and it might be interesting to know that the sanctions’ pressures have had negative impacts on them and they had to deal with feedstock shortage. Oil produced here has always had its own customers and we are ready to increase our export if the number of buyers increases even now,” he said.

 

Export from Persian Gulf FSU

 

Amir-Khosravi said the International Affairs Directorate of NIOC is tasked with marketing and finding oil buyers, adding: “In general, scheduling for annual exports is sent here and it would become clear when and how much oil should be exported. Then, oil buyers make the necessary arrangements and send tanker to Persian Gulf FSU on the specified date to receive oil.”

“Some time, due to inappropriate weather conditions, the buyers will be notified that the oil cargo may be delivered sooner,” he said.

Amir-Khosravi said the final day of arrival of oil tanker would be announced to foreign company and it will be updated after every hour. “Then, the Persian Gulf FSU will contact offshore operations officials for the necessary arrangements,” he added.

Then, he said, a group of five officers will go to the FSU by helicopter or ship to make an assessment of the situation and make necessary plans.

Amir-Khosravi said the plan will be announced to the tanker through radio transmission system. If the vessel is to berth at the FSU, the time and place should be announced to the tanker. This place is often between 1.5 and 2 miles away.

He said three tugboats will approach the FSU from behind and both sides in order to tie the tanker to the FSU with an 85-meter chain.

“After the tanker is connected to the FSU, 350-meter export pipelines are delivered to the tanker in a vessel. These pipes are connected to the tanker. As soon as the tanker valves are opened, the pumps of Persian Gulf FSU are switched on for the delivery of oil to the tanker,” he added.

Amir-Khosravi said after the start of oil export operations, sophisticated radar systems measure the delivery of oil real-time.

“Usually, for a 500,000-barrel range, a ±5 tolerance is considered and included in the contract. This tolerance is determined by the supervisor of export operations,” he said.

“After the end of export operations, the export pipes are disconnected from the tanker and the FSU is detached from the tanker and the tanker would be at the disposal of specialist,” said Amir-Khosravi.

 

Persian Gulf FSU Properties

 

Amir-Khosravi said oil extracted from Soroush and Norouz fields is heavy, adding: “Carrying this type of oil to long onshore distances is difficult. Therefore, the Soroush and Norouz oil is transferred to the Persian Gulf FSU for storage and processing.”

He said the properties of Persian Gulf FSU include pumping, storage and transfer of this type of crude oil. He added: “One of advantages of Persian Gulf FSU over other floating storage units used in the world is the ability of its connection to any size of very large crude carrier (VLCC). But other floating storage units can be only connected to small-size tankers.”

 

Persian Gulf Outstanding Features

 

Amir-Khosravi said marine standards are changing constantly and updated regularly, adding: “Sourena standards were outdated and the activity of Sourena could not continue based on new standards.”

He said that the Persian Gulf FSU is technologically different from Sourena and is operating in compliance with new marine standards.

“The vessels carrying oil products should have no direct contact with sea, as required by international standards. The middle part of these vessels should be also empty or filled with water. Sourena did not have this capability and did not have a balance reservoir,” he added.

Noting that a fluid is required to be inside the FSU for oil to exit completely, Amir-Khosravi said “In Sourena, 300,000 b/d of oil remained in the storage tanks to maintain balance, and that amount of oil was never exported. But in Persian Gulf FSU, this problem is not seen and oil could be entirely pushed out of storage tank.”

“Moreover, the exterior wall of the FSU could be filled with seawater to preserve its balance,” he added.

He said 23 tankers are storing oil for the Persian Gulf FSU, adding: “This FSU has been built in compliance with Norwegian DNV ranking which is one of the most reputed in the world.”

“Given the fact that these tankers store two different grades of oil, when they are filled or emptied, forces are exerted upon the vessel. Controlling these stresses has become easy in the Persian Gulf FSU and the storage tanks in the second wall could be easily filled with water,” said Amir-Khosravi.

 

Specialized Forces

 

Amir-Khosravi said the staff employed on Persian Gulf FSU are young, adding that graduates of chemical, petroleum and mechanical engineering are recruited to work on vessels while graduates of marine science are employed for tankers.

“One of advantages of recruitment of young staff in the Persian Gulf FSU is their specialty in crude oil metering and their knowledge about production and export,” he said.

Amir-Khosravi said those operating on Persian Gulf FSU have a good command of English and they can easily communicate in English with foreigners.

 

FPSO

 

A floating production, storage and offloading (FPSO) unit is a floating vessel used by the offshore oil and gas industry for the production and processing of hydrocarbons, and for the storage of oil. An FPSO vessel is designed to receive hydrocarbons produced by itself or from nearby platforms or subsea template, process them, and store oil until it can be offloaded onto a tanker or, less frequently, transported through a pipeline. FPSOs are preferred in frontier offshore regions as they are easy to install, and do not require a local pipeline infrastructure to export oil. FPSOs can be a conversion of an oil tanker or can be a vessel built specially for the application. A vessel used only to store oil (without processing it) is referred to as a floating storage and offloading vessel (FSO). There are also under construction (as at 2013) floating liquefied natural gas (FLNG) vessels, which will extract and liquefy natural gas on board.

Oil produced from offshore production platforms can be transported to the mainland either by pipeline or by tanker. When a tanker is chosen to transport the oil, it is necessary to accumulate oil in some form of storage tank such that the oil tanker is not continuously occupied during oil production, and is only needed once sufficient oil has been produced to fill the tanker.

Floating production, storage and offloading vessels are particularly effective in remote or deepwater locations where seabed pipelines are not cost effective. FPSOs eliminate the need to lay expensive long-distance pipelines from the processing facility to an onshore terminal. This can provide an economically attractive solution for smaller oil fields which can be exhausted in a few years and do not justify the expense of installing a pipeline. Furthermore, once the field is depleted, the FPSO can be moved to a new location.

 

Bahregan Sells Oil Despite Sanctions

 

By Mohammad Afshin

 

The Iranian Offshore Oil Company (IOOC), a subsidiary of National Iranian Oil Company (NIOC), is among the biggest offshore producers of oil. IOOC is tasked with recovery from oil and gas fields off Persian Gulf and the Sea of Oman. The main regions operated by IOOC in the Persian Gulf include Bahregan, Kharg, Siri, Lavan, Kish and Qeshm oil centers.

Bahregan Oil Center (BOC) is among Iran’s important oil regions. It covers Bahregansar, Hendijan, Soroush and Norouz oil fields.

Here we offer a general review of oil activities in BOC:

 

Bahregansar & Hendijan Fields

 

Bahregansar oil field is located 56 kilometers west of Bahregan region. Bahregansar platform was bombarded many times by Iraqi warplanes during years of imposed war (1980-1988).

After the end of the war, the necessary arrangements were made for the reconstruction of the field and renovation of offshore and onshore installations. The new installations were launched in 1989.

Bahregansar is the first and the oldest oil platform in the Persian Gulf to have been administered by Iranian engineers following the 1979 Islamic Revolution. The new Bahregansar platform is an advanced one which has been designed and constructed by Iranians. It is now operating alongside the older platform. Hendijan field is located 55 kilometers west of Bahregan region. It has 9 wells on its satellite platforms.

 

Norouz Field

 

Norouz oil field, which was almost destroyed during the imposed war, is in BOC. At the beginning, it had 14 active wells. After the end of the imposed war, onshore and offshore installations were reconstructed and the development and renovation of Norouz was planned within the framework of a buyback contract which involved drilling of 17 new horizontal wells, a production platform, a well platform and a living quarter platform.

The old Norouz oil platform is among the old platforms in the Persian Gulf. The new platform was built in cooperation with Shell several years ago. Iranian engineers are currently taking care of this new platform.

Ali-Reza Afrasiabi, director of Norouz platform, said crude oil recovery from Norouz field started more than five decades ago.

“In the past, oil from the old Norouz field used to be carried to Bahregan through pipeline. But after development, we no longer had any production in the old Norouz and it continued until Shell left,” he said.

“After Shell left, it was felt that the level of production could increase and that is why we reopened some of wells in the old Norouz and currently four wells from old Norouz are producing 7,000 to 8,000 b/d of oil,” he added.

Afrasiabi said 35 people are present in each working shift in Norouz platform, adding that most of them had received training by Shell. He added that IOOC has in recent years provided training for the staff.

He also touched on the difficult conditions the platform experienced after Shell left, saying: “Reparation of fire water pumps was one of major measures handled by Iranians. Moreover, gas compressors were launched and flaring of associated gas was prevented.”

He said 40 mcf/d of gas used to be flared when Shell was present, adding that this figure has now fallen below 8 mcf/d.

 

Soroush Field

 

One of the largest platforms in the world in terms of crude oil processing is Soroush oil platform in Soroush field. Known to be among the most advanced platforms in the world, it is located some 110 kilometers from Bahregan region.

Soroush field was bombarded during the Iraqi war and its oil production was halted due to damage inflicted by Iraqi fighter jets. In March 2000, a buyback contract was signed for the development and renovation of this field. The development project involved drilling of 10 horizontal production wells, two wells for injecting contaminated water into the reservoir, two well platforms, one production platform, one living quarter platform and a floating crude oil storage and export system with a capacity of 2.2 mb/d. This project became operational in March 2002.

Hamid-Reza Barzouki, deputy head of Soroush platform, said the crude oil in this field is ultra-heavy oil which could be processed by certain refineries.

“The refineries that could use this oil would produce valuable products,” he said.

He said Iran is exporting five types of crude oil from Soroush, Forouzan and Norouz fields.

“During the time of sanctions, the sale of Soroush and Norouz crude oil did not fall due to its reputation in the world,” he added.

Barzouki said the unique features of Soroush and Norouz oil have had big advantages for Iran’s crude oil sales.

Barzouki said Soroush is among few centers where no flaring is under way, adding that Soroush platform exports its oil and gas.

He said heavy crude oil desalting is a difficult job, adding: “In other platforms, oil is extracted and processed before being sent offshore for desalting, but in Soroush, all this is done altogether.”

“When this platform was launched and Shell delivered the project to us, it had not managed to resolve some important issues including desalting. They picked a group of consultants for this purpose, but they failed again. Finally, they left Iran due to political reasons,” said Barzouki.

“Over this time, our own forces changed the plans and formulae and finally managed to resolve the desalting challenge in Soroush and Norouz oil fields. Several months after Shell’s departure, Iranian specialists resolved this problem,” he added.

 

Drilling New Wells

 

Mohammad-Ali Rahimieh, head of BOC, said from among Hendijan, Bahregansar, Soroush and Norouz fields, the oil produced from Hendijan and Bahregansar are blended to be sent to onshore facilities for processing and storage.

He also said that the oil produced by Soroush and Norouz fields is exported after being processed.

“The quality of oil produced in these four fields is such that it has always its own customers and even during the time of sanctions, the sale of oil from these fields has not been disrupted at all,” he added.

Rahimieh aid plans have been under way for increased production. He said that new wells expected to be drilled in all four fields.

“In any oil field producing oil, decline will naturally occur and drilling of new wells or repairing oil wells in order to prevent natural increase or decrease in production will happen,” he said.

Rahimieh added that new wells are currently being drilled by two drilling rigs in Hendijan and Bahregansar regions.

 

Hendijan Field and Two Platforms

 

Rahimieh said a number of wells are expected to be drilled in Hendijan field, adding: “Two platforms are currently under construction by ISOICO in Bandar Abbas Yard. It is being done in parallel with the drilling of wells.”

“In the place where wellhead platform 7 should be installed, a jacket is being installed, but no topside has yet been installed,” he said. “In this region, 7 wells have been drilled and all of them are producing. One of the best IOOC wells is located in this region.”

Rahimieh said: “In wellhead platform 8, two wells have been spudded and there is plan for the drilling of several wells. The jacket has been installed, but no topdrive is installed.”

 

Oil Delivery from Azadegan to Bahregan

 

Rahimieh said oil produced in Azadegan field is planned to be carried to Bahregan via pipeline, adding: “In Bahregan, four three-million-barrel facilities have been constructed and installed, two of which have a 1-million-barrel capacity and two others are 500,000-barrel capacity.”

He said that these facilities are being used because they have been constructed ahead of schedule.

“But as soon as Azadegan’s oil reaches Bahregan, these facilities will be used for storing Azadegan oil,” said Rahimieh.

 

Domestic Manufacturing

 

Rahimieh said the period of sanctions was the start of move towards domestic manufacturing of equipment and parts required in the petroleum industry.

“Due to the imposition of sanctions against Iran’s petroleum industry, many foreign companies refused to sell us equipment and parts,” he added.

He said that the sanctions resulted in trust in domestic manufacturing companies. Rahimieh said pumps and its components are currently being manufactured by Iranian companies in Ahvaz, Isfahan and Tehran. He said all this equipment is of high quality and that electroengines required in the petroleum industry are supplied by a company based in the city of Mashhad.

He said that domestic companies boosted their manufacturing capabilities due to support provided for them, adding that most equipment could be procured domestically.

Rahimieh said Iran still depends partly on foreign companies for turbines, expressing hope that Iran would become self-reliant with the help of domestic companies.

 

Renovation of Platforms

 

Rahimieh underscored the necessity of reconstructing and renovating oil platforms, saying: “In the Persian Gulf region, due to high humidity, maintenance of oil platforms is of high significance and ignoring the platforms would cause corrosion. Platforms in Bahregan oil center are no exception.”

He said that tender bids are to be offered for painting old platforms in Norouz and Bahregansar, adding that renovation of two wells in Soroush platform is also to be put to tender.

 

Tough Job on Oil Platforms

 

Referring to the difficulty of work on oil platforms, Rahimieh said: “In some of oil platforms, there are many stairs and the staff have to go them up and down several times a day. On the long-term, that would harm their knee joints.”

He said he has worked on oil platforms for 12 years, adding: “Walking on iron is harmful and those working on oil platforms will suffer physical damage.”

 

Persian Gulf SFU

 

Rahimieh said Persian Gulf Floating Oil Storage Unit (FSU) is the largest terminal built in the world, adding that heavy crude is extracted from Soroush and Norouz oil fields before being processed and exported through by this FSU. He said that there are 21 storage tanks in this FSU.

He said this FSU was built by a South Korean company. He added: “The Korean company manufacturing the FSU has so far met all its obligations and there is only one problem with the metering system of this vessel. After its reparation, it should be endorsed by the Export Supervision Office.”

“At present, the problem with the metering system does not cause any disruption in exports and after this system is launched, measurements will be done inside the Persian Gulf FSU,” said Rahimieh.

Regarding Sourena FSU, he said: “At present, no oil is loaded on Sourena and Persian Gulf FSU has already replaced it.”

He said Sourena will be either overhauled or auctioned off.

 

6mb Oil Sale in 4 Months

 

The 2.2-million-barrel floating oil storage unit (FSU), dubbed the Persian Gulf, came on stream in Soroush oil region early this year.

The FSU has the capacity to take in some 200,000 barrels per day of heavy crude oil produced in Iran’s offshore oil fields of Soroush and Nowruz.

The floating terminal has a length of 337 meters, a width of 60 meters and a height of 33 meters.

The construction of FSU was over in 2011 and was installed after arriving at Iran’s waters. The launch of the FSU was delayed for two years due to restrictions imposed on Iran by the United States and the European Union. However, the FSU was launched following a series of complicated and tough operations by Iranian and Korean experts. The FSU is equipped with advanced fire extinguishing system and sophisticated systems dealing with H2S.

Since its inauguration, no life-threatening incidents have been reported on this FSU. This advanced FSU can accommodate 80 people and most of its functions are done automatically. Training of Iranian experts and specialists and indigenization of advanced FSUs are the most important achievements of the construction, installation and operation of Persian Gulf FSU for Iran’s petroleum industry.

Moreover, increased production from Soroush and Norouz oil fields, higher precision in oil export metering with the help of new advanced systems, using the most advanced storage unit, high safety and avoiding environment pollution of the Persian Gulf are among the most important measures undertaken by Iranian engineers for the first time in the country.

Mehdi Amir-Khosravi, deputy head of Persian Gulf FSU, said the contract for the construction of Persian Gulf FSU was signed with South Korea’s Samsung in 2008.

“After its construction, the FSU was moved to this region. Now nearly four months after its inauguration, 12 loadings have been done there,” he said.

Amir-Khosravi said 6 million barrels of oil have so far been exported from Soroush and Norouz fields. He said 3.1 million barrels of oil from Soroush and 2.9 million barrels from Norouz have been delivered to Chinese, Japanese and Indian oil tankers.

He said the storage capacity of this FSU was 2.2 million barrels, adding that Soroush and Norouz oil is stored separately in the storage unit to be delivered to customers based on their desired oil grade.

Amir-Khosravi said the storage tanks in the FSU could be replaced, adding: “After oil export, storage tanks are washed so that the residues are erased off and it becomes clear that there is no more oil inside.”

He noted that oil export from Persian Gulf FSU has so far not seen any delay or any other problem.

“Since the date of exports and its beginning are registered, any delay by vendor or buyer, except for delays stemming from bad weather conditions, would be punishable by cash fine,” said Amir-Khosravi.

Noting that Soroush and Norouz oil has certain properties and that certain refineries can process it he said: “It would be difficult to find an alternative for this oil.”

“For these refineries, buyers will have to purchase Soroush and Norouz oil and it might be interesting to know that the sanctions’ pressures have had negative impacts on them and they had to deal with feedstock shortage. Oil produced here has always had its own customers and we are ready to increase our export if the number of buyers increases even now,” he said.

 

Export from Persian Gulf FSU

 

Amir-Khosravi said the International Affairs Directorate of NIOC is tasked with marketing and finding oil buyers, adding: “In general, scheduling for annual exports is sent here and it would become clear when and how much oil should be exported. Then, oil buyers make the necessary arrangements and send tanker to Persian Gulf FSU on the specified date to receive oil.”

“Some time, due to inappropriate weather conditions, the buyers will be notified that the oil cargo may be delivered sooner,” he said.

Amir-Khosravi said the final day of arrival of oil tanker would be announced to foreign company and it will be updated after every hour. “Then, the Persian Gulf FSU will contact offshore operations officials for the necessary arrangements,” he added.

Then, he said, a group of five officers will go to the FSU by helicopter or ship to make an assessment of the situation and make necessary plans.

Amir-Khosravi said the plan will be announced to the tanker through radio transmission system. If the vessel is to berth at the FSU, the time and place should be announced to the tanker. This place is often between 1.5 and 2 miles away.

He said three tugboats will approach the FSU from behind and both sides in order to tie the tanker to the FSU with an 85-meter chain.

“After the tanker is connected to the FSU, 350-meter export pipelines are delivered to the tanker in a vessel. These pipes are connected to the tanker. As soon as the tanker valves are opened, the pumps of Persian Gulf FSU are switched on for the delivery of oil to the tanker,” he added.

Amir-Khosravi said after the start of oil export operations, sophisticated radar systems measure the delivery of oil real-time.

“Usually, for a 500,000-barrel range, a ±5 tolerance is considered and included in the contract. This tolerance is determined by the supervisor of export operations,” he said.

“After the end of export operations, the export pipes are disconnected from the tanker and the FSU is detached from the tanker and the tanker would be at the disposal of specialist,” said Amir-Khosravi.

 

Persian Gulf FSU Properties

 

Amir-Khosravi said oil extracted from Soroush and Norouz fields is heavy, adding: “Carrying this type of oil to long onshore distances is difficult. Therefore, the Soroush and Norouz oil is transferred to the Persian Gulf FSU for storage and processing.”

He said the properties of Persian Gulf FSU include pumping, storage and transfer of this type of crude oil. He added: “One of advantages of Persian Gulf FSU over other floating storage units used in the world is the ability of its connection to any size of very large crude carrier (VLCC). But other floating storage units can be only connected to small-size tankers.”

 

Persian Gulf Outstanding Features

 

Amir-Khosravi said marine standards are changing constantly and updated regularly, adding: “Sourena standards were outdated and the activity of Sourena could not continue based on new standards.”

He said that the Persian Gulf FSU is technologically different from Sourena and is operating in compliance with new marine standards.

“The vessels carrying oil products should have no direct contact with sea, as required by international standards. The middle part of these vessels should be also empty or filled with water. Sourena did not have this capability and did not have a balance reservoir,” he added.

Noting that a fluid is required to be inside the FSU for oil to exit completely, Amir-Khosravi said “In Sourena, 300,000 b/d of oil remained in the storage tanks to maintain balance, and that amount of oil was never exported. But in Persian Gulf FSU, this problem is not seen and oil could be entirely pushed out of storage tank.”

“Moreover, the exterior wall of the FSU could be filled with seawater to preserve its balance,” he added.

He said 23 tankers are storing oil for the Persian Gulf FSU, adding: “This FSU has been built in compliance with Norwegian DNV ranking which is one of the most reputed in the world.”

“Given the fact that these tankers store two different grades of oil, when they are filled or emptied, forces are exerted upon the vessel. Controlling these stresses has become easy in the Persian Gulf FSU and the storage tanks in the second wall could be easily filled with water,” said Amir-Khosravi.

 

Specialized Forces

 

Amir-Khosravi said the staff employed on Persian Gulf FSU are young, adding that graduates of chemical, petroleum and mechanical engineering are recruited to work on vessels while graduates of marine science are employed for tankers.

“One of advantages of recruitment of young staff in the Persian Gulf FSU is their specialty in crude oil metering and their knowledge about production and export,” he said.

Amir-Khosravi said those operating on Persian Gulf FSU have a good command of English and they can easily communicate in English with foreigners.

 

FPSO

 

A floating production, storage and offloading (FPSO) unit is a floating vessel used by the offshore oil and gas industry for the production and processing of hydrocarbons, and for the storage of oil. An FPSO vessel is designed to receive hydrocarbons produced by itself or from nearby platforms or subsea template, process them, and store oil until it can be offloaded onto a tanker or, less frequently, transported through a pipeline. FPSOs are preferred in frontier offshore regions as they are easy to install, and do not require a local pipeline infrastructure to export oil. FPSOs can be a conversion of an oil tanker or can be a vessel built specially for the application. A vessel used only to store oil (without processing it) is referred to as a floating storage and offloading vessel (FSO). There are also under construction (as at 2013) floating liquefied natural gas (FLNG) vessels, which will extract and liquefy natural gas on board.

Oil produced from offshore production platforms can be transported to the mainland either by pipeline or by tanker. When a tanker is chosen to transport the oil, it is necessary to accumulate oil in some form of storage tank such that the oil tanker is not continuously occupied during oil production, and is only needed once sufficient oil has been produced to fill the tanker.

Floating production, storage and offloading vessels are particularly effective in remote or deepwater locations where seabed pipelines are not cost effective. FPSOs eliminate the need to lay expensive long-distance pipelines from the processing facility to an onshore terminal. This can provide an economically attractive solution for smaller oil fields which can be exhausted in a few years and do not justify the expense of installing a pipeline. Furthermore, once the field is depleted, the FPSO can be moved to a new location.

 

Bahregan Sells Oil Despite Sanctions

 

By Mohammad Afshin

 

The Iranian Offshore Oil Company (IOOC), a subsidiary of National Iranian Oil Company (NIOC), is among the biggest offshore producers of oil. IOOC is tasked with recovery from oil and gas fields off Persian Gulf and the Sea of Oman. The main regions operated by IOOC in the Persian Gulf include Bahregan, Kharg, Siri, Lavan, Kish and Qeshm oil centers.

