Iran Hosts 2nd Petroleum Conference
One year after Iran's nuclear agreement with six world powers, dubbed the Joint Comprehensive Plan of Action (JCPOA), entered into force, foreign companies and investors are no longer stranger to Iran's petroleum industry. Many of them travelled to Tehran last year to consider conditions for investment. World energy industrialists have taken each and every opportunity to gather more information about Iran and investment in the country. Conferences and seminars held over the past one year bear proof to this fact.
Iran hosted second Petroleum Conference with focus on development of investment, transfer of technology and international business in upstream and downstream sectors of oil, gas, refining and petrochemicals industries. The event ran from January 30 to February 1. The conference provided foreign companies a chance to get more information on Iran's petroleum industry, as well as the investment potentials in different sectors.
The opening of the conference was attended by officials, private sector managers and managers of foreign companies.
Addressing the event, Gholam-Reza Manouchehri, deputy head of National Iranian Oil Company (NIOC) for development and engineering, highlighted Iran's 1st rank in global gas reserves and its fourth rank in oil reserves.
"Over recent years, we have had significant oil and gas exploration in the country, which will be announced soon. These explorations increase the country's oil and gas reserves to a significant level. We are in talks with international companies for implementing new exploration projects in the country," he said.
Manouchehri went on to highlight attractions of Iran's petroleum industry, saying: "The Middle East region is endowed with important capacity for growth in the petroleum industry. This issue has caught the attention of international firms."
He added: "Currently, the three countries of Iran, Iraq and Mexico are attractive to international companies. Iran, as the most stable country in the region, will have a good future in the oil and gas industry."
Manouchehri said: "If we can invest $30 to $40 billion in upstream oil industry every year up to 70% of these resources would be turned into job opportunities in the contracting, labor service and purchase sectors inside the country."
According to the NIOC top official, the presence of international companies in Iran did not mean sidelining Iranian companies; it rather meant providing a new atmosphere for domestic companies.
Phase 18 of South Pars Operational
Manouchehri said Phase 18 of South Pars gas field has already become operational, adding that more phases were expected to come online soon.
He referred to restrictions Iran was faced with in its communications with international companies during years of sanctions, saying: "During years of sanctions, our communications with many international companies were limited and even cut. We made achievements under sanctions, but we faced restrictions and problems as far as new technologies were concerned."
"But after the JCPOA was implemented, establishment of communications with international companies became possible. For this reason, the issue of transfer of new technologies to domestic companies with the objective of implementing projects and enhancing domestic manufacturing standards is taken into account in new-style oil contracts," said Manouchehri.
He referred to cooperation with Iranian universities, saying: "We are cooperating with 10 universities in the country for studying oil reservoirs. We are supposed to cooperate with them for the transfer of technology under new oil contracts."
"The new era of activity of petroleum industry is the era of growth of Iranian companies in the oil and gas sector and we need to help Iranian companies promote their status from second-rank partners to first-rank partners," Manouchehri said.
Switch From Raw Materials
Gholam-Hossein Shafei, head of Iran Chamber of Commerce, Industry, Mine and Agriculture, also addressed the opening of the conference.
He said that the private sector was ready for cooperation with different sectors of the petroleum industry, including transit and swap of petroleum products.
Shafei said the JCPOA had created good opportunities for attracting foreign investment and bringing in new technologies. He noted that Iran's huge gas reserves provided a good opportunity for supplying feedstock to petrochemical plants and developing the petrochemical industry.
"The current 64-million-ton petrochemical production capacity will increase to more than 120 million ton by the end of the 6th Five-Year Economic Development Plan," he said.
Shafei underscored the significance of the private sector in development, saying: "In no other economic timeframe, has the unity between legislative, executive body and the private sector been such important. To shift from selling raw materials we need a realistic and intelligent private sector."
"Iran's economy is currently in the process of switching from a government-oriented raw selling economy to a market-oriented product selling economy. Experience has shown that governments are not good traders. Therefore, the private sector can advise regulatory and executive bodies with a view to improving the business environment," he added.
Shafei said the private sector must prepare itself for cooperation with foreign companies in the light of transparency of financial statements, structural reforms in countries and ranking by international agencies.
He said that there have been positive developments in recent years with regard to economic blossoming, business environment improvement, interaction with world and attracting foreign investment.
"Raising the country's oil production to the pre-sanctions levels and a 250-mcm/d growth in gas production, access to 18-million-ton petrochemical and 500,000-barrel petroleum product exports are among these achievements," said Shafei.
Foreign Investment
Hamid Hosseini, member of Iran Chamber of Commerce, was the secretary of the conference.
He said that Iran's private sector had voiced its firm determination for developing downstream oil, gas and petrochemical industries based on Article 44 and the principle of resilient economy and was now ready for partnership with foreigners.
Hosseini said the 10-year formula defined for petrochemical feedstock price was a positive development towards economic prosperity.
"Introduction of new-style oil contracts and world oil giants' welcoming cooperation and partnership with NIOC, qualification of 30 foreign and 11 domestic companies, 45% oil price growth emanated from cooperation with non-OPEC countries and the possibility of government guarantee for the financing of non-governmental projects through development banks and organizations are among other effects of economic developments," he added.