Petropars Making Bonds with Oil Giants
In coincidence with the development of Phase 1 of South Pars gas field, Petropars Ltd. (PPL) was established in January 1998 thanks to efforts undertaken by then Minister of Petroleum Bijan Zangeneh. PPL is 100 percent owned by Naftiran Intertrade Company (NICO) which is affiliated with the National Iranian Oil Company (NIOC). PPL was tasked with putting efforts into upgrading the potential of Iranian contractors and transferring in cutting edge technology and project management knowhow. Two decades have since passed and Petropars is currently an internationally recognized company thanks to its acceptable performance. It was among the first group of companies whose qualifications was accepted by Iran’s Ministry of Petroleum for operating E&P projects under newly developed contracts. Last year, France’s Total teamed up with China’s CNPC and Petropars to develop Phase 11 of South Pars.
Abbas Taqipour-Nia, director of business development at PPL, has talked to Iran Petroleum exclusively about Petropars Group’s exploration and production projects.
Q: Would you please speak about the major projects that Petropars Group has operated over the past 20 years?
A: Petropars has mainly been active in the development of South Pars gas field. The projects operated by Petropars alongside domestic and foreign companies have led to the production of 11 bcf of gas. The projects operated by Petropars are valued at $17 billion, which is a big sum.
But regarding buy-back projects I can say that in the development of Phase 1 of South Pars, Petropars was working with a British company in the management of the project. Later on, it was present alongside Italy’s ENI in developing Phases 4 and 5. Then, it contributed to the development of onshore facilities in phases 6, 7 and 8 in cooperation with Norway’s Statoil for drilling wells and erecting offshore installations. Given its positive background, development of Phase 12 was fully assigned to Petropars in 2005. Petropars, on its own, fully handled the project including reservoir studies, offshore drilling, offshore installations and subsea pipeline. The project was financed by NIOC and Naftiran Intertrade Company (NICO). Development of Phase 19 was assigned to Petropars in 2010 under an EPC deal. The contractor was Petropars Iran, a subsidiary of Petropars.
Q: Have you ever been present in any international projects abroad?
A: We had good activities in Venezuela and Angola, but due to certain issues including international sanctions we could not continue our cooperation. For instance, during that time, we had good talks with Venezuela’s state-run oil company PDVSA and we contributed to the development of Venezuela’s Dobokubi heavy oil block. Petropars had a share of 26% in the project. At the same time, we conducted preliminary studies to identify oil deposits in place and even the Venezuelan parliament approved the assignment of project to Petropars. But we failed to finance it due to financial restrictions stemming from sanctions.
Also in 2009, we purchased 10% of shares for exploration and development in the onshore northern block of Cabinda in Angola. In the project, Petropars was working with ENI, Inpex Group, SOCO, ACERP, China Sonangol and Sonangol P&P. It was Petropars’ first international partnership as a non-operating partner in exploration and production activities within the framework of a production sharing agreement. The client was Angola’s oil company Sonangol. Due to the toughness of international sanctions against Iran, we had to stop cooperating.
Q: Iran’s Ministry of Petroleum has cleared a number of companies including Petropars for E&P projects. What do you think of that?
A: Before answering this question I would like to explain about the cooperation of companies under the new model of oil contracts. As you know, under new oil contracts, Iran’s petroleum ministry has decided to assist qualified oil companies to promote their E&P skills rather than working as general contractors and EPC companies. These companies will operate oil and gas projects alongside leading international firms within the framework of new oil contracts. Under buy-back deals, contractors were involved in the project until the stage of production. After reaching this stage, the company was given back to the operating company and the contractor was remunerated through the sales of products. This model was no longer attractive to investors. Therefore, a new generation of contracts was devised by the Ministry of Petroleum in the 11th administration. The timeframe for the activity of these companies became longer in these new contracts and contractors will be engaged for 15 to 25 years. The important thing for the Iranian Ministry of Petroleum was that domestic oil companies would be empowered alongside foreign companies. But to this end they had to change the nature of their activities and get involved in E&P sector. Therefore, Iran’s Ministry of Petroleum called on Iranian companies to submit their documents to the ministry. As far as I know many companies submitted their documents, but finally the qualification of a limited number of companies for activity in exploration and production was approved.
Q: Did you ever imagine seeing Petropars be qualified?
A: Among qualified companies, Petropars was a leading one. Moreover, we had a brilliant record of activity among Iranian companies. You can see our performance in the development of South Pars phases. Over the past 20 years, Petropars has focused on its own development