Bahregan Oil Center (BOC) is among Iran’s important oil regions. It covers Bahregansar, Hendijan, Soroush and Norouz oil fields.

Here we offer a general review of oil activities in BOC:

 

Bahregansar & Hendijan Fields

 

Bahregansar oil field is located 56 kilometers west of Bahregan region. Bahregansar platform was bombarded many times by Iraqi warplanes during years of imposed war (1980-1988).

After the end of the war, the necessary arrangements were made for the reconstruction of the field and renovation of offshore and onshore installations. The new installations were launched in 1989.

Bahregansar is the first and the oldest oil platform in the Persian Gulf to have been administered by Iranian engineers following the 1979 Islamic Revolution. The new Bahregansar platform is an advanced one which has been designed and constructed by Iranians. It is now operating alongside the older platform. Hendijan field is located 55 kilometers west of Bahregan region. It has 9 wells on its satellite platforms.

 

Norouz Field

 

Norouz oil field, which was almost destroyed during the imposed war, is in BOC. At the beginning, it had 14 active wells. After the end of the imposed war, onshore and offshore installations were reconstructed and the development and renovation of Norouz was planned within the framework of a buyback contract which involved drilling of 17 new horizontal wells, a production platform, a well platform and a living quarter platform.

The old Norouz oil platform is among the old platforms in the Persian Gulf. The new platform was built in cooperation with Shell several years ago. Iranian engineers are currently taking care of this new platform.

Ali-Reza Afrasiabi, director of Norouz platform, said crude oil recovery from Norouz field started more than five decades ago.

“In the past, oil from the old Norouz field used to be carried to Bahregan through pipeline. But after development, we no longer had any production in the old Norouz and it continued until Shell left,” he said.

“After Shell left, it was felt that the level of production could increase and that is why we reopened some of wells in the old Norouz and currently four wells from old Norouz are producing 7,000 to 8,000 b/d of oil,” he added.

Afrasiabi said 35 people are present in each working shift in Norouz platform, adding that most of them had received training by Shell. He added that IOOC has in recent years provided training for the staff.

He also touched on the difficult conditions the platform experienced after Shell left, saying: “Reparation of fire water pumps was one of major measures handled by Iranians. Moreover, gas compressors were launched and flaring of associated gas was prevented.”

He said 40 mcf/d of gas used to be flared when Shell was present, adding that this figure has now fallen below 8 mcf/d.

 

Soroush Field

 

One of the largest platforms in the world in terms of crude oil processing is Soroush oil platform in Soroush field. Known to be among the most advanced platforms in the world, it is located some 110 kilometers from Bahregan region.

Soroush field was bombarded during the Iraqi war and its oil production was halted due to damage inflicted by Iraqi fighter jets. In March 2000, a buyback contract was signed for the development and renovation of this field. The development project involved drilling of 10 horizontal production wells, two wells for injecting contaminated water into the reservoir, two well platforms, one production platform, one living quarter platform and a floating crude oil storage and export system with a capacity of 2.2 mb/d. This project became operational in March 2002.

Hamid-Reza Barzouki, deputy head of Soroush platform, said the crude oil in this field is ultra-heavy oil which could be processed by certain refineries.

“The refineries that could use this oil would produce valuable products,” he said.

He said Iran is exporting five types of crude oil from Soroush, Forouzan and Norouz fields.

“During the time of sanctions, the sale of Soroush and Norouz crude oil did not fall due to its reputation in the world,” he added.

Barzouki said the unique features of Soroush and Norouz oil have had big advantages for Iran’s crude oil sales.

Barzouki said Soroush is among few centers where no flaring is under way, adding that Soroush platform exports its oil and gas.

He said heavy crude oil desalting is a difficult job, adding: “In other platforms, oil is extracted and processed before being sent offshore for desalting, but in Soroush, all this is done altogether.”

“When this platform was launched and Shell delivered the project to us, it had not managed to resolve some important issues including desalting. They picked a group of consultants for this purpose, but they failed again. Finally, they left Iran due to political reasons,” said Barzouki.

“Over this time, our own forces changed the plans and formulae and finally managed to resolve the desalting challenge in Soroush and Norouz oil fields. Several months after Shell’s departure, Iranian specialists resolved this problem,” he added.

 

Drilling New Wells

 

Mohammad-Ali Rahimieh, head of BOC, said from among Hendijan, Bahregansar, Soroush and Norouz fields, the oil produced from Hendijan and Bahregansar are blended to be sent to onshore facilities for processing and storage.

He also said that the oil produced by Soroush and Norouz fields is exported after being processed.

“The quality of oil produced in these four fields is such that it has always its own customers and even during the time of sanctions, the sale of oil from these fields has not been disrupted at all,” he added.

Rahimieh aid plans have been under way for increased production. He said that new wells expected to be drilled in all four fields.

“In any oil field producing oil, decline will naturally occur and drilling of new wells or repairing oil wells in order to prevent natural increase or decrease in production will happen,” he said.

Rahimieh added that new wells are currently being drilled by two drilling rigs in Hendijan and Bahregansar regions.

 

Hendijan Field and Two Platforms

 

Rahimieh said a number of wells are expected to be drilled in Hendijan field, adding: “Two platforms are currently under construction by ISOICO in Bandar Abbas Yard. It is being done in parallel with the drilling of wells.”

“In the place where wellhead platform 7 should be installed, a jacket is being installed, but no topside has yet been installed,” he said. “In this region, 7 wells have been drilled and all of them are producing. One of the best IOOC wells is located in this region.”

Rahimieh said: “In wellhead platform 8, two wells have been spudded and there is plan for the drilling of several wells. The jacket has been installed, but no topdrive is installed.”

 

Oil Delivery from Azadegan to Bahregan

 

Rahimieh said oil produced in Azadegan field is planned to be carried to Bahregan via pipeline, adding: “In Bahregan, four three-million-barrel facilities have been constructed and installed, two of which have a 1-million-barrel capacity and two others are 500,000-barrel capacity.”

He said that these facilities are being used because they have been constructed ahead of schedule.

“But as soon as Azadegan’s oil reaches Bahregan, these facilities will be used for storing Azadegan oil,” said Rahimieh.

 

Domestic Manufacturing

 

Rahimieh said the period of sanctions was the start of move towards domestic manufacturing of equipment and parts required in the petroleum industry.

“Due to the imposition of sanctions against Iran’s petroleum industry, many foreign companies refused to sell us equipment and parts,” he added.

He said that the sanctions resulted in trust in domestic manufacturing companies. Rahimieh said pumps and its components are currently being manufactured by Iranian companies in Ahvaz, Isfahan and Tehran. He said all this equipment is of high quality and that electroengines required in the petroleum industry are supplied by a company based in the city of Mashhad.

He said that domestic companies boosted their manufacturing capabilities due to support provided for them, adding that most equipment could be procured domestically.

Rahimieh said Iran still depends partly on foreign companies for turbines, expressing hope that Iran would become self-reliant with the help of domestic companies.

 

Renovation of Platforms

 

Rahimieh underscored the necessity of reconstructing and renovating oil platforms, saying: “In the Persian Gulf region, due to high humidity, maintenance of oil platforms is of high significance and ignoring the platforms would cause corrosion. Platforms in Bahregan oil center are no exception.”

He said that tender bids are to be offered for painting old platforms in Norouz and Bahregansar, adding that renovation of two wells in Soroush platform is also to be put to tender.

 

Tough Job on Oil Platforms

 

Referring to the difficulty of work on oil platforms, Rahimieh said: “In some of oil platforms, there are many stairs and the staff have to go them up and down several times a day. On the long-term, that would harm their knee joints.”

He said he has worked on oil platforms for 12 years, adding: “Walking on iron is harmful and those working on oil platforms will suffer physical damage.”

 

Persian Gulf SFU

 

Rahimieh said Persian Gulf Floating Oil Storage Unit (FSU) is the largest terminal built in the world, adding that heavy crude is extracted from Soroush and Norouz oil fields before being processed and exported through by this FSU. He said that there are 21 storage tanks in this FSU.

He said this FSU was built by a South Korean company. He added: “The Korean company manufacturing the FSU has so far met all its obligations and there is only one problem with the metering system of this vessel. After its reparation, it should be endorsed by the Export Supervision Office.”

“At present, the problem with the metering system does not cause any disruption in exports and after this system is launched, measurements will be done inside the Persian Gulf FSU,” said Rahimieh.

Regarding Sourena FSU, he said: “At present, no oil is loaded on Sourena and Persian Gulf FSU has already replaced it.”

He said Sourena will be either overhauled or auctioned off.

 

6mb Oil Sale in 4 Months

 

The 2.2-million-barrel floating oil storage unit (FSU), dubbed the Persian Gulf, came on stream in Soroush oil region early this year.

The FSU has the capacity to take in some 200,000 barrels per day of heavy crude oil produced in Iran’s offshore oil fields of Soroush and Nowruz.

The floating terminal has a length of 337 meters, a width of 60 meters and a height of 33 meters.

The construction of FSU was over in 2011 and was installed after arriving at Iran’s waters. The launch of the FSU was delayed for two years due to restrictions imposed on Iran by the United States and the European Union. However, the FSU was launched following a series of complicated and tough operations by Iranian and Korean experts. The FSU is equipped with advanced fire extinguishing system and sophisticated systems dealing with H2S.

Since its inauguration, no life-threatening incidents have been reported on this FSU. This advanced FSU can accommodate 80 people and most of its functions are done automatically. Training of Iranian experts and specialists and indigenization of advanced FSUs are the most important achievements of the construction, installation and operation of Persian Gulf FSU for Iran’s petroleum industry.

Moreover, increased production from Soroush and Norouz oil fields, higher precision in oil export metering with the help of new advanced systems, using the most advanced storage unit, high safety and avoiding environment pollution of the Persian Gulf are among the most important measures undertaken by Iranian engineers for the first time in the country.

Mehdi Amir-Khosravi, deputy head of Persian Gulf FSU, said the contract for the construction of Persian Gulf FSU was signed with South Korea’s Samsung in 2008.

“After its construction, the FSU was moved to this region. Now nearly four months after its inauguration, 12 loadings have been done there,” he said.

Amir-Khosravi said 6 million barrels of oil have so far been exported from Soroush and Norouz fields. He said 3.1 million barrels of oil from Soroush and 2.9 million barrels from Norouz have been delivered to Chinese, Japanese and Indian oil tankers.

He said the storage capacity of this FSU was 2.2 million barrels, adding that Soroush and Norouz oil is stored separately in the storage unit to be delivered to customers based on their desired oil grade.

Amir-Khosravi said the storage tanks in the FSU could be replaced, adding: “After oil export, storage tanks are washed so that the residues are erased off and it becomes clear that there is no more oil inside.”

He noted that oil export from Persian Gulf FSU has so far not seen any delay or any other problem.

“Since the date of exports and its beginning are registered, any delay by vendor or buyer, except for delays stemming from bad weather conditions, would be punishable by cash fine,” said Amir-Khosravi.

Noting that Soroush and Norouz oil has certain properties and that certain refineries can process it he said: “It would be difficult to find an alternative for this oil.”

“For these refineries, buyers will have to purchase Soroush and Norouz oil and it might be interesting to know that the sanctions’ pressures have had negative impacts on them and they had to deal with feedstock shortage. Oil produced here has always had its own customers and we are ready to increase our export if the number of buyers increases even now,” he said.

 

Export from Persian Gulf FSU

 

Amir-Khosravi said the International Affairs Directorate of NIOC is tasked with marketing and finding oil buyers, adding: “In general, scheduling for annual exports is sent here and it would become clear when and how much oil should be exported. Then, oil buyers make the necessary arrangements and send tanker to Persian Gulf FSU on the specified date to receive oil.”

“Some time, due to inappropriate weather conditions, the buyers will be notified that the oil cargo may be delivered sooner,” he said.

Amir-Khosravi said the final day of arrival of oil tanker would be announced to foreign company and it will be updated after every hour. “Then, the Persian Gulf FSU will contact offshore operations officials for the necessary arrangements,” he added.

Then, he said, a group of five officers will go to the FSU by helicopter or ship to make an assessment of the situation and make necessary plans.

Amir-Khosravi said the plan will be announced to the tanker through radio transmission system. If the vessel is to berth at the FSU, the time and place should be announced to the tanker. This place is often between 1.5 and 2 miles away.

He said three tugboats will approach the FSU from behind and both sides in order to tie the tanker to the FSU with an 85-meter chain.

“After the tanker is connected to the FSU, 350-meter export pipelines are delivered to the tanker in a vessel. These pipes are connected to the tanker. As soon as the tanker valves are opened, the pumps of Persian Gulf FSU are switched on for the delivery of oil to the tanker,” he added.

Amir-Khosravi said after the start of oil export operations, sophisticated radar systems measure the delivery of oil real-time.

“Usually, for a 500,000-barrel range, a ±5 tolerance is considered and included in the contract. This tolerance is determined by the supervisor of export operations,” he said.

“After the end of export operations, the export pipes are disconnected from the tanker and the FSU is detached from the tanker and the tanker would be at the disposal of specialist,” said Amir-Khosravi.

 

Persian Gulf FSU Properties

 

Amir-Khosravi said oil extracted from Soroush and Norouz fields is heavy, adding: “Carrying this type of oil to long onshore distances is difficult. Therefore, the Soroush and Norouz oil is transferred to the Persian Gulf FSU for storage and processing.”

He said the properties of Persian Gulf FSU include pumping, storage and transfer of this type of crude oil. He added: “One of advantages of Persian Gulf FSU over other floating storage units used in the world is the ability of its connection to any size of very large crude carrier (VLCC). But other floating storage units can be only connected to small-size tankers.”

 

Persian Gulf Outstanding Features

 

Amir-Khosravi said marine standards are changing constantly and updated regularly, adding: “Sourena standards were outdated and the activity of Sourena could not continue based on new standards.”

He said that the Persian Gulf FSU is technologically different from Sourena and is operating in compliance with new marine standards.

“The vessels carrying oil products should have no direct contact with sea, as required by international standards. The middle part of these vessels should be also empty or filled with water. Sourena did not have this capability and did not have a balance reservoir,” he added.

Noting that a fluid is required to be inside the FSU for oil to exit completely, Amir-Khosravi said “In Sourena, 300,000 b/d of oil remained in the storage tanks to maintain balance, and that amount of oil was never exported. But in Persian Gulf FSU, this problem is not seen and oil could be entirely pushed out of storage tank.”

“Moreover, the exterior wall of the FSU could be filled with seawater to preserve its balance,” he added.

He said 23 tankers are storing oil for the Persian Gulf FSU, adding: “This FSU has been built in compliance with Norwegian DNV ranking which is one of the most reputed in the world.”

“Given the fact that these tankers store two different grades of oil, when they are filled or emptied, forces are exerted upon the vessel. Controlling these stresses has become easy in the Persian Gulf FSU and the storage tanks in the second wall could be easily filled with water,” said Amir-Khosravi.

 

Specialized Forces

 

Amir-Khosravi said the staff employed on Persian Gulf FSU are young, adding that graduates of chemical, petroleum and mechanical engineering are recruited to work on vessels while graduates of marine science are employed for tankers.

“One of advantages of recruitment of young staff in the Persian Gulf FSU is their specialty in crude oil metering and their knowledge about production and export,” he said.

Amir-Khosravi said those operating on Persian Gulf FSU have a good command of English and they can easily communicate in English with foreigners.

 

FPSO

 

A floating production, storage and offloading (FPSO) unit is a floating vessel used by the offshore oil and gas industry for the production and processing of hydrocarbons, and for the storage of oil. An FPSO vessel is designed to receive hydrocarbons produced by itself or from nearby platforms or subsea template, process them, and store oil until it can be offloaded onto a tanker or, less frequently, transported through a pipeline. FPSOs are preferred in frontier offshore regions as they are easy to install, and do not require a local pipeline infrastructure to export oil. FPSOs can be a conversion of an oil tanker or can be a vessel built specially for the application. A vessel used only to store oil (without processing it) is referred to as a floating storage and offloading vessel (FSO). There are also under construction (as at 2013) floating liquefied natural gas (FLNG) vessels, which will extract and liquefy natural gas on board.

Oil produced from offshore production platforms can be transported to the mainland either by pipeline or by tanker. When a tanker is chosen to transport the oil, it is necessary to accumulate oil in some form of storage tank such that the oil tanker is not continuously occupied during oil production, and is only needed once sufficient oil has been produced to fill the tanker.

Floating production, storage and offloading vessels are particularly effective in remote or deepwater locations where seabed pipelines are not cost effective. FPSOs eliminate the need to lay expensive long-distance pipelines from the processing facility to an onshore terminal. This can provide an economically attractive solution for smaller oil fields which can be exhausted in a few years and do not justify the expense of installing a pipeline. Furthermore, once the field is depleted, the FPSO can be moved to a new location.

 

NIGC Confirms Interest of France’s Total, Technip

 

National Iranian Gas Company (NIGC) chief has said that France-based firms are considering investments in Iran.

Hamid-Reza Araqi said the French companies expressed their interest in Iran during meetings on the sidelines of the recent World Gas Conference in Paris.

On the sidelines of the World Gas Conference in Paris, the chief executives of 15 French companies including Total, Technip, Schneider and Vinci Energy held direct talks with Araqi to discuss opportunities in Iran.

Araqi also met with France’s MEDEF which brings together French entrepreneurs.

“These companies voiced their readiness for presence and investment in Iran and contribution to a variety of projects in Iran’s gas industry,” he said.

Araqi said he also met with France’s MEDEF which brings together French entrepreneurs.

MEDEF comprises 100 big French companies including Total, Airbus, banks and investment companies involved in energy, power transmission, refinery construction, oil and gas storage and other sectors of oil and gas industries.

Araqi said NIGC offered 18 major projects for investment in Paris. They included Iran Gas Trunklines IX and XI and the completion of IGAT VII and storage projects.

He said that Iran’s presence received rapturous welcome at the World Gas Conference, adding that different ways of investment including build-operate-own (BOO), build-operate-transfer (BOT) and foreign direct investment (FDI) were discussed.

Foreign oil and gas companies are waiting for the easing of sanctions on Iran under a long-awaited nuclear deal between Tehran and six world powers.

The World Gas Conference (WGC) is the most important event of the International Gas Union (IGU) triennium. The three year period between each event generates strong expectations.

The role of natural gas is increasing in the global energy mix, now presenting a great opportunity for growing economies which are faced with the big challenge of fuelling development in an environmentally sustainable way.

IGU is a worldwide non-profit organization aimed at promoting the political, technical and economic progress of the gas industry.

 

London Clear Message to Iran Oil

 

Officials and experts have regularly attended the World National Oil Companies Congress in London. But this time, the congress was held amid intensive negotiations between Iran and six world powers with a view to reaching a comprehensive nuclear deal.

Participants in the congress expressed hope that international sanctions on Iran would be lifted to facilitate investment in the oil and gas-rich country.

During the two-day event, more than 30 oil officials, experts and representatives of international oil companies exchanged views on achievements as well as strategic challenges to the petroleum industry.

But the most important discussions were held about Iran on the sidelines of the congress.

Paul Stones of the Chatham House Royal Institute of International Affairs said international oil companies are willing to return to Iran. He said that Iran’s market would become more attractive in case Iran manages to revise its oil contracts.

He said Iran’s law does not allow production sharing agreement (PSA) for implementation of oil and gas projects.

He added that this problem could be resolved by making amendments to terms and conditions in oil contracts to become internationally attractive.

Simon Telling, Operations Director at RPS Energy, said foreign companies will flood Iran as soon as the sanctions are lifted.

He said that many foreign companies are willing to do business in Iran, adding that they are so eager to return, as Iran has been closed to them for a long time.

Chris Cook, researcher at University College London, said Iranians have been highly flexible vis-à-vis challenges and problems.

He said Iranians managed to restructure their economy during years of sanctions, adding that Arab countries would not have been able to go the same way had they been under pressure alike by the West.

 

Foreigners Seek IPC Clarification in Tehran

 

A group of foreign companies have travelled to Tehran to gather more detailed information about Iran’s new model of oil contracts, a senior official said.

Mehdi Hosseini, head of a petroleum ministry committee tasked with revising oil contracts, said top European companies have come to Tehran for discussion about Iran Petroleum Contract (IPC).

“The talks between Iran and European companies are focused on expertise, regardless of political issues,” he said. “In these meetings, the foreign parties demanded more clarification on the new model of Iran oil contracts, and the Iranian team responds to their questions and clarifies ambiguities.”

Hosseini said “constructive” expert-level talks have already been held with Asian companies about investment in Iran after the end of sanctions.

The presidential office is examining the draft of IPC which is designed to tempt foreign companies back.

IPC is expected to replace “buy-back” contracts which, he added, are no longer attractive to foreign companies.

Under a buyback deal, the host government agrees to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.

But under the IPC, National Iranian Oil Company will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.

Foreign companies are expected to rush back to Iran as hopes soar for relief in sanctions imposed on the Islamic Republic over its nuclear program.

 

Iran Woos 170 Companies for Gas Export

 

Iran’s state-run gas company held talks with 170 foreign companies last calendar year for gas exports, the head of the company said.

Ali-Reza Kameli, head of National Iranian Gas Exports Company, said the last calendar year, which started on March 21, was the first year Iran witnessed a positive gas balance.

He said that Iran’s gas production is to continue over the coming three years to reach 1 bcm/d in 2019. Then, he added, Iran would be able to export gas.

Iran holds 34 tcm of gas, which makes the country the largest holder of gas in the world, Kameli said.

He said Iran’s priority for gas exports are neighbors like Turkmenistan, Armenia, Azerbaijan, Turkey and Iraq.

“In the meantime, talks have been held with other Persian Gulf countries like the United Arab Emirates, Kuwait, Bahrain and Oman,” he said.

Kameli said negations over gas contracts are often lengthy.

He also said that talks are under way for Iran to export liquefied natural gas (LNG). He said that two major LNG projects – Pars LNG and Persian LNG – came to a halt due to international sanctions.

“But Iran LNG project is 50% complete and we are waiting for sanctions relief to import the required equipment and installations for this project,” said Kameli.

LNG makes up a 31% share in world gas trade, 70% of which is in Asia and Middle East.

“Entry into LNG industry and LNG market means access to farther markets which could not be accessed via pipeline,” he said.

Kameli said there are currently 60 LNG terminals in Asia, waiting to receive the supercooled product.

“This means that the world and particularly Asian countries are preparing to supply their needs through LNG. Naturally, Iran should be prepared for this growth in demand,” he said.

                                                                    

“Iran will be able to export gas to Persian Gulf littoral states by building a maximum 200-kilometer pipeline. Naturally, these countries are Iran’s top priority for gas exports due to further interests, shorter  time and lower costs,” said Kameli.

He said that access to Europe’s gas market would need at least 4,000 kilometers of pipeline, which costs too much and takes long.

“But it does not mean that we do not eye the European market. We hold a long-term look at this market and we hope to be able to access Europe’s market through LNG,” said Kameli.

Major portion of Iran’s gas is accumulated in the giant offshore South Par gas field. South Pars, divided into 29 development phases, holds 40 tcm of natural gas, or 21% of world’s total gas reserves, and 50 billion barrels of condensate. 

