IOR Memorandums Signed with 18 Foreign Firms
Gholam-Reza Manouchehri, 60, joined Iran's Ministry of Petroleum in 2001 when Bijan Zangeneh was serving as minister of petroleum. Manouchehri served as CEO of Petropars Company for nine years up to 2010. At the same time he was in charge of managing developments phases 6, 7 and 8 of South Pars gas field. From 2010 to 2011 he was a senior advisor to the CEO of National Iranian Oil Company (NIOC) before becoming CEO of Sadid Industrial Group for two years.
Manouchehri was appointed CEO of the Iranian Offshore Oil Company (IOEC) in 2014. One year later, he was named deputy managing director of NIOC for engineering and development.
"Iran Petroleum" has interviewed this veteran oil manager about challenges and opportunities in petroleum industry and other development issues.
Q: As the first question, would you please tell us about petroleum industry's challenges and opportunities?
A: Under the current circumstances, enhancing recovery from oil fields in the country and applying relevant cutting edge technologies are among issues taken into consideration at the petroleum industry. According to BP estimates, Iran ranks the first in terms of oil and gas reserves together. That is why experts believe that Iran enjoys the highest capacity for oil investment in the world. Iran has the possibility of exports and oil swap and can serve as a center for energy exchanges. It is noteworthy that Iran's development is tied to the petroleum industry. Although we are witnessing quick developments in the energy sector like in solar energy, we will continue to see increased use of hydrocarbon reserves including oil and gas.
Q: How much is the current recovery rate of oil reserves? What are NIOC's plans for enhancing this rate?
A: As you know many oil fields in Iran are currently in the second half of their lifecycle and have seen their output drop. The current recovery rate of oil fields in the country stands between 25% and 27%, which can increase to 40%. Iran holds around 800 billion barrels of oil in place, which could add eight billion barrels of oil to the country's output capacity with a one-percent growth in the recovery rate. Based on current prices, that would amount to $400 billion. Enhancing the recovery rate in oil reservoirs is a must because some of these fields are jointly owned and some others see their recovery decline overtime. This issue is being pursued seriously by NIOC. In this regard, memorandums have been signed with domestic and foreign companies for feasibility studies on secondary development of hydrocarbon fields. Once studies and surveys have been concluded in hydrocarbon fields, enough investment has been attracted, new technologies and human resources have been available, oil recovery rate is expected to increase at a significant level in coming years.
Q: You highlighted the necessity of enhanced recovery from jointly owned fields. Would you please tell us about the rate of recovery from oil fields in the West Karoun area?
A: In the contracts signed for West Karoun, the recovery rate is forecast at 5.5%, while we can envisage 20% or even above 30%. Such enhanced recovery would depend more than anything else on new technology. What we refer to as transfer of knowhow and technology is in fact the ability to apply state-of-the-art technologies by Iranians. We need to have a theoretical understanding of technologies and identify necessary tools for their implementation.
In other words, technology is partly related to reservoir engineering and detailed geological knowledge of reservoir and the quality of fluid so that we would be able to identify our own reservoir layers and follow them. Then we can do extraction based on assessments before and after trial drilling. Of course, in this stage we need to have necessary tools and technology in order to deplete the layers. It has to be noted that these tools are not limited to the method of drilling. Injection of chemicals, water and gas as well as hydrocracking for releasing hydrocarbons trapped in the reservoir, are also part of these diverse technologies.
In the upstream oil industry, identification of hardware and software used in management systems, technical knowhow and the possibility of its implementation are known as the transfer of technology. Therefore, in case we could have successful partnership with big international companies, Iranian companies will also follow suit and will grow fast. For example, after [France's] Total stepped into South Pars and successfully managed and operated phases 2 and 3 of development of South Pars, Iranian companies grew alongside this French company and they followed the model of development applied to phases 2 and 3 to other projects and they proved quite successful.