development applied to phases 2 and 3 to other projects and they proved quite successful.
Q: How do you assess the South Pars development?
A: NIOC and its staff proved their capabilities in the development of oil and gas fields, particularly the jointly owned South Pars field, during years of sanctions. In those years, phases 12, 15, 16, 17 and 18 of South Pars were fully developed while phases 19, 20 and 21 were partly developed. Furthermore, phases 13, 14, 22, 23 and 24 are to come on-stream gradually up to the end of next [calendar] year. Gas production capacity currently stands at more than 460 mcm/d in South Pars, which is expected to reach 520 mcm/d by early next [calendar] year. Of course, it is noteworthy that South Pars has now entered the phase of pressure fall-off and we have to install pressure booster stations over coming years in order to preserve the production ceiling. Currently, we need to apply state-of-the-art technologies and carry out complementary measures in order to set up secondary recovery system which is tough and costly. If Iranian companies work with qualified international companies they will learn how to manage reservoirs and operate them. In Qatar, which shares [South Pars] with Iran, leading international companies are working. We have to be able to at least apply cutting edge technologies for the development of such shared fields on our own side in order to enable Iranian companies to use such technologies in other phases for operation. As far as recovery from South Pars is concerned, we have to continue natural gas and condensate production more smartly and continue developing the project. In order to acquire cutting edge technologies we have to cooperate with service companies and international oil companies so that they would bring capital, technology and management altogether into the country.
Q: How much is the share of domestic manufacturing in oil projects now?
A: According to plans, $200 billion has to be invested in the petroleum industry, 70% of which should go to contracts for domestic manufacturing and management. We are currently looking for cooperation with top international companies that own technology, but the bulk of these projects must be operated through partnership with Iranian companies.
Q: What is the current rate of oil and gas production capacity in Iran?
A: Currently, the production of gas and its derivatives in the country equals oil production in terms of hydrocarbon equivalent and even exceeds it. At present, 4.5 million barrels of gas, condensate and other derivatives' equivalent is being produced. Oil production stands at 4 mb/d. Therefore, more than 8 million barrels of oil equivalent is being produced in the country.
Q: How many new-style memorandums has NIOC signed with foreign companies?
A: NIOC has so far signed 18 international memorandums with Royal Dutch Shell, France's Total, Japan's Inpex, Russia's Gazprom Neft, etc. Some of these memorandums, including the one signed for Phase 11 of South Pars, are HOAs. Other oil memorandums are also being signed.
Q: Which fields have you so far signed memorandums for? What is the criterion for priority in the development of fields?
A: So far, memorandums have been signed to conduct feasibility studies on Yaran, Maroun, Koupal, Phase 11 of South Pars, Paydar Gharb, Aban, Ab Teimour, Mansouri, Dehloran, Soumar, Changouleh, Karanj, Shadgan, Rag Sefid, Cheshmeh Khosh, Dalpari, Balal, Azadegan, Yadavaran, Kish, Sousangerd and Farzad B. For some of these fields, memorandums have been signed with more than a single company. Such criteria as accumulated production volume, applied technologies and production plateau are examined in the projects proposed by companies which are party to memorandums with NIOC. However, in the end, the development of fields is decided based on tenders. The only difference is that the companies that have signed memorandums for feasibility studies will have more time to examine the field. The issue which must be taken into account is that due to the big volume of hydrocarbon reserves in Iran, our petroleum industry needs big financing and attracting foreign investment is inevitable for realizing the foreseen goals. NIOC is seeking to attract foreign investment along with state-of-the-art technologies in order to develop oil and gas fields. It intends to realize this objective through new-style oil contracts and benefiting from partnership between Iranian and international companies. To that end, Iranian exploration and production (E&P) companies are for the first time being given the chance to collaborate with international companies.
Q: What is the advantage of Iran's oil and gas sector for attracting investment?
A: Low cost and risk in oil and gas production are two advantages of Iran for attracting investment. In fact, "investment security" in Iran's oil and gas industry has been one of requirements to which NIOC has remained committed. In the operating sector, investment in the upstream oil and gas sectors has been highly secure. This is while in light of the current level of oil prices, investment in upstream oil projects is not economically justified in many areas in the world. Investment for the development of deepwater oil fields in the Gulf of Mexico or development of unconventional shale oil and gas fields is hardly justified. Given the aforesaid points, with the current level of crude oil prices, the risk of investment in oil and gas fields in Iran is low. Oil and gas production costs in Iran are lower than many countries in the world. This issue has doubled the motivation of international companies for investment in the country's oil and gas industry. Meantime, given political tumults and insecurity in Arab countries in the Middle East, Iran's stable political and security situation is creating a proper venue for the development of investment.