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

 

Technology Management, Key to Iran Drilling Industry

 

By Hadi Mohammadi

 

One of the most important characteristics of the current era is the fast pace of developments. New technologies are emerging and commercial equations are disrupted. Management systems are required to catch up with these changes. Technology-oriented companies are either developers of technology or benefiting from technologies they purchase. These companies must have a system to regularly monitor basic, key and emerging technologies in the world so that it would determine the appropriate time and method for the application of technology. As much as a correct process of transfer of technology would help boost the technological skills of an organization and end in the acquisition of technical knowhow, its improper application may lead to the waste of resources, permanent dependence and weakening of endogenous research and development within the organization.

In this article, technology management is introduced as an interdisciplinary issue connecting science, engineering and management. Then, musts and mustn'ts, challenges of technology-based industries including oil and gas industries and practical approaches would be discussed.

 

Technology Management and Successful Managers

 

Today, in scientific issues, technology is defined as the collection of knowledge, products, procedures, tools, methods and systems, which contribute to the manufacturing of commodities or provision of services. Technology is a knowledge which we use for manufacturing commodities, providing services and improving the use of our valuable but limited resources.

Management of technology comprises five major procedures. They are closely linked and the absence of either of them would leave the puzzle of technology management incomplete. These five procedures are as follows:

 

1. Exploration and identification of relevant technologies
2. Selection of technologies needed by enterprises
3. Acquisition of technology
4. Application of technology
5. Protection of technology and technical expertise

 

Technology in Oil/Gas Drilling

 

Oil and gas drilling industry is nearly century-old. This industry is following a quite calm route towards upgrading technology and we have not yet seen any revolutionary changes in this industry.

Of course, in compliance with the hardship of working in this industry and in light of necessity and conditions, most changes have been focused upon further mechanization of affairs in operation and control sections on the one hand ,and information gathering by applying new technologies, on the other.

According to new divisions, technologies applied in drilling industry are classified under drilling and technical services categories.

The drilling sector involves drilling rig (structure, pumps, engines and generators, mud rotary system, transmission system and drill working). Over recent years, the drilling system has not changed too much and rotary drilling system is still being used.

Compared with drilling, specialized technical services have seen more technological changes. In recent years, new services based on modern technologies have entered the drilling industry. This section includes cement, acid, coiled tubing, well testing, well completion, logging, drilling mud data and even services provided to oil and gas wells outside drilling operations.

From the standpoint of classification of technologies, the most important basic technologies for drilling industry in Iran include rotary drilling technology, drilling fluid technology, cementing technology, pipe laying technology, well testing technology, well completion technology and acidizing technology.

In this classification, key technologies include topdrive technology, downhole engines, horizontal and directional drilling, drilling with coiled tubing, air drilling, extended reach drilling, underbalanced drilling, deepwater drilling, high-temperature and high-pressure drilling and small-diameter well drilling.

With regard to emerging technologies, the situation is definitely different from the other two cases. In today’s oil and gas drilling industry, big companies invest in technology and are willing to be the first holder and user or seller of a significant emerging technology. To that effect, they are experiencing big jumps.

Among major points which have come to the fore in recent years in the world of technology in general and in drilling technology in particular, one may refer to drilling with casing, lab-scale laser drilling, nanotechnology and its use in drilling, information technology (IT), and automation technology, modern technology in materials and metallurgy, modern technology in chemistry, biochemistry and biotechnology.

 

Technological Status of Drilling Companies

 

Based on basic, key and emerging technologies explained here, the status of each company involved in the oil and gas drilling industries is determined. The companies are assessed on the basis of the technology they apply in their drilling operations.

Companies with basic technology often work out strategies for copying new technologies.

Medium-level companies with key technology have competitive advantages. Technologies and intelligent properties provide separate commodities for these companies. These companies are no leader in technology and they try hard to develop from this aspect. These organizations could be described as “progressive followers”. Change and improvement are often the strategy adopted by these companies for acquiring technology. However, they might pursue the case in a different way to become a leader of technology through getting license.

Companies with highest level of technology are emerging. The companies making progress in the market are often filled with new commodities and offer new services. The strategy of technology acquisition by these companies is invention and improvement.

For instance, if an organization intends to become a progressive one, the strategies of acquisition of technology should change, too. Organizations have often different types of technology in different parts of their chart. Big companies with clearly defined strategy often benefit from their strengths in some sections of technology for assisting weaker sections.

In the oil and gas drilling industry, multinational and Western companies have long been “leading in the market.” By getting linked to prestigious universities in the world and by earmarking a high percentage of their budget to research and technology, they have always developed new technologies for this industry. In addition, from time to time, they have presented new versions of their technologies in a bid to keep the market dependent on themselves.

Level II companies in this industry are often companies in the East, mainly from China. These companies often buy technology before trying reverse engineering and developing their own brand. In the next step, these companies would acquire a big share of the market as vendors of technology.

The highest number of companies in this industry is classified under Level III companies. Most drilling service providing companies concentrate their efforts on acquiring customary technologies for getting a share of the market and not introducing their latest services. In other words, when technology goes from emerging to key stage and then to basic stage, this technology would be exclusively purchased and used.

In Iran, oil and gas drilling companies and technical service providers have expanded their activities in the aftermath of the 1979 Islamic Revolution and specifically in recent years.

Most of these companies are categorized under the three classes of technology explained earlier. However, a few number of big companies involved in this industry have developed links with prestigious universities including Sharif University of Technology, University of Tehran, Amir Kabir University of Technology, Petroleum University of Technology, Research Institute of Petroleum Industry, Shahid Chamran University, Khuzestan Park of Science and Technology and several other academic research centers. These universities and research centers are known as centers of excellence in different sectors of technology related to drilling.

 

Conclusion

 

Based on what was outlined above, for technology-oriented companies involved in the drilling industry, making decision about the level of technology they intend to be classified under is a very vital and strategic move.

These companies have to set technology management as one of their main pillars and while monitoring the status of technology in their structure, analyze and make decision about preservation or elimination of technology through their technology management system.

Moreover, companies willing to be classified in the second or third levels are required to conduct studies and follow up on world drilling technologies through establishing a future prospect unit as one of their most essential measures. They should also strengthen their research and development units to develop a precise plan for acquiring their necessary technologies.

Domestic Manufacturing in Iran Petroleum Industry

 

Indigenization and acquisition of state-of-the-art technology have always been a major cause of concern for Iran’s petroleum industry.  Over recent years, petroleum industry managers have seriously worked to make maximum benefit from domestic capabilities for meeting the country’s needs. To that effect, the significance and advantages of commercialization and gaining revenues should not be ignored. A simple estimate indicated that 50% to 70% of several hundred billion dollars in investment, envisaged to be made in the petroleum industry in the coming decades, would be spent on the purchase of equipment.

Making policies for overhaul in the four main subsidiaries of Ministry of Petroleum, supervision on petroleum industry standards, assessment of the qualifications of contractors, consultants and manufacturers involved in the petroleum industry, drawing up IPS standards, and compiling vendor list for commodities required in the petroleum industry are among tasks assigned to the Office of Deputy Minister of Petroleum for Engineering Affairs.

Emad Hosseini, deputy petroleum minister for engineering affairs, told Iran Petroleum in an interview that Iran’s Ministry of Petroleum has always prioritized domestic manufacturers and companies.

He said an electronic system has been launched for the supply of commodities for Iran’s petroleum industry.

“The launch of this system was aimed at promoting domestic manufacturing, defining integrated supportive policies, industrial self-sufficiency and preparing integrated ground in all commercial sectors and purchasing centers of petroleum ministry,” Hosseini said.

He said one-phase and two-phase tender bids have been loaded in the system, adding: “More than 2,000 manufacturing and procurement companies in the petroleum industry equipment and services have so far registered in the commodity electronic system.”

He referred to Iran’s 107-year-old petroleum industry and the process of purchase of equipment and commodities over the past century, saying: “By using the electronic commodity system, this process has significantly changed. Before this, state-run companies used to purchase foreign-made products as they knew nothing about domestically made products, while we knew there were similar products made in the country.”

 

1m Items Identified

 

Hosseini said this system blocks irregularities in the petroleum industry, adding: “The electronic system of commodities works like a central system whose different modules process demands in a fully mechanized way from the state of demand to delivery and clearance of commodity.”

He said more than 1.1 million items of petroleum industry commodities were identified and coded through this system.

Noting that quantity and quality are two important conditions for using domestically manufactured commodities for the petroleum industry, Hosseini said that Iranian and foreign companies will ,from now on, run for tender bids for commodity manufacturing under equal conditions.

Hosseini said the issue of domestic manufacturing in Iran is an issue outside political factionalism, adding: “Now, given the Western sanctions against our country, supporting domestic manufacturing as a strategy is among Iran’s macro policies.”

 

Sophisticated Commodities

 

Hosseini said10 groups of sophisticated petroleum industry equipment are to be manufactured in Iran.

“These 10 groups are divided into 640 items of commodities which are to be manufactured domestically for the first time in Iran in two years. Now, more than 70% of the country’s petroleum industry equipment is manufactured domestically and the remaining 30% which includes hi-tech rotary equipment for whose manufacturing Iranian specialists have made great success,” he added.

Hosseini said improving productivity indices like cutting time and cost for the implementation of projects is a top priority for Iran’s Ministry of Petroleum in light of special conditions prevailing over the country with regard to finance.

He said that expert and specialized committees have been set up at the Ministry of Petroleum to draw up plans for management of knowhow in the petroleum industry.

Hosseini said the costs for the implementation of petroleum industry projects have unreasonably trebled in recent years.

“One of the current causes of concern is the high cost of implementation of projects. Therefore, one of our objectives behind drawing up this bylaw in order to cut costs and time for the execution of oil and gas projects in the country,” he said.

Hosseini said cutting costs for the implementation of petroleum projects would lead to attracting more investment for this industry, adding that petroleum industry experts and university professors from across the country are contributing.

He said a bylaw has been drawn up for managing assets for the petroleum industry, adding: “This issue is being done for the first time in the country and even in the Middle East. This bylaw has 10 main indices, including self-assessment.”

Hosseini said one of basic measures by the administration of President Hassan Rouhani in the petroleum industry was the prioritization of strategic projects.

“For example, this policy was executed in South Pars gas field over the past two years and we saw that 100 mcm/d of gas was added to the country’s output. Based on existing plans, the same amount is to be added to Iran’s production this year,” he said.

Hosseini said involvement of Iranian companies in Phases 12, 15&16 of South Pars are indicative of Iranians’ self-belief with regard to the petroleum industry.

“In these projects, Iranian companies mainly manufactured equipment through reverse engineering. But from now on, domestic manufacturing in Iran is planned to go ahead in a knowledge-based manner,” he added.

Hosseini said development of knowledge-based companies is a priority of petroleum industry in the future, adding: “With the removal of international sanctions and renewed entry of international companies into petroleum industry, Iran should manage knowhow in its projects so that we would use it in the future projects. Unfortunately, that has not been done as it should in the past.”

 

Bolstering Iranian Contractors

 

Hosseini referred to the capabilities of Iranian companies and contractors in the past years, saying: “Now, given the fact that Iran’s petroleum industry is weak with regards to contractor companies, one of our future policies is to devise required mechanisms for upgrading these companies. Of course, Iranian companies can be engaged in joint cooperation with foreign companies.”

Hosseini said technical regulations are being revised and projects under construction in Iran’s petroleum industry are to be implemented.

“This revision is in conformity with the country’s conditions, world standards, spatial planning and value engineering. In case of promulgation by the minister of petroleum, a very effective step would have been taken in this industry,” he said.

“Long-term priorities of Iran’s petroleum industry are development of joint oil and gas fields in the upstream sector. Currently, a large segment of these financial resources of this industry is directed towards these fields,” he added.

Hosseini said IPS standards are being updated in the petroleum industry every five years, adding: “With the signature of a memorandum of understanding between Ministry of Petroleum and National Standards Organization, standards applied to this industry would be focused upon further. These standards are to be used in petroleum industry commodities and equipment; therefore, they would be a combination of domestic and international standards.”

Hosseini said British Petroleum (BP) has named Iran as the largest holder of gas reserves in the word.

“By relying on these resources, numerous plans will be implemented for preventing crude sales and developing downstream industries. Siraf refineries project is a case in point,” he added.

Hosseini highlighted the petroleum minister’s support for Iranian manufacturers and contractors, saying a proposal was recently submitted to the government for the establishment of a fund for supporting Iranian manufacturers and contractors. He said 10%  of NDFI would be funneled into this fund.

 

Corrosion Management Document

 

Hosseini said a document has been drawn up for managing corrosion in the petroleum industry. “Execution of the strategic document of corrosion management in the petroleum industry would enhance gross national product (GNP) by five percent. The final objective of this document is to avoid waste of assets and boosting GNP,” he added.

Hosseini said executive committees have been established in the four main subsidiaries of petroleum ministry, as well as other companies and directorates for the execution of this document.

He said this document has been drafted for protecting physical assets of the petroleum industry and reducing accidents stemming from corrosion and minimizing financial and environment damage from corrosion.

Hosseini noted that corrosion is one of the most important factors causing destruction of industrial equipment. He said that corrosion is known as one of the most harmful things in the industry.

Corrosion is a natural process, which converts refined metal to their more stable oxide. It is the gradual destruction of materials (usually metals) by chemical reaction with their environment.

In the most common use of the word, this means electrochemical oxidation of metal in reaction with an oxidant such as oxygen. Rusting, the formation of iron oxides is a well-known example of electrochemical corrosion. This type of damage typically produces oxide(s) or salt(s) of the original metal. Corrosion can also occur in materials other than metals, such as ceramics or polymers, although in this context, the term degradation is more common. Corrosion degrades the useful properties of materials and structures including strength, appearance and permeability to liquids and gases.

Hosseini also said that a bylaw has been adopted for managing physical assets of the petroleum industry in both upstream and downstream sectors.

He said this bylaw has been drafted following scientific studies and comparative surveys in leading oil companies in the world.

Hosseini said this model is an appropriate facilitator for re-engineering and improving the productivity of procedures for protecting the assets of petroleum industry.

He cited the example of ISO 55000 which is an international standard covering management of physical assets. Initially a Publicly Available Specification (PAS 55) published by the British Standards Institution in 2004, the ISO 55000 series of Asset Management standards was launched in January 2014.

Hosseini said this bylaw will be obligatory for all companies after being promulgated by the petroleum minister.

“Given the accumulation of physical assets and their scattering on vast swaths of land in the country as well as the problems related to procurement of commodities and equipment, optimal maintenance and maximum use of existing facilities and equipment is a must,” he said.

Hosseini said this strategic document would bring about valuable integration and synergy in all management and maintenance activities related to the petroleum industry.

The tangible results of joined-up, risk-based, whole life cycle asset management are increasingly proven around the world.  They include:

Alignment of processes, resources and functional contributions (instead of departmental silos and competing, short-term priorities);

Creating a transparent audit trail for what is done, when and why;

Better understanding and usage of data and information to provide informed and consistent decisions;

Improved planning (especially capital expenditure);

Consistent, prioritized and auditable risk management;

Alignment and coordination of existing initiatives, including competency development; and

Greater engagement of the workforce, including leadership, communications and cross-disciplinary teamwork.

Domestic Manufacturing in Iran Petroleum Industry

 

Indigenization and acquisition of state-of-the-art technology have always been a major cause of concern for Iran’s petroleum industry.  Over recent years, petroleum industry managers have seriously worked to make maximum benefit from domestic capabilities for meeting the country’s needs. To that effect, the significance and advantages of commercialization and gaining revenues should not be ignored. A simple estimate indicated that 50% to 70% of several hundred billion dollars in investment, envisaged to be made in the petroleum industry in the coming decades, would be spent on the purchase of equipment.

Making policies for overhaul in the four main subsidiaries of Ministry of Petroleum, supervision on petroleum industry standards, assessment of the qualifications of contractors, consultants and manufacturers involved in the petroleum industry, drawing up IPS standards, and compiling vendor list for commodities required in the petroleum industry are among tasks assigned to the Office of Deputy Minister of Petroleum for Engineering Affairs.

Emad Hosseini, deputy petroleum minister for engineering affairs, told Iran Petroleum in an interview that Iran’s Ministry of Petroleum has always prioritized domestic manufacturers and companies.

He said an electronic system has been launched for the supply of commodities for Iran’s petroleum industry.

“The launch of this system was aimed at promoting domestic manufacturing, defining integrated supportive policies, industrial self-sufficiency and preparing integrated ground in all commercial sectors and purchasing centers of petroleum ministry,” Hosseini said.

He said one-phase and two-phase tender bids have been loaded in the system, adding: “More than 2,000 manufacturing and procurement companies in the petroleum industry equipment and services have so far registered in the commodity electronic system.”

He referred to Iran’s 107-year-old petroleum industry and the process of purchase of equipment and commodities over the past century, saying: “By using the electronic commodity system, this process has significantly changed. Before this, state-run companies used to purchase foreign-made products as they knew nothing about domestically made products, while we knew there were similar products made in the country.”

 

1m Items Identified

 

Hosseini said this system blocks irregularities in the petroleum industry, adding: “The electronic system of commodities works like a central system whose different modules process demands in a fully mechanized way from the state of demand to delivery and clearance of commodity.”

He said more than 1.1 million items of petroleum industry commodities were identified and coded through this system.

Noting that quantity and quality are two important conditions for using domestically manufactured commodities for the petroleum industry, Hosseini said that Iranian and foreign companies will ,from now on, run for tender bids for commodity manufacturing under equal conditions.

Hosseini said the issue of domestic manufacturing in Iran is an issue outside political factionalism, adding: “Now, given the Western sanctions against our country, supporting domestic manufacturing as a strategy is among Iran’s macro policies.”

 

Sophisticated Commodities

 

Hosseini said10 groups of sophisticated petroleum industry equipment are to be manufactured in Iran.

“These 10 groups are divided into 640 items of commodities which are to be manufactured domestically for the first time in Iran in two years. Now, more than 70% of the country’s petroleum industry equipment is manufactured domestically and the remaining 30% which includes hi-tech rotary equipment for whose manufacturing Iranian specialists have made great success,” he added.

Hosseini said improving productivity indices like cutting time and cost for the implementation of projects is a top priority for Iran’s Ministry of Petroleum in light of special conditions prevailing over the country with regard to finance.

He said that expert and specialized committees have been set up at the Ministry of Petroleum to draw up plans for management of knowhow in the petroleum industry.

Hosseini said the costs for the implementation of petroleum industry projects have unreasonably trebled in recent years.

“One of the current causes of concern is the high cost of implementation of projects. Therefore, one of our objectives behind drawing up this bylaw in order to cut costs and time for the execution of oil and gas projects in the country,” he said.

Hosseini said cutting costs for the implementation of petroleum projects would lead to attracting more investment for this industry, adding that petroleum industry experts and university professors from across the country are contributing.

He said a bylaw has been drawn up for managing assets for the petroleum industry, adding: “This issue is being done for the first time in the country and even in the Middle East. This bylaw has 10 main indices, including self-assessment.”

Hosseini said one of basic measures by the administration of President Hassan Rouhani in the petroleum industry was the prioritization of strategic projects.

“For example, this policy was executed in South Pars gas field over the past two years and we saw that 100 mcm/d of gas was added to the country’s output. Based on existing plans, the same amount is to be added to Iran’s production this year,” he said.

Hosseini said involvement of Iranian companies in Phases 12, 15&16 of South Pars are indicative of Iranians’ self-belief with regard to the petroleum industry.

“In these projects, Iranian companies mainly manufactured equipment through reverse engineering. But from now on, domestic manufacturing in Iran is planned to go ahead in a knowledge-based manner,” he added.

Hosseini said development of knowledge-based companies is a priority of petroleum industry in the future, adding: “With the removal of international sanctions and renewed entry of international companies into petroleum industry, Iran should manage knowhow in its projects so that we would use it in the future projects. Unfortunately, that has not been done as it should in the past.”

 

Bolstering Iranian Contractors

 

Hosseini referred to the capabilities of Iranian companies and contractors in the past years, saying: “Now, given the fact that Iran’s petroleum industry is weak with regards to contractor companies, one of our future policies is to devise required mechanisms for upgrading these companies. Of course, Iranian companies can be engaged in joint cooperation with foreign companies.”

Hosseini said technical regulations are being revised and projects under construction in Iran’s petroleum industry are to be implemented.

“This revision is in conformity with the country’s conditions, world standards, spatial planning and value engineering. In case of promulgation by the minister of petroleum, a very effective step would have been taken in this industry,” he said.

“Long-term priorities of Iran’s petroleum industry are development of joint oil and gas fields in the upstream sector. Currently, a large segment of these financial resources of this industry is directed towards these fields,” he added.

Hosseini said IPS standards are being updated in the petroleum industry every five years, adding: “With the signature of a memorandum of understanding between Ministry of Petroleum and National Standards Organization, standards applied to this industry would be focused upon further. These standards are to be used in petroleum industry commodities and equipment; therefore, they would be a combination of domestic and international standards.”

Hosseini said British Petroleum (BP) has named Iran as the largest holder of gas reserves in the word.

“By relying on these resources, numerous plans will be implemented for preventing crude sales and developing downstream industries. Siraf refineries project is a case in point,” he added.

Hosseini highlighted the petroleum minister’s support for Iranian manufacturers and contractors, saying a proposal was recently submitted to the government for the establishment of a fund for supporting Iranian manufacturers and contractors. He said 10%  of NDFI would be funneled into this fund.

 

Corrosion Management Document

 

Hosseini said a document has been drawn up for managing corrosion in the petroleum industry. “Execution of the strategic document of corrosion management in the petroleum industry would enhance gross national product (GNP) by five percent. The final objective of this document is to avoid waste of assets and boosting GNP,” he added.

Hosseini said executive committees have been established in the four main subsidiaries of petroleum ministry, as well as other companies and directorates for the execution of this document.

He said this document has been drafted for protecting physical assets of the petroleum industry and reducing accidents stemming from corrosion and minimizing financial and environment damage from corrosion.

Hosseini noted that corrosion is one of the most important factors causing destruction of industrial equipment. He said that corrosion is known as one of the most harmful things in the industry.

Corrosion is a natural process, which converts refined metal to their more stable oxide. It is the gradual destruction of materials (usually metals) by chemical reaction with their environment.

In the most common use of the word, this means electrochemical oxidation of metal in reaction with an oxidant such as oxygen. Rusting, the formation of iron oxides is a well-known example of electrochemical corrosion. This type of damage typically produces oxide(s) or salt(s) of the original metal. Corrosion can also occur in materials other than metals, such as ceramics or polymers, although in this context, the term degradation is more common. Corrosion degrades the useful properties of materials and structures including strength, appearance and permeability to liquids and gases.

Hosseini also said that a bylaw has been adopted for managing physical assets of the petroleum industry in both upstream and downstream sectors.

He said this bylaw has been drafted following scientific studies and comparative surveys in leading oil companies in the world.

Hosseini said this model is an appropriate facilitator for re-engineering and improving the productivity of procedures for protecting the assets of petroleum industry.

He cited the example of ISO 55000 which is an international standard covering management of physical assets. Initially a Publicly Available Specification (PAS 55) published by the British Standards Institution in 2004, the ISO 55000 series of Asset Management standards was launched in January 2014.

Hosseini said this bylaw will be obligatory for all companies after being promulgated by the petroleum minister.

“Given the accumulation of physical assets and their scattering on vast swaths of land in the country as well as the problems related to procurement of commodities and equipment, optimal maintenance and maximum use of existing facilities and equipment is a must,” he said.

Hosseini said this strategic document would bring about valuable integration and synergy in all management and maintenance activities related to the petroleum industry.

The tangible results of joined-up, risk-based, whole life cycle asset management are increasingly proven around the world.  They include:

Alignment of processes, resources and functional contributions (instead of departmental silos and competing, short-term priorities);

Creating a transparent audit trail for what is done, when and why;

Better understanding and usage of data and information to provide informed and consistent decisions;

Improved planning (especially capital expenditure);

Consistent, prioritized and auditable risk management;

Alignment and coordination of existing initiatives, including competency development; and

Greater engagement of the workforce, including leadership, communications and cross-disciplinary teamwork.

Capping Greenhouse Emissions

 

The Kyoto Protocol is an international treaty, which extends the 1992 United Nations Framework Convention on Climate Change (UNFCCC) that commits State Parties to reduce greenhouse gases emissions, based on the premise that global warming exists and man-made CO2 emissions have caused it.

The growing production of greenhouse gases showed that only a solid and binding obligation for developed countries could put a brake on the emission of these gases. Such an obligation would require companies, communities and individuals to deal with climatic changes. That was why negotiations started for the drafting of an additional protocol to the convention.

The Kyoto Protocol was adopted in Kyoto, Japan, on 11 December 1997 and entered into force on February 16, 2005. There are currently 192 Parties (Canada withdrew effective December 2012) to the Protocol. The Kyoto Protocol implemented the objective of the UNFCCC to combat global warming by reducing greenhouse gas concentrations in the atmosphere to a level that would prevent dangerous anthropogenic interference with the climate system. The Protocol is based on the principle of common but differentiated responsibilities: it puts the obligation to reduce current emissions on developed countries on the basis that they are historically responsible for the current levels of greenhouse gases in the atmosphere.

Having joined the Kyoto Protocol, Iran has in recent years undertaken lots of measures for limiting its greenhouse gases in the upstream sector. A case in point is Amak no-flaring project which is about associated petroleum gas gathering in oil-rich regions. Carbon dioxide is a greenhouse gas released into the atmosphere. It pollutes the environment; therefore, an effective method is needed for reducing this gas to serve the environment.

Greenhouse gas and its growing concentration in the atmosphere pose the biggest challenge to human beings. Global warning, melting of throes, sea level rise, drought on large swaths of land and torrential rains are all consequences of carbonic gas emission. Humans’ need for energy is growing. Although energy generation from renewable sources has enhanced significantly, demand for oil and other fossil fuels is still growing. It is predicted that the demand for fossil fuel would increase by 30% by 2050.

In order to head off their own annihilation, human beings have no option but to deal with this threat. To that effect, CO2 emission needs to be stopped. As of 2020, heavy penalties would be slapped on the countries releasing CO2 into the atmosphere. Iran is among the few countries have the necessary technology to gather carbonic gas and use it in other industrial sectors. These countries reduce carbonic gas commitments for others and change them into opportunities.

Every year, over 45 giga tons of carbonic gas is released into the atmosphere. It is more than any other greenhouse gases. Carbonic gas is the major contributor to global warning. The increase in CO2 concentration from 270 to 380 ppm in the atmosphere has increased the temperature of the Earth by two degrees centigrade. It is the major cause of all challenges, including water shortage in the Middle East. This trend is worsening at an incredibly high speed.

In the forthcoming Paris meeting on climatic changes, penalties will be approved for industrial and developing countries violating the treaty as of 2020. Release of each ton of carbonic gas into the atmosphere would be fined by $30 to $50 in penalties. CO2 recovery from the chimneys of industrial plants consuming fossil fuel to be used in industrial and service sectors would be the best option for curbing carbonic gas emissions. Carbonic gas is used widely. For instance, it is used in petrochemical plants for urea and methanol production, enhanced oil recovery, gas-to-liquids (GTL) and treatment of urban and industrial wastes.

Iran recently extended its greenhouse gas emission projects to the downstream oil sector. The first unit of carbon dioxide removal (CDR) was launched recently at a petrochemical plant in the western province of Kermanshah in the presence of managing director of National Petrochemical Company, Abbas Sha'ri-Moqaddam. CDR refers to a number of technologies which reduce the levels of carbon dioxide in the atmosphere.

The first CO2 recovery unit in Iran’s petrochemical industry has become operational with Iranian technology at Kermanshah Petrochemical Plant. This technology stands at a higher level than those acquired by famous foreign rivals like Japan’s Mitsubishi and US Flowrdaneill.

Having mastered this technology, Iran will be able to become one of the major bases of CO2 recovery and become an exporter of this valuable technology to different countries across the globe.

Currently, 132 tons of CO2 with 99.9% purity is recovered from natural gas combustion at the ammonium reformer unity of Kermanshah Petrochemical Plant. Once this project has been launched, CO2 emission will be cut by 25%. The investment made in this project equals IRR 350 billion, whose return is estimated to be possible in one year and a half.

CO2 recovery from chimneys of a petrochemical plant is the first scientific and practical step for clean air. Currently, two petrochemical plants along with tens of other industrial plants in Kermanshah province are able to implement these environmental projects. Kermanshah province is currently in the first position in terms of the number of petrochemical units in Iran. Bisotoun, Kermanshah Polymer and urea and ammoniac plants are currently operating at full capacity in this province.

Sha'ri-Moqaddam has said that Kermanshah province can still house tens of other petrochemical plants due to its potentialities.

In May 2015, senior managers of Iran’s petrochemical industry visited the Kermanshah province to get familiar with the activities of petrochemical plants. During their trip, serious discussions were held with provincial officials about the development of petrochemical industry in this province.

Invitation for investor and contractor for the fourth petrochemical projects in Kermanshah was among issues discussed there. After the holy fasting month of Ramadan, a symposium is to be held in the province in the presence of private investors in Qasr-e Shirin in the province.

Sha'ri-Moqaddam said in his meeting with provincial officials that preservation of ecosystem, existence of water resources and presence of famous and experienced investors are necessary for the development of downstream industries in border cities of Kermanshah province.

Referring to the point that NPC is legally barred from investing in petrochemical industry, he said: “In case investors in the Kermanshah province are supported, we would witness an industrial revolution in the petrochemical sector of this province in light of export markets and water resources.”

Sha'ri-Moqaddam said investment is being sought for the construction of a fourth petrochemical plant with an investment of $1.5 billion in the province.

“With three operating petrochemical plants (Bisotoun, Kermanshah Polymer and Kermanshah Urea and Ammoniac), Kermanshah province is one of the leading provinces in the development of this industry,” he said.

“Upon instructions of minister of petroleum Bijan Zangeneh, we have been conducting studies and making plans for the development of downstream petrochemical industries in the province for more than 20 months,” he added.

Noting that upstream petrochemical industries would require at least $500 million in investment and huge water resources, he said: “Downstream industries would need less investment than upstream industries and they will be also more economical and job creative.”

Sha'ri-Moqaddam said the government is now authorized to invest in the downstream industries, adding that the Ministry of Petroleum would support the establishment of industrial parks and downstream industries in compliance with the state-of-the-art technology in border regions.

Nuclear Deal to Retain Iran Market Share  

 

Iran and six world powers are working to finalize a nuclear deal by a self-imposed end of June deadline. A comprehensive permanent deal between Iran and the global powers, known as the P5+1 (the United States, France, Britain, Russia, China and Germany), will see sanctions eased on the Islamic Republic in return for limits on Iran’s nuclear activities.

As the deadline approaches, speculation is rife about post-sanctions Iran. Lifting of restrictions on Iran would allow the country to sell more oil and get its petrodollars. Some foreign companies have already expressed their willingness to invest in Iran, once the sanctions have been lifted.

Iran Petroleum has interviewed senior energy expert Narsi Qorban to discuss economic aspects of a long-awaited nuclear deal.

 

 

Q: Can Iran get more revenue in the aftermath of successful negotiations with P5+1?

A: If the current negotiations with P5+1 end with a comprehensive agreement, in which the sanctions against Iranian sale of petroleum products and banking restrictions are removed, Iran can attempt to regain its lost share in the oil markets in the coming months. Minister of Petroleum Bijan Zangeneh has indicated in the recent OPEC meeting that Iran will get back its market share and OPEC has to cater for that in determining its production ceiling or producers have to be prepared to adjust their output when Iran oil is back on the markets. Increasing oil sales by Iran may not necessarily increase the revenue if the price of oil falls further due to this or other considerations. However it is essential that Iran’s traditional markets be restored as soon as possible. The most important issue is not the oil revenue for this year or next but the position of Iran in the long-term business of oil and gas worldwide.

 

Q: How important is the role of the international companies in the development of Iran’s petroleum industry? 

A: Iran has managed to continue with its oil and gas development, production, refining, distribution and export in spite of sanctions in the past ten years and may be able to manage the industry if the sanctions are to continue, thanks to the expertise gained by the NIOC, NIGC and the involvement of private sector that has gained an important position in the industry in the recent years. However this is not the desirable scenario. Iran holds about 18% of the world gas reserves and about 10% of the world oil reserves and has to find its appropriate position within the world petroleum industry. To reach this desired position, huge investment and engaging the best oil and gas technologies are required. That is why the presence of those international companies with technology and finance could enhance the development of petroleum industry in Iran.

 

Q: How can we encourage the participation of international companies in the Iranian oil and gas industry and what can Iranian market offer to foreign investors?

A: The international companies are well aware of the importance of Iran in the future of the world petroleum industry and have already indicated their willingness to get back into the projects in Iran. However, it is not only the sanctions that are the barrier to their entrance. International companies are not as political as in the past and are mostly eager to pursue their long term objective of profitable growth. They will look at the opportunities around the world based on the availability of hydrocarbons, the capital needed for the development of these resources, the general conditions surrounding their operations and the profit to gain. The buy-back service contracts that were offered by Iran prior to sanctions are no longer a big incentive for foreign firms to engage in Iran even after sanctions. An alternative is to come to a win-win framework that ensures long term profits for all the parties involved in Iran. The new “Iran Petroleum Contract” recently announced by the oil ministry is aiming to achieve this objective and will be tested soon. This is not the best that the international oil industry would want to see, but given the Iranian reserves and the availability of strong private sector partners to engage in variety of the oil and gas business may have the additional weight to attract technology and finance to Iran.

 

Q: How important is the role of the oil industry in the realization of Iran's long term objectives?

A: The country's long term objectives are well spelled in the “Vision Plan” which was adopted ten years ago. In this, the emphasis has been placed on reducing sales of crude oil and gas and concentrate on selling products from oil and gas, as well as those products from the gas based industries. Replacing oil products by gas also enhances the revenue through export of crude and petroleum products. The oil industry in Iran has been the heart of development in Iran for decades and its role cannot be diminished easily.

 

Q: Is dependence on oil income desirable?

A: Dependence on a single commodity is not desirable for any country and many experts have suggested that Iran must try to move away from becoming a country dependent on the sale of oil. This is not a new argument and one can see struggle to move away from dependence on oil for more than 65 years from 1950 when oil industry was nationalized. I believe that the issue is not to ignore or not to develop the oil and gas industry, which is the real strength of Iran. The real issue is how to utilize oil revenues. In the past the oil revenues were used to help with the day to day expenses of governments. This is why we have become so dependent on oil revenues. A mechanism must be found where the income from oil could be used directly or indirectly only as investment in projects that could bring about future income for the coming generations. To that effect, Iran should run its economy without development and utilizing revenue from the oil and gas sector contradicts all definitions of economic development.

 

Q: How important is the final outcome of the current negotiations?

A: I believe that the future of the coming generation is very much dependent on the current negotiations. Given the political disarray in the region and a clear attempt to undermine Iran’s economic progress, the value of opening Iran’s doors for interaction with the world economy is of vital importance. Those opposing the resolution of the nuclear debate are now openly saying that it is the potential economic strength of Iran after the sanctions and not the nuclear threat that in reality concerns them. Iran’s future with 80 million population, half of them young and educated, sitting on one of the largest hydrocarbon reserves in the world and geographically advantageous location is very bright, provided that it can freely interact with world economy. Investment by the Iranians and international private sector in a variety of projects from energy industry to tourism will be into billions of dollars, creating job opportunities and prosperity for young generation of this country.

 

Iran, Entry Gate to Mideast Oil

 

By Jaafar Pour-Farjoudi

 

Iran is an attractive market for foreign investment. Iran’s petroleum industry has extensive plans for developing upstream and downstream sectors. Implementation of these plans requires big investment in different fields and to that effect international companies are vying for chances of presence in Iran.

The Italian city of Bergamo held the first conference and exhibition on industrial valves on May 27 and 28. The exhibition, which is projected to be held every two years, is aimed at highlighting the industrial capabilities of Italian companies manufacturing industrial valves. This exhibition provides the ground for CEOs, experts and technicians to get acquainted with the latest industrial achievements.

On the sidelines of the event, Iran Petroleum talked to Maurizio Brancaleoni who was the chief organizer of Industrial Valve Summit (IVS).

 

Q: As you know Iran and Italy have long cooperated in oil and gas projects. Before anything else, I would like to know your view about future cooperation with Iran?

A: Iran and Italy hold good memories of mutual cooperation. As an Italian, I personally like to see Iran’s relations grow not only with Italy but also with all countries. I think that the idea of restricting Iran in recent years has been a mistake and it would be wrong to isolate Iran in the international community and impose restrictions on its relations with other countries. In my view, Iran-Italy relations should grow in the future. This point is important not only for governments but also for the future of youths in both countries. The youths who plan to get involved in production in coming years need the development of this cooperation. The future of the world is in the hands of youths and we have to make sure that they will go a safe way from school to university and workplace and that they would not repeat the past mistakes. The governments should work out plans such that all youths would be able to see a bright future. Meantime, we should take into consideration our own international responsibilities. There are two billion people suffering thirst and hunger. We have to work together to put an end to this situation.

 

Q: How can Italian industrialists help Iranian companies in development?

A: I remember well that Iranian and Italian companies have long had extensive cooperation in different sectors including oil, gas, refining, petrochemical and electricity projects. All problems started after sanctions were imposed on Iran over it nuclear dossier. Of course, we think that the sanctions slapped on Iran have been very harsh and they constitute a big mistake. Regardless of the views of European people, world powers have unilaterally imposed tough restrictions and now I think that the time has come for us to destruct the walls erected between us. Iran and Italy should return to their good old days and the flow of capital, science and technology; and information should be restored between the two countries. We have to exchange what we have at our disposal. For that purpose, we need to develop new methods for cooperation. For instance, we are now ready to manufacture sophisticated industrial valves in Iran with the help of Iranian companies. Italy has powerful industrial companies and universities that can cooperate with Iranian universities and companies. We view Iran as the entrance gate into the Middle East market. We think that we can look at Iran as a base for manufacturing and supply of industrial valves in the Middle East.

 

Q: One criterion in selecting industrial commodities for projects is the factor of price. Due to their low-price products, Chinese companies have outperformed the European firms. What do you think of that?

A: In my view, the factor of price should be assessed based on the quality and durability of the product. It would be highly significant to know the length of useful life of an industrial valve and its durability. Then the issue of price could be considered. Iran’s petroleum industry has always demanded the highest quality for the commodities it needs. Petroleum industry is very sensitive and nothing risky should be done in this regard. Due to its ambitious oil, gas, refining and petrochemical development projects, Iran is a potential market for high-quality equipment supply. Italian companies manufacturing industrial valves are already vying with French, German, American, Indian and Chinese companies for presence in Iran’s market. But I wonder why Iranian companies have no share in their own market. We have devised plans to that effect and we can help empower Iranian companies to manufacture high-quality products required for the petroleum industry. In this regard, Tehran Oil Show is a good opportunity for the development of ties between Iran and Italy. We were already close to manufacturing industrial valves in Iran. Some customs problems had slowed down work which came to a total halt following the imposition of sanctions. However, we are now ready to resume cooperation with Iran.

 

Q: How can Iranian and Italian companies cooperate with each other?

A: We have to work honestly to have a win-win result. The advantage we can provide to Iran is to transfer our centuries-old experience in industrial valve manufacturing to this country. But we also expect Iran to have professional manpower for manufacturing. I assure you that we will have the best cooperation with Iran and our joint products could be exported to different markets. Of course Iran should prepare the required conditions and ground for cooperation; and the past mistakes should not be repeated. For us, API and MMS are acceptable standards in the world and they are applicable for the manufacturing of commodities required for the petroleum industry.

Iran used to be one of the best countries in attracting investment. We still believe that Iran is one of the most secure countries in the Middle East for investment. However, the important point is that the foundation for this cooperation should be laid before the end of sanctions imposed on Iran so that we would immediately start work after sanctions are lifted. We want to cooperate with Iran in practice and not just in words. We try to show in practice that unlike other countries that promise cooperation, we are serious in joint activity with Iran. If Iran opens a window to us we will open our doors to Iran. In car races, Ferrari always reaches the finish line faster than Mercedes Benz!

 

Q: What do you think of oil price slump and the negative impacts of low oil prices on investment in development projects?

A: The obvious point in this regard is that the oil price would never return to above $100 ,because Saudi Arabia has in the past one year moved to have prices cut in a bid to drive US and Canada shale oil out of market. In my view, that was a strategic attempt for eliminating high oil production from market. But at the same time, the companies with high-quality and costly production have also suffered. This decision could prove to be useful in the short-term, but it would inflict serious damage on development investments in the long-term. Now, even Chinese companies have realized that high-quality commodity manufacturing costs high; therefore they have increased the price of their commodities.

 

Q: As you know, Iran has extensive plans for gas production mainly from South Pars gas field. How can Italian companies cooperate with Iran to that effect?

A: Based on our studies, if Iran is not the first market for commodities related to sour gas production, it will certainly be the second. Due to their specifications and acidity corrosion, sour gas production equipment needs high quality and sophisticated technical knowhow. Italian companies are experienced in this regard, but we have first to get familiar with the technical specifications of equipment needed for Iran. Therefore, before starting cooperation, we need to hold meetings with Iranian engineers and experts active in these fields. We are hopeful of cooperation with Iran.

 

Q: What do you think of security of investment in Iran’s energy sector?

A: In the past and before the sanctions were imposed, Iran was one of the best countries for investment particularly in the energy sector. And I think that this potential still exists and after the lifting of the sanctions, Iran will definitely be one of the most secure countries for investment.

Oil Price and Future of Persian Gulf Arabs

 

By Shuaib Bahman

 

The Iraqi invasion of Iran in 1980 and its destructive aftermaths persuaded leaders of Persian Gulf Arab countries to work out mechanisms for guaranteeing their own security and survival in light of their fear of the spread of Iran’s 1979 Islamic Revolution.

In 1981, the leaders of six littoral states of Persian Gulf (Saudi Arabia, Oman, Kuwait, Qatar, United Arab Emirates and Bahrain) established the Gulf Cooperation Council (GCC).

Regardless of political and security issues, one of the most important objectives behind the establishment of this council was to guarantee the access of consumer countries to oil and safeguarding shipping lines by Persian Gulf Arab states. This objective has largely been realized thanks to lucrative arms deals between Arab states and the United States. However, the fact is that the GCC has failed to arrange oil policies of its member states. For this reason, although these countries pursue similar energy policies they are at loggerheads over major issues.

Oil price has witnessed a sharp decline in the past one year. The impact of this price fall on GCC member states has come to the limelight. Speculation is rife that GCC member states have been following Saudi Arabia with regard to oil price. They contributed altogether to cutting oil prices. However, it seems that oil price fall will have undesired political and economic consequences for these countries in the long term to the extent that they would be forced to separate their way from the Saudi government.

This article analyzes the effects of oil price fall on the Arab states of Persian Gulf and future perspective of oil market.

 

Optimistic and Pessimistic Views

 

Persian Gulf Arab states sit atop a lion’s share of world oil deposits. These countries hold more than 30% of the world’s proven oil reserves. In 2013, they produced around 24% of the world’s total output.

Saudi Arabia is the leading state among them in terms of oil reserves and production. Saudi Arabia is producing 11.5 mb/d of oil. It is the largest producer of oil across the globe. Kuwait is estimated to hold 6% of the world’s total oil reserves, UAE holds 5.8%, Qatar holds 1.5% and Oman holds 0.3% of world’s oil reserves.

The slump in oil prices since June 2014 would definitely affect the economy of Bahrain, Kuwait, Oman, Qatar, UAE and Saudi Arabia. On the one hand, these countries depend on energy sales for the bulk of their revenues while the oil price fall is forecast to continue for three to four more years. To that effect, there are optimistic and pessimistic views about the impact of oil price fall on the Persian Gulf Arab states.

From an optimistic standpoint, some estimates indicate that the Persian Gulf Arab states would see 3.4% economic growth this year despite the sharp price fall. Based on this, the Persian Gulf states are expected to be immune to oil price fall for the following reasons:

First, most Persian Gulf Arab states gained big revenues from selling oil when its price was high.

Second, the economic growth of some member states like Qatar and UAE has been mainly due to their investment in other sectors than hydrocarbon.

Third, the member states’ liabilities stand low; therefore, they can get loans to make up for their short-term budget deficit.

But from a pessimistic viewpoint, the World Bank announced in its February 2015 report that the Persian Gulf Arab states would experience a $215 billion loss due to oil price fall. Based on this forecast, the Arab states are expected to face numerous economic challenges.

First, the oil price fall from $110 to $60 a barrel means that the Persian Gulf Arab states would see a loss equivalent to 14% of their gross domestic product (GDP) due to the oil price decline.

Second, the shock of oil price fall could lead to more budgetary shortfall in the Persian Gulf oil producers.

Third, oil price decline could threaten some oil producers with regard to their obligations to account for their spending. That will have undesired consequences on the economy of these countries.

 

Challenges

 

The population growth rate stands high in the Persian Gulf Arab states. The population of these countries is forecast to increase by one-third to 53 million by 2020. This issue would give rise to the following challenges for these Arab governments:

1. The majority of population in these countries will be aged below 25 and will need a job. Therefore, the Persian Gulf Arab governments will have to invest in different sectors in order to create jobs for youths. The unemployment rate is already high in some of these countries and their governments have failed to generate jobs. Therefore, if the current trend of low oil price continues these countries will become unable in creating jobs for their people and they should brace for social unrest in the future.
2. The Persian Gulf Arab governments are set to face problems for meeting the growing expectations of their population in the future because their demands will involve housing subsidies for themselves and their children. While subsidies play a fundamental role in increasing domestic demand, oil price fall would mean a decline in the government subsidies. That could exacerbate social unrest in these countries. In case oil prices keep falling, all GCC member states, except for gas-rich Qatar, are forecast to be obliged to slash subsidies and public spending or dip into their sovereign wealth funds to meet their social obligations. That would cause certain problems for countries like Bahrain, Kuwait and Saudi Arabia because they have already raised the costs of their social plans in the wake of Arab Spring. For instance, the International Monetary Fund (IMF) has predicted that Kuwait will have spent all its reserves by 2017 should it go ahead with its current trend of spending.
3. Failure of Persian Gulf Arab states in meeting the needs of their citizens will force them to increase their energy production in order to make up for their shortcomings. That means that these countries will have to explore and produce oil at a higher pace and their energy resources are likely to fail to meet domestic demand in the future. Meantime, the dependence of these countries on petrodollars for investment in social and economic sectors has increased and therefore oil price fall will leave these Arab states nothing to save. That would mean that oil production would not be profitable enough for these Arab countries. Under such circumstances, there would be no motivation for investment in new oil fields in these countries and their production will be affected seriously.

 

Tough Future

 

The issue of oil price fall is not merely an economic one for the GCC member states and it could have political consequences for the Arab governments.

On the one hand, the Arab world has faced numerous uprisings and revolts in recent years while on the other, there has been social and political unrest as well as economic gasp in all GCC member states. Therefore, these countries are likely to face popular uprisings against their rulers in the future. That is why the issue of oil price fall has become a vital one for the Arab governments of Persian Gulf region. The Arab governments are likely to distance themselves from Saudi Arabia in the future and no longer follow Riyadh in oil price setting.

Moreover, given the challenges of low oil price fall and its negative impact on the social and economic atmosphere of the GCC member states, these countries will have to switch from politics and security to economy in their convergence. In fact, they should understand that oil resources will not remain forever and they will have to diversify their sources of income in the long term in order to preserve their economic growth.

The Persian Gulf Arab states will also have to cut their spending like energy subsidies. Each of these measures may pose challenges to the GCC member states, but they will have no option but to cut dependence on oil revenues, reduce energy subsidies and diversify their economy.

Mexico PEMEX Reports Shallow-Water Discoveries

 

PEMEX has reported discovery of four new fields in shallow water of the Gulf of Mexico. Multiple news reports, including Bloomberg, cite Petroleos Mexicanos CEO Emilio Lozoya as saying the new fields have potential production of 200,000 b/d of oil and 170 MMcf/d of natural gas.

The discoveries are GoM blocks that PEMEX maintained last year as part of the non-competitive bid Round Zero. The finds are close to 14 shallow-water blocks that private companies will bid on next month.

“This is the first tangible result of the energy reform,” Lozoya told reporters following the inauguration of the Oil Workers’ Conference in Guadalajara.

Tanzania to Get Shallow-Water Rig

 

Orca Exploration Group has started the first phase of the Songo Songo development program offshore Tanzania.

This follows World Bank’s approval for International Finance Corp.’s (IFC) investment.

Orca has entered into a drilling contract with Paragon Offshore for the use of its M826 mobile drilling workover rig and associated services for the offshore phase of the Songo Songo gas field program.

The rig can operate in the shallow water operating environment around Songo Songo Island, which Orca describes as “somewhat unique.”  However, the company still needs to obtain certain regulatory and contractual approvals related to certain aspects of the development program.

 

Norway Approves Two Sea Wells

 

The Norwegian Petroleum Directorate (NPD) has authorized two exploration wells in the Norwegian Sea.

Repsol Exploration Norge will use the semisubmersible Bredford Dolphin to drill well 6306/5-2, the first on license PL642, which was awarded early in 2012. The location is 64 km (40 mi) northeast of the Ormen Lange field and 34 km (21 mi) south of VNG Norge’s 6406/12-3 S (Pil) discovery.

Operations will begin after the rig has completed wildcat well 16/4-9 S in PL359 for Lundin Norway.

NPD has also sanctioned use of the semisubmersible Transocean Arctic for VNG’s well 6406/12-4 S in PL586, after completion of the rig’s current exploration well for Wintershall in PL378.

VNG’s well will be drilled 33 km (20.5 mi) southwest of the Njord field. It will be the fourth well to date on the license.

Thailand Oil Field Comes Online

 

Mubadala Petroleum has delivered first oil from the Nong Yao field in the G11/48 license in the Gulf of Thailand.

Production currently flows from three wells. This also represents the first field development onstream for partner KrisEnergy.

Keith Cameron, the company’s CEO, said: “We are currently working on a further four oil developments in the Gulf of Thailand including the KrisEnergy-operated Wassana oil field in the adjacent G10/48 concession, which we expect to go into production shortly.”

Eventually up to 23 wells will be in service at Nong Yao, connected to a wellhead processing platform and a minimum facility wellhead platform with crude exported via a floating storage and offloading vessel.

 

Offshore Australia Decommissioning Planned

 

Chevron is planning to decommission several installations offshore Australia following production declines at the Saladin, Cowle, Yammaderry, Crest, Roller, and Skate fields.

Beyond the onshore production plant, decommissioning should include platforms at Saladin and shallow-water monopods at Roller, Skate, Yammaderry, and Cowle. Subsea flowlines from the fields to the onshore installation are included in the decommissioning plans.

The company plans to use a jackup and construction vessel with a crane for the offshore work and a workover rig for the task of plugging the wells.

Saudi Arabia Oil Exports Slip in April

 

Saudi Arabia’s April crude exports fell by 161,000 barrels per day (bpd) as domestic refiners processed more crude, official data showed.

Exports fell to 7.737 million bpd from 7.898 million in March when they hit their highest levels in almost a decade.

Domestic refiners processed 2.224 million bpd, up 315,000 bpd from 1.909 million bpd in March, figures supplied by Riyadh to the Joint Organisations Data Initiative (JODI) showed.

JODI compiles data supplied from oil-producing members of global organisations including the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC).

Saudi Arabia has traditionally been the world's biggest exporter of crude and the kingdom's rapid transition into one of the largest oil refiners adds an extra dimension to global oil markets.

The growth puts its national oil company Saudi Aramco's owned or equity stakes in refining at 5.4 million bpd, at least 40 percent above a decade ago.

Aramco itself markets more than 3 million bpd of that, tying it with Shell as the world's fourth-largest oil refiner.

 

In April, the kingdom's oil output inched up to its highest rate on record at 10.308 million bpd from 10.294 million bpd in March, according to JODI.

An executive from Saudi Aramco said last week his country is ready to increase output in the coming months to a new record to meet a rise in global demand, despite increased domestic use.

Russia, Japan to Build LNG Plant in Sakhalin

 

Russia views Japan as a strategic partner in its bid to ramp up the production of liquefied natural gas on its Far Eastern Sakhalin Island, Japanese media reported.

During his meeting with foreign news agency executives in St. Petersburg President Vladimir Putin mentioned the joint development of natural resources and the production of LNG on Sakhalin Island as the bedrock of this country’s cooperation with Japan.

“Our production capacities proved bigger than expected,” Kyodo news agency quoted the Russian leader as saying.

Vladimir Putin also said that the government planned an increase in LNG production in Russia.

Asia Butadiene-Naphtha Spread Hits 2-Year High

 

The Asia butadiene-naphtha spread rose $7.25/mt day on day to $824.88/mt, driven by a bullish butadiene market, Platts data showed.

The spread is the highest since March 14, 2013, when it was calculated at $918/mt.

Asian butadiene prices have generally been on an uptrend since mid-May as end-users were actively seeking spot cargoes in South Korea and Taiwan amid the butadiene plant turnaround season.

In South Korea, Yeochun NCC had shut its 220,000 mt/year butadiene plant in Yeosu over May 13 to mid-June for annual maintenance.

In Taiwan, Formosa shut its No. 1 steam cracker in Mailiao June 9 for 40 days of annual maintenance.

The cracker is able to produce 109,000 mt/year of butadiene.

A market source said some of South Korea's end-users were willing to pay $1,400-1,450/mt on a CFR basis, much higher than the current price for the export market. But this could not be confirmed with the market.

"South Korean butadiene producers are reluctant to export butadiene now, as they are able to achieve higher prices in the domestic market," said a trading source.

Rosneft to Buy 30% of ChemChina Subsidiary

 

Russia's top oil producer Rosneft has signed a memorandum that paves the way for purchasing 30 percent of China National Chemical Corp's, a subsidiary of ChemChina Petrochemical (CCPC), the oil major said.

Rosneft will also supply 200,000 tonnes of crude oil a month (48,000 barrels per day) to the company within a year, in a deal that would strengthen Rosneft's position in the world's top energy consumer.

It's not clear, when Rosneft will start supplying oil to CCPC.

"Together with the project of construction of a refinery in China the cooperation with ChemChina will allow Rosneft to obtain a new potential for the production and marketing of products along the whole value-chain to the end-customer," Rosneft said in a statement.

It also said that the signed memorandum envisages Rosneft’s analysis of CCPC assets.

Angola Oil Reserves at 12b Barrels

 

Proven and probable oil reserves in Angola are estimated at 12.667 billion barrels, following recent discoveries in shallow, deep and ultra deep waters, the country’s Oil minister said in Hamburg.

Speaking at the 7th German-African Energy Forum, Botelho de Vasconcelos said one of the priorities for the 2013/2017 period was to maintain a balance between reserves and production by auctioning blocks and making use of new exploration and production technologies.

Priorities also include the completion of ongoing development projects, including the Kizomba satellites in Block 15, among others.

Botelho de Vasconcelos, before an audience of over 150 people, recalled that Angola, when it become independent on 11 November 1975 produced only about 175,000 barrels of oil per day.

Petrobras Mulls Sale of Ethanol Plants

 

Brazilian state-run oil company Petrobras is looking to sell some of its biofuel assets as it tries to raise cash to cover investment for new offshore oilfields and service its debt, two sources told Reuters.

The company, whose $125 billion of debt is the biggest of any oil company and the third-largest of any non-financial enterprise, plans to sell as much as $13.7 billion of assets by the end of 2016.

The first source, who has direct knowledge of Petrobras' plans, said the company's ethanol plants, which transform sugarcane into fuel, were the most likely area of the business to be sold. Petrobras has nine ethanol plants and five biodiesel plants.

The plants are less profitable than its businesses that distribute or sell ethanol and other biofuels, the source added. The company, formally known as Petroleo Brasileiro SA, does not plan to exit the biofuels sector entirely, according to the source.

"There are various ways for you to take part in the biofuels market. One way is business the other is owning assets," the source said. "To be in the business you don't need to have assets."

Petrobras has already shown assets to potential buyers, a second source told Reuters after being briefed on the company's plans.

Both sources asked not to be named as final decisions on the future of its biofuel businesses have not been made.

OPEC Ceding Global Swing Status

OPEC's decision this month to maintain existing oil output will fail to push rival producers out of the market because rising global crude demand should soon lift prices and boost drilling activity, North Dakota Governor Jack Dalrymple said.

Since November, the Saudi Arabian-led cartel has held to a policy of unconstrained output, an approach many suspect is designed to flood global markets with more crude, push prices lower and punish rivals, including North Dakota, the second-largest U.S. oil producer.

"It's not surprising that Saudi Arabia would finally make a decision that they are not going to be the sole equalizer of supply and demand around the world," Dalrymple said in an interview with Reuters this week at his capitol office. "They are going to expect other countries to be part of controlling supply."

Yet the strategy seems to have backfired, as producers have had to become leaner and more efficient, steps that allow them to profit despite the more than 40 percent drop in prices over the past year.

At the same time, Dalrymple said he's glad oil prices have fallen from around $100 per barrel roughly a year ago to about $60.

"Looking back, people are realizing that the $100 price level probably hung on longer than it should have," he said.

With global demand for oil rising, North Dakota - which produces about 1.4 percent of the world's oil each day - and other shale oil states likely will have to boost production soon, rather than slowly watch it dip, as has happened in recent months, Dalrymple said.

"Those two forces will come together at some point, hopefully not too far in the future, and we're going to have a stable price situation," he said.

Dalrymple praised recent safety rules from the United States and Canada that will require thicker hulls, among many other standards, to improve the safety of crude-by-rail transport.

"I think the improvements are very good," he said. "The biggest factor in safety of transport are the cars themselves."

Iraq Oil Revenues Fall Short of Budget Projections

 

Iraq’s Prime Minister Haider al-Abadi says despite remarkable hike in the country’s crude oil production, the oil revenues have not been high enough to cover budget projections.

Speaking in a televised interview, Abadi said the country’s oil revenues are even lower than the figure projected in the country's austere budget for 2015, AFP reported.

"So far, our oil revenues are below what was passed in the budget," Abadi added, without providing exact figures on the shortfall.

Abadi's remarks came in spite of the previous reports, which showed that the country has registered the highest level of crude oil exports in decades during the recent months.

On May 2, Iraqi Oil Ministry announced that the country’s oil exports climbed to 3.077 million barrels per day (bpd) in April, compared to 2.98 million bpd in March.

According to a statement by Iraq’s Oil Ministry, the country exported a total of 92.8 million barrels of crude oil in March and brought in USD 4.8 billion in revenue, at an average selling price of USD 51.7 per barrel.

Iraq's parliament approved the country’s annual budget of 119.5 trillion Iraqi dinars in January (about USD 99.6 billion at that time).

The budget was about USD 3 billion lower than the original figure that had been approved by the Iraq’s cabinet a month before. The fall in budget was blamed on the current slump in price of oil, on which the government is almost completely reliant for funds.

Qatar Vast Gas Reserves 'to Last 138 Years

 

Qatar's gas reserves are so vast it can maintain production at current rates for another 138 years, according to an official report.

An "Economic Commentary" from the Qatar National Bank (QNB) said the vast reserves of the tiny Persian Gulf country will ensure it maintains its prominent position in the hydrocarbon sector "for years to come".

It added that "Qatar has enough gas reserves to maintain production at current rates for 138 years".

"Looking forward, Qatar is expected to maintain its dominant role in the global hydrocarbon sector," read the QNB report.

"Global demand for clean energy is expected to continue rising, and Qatar is a leader in the Liquified Natural Gas (LNG) market."

Qatar is the third largest producer of natural gas in the world behind the United States and Russia.

Globally, it accounts for just over five percent of the market.

LNG is gas cooled to -160 degrees Celsius when it then turns into a liquid, allowing it to be more easily transported.

The vast reserves of gas have helped fuel Qatar to becoming one of the richest countries on the planet.

The QNB report was using figures contained in BP's Statistical Review of World Energy, released earlier this month.

That review by the British multinational showed that UK imports of LNG in 2014 increased by 20.5 percent.

QNB is a bank half-owned by the Qatar Investment Authority, Qatar's sovereign wealth fund, and the rest by the private sector.

Statoil to Cut 1,500 More Jobs

 

Norway’s energy giant, Statoil, is planning in the next phase of its efficiency program to cut between 1,100 and 1,500 permanent jobs by the end of 2016 in a bid to increase efficiency and competitiveness of its operations.

The announcement came amid plunging global oil prices, which have made the Norwegian company slash up to 7 percent of its workforce by the end of next year, AFP reported.

Sources at Statoil also noted that a further 525 consultant positions will be also cut, promising that further alterations to the company’s organization will come at the end of the month.

This is not the first time that the company, which is 67 percent state-owned, is laying off workers as it cut 8 percent of its staff last year, reducing it to 22,500.

"We regret the need for further reductions, but the improvements are necessary to strengthen Statoil's competitiveness and secure our future value creation," chief operating officer, Anders Opedal, said in the statement.

The company launched a program to improve cost and capital expenditure back in 2013 with the main goal of dealing more efficiently with industry-wide cost and competitiveness challenges and to generate USD 1.7 billion in annual savings starting from 2016. The program was announced by Statoil last year when oil prices were still above USD 100 per barrel.

Since that time, oil prices fell to below USD 50 per barrel, though they have recently recovered a bit and are now standing at around USD 60. The global oil drop has pushed energy companies to accelerate cost-cutting measures and suspend or scale back investment plans.

In February, Statoil announced that its annual profits had decreased in half due to tumbling oil prices. The company also declared a 10-percent cut in its USD-20-billion investment budget for this year.

Oil Market Perspective

 

Benchmark crude oil prices remained almost steady in the first half of 2014. OPEC basket price averaged $104.79 for January 2014-May 2014 period, vacillating between $101 and $107 a barrel.

In June 2014, unexpected advances by Daesh (ISIS) in Iraq and growing concerns about the impact of the terrorist group’s operations on Iraqi oil production drove oil prices up. The prices soared past $110 on June 20. But after Daesh’s advances towards oil-rich regions in southern Iraq halted in late June, the market jittery was calmed down. Then, oil prices started falling.

 

Table 1: 2014 Crude Oil Prices ($/barrel)

 

	OPEC Basket		Dubai	Dated Brent	WTI
2013 Average		105.94	105.51	108.69	97.87
January 2014		104.71	104.01	108.26	94.9
February 2014		105.38	105.04	108.87	100.78
March 2014		104.15	104.32	107.55	100.53
April 2014		104.27	104.68	107.69	102.02
May 2014		105.44	105.55	109.67	102.03
June 2014		107.89	108.03	111.66	105.24
July 2014		105.61	106.13	106.64	102.87
August 2014		100.75	101.73	101.56	96.38
September 2014		95.98	96.47	97.3	93.36
October 2014		85.06	86.73	87.41	84.43
November 2014		75.57	76.33	78.9	76.04
December 2014		59.46	60.25	62.53	59.5

  

The downward trend in oil prices continued in the third and fourth quarters of 2014. The prices experienced a record 50% drop from June 20 to December 31. OPEC basket prices fell to $52 per barrel on December 31, 2014.

Numerous factors contributed to the sharp fall in oil prices. Chief among them were as follows:

 

1. Subsidence of Political Crises Affecting Oil Market: In the first half of 2014, a variety of geopolitical factors including the crisis in Ukraine, Zionist Regime invasion of the Gaza Strip, the war in Syria, Iran’s nuclear issue and the emergence of Daesh in Iraq swayed the oil market. But in the second half of the year, these crises subsided to some extent and concerns about possible halt in oil supply were allayed.
2. Non-OPEC Record Output Hike, Particularly Shale Oil Production in US: Non-OPEC crude oil production increased significantly in 2014. Oil output by these countries rose from 41.28 mb/d in 2013 to 1.23 mb/d in 2014, while their gas condensate production reached 6.71 mb/d, up 40,000 b/d year-on-year. Moreover, non-OPEC unconventional oil production grew 257,000 b/d to reach 4.76 mb/d. In 2014, the excess in non-OPEC oil supply stood at 1.89 mb/d, much higher than global growth in demand.
3. Lower-Than-Expected Increase in Global Demand: At the beginning of 2014, the Organization of the Petroleum Exporting Countries estimated the global demand for oil to increase 1.2 mb/d. But the figures released at the end of the year indicated lower-than-expected growth for demand. In its monthly market review for January 2015, OPEC’s estimate for growth in demand in 2014 was reported at 1 mb/d, 200,000 b/d below its previous estimates. In early 2014, the International Energy Agency (IEA) had estimated the global demand for oil to grow 1.3 mb/d. By the end of the year, the IEA cut its estimate to 600,000 b/d, less than half of the initial estimates.
4. Growing Oil and Petroleum Products Stocks Due to Ample Supply and Sliggish Demand: Throughout 2014, the market was oversupplied with oil. The market saw 1.1 mb/d, 1.5 mb/d, 0.6 mb/d and 0.5 mb/d of oil oversupply during the four quarters of the year, respectively. That caused crude oil and petroleum products stocks to increase significantly. To that effect, member states of the Organization for Economic Co-operation and Development (OECD) increased their strategic stocks to 2,678 million barrels in December 2014 from 2,567 mb/d in January that year. That was enough for 58.6 days demand by these countries.
5. OPEC Overproduction Capacity: Oil overproduction capacity among OPEC member states has been an important factor affecting oil prices. In early 2014, the overproduction capacity for all OPEC member states stood at 4.86 mb/d, excluding 3.33 mb/d share of Iran, Iraq, Nigeria and Libya. Although OPEC excess capacity fell to 3.99 mbd by the end of the year, its total excess capacity has reached 3.39 mb/d without taking into consideration the quotas of Libya, Nigeria, Iraq and Iran. That indicates that the oil market is not so worried about production capacity shortages.
6. Libya Oil Output Hike: In 2014, Libya’s oil production was an influential factor on the price of oil. After the 2012 removal of its long-time dictator Moammer Gaddafi, Libya’s oil production fell sharply, but it rebounded very quickly and reached 1.4 mb/d in the first half of 2013. As political tensions increased and internal dispute simmered between forces that contributed to the downfall of Gaddafi, oil production in Libya started falling from the middle of 2013 to reach 213,000 b/d in May 2014. But the rival groups reached agreement and oil production started growing in 2014 to reach 880,000 b/d in October that year. Libya’s oil production hike in the second half of 2014 due to market oversupply did not have any special impact on the downward trend in oil prices.
7. OPEC’s Non-Intervention: Ever since oil prices started falling in July 2014, many oil market analysts were waiting for an emergency ministerial meeting of OPEC to cut its production ceiling in order to shore up prices, but OPEC did hold no emergency meeting and it opted to keep its production ceiling unchanged at 30 mb/d in its regular meeting in November 2014. Some OPEC member states including Iran and Venezuela were in favor of a cut in production ceiling, but Saudi Arabia, United Arab Emirates, Qatar and Kuwait firmly opposed any reduction in the OPEC output ceiling.
8. Dollar Value Appreciation: Throughout 2013 and during the first half of 2014, the US administration was injecting $80 billion per month into the country’s economy through buying bonds. That caused the dollar to depreciate against other major currencies. But in the second half of 2014, the US ended its bond purchase activities and the dollar became stronger in value. In June 2014, the euro was traded at $1.38, but by the end of the year, the conversion rate fell to 1.2. Since the oil price is set in dollars, the strengthening of the greenback caused further decline in oil prices.
9. A group of other factors including China’s slow economic growth rate and weak demand for oil, production hike in Iraq, less purchase by speculators in future oil markets, oil price discount by some Persian Gulf producers particularly Saudi Arabia, slowdown in Japan’s economic growth and the strength of the possibility of a nuclear deal between Iran and six world powers further drove the prices down.

2015 Outlook

 

In 2014, oil demand grew at a slower pace than oil supply; therefore, the market was oversupplied. The same trend is forecast to continue in the first and the second quarters of 2015 before seeing a slight improvement in the third quarter of the year. In the fourth quarter, global demand for oil is expected to increase and the market would experience equilibrium in supply and demand.

In its monthly review for January 2015, OPEC estimated the global demand for oil to stand at 91.3 mb/d, 91.2 mb/d, 92.9 mb/d and 93.8 mb/d, respectively in the fourth quarters of the year. The average is 92.3 mb/d, up 1.1 mb/d from a year ago.

Non-OPEC supply is estimated to reach 57.5 mb/d, up 1.3 mb/d from the year before. Lower supply by non-OPEC oil producers and growing demand for oil in 2015 will cause demand for OPEC oil to reach 30 mb/d in the last quarter of 2015. In case, OPEC adheres to its production ceiling, the market will be balanced by the end of the year.

 

2015 Supply & Demand Forecasts (mb/d)

 

	2012	2013	2014	Q1 2015	Q2 2015	Q3 2015	Q4 2015	2015	Changes Yr/Yr
Global Demand	89.0	90.2	91.2	91.3	91.2	92.9	93.8	92.3	1.1
Non-OPEC Supply	52.9	54.2	56.2	57.7	57.4	57.3	57.6	57.5	1.3
OPEC Gas Condensate and Unconventional Oil Supply	5.6	5.6	5.8	5.9	6.0	6.1	6.2	6.0	0.2
Total Supply, Excluding OPEC Crude Oil Production	58.4	59.9	62.0	63.6	63.3	63.4	63.8	63.5	1.5
Demand for OPEC Oil	30.5	30.3	29.1	27.8	27.8	29.5	30.0	28.8	-0.3
OPEC Crude Oil Production	31.1	30.2	30
Total Global Supply	89.6	90.1	92.1
Market Equilibrium	0.6	-0.1	0.9

 

However, the most unpredictable issues which largely affect oil prices in the short term are non-fundamental factors. The bulk of the world’s oil is produced in the Middle East, North Africa, West Africa, Latin America and Eurasia. But these oil-rich regions do not enjoy political stability. Any crisis in either of these regions would cause a halt to their oil supply and significantly affect oil prices. Moreover, we ought to wait and see what OPEC and non-OPEC oil producers would do in the second half of the year because the current level of oil prices is not acceptable to most oil exporters.

First ‘Made in Iran’ Gas Turbine

 

Gas turbines are one of the main equipment used in the petroleum industry, particularly in production in the upstream sector. Solar gas turbine is the most widely used in the petroleum industry. Due to the high significance and utility of this key equipment in the petroleum industry, Iranian engineers have managed to indigenize and build the first solar turbine, known under trademark T-4502.

This turbine was ordered by National Iranian South Oil Company (NISOC) and built by Turbine Machine Middle East Company.

Rokneddin Javadi, managing director of National Iranian Oil Company (NIOC), said in the ceremony organized for unveiling the first domestically manufactured gas turbine that Iran is now manufacturing more than 80% of petroleum industry equipment.

“Future projects of petroleum industry are based on domestic manufacturing potential and as long as domestic manufacturers are able to supply the equipment we will not import any equipment from foreign countries,” he said.

Javadi said the grounds are paved for reliance on domestic industry, adding that NIOC is supporting domestic manufacturers.

Regarding the construction of national gas turbine, he said: “This turbine is technically complete and has no shortages. In case competitive conditions are prepared, this turbine can rival foreign-made ones.”

Javadi said this turbine has been manufactured domestically under the aegis of Ministry of Petroleum.

“Turbine is one of the most sophisticated equipment needed in the petroleum industry. But it is now built in Iran,” he added.

Regarding mass production of gas turbine and other NIOC projects, Javadi said: “Across the world, rotary machinery is manufactured for specific capacities and designs must be made based on these capacities.”

“For future projects of the petroleum industry, instructions have to be defined, based on which capacities are selected for rotary machinery,” he said.

 

Monopoly Lifted

 

Mohammad-Hossein Khandan, deputy head of NISOC, said the monopoly held by foreign companies on the manufacturing of gas turbine has been broken by Iranian companies.

“NISOC is century-old and gas turbines, which are key equipment in [oil-rich] regions, had long been supplied by foreign countries,” he said.

“Under conditions of sanctions, foreign companies did not even accept to remove technical problems and repair gas turbines in the country and they refused to supply key components. That resulted in the manufacturing of a strategic commodity in the petroleum industry and the end of monopoly on gas turbine manufacturing,” said Khandan.

He said that 3MW to 5MW gas turbines are among the most technologically important petroleum industry equipment in Iran.

 

Solar Centaur Gas Turbines

 

Hassan Helali, managing director of Turbine Machine Middle East Company, underlined Iran’s capability in manufacturing gas turbines of different classes. He said: “This class of gas turbines had not yet been manufactured in the country and now with this achievement, a major portion of needs of NISOC and many other companies would be met.”

Helali said Turbine Machine ME Company is receiving orders valued at IRR 350 billion to IRR 400 billion every year, adding that it is ready to receive up to IRR 1,600 billion orders.

He expressed hope that the potentialities of his company would be used in a more effective way.

Helali said Turbine Machine ME Company has so far delivered 430 types of products to the petroleum industry, including more than 30 turbines ordered by Tehran Kala Naft Company.

“Turbine Machine ME Company is currently planning to produce more than 33 turbines. In response to the petroleum industry needs, 10 to 15 turbines are currently under construction,” he said.

Helali said development of gas turbines plays a key role in the petroleum industry, adding: “Turbine Machine ME Company has moved to repair and produce gas turbine parts in recent years. After 13 years, it managed to produce all parts for this turbine and in the end, a national turbine was manufactured.”

The first Solar Centaur gas turbine, T4502, has been constructed for IRR 180 billion.

Due to international sanctions, it was difficult to purchase components for these turbines. Meantime, factories needed new turbines to run. But the domestic manufacturing of this gas turbine removed a major challenge in the country.

In total, there are 130 Solar Centaur turbines in the companies affiliated with Iran’s Ministry of Petroleum. NISOC holds 76. Among them, at least 30% of

T-4000 model need to be upgraded to T-4502.

After management pathology and expertise were done at NISOC, the necessity of indigenization of technology for domestic manufacturing of turbine came to sharp relief. In order to reduce risks and create a strategic attitude, the Supreme Council for Research of NISOC give green light to the indigenization of technical savvy and domestic manufacturing of T-4502 Solar Centaur gas turbine.

This turbine which underwent final tests and finally delivered to NISOC will be installed in a pressure gas booster station.

Crude Oil Electrostatic Desalter Pilot Designed

 

The crude oil  extracted from onshore and offshore underground reservoirs always contains a significant amount of unwanted substances like water and salts, which always cause disruption in refining processes, crude oil transmission pipelines as well as different processes that should be done on crude oil. Corrosion and sedimentation are among damage inflicted by these salts on oil installations. Water could be separated from crude oil by applying gravity method which is based on difference in density. Gravity is of help in multi-phase separation, but it would not be perfect because water is always trapped in emulsion in oil and it will be impossible to separate these water droplets. In order to have a satisfactory result, crude oil should undergo electrostatic desalting.

Electrostatic desalting is employed for both oil field and refinery applications, to facilitate the removal of inorganic chlorides and water-soluble contaminants from crude oil. In refinery applications, the removal of these water-soluble compounds prevents or minimizes damage to downstream distillation equipment.

This process relies on establishing a high voltage AC electrical field in the oil phase of dehydrator/desalter vessels. The electrical field imposes an electrical charge on water droplets entrained in the oil stream, thus causing them to oscillate as they pass through the electrodes.

Therefore, the first unit in upstream sector and in oil and gas condensate refineries is tasked with electrostatic desalting. In this unit, the remaining salt and water are separated from crude oil and the oil would be then ready to enter the distillation and separation units in the refinery. Iran has to import this technology and the construction of electrostatic desalting units is assigned to foreign companies. But due to sanctions, foreign companies surcharge Iran.

Electrostatic desalter was unknown in Iran due to its sophisticated technology. Four years ago, the Research Institute of Petroleum Industry (RIPI) decided to meet this need and it worked out plans for the indigenization of electrostatic desalter technology.

For the first time in Iran, RIPI developed the pilot of the first crude oil electrostatic desalter with a capacity of 20,000 b/d. This pilot became operational after undergoing the necessary tests and turning out to be effective. For three months, this pilot was tested for its response to varieties of crude oil.

The results obtained from data logging showed the success of the pilot with a high separation degree. Moreover, this pilot was responsive to different operational conditions. That encouraged efforts for developing technical knowledge for electrostatic desalter.

These results help obtain the primary data needed for designing desalting units. Moreover, different operational conditions in desalting units could be assessed by this pilot.

 

Accelerated Construction

 

Mohammad-Reza Moqaddam, deputy minister of petroleum for research and technology, said in a ceremony organized for unveiling the electrostatic desalter pilot that faster construction of the desalter by RIPI would be of great help in enhanced recovery from oil fields.

“Designing and building crude oil electrostatic deslating pilot is indicative of the firm determination of RIPI in developing this technology,” he said.

Moqaddam said RIPI should sign a contract with universities to that effect.

Noting that the RIPI has not been entangled in administrative red tape for designing the pilot, he said the research institute is the only owner of desalter technical savvy in Iran.

Moqaddam said construction of drilling rigs; coiled tubing and desalter are among top priority commodities for the petroleum industry.

“The petroleum minister insists too much on faster construction of desalters,” he said.

Moqaddam said the main structure of desalters is built outside operational zones, which requires cooperation with universities.

 

Semi-Industrial Scale

 

Amir-Abbas Hosseini, deputy head of RIPI for technology and international affairs, said oil production is the objective pursued jointly by all sectors of the petroleum industry.

“By unveiling crude oil electrostatic desalting pilot, RIPI addressed one of concerns of the upstream sector and is ready to build fully Iranian desalter,” he said.

Hosseini said RIPI has gone through the stages of development of technology for crude oil electrostatic desalter up to semi-industrial pilot and has acquired the necessary technical knowhow.

He said a memorandum has been signed between universities and knowledge-based satellite companies affiliated with RIPI.

“RIPI is capable of building Iranian desalter with Iranian knowhow and global experiences. To that effect, it needs the petroleum industry’s support,” said Hosseini.

He said RIPI is ready to build a mobile prototype of this technology for field tests in order to save costs.

 

Pilot for Variety of Crude

 

Mehdi Mohammadi, director of technical knowhow for oil electrostatic desalting project, said this pilot has been designed and built for the first time in Iran by RIPI. He said the pilot has ended Iran’s need to import this technology.

Mohammadi said the pilot is used for processing a variety of crude oil in different regions, adding that the technology is highly effective even without adding demulsifier.

“This pilot was tested with three types of crude oil with different density and such parameters as electrical energy and fossil fuel consumption, pressure fall-off in mixing valve and water-cut level are included,” he said.

Mohammadi said development of this technology facilitates development of simulator for desalting operation.

“Given its experience and background in this technical knowhow, RIPI could provide services by contributing to industrial projects, construction of desalting units, consultation for better performance of desalting units, pilot test for varieties of crude oil to determine optimal operational conditions and construction of mobile pilot for conducting field tests to select demulsifier,” he said.

This pilot is of help to the petroleum industry from different aspects. It could be used for testing the performance of operational conditions for different varieties of crude oil and selecting optimal operational conditions. It could be also used for examining the performance of demulsifiers.

Every year, desalting units undergo field tests for demulsifier selection. The risk is that the crude oil achieved from this unit may not meet the necessary quality standards for exports and transmission. But by using a mobile pilot, it would be possible to test demulsifiers and compare their efficacy in order to choose the most appropriate one.

To that effect, RIPI plans to build a mobile pilot for desalting for tests on larger scales.

This pilot would be used near operational units. The main feedstock will be branched out to this pilot for field test.

This pilot is also of help in conducting field test on the performance of demulsifier on very small scale in the petroleum industry. Then, a demulsifier which would conform to the reservoir conditions, category of crude oil and its water content would be chosen.

Safeguarding Hoor al-Azim Lagoon, a Must

 

Hoor al-Azim Lagoon is the only Mesopotamian lagoon to have survived. Located in the west of Iran’s oil-rich southwestern province of Khuzestan, the lagoon is rich in terms of biodiversity. Karkheh, Nissan and Sableh rivers flow into this lagoon.

The historical background of these lagoons has always caught international attention. Studies show that these lagoons, whose area once reached two million hectares, occupied nearly one-third of Iraq, stretching from Baghdad to Arvandroud River.

Hoor al-Azim is divided between Iran and Iraq. Iran holds one-third of the lagoon which is an important habitat for migratory and local birds. Heron, goose, jackal, fox, jungle cat, otter, boar, lion and common carp live in this habitat.

Satellite images taken in 1970, 1990 and 2000 from Hoor al-Azim Lagoon show that dam construction projects by Turkey and Iraq have inflicted heavy damage on this lagoon.

The flow of both Euphrates and Tigris fluctuates in different seasons due to drought and destructive flooding. In spring, the two rivers run at more than 5,000 cubic meters per second while in summer, the flow is down to 150 to 200 cubic meters per second. Precipitation has fallen by 13% over the past nine years in Karkheh catchment; therefore, the recyclable potential of water has dropped to 24%.

Surface runoff in Karkheh draining basin has declined by 50% over the past nine years. The reasons include low rainfall and tapping water tables to irrigate farmlands.

Hoor al-Azim is estimated to need 1,283 mcm of water every year. Due to low flow of water in recent years, the lagoon would receive 284 mcm of water this year at best.

 

Lagoon Shrinks

 

The main reasons behind 75% shrinkage in the surface area of Hoor al-Azim may be attributed to the following factors: Construction of dams and canals in neighboring countries, the aftermath of Iraq-Iran war (1980-1988), location of Khuzestan province in a desert region and the impact of quicksand on 700,000 ha of land, lack of spatial planning, high evaporation rate, flow of drained water and wastes into the lagoon, inability of the lagoon in reconstruction and self-remediation as well as low precipitation and surface runoff in the region.

 

Regular Monitoring

 

Abdorreza Haj Hosseinnejad, managing director of Petroleum Engineering and Development Company (PEDEC), said PEDEC, which is affiliated with National Iranian Oil Company (NIOC), is operating many oil fields in Khuzestan province. North Azadegan, South Azadegan, Yadavaran, North Yaran and South Yaran are run by PEDEC.

Segments from North Azadegan, South Azadegan, North Yaran and South Yaran oil fields lie in Hoor al-Azim.

Darkhoein, Hoveizeh and Sousangerd are the closest cities to West Karoun oil fields in southwest Iran.

Since most oil fields in West Karoun lie in the lagoon lands, PEDEC regularly monitors activities in West Karoun and is planning to revive Hoor al-Azim in order to safeguard the environment and curb contamination stemming from the development of West Karoun oil fields. A comprehensive environment management plan has been designed by PEDEC to be executed in West Karoun region.

 

244 Culverts

 

In a bid to protect the environment and curb hazes coming to Iran from Iraq, PEDEC has concentrated its efforts on Hoor al-Azim and its surroundings. To that effect, the Department of the Environment and its Khuzestan provincial branch have been pursuing measures to control harmful impacts on the environment. These measures include construction of 244 culverts under roads in North Azadegan zone, construction of sub-road culverts on the road into Yaran field, water release after construction activities and laying pipelines in order to minimize impacts on the flow of water into Hoor al-Azim, regular reparation of roads, and construction of 44 culverts for exchange of water.

 

Oil Spill Control

 

Other measures include regular monitoring of culverts and multi-span bridges on the access routes, regular assessment of hydrological changes in the region, spreading soil around drilling spots to avoid pollution, oil spill plan, using reinforced concrete in waste holes, construction of access roads for drainage of surface runoff to trenches.

 

Hunting Banned

 

Minimizing travels by vehicles and limiting them to specific roads, spreading sand on the roads, installing cement shield inside the wells deeper than water tables in order to isolate the wells throughout drilling operations and well completion, requiring contractors to purchase water for construction and drilling operations and banning them from water recovery from the lagoon, regular monitoring of the environment throughout construction operations, earth revival projects through expansion of green space in non-industrial places, banning hunting and fishing in compliance with the regulations set by the Department of the Environment, installing automatic valves where the pipelines meet Karoun River, burying pipelines underground in order to avoid oil spill, imposing penalties on violators of environmental regulations are among measures carried out for protecting Hoor al-Azim Lagoon.

 

Monitoring Spots

 

In order to manage the environment for West Karoun projects, PEDEC has specified some monitoring spots in its oil field development projects. Given the significance of Hoor al-Azim, the following monitoring spots have been specified: 15 stations to monitor surface runoff in the northern, southern and central parts of Hoor al-Azim, 14 stations to monitor soil and sediments in farmlands and nearby villages, 13 stages to monitor aquatic animals living in Karkheh River.

Drawing up a schedule for water release into all basins of Hoor al-Azim Lagoon up to 2016, reparation of 244 culverts, construction of 44 new three-span culverts and village in spots endorsed by the Khuzestan provincial branch of the Department of the Environment, conducting hydrology studies in the region and measuring the height of roads, wellhead installations and pipelines for water release into Hoor al-Azim are among measures conducted with regard to the management of hydrology of Hoor al-Azim.

 

NIOC Tasks

 

The Iranian government ratified a measure in March for fighting the harmful impacts of hazes. The ratification assigned the following tasks to NIOC: Providing assistance to development oil projects, water release into Hoor al-Azim Lagoon and construction of culverts on the roads leading to oil fields in West Karoun.

Following this ratification, PEDEC conducted the following measures: construction, reparation and modification of culverts, construction of culverts and new bridges, establishing regular monitoring of Hoor al-Azim Lagoon, opening water sluices into the lagoon, reparation of damage in the lagoon, planning for waste treatment system, greenbelt expansion and installing environment spot.

Construction of culverts costs $5 million, while reparation of 244 culverts would cost IRR 1 billion for each period of remediation. The culverts in Yaran oil field would cost IRR 13 billion. A total of IRR 115 billion has been spent on the construction of 24 new culverts. Each bridge in North Azadegan costs IRR 4 billion. Construction of 12 box culverts in North Yaran costs IRR 20 billion and each period of monitoring would cost IRR 700 million.

PEDEC has already built more than 31 ha of greenbelt in West Karoun region.

 

North Yaran

 

Arash Baqerzadeh, operator of North Yaran field development project, has announced satisfactory progress in the oil field development.

“At beginning, North Yaran was a desert, and water had been agreed by relevant organs to be released into the lagoon in 2016. Until 10 years ago, there was no issue of hazes and last year, NIOC managing director and DOE deputy head visited West Karoun projects and said water could be released. That finally happened. It was both oil and environmental activity,” he said.

“Previous deserts have now become marshlands and environmentally significant measures have been carried out in the region,” he added.

Baqerzadeh said he has already outlined plans and measures in a letter to the Department of the Environment.

He said the measures had been explained to the DOE more than a year before they were to be implemented.

“We made efforts to reconstruct the roads ruined during the imposed war and we tried our best not to build new roads. We did our utmost so that no destruction would occur to the environment. Water tankers have been also deployed to water plants,” he added.

Baqerzadeh said PEDEC even agreed to build 43 culverts more than demanded by DOE, at a cost of IRR 300 billion, in order to show its goodwill and let water flow smoothly.

“Surveys showed that by equipping roads, it would be possible to avoid the fall of transport vehicles into the lagoon to contaminate water. For that purpose, guard rails and other safety equipment have been installed along the roads,” he said.

“In North Yaran, 45% of surface area is covered with marshlands and the rest covered with plants,” he said, adding that unpaved roads may churn out dust from time to time.

Baqeradeh said all oil activities in North Yaran have occupied only one percent of the entire field and there has been correspondence with DOE to get permit for NIOC to plant 17,000 trees. Since trees may not grow properly in the lagoon, decision-making for this purpose was assigned to the DOE.

“In order to avoid contamination and help improve weather in Ahvaz, we gave up our early production plan in North Yaran,” he said.

 

No Obstacle to Opening Sluices

 

Elham Ardalani, head of HSE at PEDEC, said NIOC has no problem with the opening of sluices to let water into the lagoon.

She said that some roads were built during the war with Iraq in the lagoon and that is why the lagoon has been divided into basins.

Ardalani said it was up to DOE and Khuzestan Water and Electricity Authority to decide about the release of water into the lagoon.

She said the level of water calculated to be released is above the level of the field; therefore, there is no obstacle to water release.

Ardalani said PEDEC built culverts and bridges although the Khuzestan branch of DOE refused to give any response to requests. She said these measures were essential to revive the environment of the region. She added that these measures had been proposed to DOE by Iran’s Ministry of Petroleum for the revival of ecology.

She said that the goodwill of the provincial governor of Khuzestan is an encouraging sign for resolving the problems related to Hoor al-Azim Lagoon.

Ardalani said PEDEC’s positive measures for Hoor al-Azim should be judged fairly.

She said IRR 350 billion was spent on demining in the region, adding that measures were taken for more safety on the roads.

NIOC managing director, Rokneddin Javadi, had written a letter to DOE chief Masoumeh Ebtekar, noting that Ministry of Petroleum feels obliged to revive the lagoon.

He noted in the letter that the important tissue of Hoor al-Azim Lagoon has been taken into consideration in oil development projects.

Haj Hosseinnejad said the lagoons which have already dried up or are drying are a major cause of hazes. He said efforts started for the release of water into Hoor al-Azim.

He said the government is still trying to resolve the issue of hazes.

Haze is traditionally an atmospheric phenomenon where dust, smoke and other dry particles obscure the clarity of the sky. The World Meteorological Organization manual of codes includes a classification of horizontal obscuration into categories of fog, ice fog, steam fog, mist, haze, smoke, volcanic ash, dust, sand and snow. Sources for haze particles include farming (ploughing in dry weather), traffic, industry, and wildfires.

Haze often occurs when dust and smoke particles accumulate in relatively dry air. When weather conditions block the dispersal of smoke and other pollutants they concentrate and form a usually low-hanging shroud that impairs visibility and may become a respiratory health threat. Industrial pollution can result in dense haze, which is known as smog.

Haze causes issues in the area of terrestrial photography, where the penetration of large amounts of dense atmosphere may be necessary to image distant subjects. This results in the visual effect of a loss of contrast in the subject, due to the effect of light scattering through the haze particles. For these reasons, sunrise and sunset colors appear subdued on hazy days, and stars may be obscured at night. In some cases, attenuation by haze is so great that, toward sunset, the sun disappears altogether before reaching the horizon.

Haze can be defined as an aerial form of the Tyndall effect; therefore, unlike other atmospheric effects such as cloud and fog, haze is spectrally selective: shorter (blue) wavelengths are scattered more, and longer (red/infrared) wavelengths are scattered less. For this reason many super-telephoto lenses often incorporate yellow filters or coatings to enhance image contrast.

Safeguarding Hoor al-Azim Lagoon, a Must

 

Hoor al-Azim Lagoon is the only Mesopotamian lagoon to have survived. Located in the west of Iran’s oil-rich southwestern province of Khuzestan, the lagoon is rich in terms of biodiversity. Karkheh, Nissan and Sableh rivers flow into this lagoon.

The historical background of these lagoons has always caught international attention. Studies show that these lagoons, whose area once reached two million hectares, occupied nearly one-third of Iraq, stretching from Baghdad to Arvandroud River.

Hoor al-Azim is divided between Iran and Iraq. Iran holds one-third of the lagoon which is an important habitat for migratory and local birds. Heron, goose, jackal, fox, jungle cat, otter, boar, lion and common carp live in this habitat.

Satellite images taken in 1970, 1990 and 2000 from Hoor al-Azim Lagoon show that dam construction projects by Turkey and Iraq have inflicted heavy damage on this lagoon.

The flow of both Euphrates and Tigris fluctuates in different seasons due to drought and destructive flooding. In spring, the two rivers run at more than 5,000 cubic meters per second while in summer, the flow is down to 150 to 200 cubic meters per second. Precipitation has fallen by 13% over the past nine years in Karkheh catchment; therefore, the recyclable potential of water has dropped to 24%.

Surface runoff in Karkheh draining basin has declined by 50% over the past nine years. The reasons include low rainfall and tapping water tables to irrigate farmlands.

Hoor al-Azim is estimated to need 1,283 mcm of water every year. Due to low flow of water in recent years, the lagoon would receive 284 mcm of water this year at best.

 

Lagoon Shrinks

 

The main reasons behind 75% shrinkage in the surface area of Hoor al-Azim may be attributed to the following factors: Construction of dams and canals in neighboring countries, the aftermath of Iraq-Iran war (1980-1988), location of Khuzestan province in a desert region and the impact of quicksand on 700,000 ha of land, lack of spatial planning, high evaporation rate, flow of drained water and wastes into the lagoon, inability of the lagoon in reconstruction and self-remediation as well as low precipitation and surface runoff in the region.

 

Regular Monitoring

 

Abdorreza Haj Hosseinnejad, managing director of Petroleum Engineering and Development Company (PEDEC), said PEDEC, which is affiliated with National Iranian Oil Company (NIOC), is operating many oil fields in Khuzestan province. North Azadegan, South Azadegan, Yadavaran, North Yaran and South Yaran are run by PEDEC.

Segments from North Azadegan, South Azadegan, North Yaran and South Yaran oil fields lie in Hoor al-Azim.

Darkhoein, Hoveizeh and Sousangerd are the closest cities to West Karoun oil fields in southwest Iran.

Since most oil fields in West Karoun lie in the lagoon lands, PEDEC regularly monitors activities in West Karoun and is planning to revive Hoor al-Azim in order to safeguard the environment and curb contamination stemming from the development of West Karoun oil fields. A comprehensive environment management plan has been designed by PEDEC to be executed in West Karoun region.

 

244 Culverts

 

In a bid to protect the environment and curb hazes coming to Iran from Iraq, PEDEC has concentrated its efforts on Hoor al-Azim and its surroundings. To that effect, the Department of the Environment and its Khuzestan provincial branch have been pursuing measures to control harmful impacts on the environment. These measures include construction of 244 culverts under roads in North Azadegan zone, construction of sub-road culverts on the road into Yaran field, water release after construction activities and laying pipelines in order to minimize impacts on the flow of water into Hoor al-Azim, regular reparation of roads, and construction of 44 culverts for exchange of water.

 

Oil Spill Control

 

Other measures include regular monitoring of culverts and multi-span bridges on the access routes, regular assessment of hydrological changes in the region, spreading soil around drilling spots to avoid pollution, oil spill plan, using reinforced concrete in waste holes, construction of access roads for drainage of surface runoff to trenches.

 

Hunting Banned

 

Minimizing travels by vehicles and limiting them to specific roads, spreading sand on the roads, installing cement shield inside the wells deeper than water tables in order to isolate the wells throughout drilling operations and well completion, requiring contractors to purchase water for construction and drilling operations and banning them from water recovery from the lagoon, regular monitoring of the environment throughout construction operations, earth revival projects through expansion of green space in non-industrial places, banning hunting and fishing in compliance with the regulations set by the Department of the Environment, installing automatic valves where the pipelines meet Karoun River, burying pipelines underground in order to avoid oil spill, imposing penalties on violators of environmental regulations are among measures carried out for protecting Hoor al-Azim Lagoon.

 

Monitoring Spots

 

In order to manage the environment for West Karoun projects, PEDEC has specified some monitoring spots in its oil field development projects. Given the significance of Hoor al-Azim, the following monitoring spots have been specified: 15 stations to monitor surface runoff in the northern, southern and central parts of Hoor al-Azim, 14 stations to monitor soil and sediments in farmlands and nearby villages, 13 stages to monitor aquatic animals living in Karkheh River.

Drawing up a schedule for water release into all basins of Hoor al-Azim Lagoon up to 2016, reparation of 244 culverts, construction of 44 new three-span culverts and village in spots endorsed by the Khuzestan provincial branch of the Department of the Environment, conducting hydrology studies in the region and measuring the height of roads, wellhead installations and pipelines for water release into Hoor al-Azim are among measures conducted with regard to the management of hydrology of Hoor al-Azim.

 

NIOC Tasks

 

The Iranian government ratified a measure in March for fighting the harmful impacts of hazes. The ratification assigned the following tasks to NIOC: Providing assistance to development oil projects, water release into Hoor al-Azim Lagoon and construction of culverts on the roads leading to oil fields in West Karoun.

Following this ratification, PEDEC conducted the following measures: construction, reparation and modification of culverts, construction of culverts and new bridges, establishing regular monitoring of Hoor al-Azim Lagoon, opening water sluices into the lagoon, reparation of damage in the lagoon, planning for waste treatment system, greenbelt expansion and installing environment spot.

Construction of culverts costs $5 million, while reparation of 244 culverts would cost IRR 1 billion for each period of remediation. The culverts in Yaran oil field would cost IRR 13 billion. A total of IRR 115 billion has been spent on the construction of 24 new culverts. Each bridge in North Azadegan costs IRR 4 billion. Construction of 12 box culverts in North Yaran costs IRR 20 billion and each period of monitoring would cost IRR 700 million.

PEDEC has already built more than 31 ha of greenbelt in West Karoun region.

 

North Yaran

 

Arash Baqerzadeh, operator of North Yaran field development project, has announced satisfactory progress in the oil field development.

“At beginning, North Yaran was a desert, and water had been agreed by relevant organs to be released into the lagoon in 2016. Until 10 years ago, there was no issue of hazes and last year, NIOC managing director and DOE deputy head visited West Karoun projects and said water could be released. That finally happened. It was both oil and environmental activity,” he said.

“Previous deserts have now become marshlands and environmentally significant measures have been carried out in the region,” he added.

Baqerzadeh said he has already outlined plans and measures in a letter to the Department of the Environment.

He said the measures had been explained to the DOE more than a year before they were to be implemented.

“We made efforts to reconstruct the roads ruined during the imposed war and we tried our best not to build new roads. We did our utmost so that no destruction would occur to the environment. Water tankers have been also deployed to water plants,” he added.

Baqerzadeh said PEDEC even agreed to build 43 culverts more than demanded by DOE, at a cost of IRR 300 billion, in order to show its goodwill and let water flow smoothly.

“Surveys showed that by equipping roads, it would be possible to avoid the fall of transport vehicles into the lagoon to contaminate water. For that purpose, guard rails and other safety equipment have been installed along the roads,” he said.

“In North Yaran, 45% of surface area is covered with marshlands and the rest covered with plants,” he said, adding that unpaved roads may churn out dust from time to time.

Baqeradeh said all oil activities in North Yaran have occupied only one percent of the entire field and there has been correspondence with DOE to get permit for NIOC to plant 17,000 trees. Since trees may not grow properly in the lagoon, decision-making for this purpose was assigned to the DOE.

“In order to avoid contamination and help improve weather in Ahvaz, we gave up our early production plan in North Yaran,” he said.

 

No Obstacle to Opening Sluices

 

Elham Ardalani, head of HSE at PEDEC, said NIOC has no problem with the opening of sluices to let water into the lagoon.

She said that some roads were built during the war with Iraq in the lagoon and that is why the lagoon has been divided into basins.

Ardalani said it was up to DOE and Khuzestan Water and Electricity Authority to decide about the release of water into the lagoon.

She said the level of water calculated to be released is above the level of the field; therefore, there is no obstacle to water release.

Ardalani said PEDEC built culverts and bridges although the Khuzestan branch of DOE refused to give any response to requests. She said these measures were essential to revive the environment of the region. She added that these measures had been proposed to DOE by Iran’s Ministry of Petroleum for the revival of ecology.

She said that the goodwill of the provincial governor of Khuzestan is an encouraging sign for resolving the problems related to Hoor al-Azim Lagoon.

Ardalani said PEDEC’s positive measures for Hoor al-Azim should be judged fairly.

She said IRR 350 billion was spent on demining in the region, adding that measures were taken for more safety on the roads.

NIOC managing director, Rokneddin Javadi, had written a letter to DOE chief Masoumeh Ebtekar, noting that Ministry of Petroleum feels obliged to revive the lagoon.

He noted in the letter that the important tissue of Hoor al-Azim Lagoon has been taken into consideration in oil development projects.

Haj Hosseinnejad said the lagoons which have already dried up or are drying are a major cause of hazes. He said efforts started for the release of water into Hoor al-Azim.

He said the government is still trying to resolve the issue of hazes.

Haze is traditionally an atmospheric phenomenon where dust, smoke and other dry particles obscure the clarity of the sky. The World Meteorological Organization manual of codes includes a classification of horizontal obscuration into categories of fog, ice fog, steam fog, mist, haze, smoke, volcanic ash, dust, sand and snow. Sources for haze particles include farming (ploughing in dry weather), traffic, industry, and wildfires.

Haze often occurs when dust and smoke particles accumulate in relatively dry air. When weather conditions block the dispersal of smoke and other pollutants they concentrate and form a usually low-hanging shroud that impairs visibility and may become a respiratory health threat. Industrial pollution can result in dense haze, which is known as smog.

Haze causes issues in the area of terrestrial photography, where the penetration of large amounts of dense atmosphere may be necessary to image distant subjects. This results in the visual effect of a loss of contrast in the subject, due to the effect of light scattering through the haze particles. For these reasons, sunrise and sunset colors appear subdued on hazy days, and stars may be obscured at night. In some cases, attenuation by haze is so great that, toward sunset, the sun disappears altogether before reaching the horizon.

Haze can be defined as an aerial form of the Tyndall effect; therefore, unlike other atmospheric effects such as cloud and fog, haze is spectrally selective: shorter (blue) wavelengths are scattered more, and longer (red/infrared) wavelengths are scattered less. For this reason many super-telephoto lenses often incorporate yellow filters or coatings to enhance image contrast.

Naft Tehran FC Eyes Asian Championship

 

By Amir Sadeqi Panah

 

After berthing a place in the quarterfinals of AFC Club Cup, Naft Tehran soccer team is dreaming of championship in the Asian continent.

Some five years ago, Naft Tehran FC, whose players were not well-known, was led by veteran coach Mehdi Dinvarzadeh into Pro League.

Nobody imagined that this team could make gains one after another so soon to become the only representative of Iran among eight teams from across Asia.

Now, Naft Tehran FC has another advantage and it is highly likely to win the championship title in Asia.

 

Road of Success

 

Naft Tehran FC was set up many years ago, but it was kept aloof from football for years. However, it was cleared to run for Pro League in 2010.

At the beginning, the team did not fare well with Dinvarzadeh as coach. Therefore, Hossein Faraki took over from him. That was the beginning of treading the road of success. It was Faraki’s first experience as Pro League head coach. In the first year, he held the team in Pro League, but in the second year, Naf Tehran FC ranked fourth. Faraki then passed the flame to Mansour Ebrahimzadeh and the result was one notch decline in Pro League ranking. He was succeeded by Yahya Gol-Mohammadi who managed to win a berth in Asian championship. However, the 14^th league was totally different for this emerging soccer team of Iran.

 

Mansourian Surprised Everyone

 

Everyone fired broadside at the managers of Naft Tehran FC after Ali-Reza Mansourian was named to lead the team in the 14^th league. Many believed that Mansourian was not qualified enough to lead Naft Tehran FC in Asia. From the very beginning, Naft Tehran FC was forecast to drop again in ranking. But the final result was exactly the opposite. Under the aegis of influential management of Naft Tehran FC with Mansour Qanbarzadeh at head, its technical staff and ambitious youths, the players were close to becoming champion, but they failed to overpower Tractor Sazi Tabriz. But the conditions were different in AFC championship and Naft Tehran FC was the only Iranian team to make its way into the quarterfinals of AFC Championship. There are high chances for Naft Tehran FC to become champion of Asia.

 

Management Stability

 

Success in rapid succession by Naft Tehran FC has raised questions about the secret of quick progress over five years. It has happened while Naft Tehran FC has experienced five head coaches throughout these years.

Many experts believe that stability in the management of team is the reason behind recent successes by Naft Tehran FC. The club has seen many changes in its lineup, but it saw no management changes over these years. The managers of this club moved ahead with their aforethought plans with a view to gaining more success.

 

Wining Over Supporters

 

It is really regrettable to see that Naft Tehran FC has not won over many supporters despite its success in recent years. Naft Tehran FC was recognized as the best soccer team in Tehran in the last season of Pro League, but its supporters are not enough yet. To that effect, managers of the club have devised many plans in order to encourage people to support this team. Future successes by Naft Tehran FC would be instrumental in winning supporters.

 

Mansourian, Key to Success

 

The very day Ali-Reza Mansourian experienced his last playing for Esteghlal of Tehran, the supporters of the Blues always expected him to become head coach.

After Naft Tehran FC made headway under Mansourian, the Esteghlal Club did its utmost to hire Mansourian, but Naft Tehran never let him go. That was a correct decision made by Naft Tehran FC managers and that was why Naft Tehran FC turned out to be successful.

Mansourian’s presence as the head coach of Naft Tehran FC, and hiring of veteran players promise good days for this soccer team.

 

Asian Championship Targeted

 

According to plans made by Naft Tehran FC managers, this soccer team is much likely to win the trophy at the AFC Championship. Naft Tehran FC is experiencing its first presence in this Asian tournament .It will have to play Al-Ahli of the United Arab Emirates in the quarterfinals.

Boosting Naft Tehran FC will be an influential factor in the future of this team. Everyone else also expects this team to win the championship title in Asia.

 

Qualifications for Asia Championship

 

Undoubtedly, one of major factors behind the success of Naft Tehran FC is the presence of Mansour Qanbarzadeh as its managing director. Over these years, he has made correct decisions and has managed to create brilliant days for his team. He places hope in the future of his team and its championship in Asia. His only concern is insufficient supporters. He hopes that Naft Tehran FC would become Number 1 in Iran and in Asia.

Below is the text of Iran Petroleum interview with Mansour  Qanbarzadeh managing director of Naft Tehran FC:

Q: Would you please tell us about the path Naft Tehran FC has been through to reach the recent successes?

A: The fact is that the strategic plan of Naft Tehran FC was executed two years ago. This strategic plan requires Naft Tehran FC to reach the semi-finals of AFC Championship after five years. But you can see that we are already two years ahead of plan. In case of victory in the quarterfinals, we will reach the semi-finals in our third year of work. This progress has been beyond our own imagination. But it has happened and we are determined to go ahead.

 

Q: What was key to these successes?

A: This significant progress made in Naft Tehran FC is based on solidarity and friendship in the soccer team. At Naft Tehran FC, everyone steers clear of marginal issues and they concentrate their minds on more and more success. Technically speaking, we have had good choices throughout all these years and our coaches have trusted young players and they noticed they were right.

 

Q: Successful teams have always to deal with numerous challenges. Have you thought of that?

A: Sure! Besides all these successes, we have also weaknesses which we should deal with. Our main concern in the Naft Tehran FC is that we don’t have sufficient supporters. Of course we have plans to win over supporters in the coming years. Moreover, continuation of success by Naft Tehran FC has been important in winning over supporters.

 

Q: Over these years, you have made many changes in the technical structure of the team. It seems that you are opposed to so many changes. Is that true?

A: That’s exactly right! Frankly speaking, financial issues have barred us from keeping our coaches. However, we signed a two-year deal with Ali-Reza Mansourian and we did not let him join Esteghlal because we want to lead a powerful team to future games.

 

Q: Naft Tehran FC is now in the quarterfinals of AFC Championship. Do you think it would become champion of Asia?

A: I should say that what it has done so far has been great enough and I extend my gratitude to the technical staff and the players. We are now in a stage we are making efforts to win championship. We have been lucky to face Al-Ahli of the UAE. We can defeat it.

 

Q: Given the facilities of your rival, don’t you think that certainty with championship in Asia would be a bit ambitious for Naft Tehran FC?

A: Once we were in the playoff stage and if that time we talked about championship that would be exaggeration, but now we are among the top eight teams. Therefore, we can think of championship. I assure you that relying on capability of the technical staff and the players as well as the plans we have devised for next year, Naft Tehran FC has the potential to win the Asian Championship.

Shiraz, the Promised Paradise

 

Shiraz, the provincial capital of Fars province in southern Iran, is among big cities in the country. The ancient city which houses a treasure of Persian culture was the capital of Iran under Zand Dynasty from 1750 until 1781 is known for its famous poets Hafez and Saadi.

The earliest reference to the city is on Elamite clay tablets dated to 2000 BCE, found in June 1970, while digging to make a kiln for a brick factory in the south western corner of the city. The tablets written in ancient Elamite name a city called Tiraziš.

Shiraz has always been attractive to Iranian and foreign tourists. It is unique in terms of both ancient monuments and pilgrimage sites.

Delgosha Garden, Eram Garden, Qavam Orange Garden, Afifabad Garden, Jahan Nama Garden, Tomb of Saadi, Tomb of Hafez, Karim Khan Fortress, Shah Cheragh Mausoleum, Quran Gate, Vakil Bazaar, Sibouyeh Tomb, Vakil Hammam, Atiq Friday Mosque and Pars Museum are among the most important tourist attractions in Shiraz.

 

Eram Garden

Eram Garden dates back to nine centuries ago when the Seljukids ruled in Iran. The garden was owned by kings and local governors until the end of Zand Dynasty.

After Zand Dynasty was overthrown, Qashqai tribal chiefs established their bases in Eram Garden and chieftain Jani Khan and his son erected an edifice inside the garden.

When Nasser ad Din Shah Qajar came to power, Haj Nasir al-Molk, who was an influential figure in Shiraz, bought the garden from Qashqai tribal chiefs and built the current beautiful building there. The garden changed hands throughout years until it was given to Shiraz University in 1963. As of 1980, Eram has become a botanic garden where different species grow.

In his poems, Hafez has referred to Eram Garden as one of the outstanding features of Shiraz.

 

Karim Khan Fortress

Karim Khan Zand was the founder of Zand Dynasty. He chose Shiraz as the capital of his governance. Karim Khan started constructing royal and public benefit buildings in the city.

Karim Khan Fortress is among the most important monuments of Zand Dynasty. It has a surface area of 12,800 square meters and a built-up area of around 400 square meters.

The interior decoration once included marble from Yazd and Marār on the lower parts of the walls of the verandas and halls and Shirazi-style patterns painted in gilt and lapis lazuli on the plastered surfaces of the upper parts and the ceilings. The lower parts of the courtyard were adorned with large carved stone panels, and throughout the building there were ornamental wooden skirting boards beneath the marble panels.

 

Zinat al-Molk House

 

This attractive edifice dating back to Qajar Dynasty is a reminiscent of Qaval al-Molk Household. Construction of the building started in 1290 AH and ended in 1302 AH on the lunar calendar.

It is a beautiful house in traditional style with a court yard in the middle and the rooms around the court yard. The rooms are richly decorated with wall and ceiling paintings or mirror tile work.

Today most of the finely decorated rooms are stuffed with exhibits in the Fars History Museum, while others serve as galleries for young Shirazi artists. The gardens are in a walled compound 400m south of the Nasir ol-Molk Mosque.

 

Hafez Tomb

 

Hafez, the renowned mystic poet, was born in Shiraz. He is laid to rest in a north of the city. The tomb of Hafez is among the most important tourist attractions in Shiraz.

The open pavilion structures are situated in the Mosalla Gardens on the north bank of a seasonal river and house the marble tomb of Hafez. The present buildings, built in 1935 and designed by the French architect and archaeologist André Godard, are at the site of previous structures, the most well-known of which was built in 1773. The tomb, its gardens, and the surrounding memorials to other great figures are a focus of tourism in Shiraz.

In 1452, some sixty years after Hafez’s death, the Timurid governor of Fars, Abul Qasem Mirza Babor ordered his vizier, Sham-al-Din Mohammad Yaghmaei, to erect a dome-like structure over Hafez’s grave in the Mosalla Garden. In the front part of the garden he also built a large pool, which was filled from the nearby Roknabad Stream.

This building was restored twice, first in the reign of the Safavid Shah Abbas I (1587-1629), and again on the order of Nader Shah Afshar (1736-47).

In 1187/1772-73, Karim Khan Zand (1751-79) enlarged and enclosed the site. He built a vaulted hall in the style of the palace he had made, with four massive tall stone columns, open on the north and south and flanked by two large rooms on the east and west sides.

 

Tomb of Saadi

 

The mausoleum of Saadi, known also as the tomb of Saadi or Sadiyeh, is one of the major tourist attractions of Shiraz.

Saadi was buried where he lived in the final years of his life. In the 7^th century AH, Khajeh Shamsoddin Mohammad Saheb Divani erected a tomb on Saadi’s grave. But in 998 AH, then governor of Fars, Yaqoub Zolqadr ordered the destruction to the tomb.

Again in 1187, Karim Khan of Zand Dynasty ordered the construction of an edifice on the tomb. The edifice was a two-storey building.

The current tomb of Saadi was built in 1952 based on an ancient and new architecture. The hexagonal tomb is adorned with tile work.   

Huge number of Iranians and non-Iranians pay a visit to this burial place and show their respect to Saadi and interest in his works, prose and poems. This Iranian poet is a globally known scholar whose words have touched many hearts across the world and wakened up many minds to take new steps in their lives to reach higher levels of humanity. The ambiance of this location is much more attractive than its architecture although it has got interesting character by itself.

 

Qavam House

 

Narenjestan or Qavam Garden of Shiraz dates back to Qajar era and is located on the eastern side of the end of Lotfali Khan Zand Avenue. Due to abundance of sour orange trees it is called Narenjestan. Narenjestan building has been a place where ordinary people went for administrative purposes and public meetings as well as meetings among Qajar dignitaries and nobles were held there.

Construction of the building started by Ali Mohammad Khan Qavam-ol-Molk in 1257-1267 AH and was completed by Mirza Mohammad Reza Khan, grandson of the first Qavam-ol-Molk and grandfather of Qavam in about 1300 AH. The building has been rehabilitated once by Ebrahim Qavam and has been decorated with mirrors, paintings, tile work, plaster work, and inlay. It is an architectural feat of Qajar period.

The main entrance of the garden opens toward south along the main axis of the building and into an octagonal corridor. Its façade is decorated with bricks. There is a tablet of marble stone on top of the entrance on which Quranic verses have been written along with poems of Asudeh Shirazi about founder of the garden and date of its construction. On both sides of the lower part of the entrance you can see two Qajar soldiers holding their rifles. The entrance door is made of wood and has been inlaid. Ceiling of the octagonal corridor is decorated with bricks and tiles and is shaped like stars.

 

Afifabad Garden

 

Afifabad Garden with an area of approximately 127,000 square meters is one of the most beautiful historical gardens in Shiraz, which was built in 1863. The garden was an important garden and promenade of kings in Safavid period.

Afif Aabd Garden is an actual symbol of the Iranian art of planting flowers. It is located in a wealthy area of Shiraz. It contains a royal palace, a museum of old weapons and an Iranian garden, all providing public visit.

The building of the manor has two floors where there are nearly 30 chamber halls. There are two carved marble fireplaces in the north and south of the hall. The lower floor is now a military museum and a beautiful fountain has been built there. This floor goes to the second floor with three stairs. The second floor has a long corridor with nested rooms along both sides. There is a magnificent large hall at the center of this floor. It has a wooden ceiling and is ornamented with pictures of flowers and plants, hunting preserves, and festivity and joy. All around the “Ebrat Museum” (The Lesson Museum) is in this floor.

Shiraz, the Promised Paradise

 

Shiraz, the provincial capital of Fars province in southern Iran, is among big cities in the country. The ancient city which houses a treasure of Persian culture was the capital of Iran under Zand Dynasty from 1750 until 1781 is known for its famous poets Hafez and Saadi.

The earliest reference to the city is on Elamite clay tablets dated to 2000 BCE, found in June 1970, while digging to make a kiln for a brick factory in the south western corner of the city. The tablets written in ancient Elamite name a city called Tiraziš.

Shiraz has always been attractive to Iranian and foreign tourists. It is unique in terms of both ancient monuments and pilgrimage sites.

Delgosha Garden, Eram Garden, Qavam Orange Garden, Afifabad Garden, Jahan Nama Garden, Tomb of Saadi, Tomb of Hafez, Karim Khan Fortress, Shah Cheragh Mausoleum, Quran Gate, Vakil Bazaar, Sibouyeh Tomb, Vakil Hammam, Atiq Friday Mosque and Pars Museum are among the most important tourist attractions in Shiraz.

 

Eram Garden

Eram Garden dates back to nine centuries ago when the Seljukids ruled in Iran. The garden was owned by kings and local governors until the end of Zand Dynasty.

After Zand Dynasty was overthrown, Qashqai tribal chiefs established their bases in Eram Garden and chieftain Jani Khan and his son erected an edifice inside the garden.

When Nasser ad Din Shah Qajar came to power, Haj Nasir al-Molk, who was an influential figure in Shiraz, bought the garden from Qashqai tribal chiefs and built the current beautiful building there. The garden changed hands throughout years until it was given to Shiraz University in 1963. As of 1980, Eram has become a botanic garden where different species grow.

In his poems, Hafez has referred to Eram Garden as one of the outstanding features of Shiraz.

 

Karim Khan Fortress

Karim Khan Zand was the founder of Zand Dynasty. He chose Shiraz as the capital of his governance. Karim Khan started constructing royal and public benefit buildings in the city.

Karim Khan Fortress is among the most important monuments of Zand Dynasty. It has a surface area of 12,800 square meters and a built-up area of around 400 square meters.

The interior decoration once included marble from Yazd and Marār on the lower parts of the walls of the verandas and halls and Shirazi-style patterns painted in gilt and lapis lazuli on the plastered surfaces of the upper parts and the ceilings. The lower parts of the courtyard were adorned with large carved stone panels, and throughout the building there were ornamental wooden skirting boards beneath the marble panels.

 

Zinat al-Molk House

 

This attractive edifice dating back to Qajar Dynasty is a reminiscent of Qaval al-Molk Household. Construction of the building started in 1290 AH and ended in 1302 AH on the lunar calendar.

It is a beautiful house in traditional style with a court yard in the middle and the rooms around the court yard. The rooms are richly decorated with wall and ceiling paintings or mirror tile work.

Today most of the finely decorated rooms are stuffed with exhibits in the Fars History Museum, while others serve as galleries for young Shirazi artists. The gardens are in a walled compound 400m south of the Nasir ol-Molk Mosque.

 

Hafez Tomb

 

Hafez, the renowned mystic poet, was born in Shiraz. He is laid to rest in a north of the city. The tomb of Hafez is among the most important tourist attractions in Shiraz.

The open pavilion structures are situated in the Mosalla Gardens on the north bank of a seasonal river and house the marble tomb of Hafez. The present buildings, built in 1935 and designed by the French architect and archaeologist André Godard, are at the site of previous structures, the most well-known of which was built in 1773. The tomb, its gardens, and the surrounding memorials to other great figures are a focus of tourism in Shiraz.

In 1452, some sixty years after Hafez’s death, the Timurid governor of Fars, Abul Qasem Mirza Babor ordered his vizier, Sham-al-Din Mohammad Yaghmaei, to erect a dome-like structure over Hafez’s grave in the Mosalla Garden. In the front part of the garden he also built a large pool, which was filled from the nearby Roknabad Stream.

This building was restored twice, first in the reign of the Safavid Shah Abbas I (1587-1629), and again on the order of Nader Shah Afshar (1736-47).

In 1187/1772-73, Karim Khan Zand (1751-79) enlarged and enclosed the site. He built a vaulted hall in the style of the palace he had made, with four massive tall stone columns, open on the north and south and flanked by two large rooms on the east and west sides.

 

Tomb of Saadi

 

The mausoleum of Saadi, known also as the tomb of Saadi or Sadiyeh, is one of the major tourist attractions of Shiraz.

Saadi was buried where he lived in the final years of his life. In the 7^th century AH, Khajeh Shamsoddin Mohammad Saheb Divani erected a tomb on Saadi’s grave. But in 998 AH, then governor of Fars, Yaqoub Zolqadr ordered the destruction to the tomb.

Again in 1187, Karim Khan of Zand Dynasty ordered the construction of an edifice on the tomb. The edifice was a two-storey building.

The current tomb of Saadi was built in 1952 based on an ancient and new architecture. The hexagonal tomb is adorned with tile work.   

Huge number of Iranians and non-Iranians pay a visit to this burial place and show their respect to Saadi and interest in his works, prose and poems. This Iranian poet is a globally known scholar whose words have touched many hearts across the world and wakened up many minds to take new steps in their lives to reach higher levels of humanity. The ambiance of this location is much more attractive than its architecture although it has got interesting character by itself.

 

Qavam House

 

Narenjestan or Qavam Garden of Shiraz dates back to Qajar era and is located on the eastern side of the end of Lotfali Khan Zand Avenue. Due to abundance of sour orange trees it is called Narenjestan. Narenjestan building has been a place where ordinary people went for administrative purposes and public meetings as well as meetings among Qajar dignitaries and nobles were held there.

Construction of the building started by Ali Mohammad Khan Qavam-ol-Molk in 1257-1267 AH and was completed by Mirza Mohammad Reza Khan, grandson of the first Qavam-ol-Molk and grandfather of Qavam in about 1300 AH. The building has been rehabilitated once by Ebrahim Qavam and has been decorated with mirrors, paintings, tile work, plaster work, and inlay. It is an architectural feat of Qajar period.

The main entrance of the garden opens toward south along the main axis of the building and into an octagonal corridor. Its façade is decorated with bricks. There is a tablet of marble stone on top of the entrance on which Quranic verses have been written along with poems of Asudeh Shirazi about founder of the garden and date of its construction. On both sides of the lower part of the entrance you can see two Qajar soldiers holding their rifles. The entrance door is made of wood and has been inlaid. Ceiling of the octagonal corridor is decorated with bricks and tiles and is shaped like stars.

 

Afifabad Garden

 

Afifabad Garden with an area of approximately 127,000 square meters is one of the most beautiful historical gardens in Shiraz, which was built in 1863. The garden was an important garden and promenade of kings in Safavid period.

Afif Aabd Garden is an actual symbol of the Iranian art of planting flowers. It is located in a wealthy area of Shiraz. It contains a royal palace, a museum of old weapons and an Iranian garden, all providing public visit.

The building of the manor has two floors where there are nearly 30 chamber halls. There are two carved marble fireplaces in the north and south of the hall. The lower floor is now a military museum and a beautiful fountain has been built there. This floor goes to the second floor with three stairs. The second floor has a long corridor with nested rooms along both sides. There is a magnificent large hall at the center of this floor. It has a wooden ceiling and is ornamented with pictures of flowers and plants, hunting preserves, and festivity and joy. All around the “Ebrat Museum” (The Lesson Museum) is in this floor.

Shiraz, the Promised Paradise

 

Shiraz, the provincial capital of Fars province in southern Iran, is among big cities in the country. The ancient city which houses a treasure of Persian culture was the capital of Iran under Zand Dynasty from 1750 until 1781 is known for its famous poets Hafez and Saadi.

The earliest reference to the city is on Elamite clay tablets dated to 2000 BCE, found in June 1970, while digging to make a kiln for a brick factory in the south western corner of the city. The tablets written in ancient Elamite name a city called Tiraziš.

Shiraz has always been attractive to Iranian and foreign tourists. It is unique in terms of both ancient monuments and pilgrimage sites.

Delgosha Garden, Eram Garden, Qavam Orange Garden, Afifabad Garden, Jahan Nama Garden, Tomb of Saadi, Tomb of Hafez, Karim Khan Fortress, Shah Cheragh Mausoleum, Quran Gate, Vakil Bazaar, Sibouyeh Tomb, Vakil Hammam, Atiq Friday Mosque and Pars Museum are among the most important tourist attractions in Shiraz.

 

Eram Garden

Eram Garden dates back to nine centuries ago when the Seljukids ruled in Iran. The garden was owned by kings and local governors until the end of Zand Dynasty.

After Zand Dynasty was overthrown, Qashqai tribal chiefs established their bases in Eram Garden and chieftain Jani Khan and his son erected an edifice inside the garden.

When Nasser ad Din Shah Qajar came to power, Haj Nasir al-Molk, who was an influential figure in Shiraz, bought the garden from Qashqai tribal chiefs and built the current beautiful building there. The garden changed hands throughout years until it was given to Shiraz University in 1963. As of 1980, Eram has become a botanic garden where different species grow.

In his poems, Hafez has referred to Eram Garden as one of the outstanding features of Shiraz.

 

Karim Khan Fortress

Karim Khan Zand was the founder of Zand Dynasty. He chose Shiraz as the capital of his governance. Karim Khan started constructing royal and public benefit buildings in the city.

Karim Khan Fortress is among the most important monuments of Zand Dynasty. It has a surface area of 12,800 square meters and a built-up area of around 400 square meters.

The interior decoration once included marble from Yazd and Marār on the lower parts of the walls of the verandas and halls and Shirazi-style patterns painted in gilt and lapis lazuli on the plastered surfaces of the upper parts and the ceilings. The lower parts of the courtyard were adorned with large carved stone panels, and throughout the building there were ornamental wooden skirting boards beneath the marble panels.

 

Zinat al-Molk House

 

This attractive edifice dating back to Qajar Dynasty is a reminiscent of Qaval al-Molk Household. Construction of the building started in 1290 AH and ended in 1302 AH on the lunar calendar.

It is a beautiful house in traditional style with a court yard in the middle and the rooms around the court yard. The rooms are richly decorated with wall and ceiling paintings or mirror tile work.

Today most of the finely decorated rooms are stuffed with exhibits in the Fars History Museum, while others serve as galleries for young Shirazi artists. The gardens are in a walled compound 400m south of the Nasir ol-Molk Mosque.

 

Hafez Tomb

 

Hafez, the renowned mystic poet, was born in Shiraz. He is laid to rest in a north of the city. The tomb of Hafez is among the most important tourist attractions in Shiraz.

The open pavilion structures are situated in the Mosalla Gardens on the north bank of a seasonal river and house the marble tomb of Hafez. The present buildings, built in 1935 and designed by the French architect and archaeologist André Godard, are at the site of previous structures, the most well-known of which was built in 1773. The tomb, its gardens, and the surrounding memorials to other great figures are a focus of tourism in Shiraz.

In 1452, some sixty years after Hafez’s death, the Timurid governor of Fars, Abul Qasem Mirza Babor ordered his vizier, Sham-al-Din Mohammad Yaghmaei, to erect a dome-like structure over Hafez’s grave in the Mosalla Garden. In the front part of the garden he also built a large pool, which was filled from the nearby Roknabad Stream.

This building was restored twice, first in the reign of the Safavid Shah Abbas I (1587-1629), and again on the order of Nader Shah Afshar (1736-47).

In 1187/1772-73, Karim Khan Zand (1751-79) enlarged and enclosed the site. He built a vaulted hall in the style of the palace he had made, with four massive tall stone columns, open on the north and south and flanked by two large rooms on the east and west sides.

 

Tomb of Saadi

 

The mausoleum of Saadi, known also as the tomb of Saadi or Sadiyeh, is one of the major tourist attractions of Shiraz.

Saadi was buried where he lived in the final years of his life. In the 7^th century AH, Khajeh Shamsoddin Mohammad Saheb Divani erected a tomb on Saadi’s grave. But in 998 AH, then governor of Fars, Yaqoub Zolqadr ordered the destruction to the tomb.

Again in 1187, Karim Khan of Zand Dynasty ordered the construction of an edifice on the tomb. The edifice was a two-storey building.

The current tomb of Saadi was built in 1952 based on an ancient and new architecture. The hexagonal tomb is adorned with tile work.   

Huge number of Iranians and non-Iranians pay a visit to this burial place and show their respect to Saadi and interest in his works, prose and poems. This Iranian poet is a globally known scholar whose words have touched many hearts across the world and wakened up many minds to take new steps in their lives to reach higher levels of humanity. The ambiance of this location is much more attractive than its architecture although it has got interesting character by itself.

 

Qavam House

 

Narenjestan or Qavam Garden of Shiraz dates back to Qajar era and is located on the eastern side of the end of Lotfali Khan Zand Avenue. Due to abundance of sour orange trees it is called Narenjestan. Narenjestan building has been a place where ordinary people went for administrative purposes and public meetings as well as meetings among Qajar dignitaries and nobles were held there.

Construction of the building started by Ali Mohammad Khan Qavam-ol-Molk in 1257-1267 AH and was completed by Mirza Mohammad Reza Khan, grandson of the first Qavam-ol-Molk and grandfather of Qavam in about 1300 AH. The building has been rehabilitated once by Ebrahim Qavam and has been decorated with mirrors, paintings, tile work, plaster work, and inlay. It is an architectural feat of Qajar period.

The main entrance of the garden opens toward south along the main axis of the building and into an octagonal corridor. Its façade is decorated with bricks. There is a tablet of marble stone on top of the entrance on which Quranic verses have been written along with poems of Asudeh Shirazi about founder of the garden and date of its construction. On both sides of the lower part of the entrance you can see two Qajar soldiers holding their rifles. The entrance door is made of wood and has been inlaid. Ceiling of the octagonal corridor is decorated with bricks and tiles and is shaped like stars.

 

Afifabad Garden

 

Afifabad Garden with an area of approximately 127,000 square meters is one of the most beautiful historical gardens in Shiraz, which was built in 1863. The garden was an important garden and promenade of kings in Safavid period.

Afif Aabd Garden is an actual symbol of the Iranian art of planting flowers. It is located in a wealthy area of Shiraz. It contains a royal palace, a museum of old weapons and an Iranian garden, all providing public visit.

The building of the manor has two floors where there are nearly 30 chamber halls. There are two carved marble fireplaces in the north and south of the hall. The lower floor is now a military museum and a beautiful fountain has been built there. This floor goes to the second floor with three stairs. The second floor has a long corridor with nested rooms along both sides. There is a magnificent large hall at the center of this floor. It has a wooden ceiling and is ornamented with pictures of flowers and plants, hunting preserves, and festivity and joy. All around the “Ebrat Museum” (The Lesson Museum) is in this floor.

Shiraz, the Promised Paradise

 

Shiraz, the provincial capital of Fars province in southern Iran, is among big cities in the country. The ancient city which houses a treasure of Persian culture was the capital of Iran under Zand Dynasty from 1750 until 1781 is known for its famous poets Hafez and Saadi.

The earliest reference to the city is on Elamite clay tablets dated to 2000 BCE, found in June 1970, while digging to make a kiln for a brick factory in the south western corner of the city. The tablets written in ancient Elamite name a city called Tiraziš.

Shiraz has always been attractive to Iranian and foreign tourists. It is unique in terms of both ancient monuments and pilgrimage sites.

Delgosha Garden, Eram Garden, Qavam Orange Garden, Afifabad Garden, Jahan Nama Garden, Tomb of Saadi, Tomb of Hafez, Karim Khan Fortress, Shah Cheragh Mausoleum, Quran Gate, Vakil Bazaar, Sibouyeh Tomb, Vakil Hammam, Atiq Friday Mosque and Pars Museum are among the most important tourist attractions in Shiraz.

 

Eram Garden

Eram Garden dates back to nine centuries ago when the Seljukids ruled in Iran. The garden was owned by kings and local governors until the end of Zand Dynasty.

After Zand Dynasty was overthrown, Qashqai tribal chiefs established their bases in Eram Garden and chieftain Jani Khan and his son erected an edifice inside the garden.

When Nasser ad Din Shah Qajar came to power, Haj Nasir al-Molk, who was an influential figure in Shiraz, bought the garden from Qashqai tribal chiefs and built the current beautiful building there. The garden changed hands throughout years until it was given to Shiraz University in 1963. As of 1980, Eram has become a botanic garden where different species grow.

In his poems, Hafez has referred to Eram Garden as one of the outstanding features of Shiraz.

 

Karim Khan Fortress

Karim Khan Zand was the founder of Zand Dynasty. He chose Shiraz as the capital of his governance. Karim Khan started constructing royal and public benefit buildings in the city.

Karim Khan Fortress is among the most important monuments of Zand Dynasty. It has a surface area of 12,800 square meters and a built-up area of around 400 square meters.

The interior decoration once included marble from Yazd and Marār on the lower parts of the walls of the verandas and halls and Shirazi-style patterns painted in gilt and lapis lazuli on the plastered surfaces of the upper parts and the ceilings. The lower parts of the courtyard were adorned with large carved stone panels, and throughout the building there were ornamental wooden skirting boards beneath the marble panels.

 

Zinat al-Molk House

 

This attractive edifice dating back to Qajar Dynasty is a reminiscent of Qaval al-Molk Household. Construction of the building started in 1290 AH and ended in 1302 AH on the lunar calendar.

It is a beautiful house in traditional style with a court yard in the middle and the rooms around the court yard. The rooms are richly decorated with wall and ceiling paintings or mirror tile work.

Today most of the finely decorated rooms are stuffed with exhibits in the Fars History Museum, while others serve as galleries for young Shirazi artists. The gardens are in a walled compound 400m south of the Nasir ol-Molk Mosque.

 

Hafez Tomb

 

Hafez, the renowned mystic poet, was born in Shiraz. He is laid to rest in a north of the city. The tomb of Hafez is among the most important tourist attractions in Shiraz.

The open pavilion structures are situated in the Mosalla Gardens on the north bank of a seasonal river and house the marble tomb of Hafez. The present buildings, built in 1935 and designed by the French architect and archaeologist André Godard, are at the site of previous structures, the most well-known of which was built in 1773. The tomb, its gardens, and the surrounding memorials to other great figures are a focus of tourism in Shiraz.

In 1452, some sixty years after Hafez’s death, the Timurid governor of Fars, Abul Qasem Mirza Babor ordered his vizier, Sham-al-Din Mohammad Yaghmaei, to erect a dome-like structure over Hafez’s grave in the Mosalla Garden. In the front part of the garden he also built a large pool, which was filled from the nearby Roknabad Stream.

This building was restored twice, first in the reign of the Safavid Shah Abbas I (1587-1629), and again on the order of Nader Shah Afshar (1736-47).

In 1187/1772-73, Karim Khan Zand (1751-79) enlarged and enclosed the site. He built a vaulted hall in the style of the palace he had made, with four massive tall stone columns, open on the north and south and flanked by two large rooms on the east and west sides.

 

Tomb of Saadi

 

The mausoleum of Saadi, known also as the tomb of Saadi or Sadiyeh, is one of the major tourist attractions of Shiraz.

Saadi was buried where he lived in the final years of his life. In the 7^th century AH, Khajeh Shamsoddin Mohammad Saheb Divani erected a tomb on Saadi’s grave. But in 998 AH, then governor of Fars, Yaqoub Zolqadr ordered the destruction to the tomb.

Again in 1187, Karim Khan of Zand Dynasty ordered the construction of an edifice on the tomb. The edifice was a two-storey building.

The current tomb of Saadi was built in 1952 based on an ancient and new architecture. The hexagonal tomb is adorned with tile work.   

Huge number of Iranians and non-Iranians pay a visit to this burial place and show their respect to Saadi and interest in his works, prose and poems. This Iranian poet is a globally known scholar whose words have touched many hearts across the world and wakened up many minds to take new steps in their lives to reach higher levels of humanity. The ambiance of this location is much more attractive than its architecture although it has got interesting character by itself.

 

Qavam House

 

Narenjestan or Qavam Garden of Shiraz dates back to Qajar era and is located on the eastern side of the end of Lotfali Khan Zand Avenue. Due to abundance of sour orange trees it is called Narenjestan. Narenjestan building has been a place where ordinary people went for administrative purposes and public meetings as well as meetings among Qajar dignitaries and nobles were held there.

Construction of the building started by Ali Mohammad Khan Qavam-ol-Molk in 1257-1267 AH and was completed by Mirza Mohammad Reza Khan, grandson of the first Qavam-ol-Molk and grandfather of Qavam in about 1300 AH. The building has been rehabilitated once by Ebrahim Qavam and has been decorated with mirrors, paintings, tile work, plaster work, and inlay. It is an architectural feat of Qajar period.

The main entrance of the garden opens toward south along the main axis of the building and into an octagonal corridor. Its façade is decorated with bricks. There is a tablet of marble stone on top of the entrance on which Quranic verses have been written along with poems of Asudeh Shirazi about founder of the garden and date of its construction. On both sides of the lower part of the entrance you can see two Qajar soldiers holding their rifles. The entrance door is made of wood and has been inlaid. Ceiling of the octagonal corridor is decorated with bricks and tiles and is shaped like stars.

 

Afifabad Garden

 

Afifabad Garden with an area of approximately 127,000 square meters is one of the most beautiful historical gardens in Shiraz, which was built in 1863. The garden was an important garden and promenade of kings in Safavid period.

Afif Aabd Garden is an actual symbol of the Iranian art of planting flowers. It is located in a wealthy area of Shiraz. It contains a royal palace, a museum of old weapons and an Iranian garden, all providing public visit.

The building of the manor has two floors where there are nearly 30 chamber halls. There are two carved marble fireplaces in the north and south of the hall. The lower floor is now a military museum and a beautiful fountain has been built there. This floor goes to the second floor with three stairs. The second floor has a long corridor with nested rooms along both sides. There is a magnificent large hall at the center of this floor. It has a wooden ceiling and is ornamented with pictures of flowers and plants, hunting preserves, and festivity and joy. All around the “Ebrat Museum” (The Lesson Museum) is in this floor.

Oil Products Distribution in Fars Province

 

Fars province is among the vast provinces in Iran. Located in southern Iran, it sprawls on 124,000 square kilometers.

Fars is the fifth province in Iran in terms of distribution and consumption of oil products.

Due to its tourist attractions, Fars province welcomes a large number of Iranian and foreign visitors every year. Therefore, distribution of oil products is of high significance in this province.

Mohammad-Reza Amin, director of Fars branch office of National Iranian Oil Products Distribution Company (NIOPDC), said Fars province which is one of the most important producers and exporters of products has 94 cities, 30 communes and 7,000 villages.

Amin said Fars province has 16 distribution points, which would rise to 24 soon.

He said 3 oil storage facilities with a capacity of 94 million liters are active in Shiraz, Abadeh and Larestan cities. Abadeh is in the north and Larestan is in the south of Fars province.

Amin said a 160-million-liter new oil depot is under construction near Shiraz oil refinery.

Noting that Fars is supplied with oil products from seven spots, Amin said Shiraz refinery is the main supplier.

He said Shiraz refinery accounts for 45% of petroleum products distributed in Fars province. Bandar Abbas and Isfahan refineries and Bushehr, Sirjan, Yazd and Mahshahr oil depots provide the rest. These refineries and oil depots are located in the neighboring provinces.

Amin said due to lack of pipeline in the province, all oil products are carried by 1,150 oil tankers.

He said average gasoline and gasoil consumption in Fars province stands respectively at 4.4 million liters and 5.2 million liters a day.

Amin said kerosene consumption amounts to 600,000 b/d, fuel oil to 500,000 b/d, liquefied petroleum gas (LPG) consumption to 420,000 tons a day, jet fuel to 182,000 liters a day and compressed natural gas (CNG) consumption to 1.3 mcm/d.

He also referred to the annual consumption of oil products in Fars province in the last calendar year to March, saying gasoline consumption reached 1.6 million liters, vehicles’ gasoil 1.8 million liters, heating gasoil 885 million liters, kerosene 216 million liters, fuel oil 182 million liters, LPG 154,000 tons and jet fuel 66.5 million liters.

Amin noted that fuel consumption even doubles during New Year holidays in March. Every year, holidaymakers from across the country travel to Shiraz on the occasion of New Year holidays.

He said 237 gasoline and gasoil stations are working across Fars province, adding that 70 more are under construction in response to growing demand.

Amin also said that 117 CNG stations are already operating with 12 more under construction.

He said 2.4 million liters of gasoil was delivered to power plants in the last calendar year, adding that the power plants consumed 67% more gasoline in the last year than in the preceding year.

Amin said power plants are expected to cut their gasoil consumption as new phases of the massive offshore South Pars gas field are becoming operational.

He said between 400,000 and 500,000 liters a day of euro-4 gasoil has been distributed in Shiraz since February. He added that euro-4 gasoline is planned to be distributed in the city soon.