besides working in master development plan (MDP) sector and experiencing production in our subsidiaries. Based on evaluation mechanism devised by the Iranian Ministry of Petroleum, our company’s competence has been significantly different from that of other qualified companies. Furthermore, the new model of oil contracts requires Iranian companies to operate in exploration and production and increase their experience in this sector gradually. As Petropars Group, we also believe that the presence of Iranian companies in E&P framework is better for the country. The new model of oil contracts is more attractive for investors and naturally we intend to take steps in this direction.
Q: Have you decided to become an E&P company after Iran’s petroleum ministry cleared you?
A: No, that’s not so. Petropars had taken steps in this direction before this new model of oil contracts had been worked out. More precisely, when Gholam-Reza Manouchehri, the current deputy head of NIOC for development and engineering, was CEO of Petropars, he had reiterated that PPL had to move in this direction and become an oil and gas operator. It was such that a top foreign company had studied our strategy and offered proposals in this regard. We also took steps on this path since that time.
Q: The first international agreement within the framework of new oil contracts was signed by a consortium of Total, CNPC and Petropars for the development of Phase 11 of South Pars. The heads of agreement for this contract had been signed in November 2016. Why did it last so long?
A: In the agreement for the development of Phase 11 of South Pars, Total is the operator while Petropars and CNPC are non-operators. It was the first international contract under the new model of oil contracts and it was natural for negotiations to take time. These negotiations were of high significance for Iran because they served as the example for future talks. I forecast future negotiations for oil contracts to be shorter after this agreement has been signed.
Another reason for the long drawn-out talks was that international companies had been kept away from Iran’s petroleum industry for nearly eight years. The new model of oil contracts looked unfamiliar and foreign companies were not aware of their terms. Anyway, this contract is worth near $5 billion and for the first time we want to use pressure-booster platforms in South Pars. The mechanism of technology transfer and the activity of companies were other issues whose discussion lasted long.
Q: How will Petropars be involved in this partnership agreement?
A: As I said we are non-operator in this partnership. Our main job is to provide capital and support the operator. Petropars must provide $20 of the capital needed for this agreement. We are also making efforts to be present alongside Total in different phases of the project including management and particularly where technology transfer is needed. Of course Petropars already owns technologies needed for building jackets and topsides, but we lack the technology needed for building pressure booster platforms. We want Total to help us by providing this technical knowhow. Petropars has already worked alongside such companies as Agip, ENI and Statoil. This time it wants to experience cooperation with Total.
Q: Have you had any negotiations with other international companies to develop oil and gas fields?
A: We have held talks with numerous companies over this period of time. For instance, I can refer to Germany’s Wintershall for enhancing recovery from Dehloran oil field. I hope that our talks will bear fruits by the end of the current Iranian calendar year (21 March 2018) and end in the signature of a contract. In this project, Wintershall will be operator and Petropars will remain non-operator.
Q: Isn’t Petropars willing to work as the main contractor in implementing these projects?
A: Petropars has no interest to operate projects whose required capital would exceed $3 billion because we lack such a capacity now. Of course we recently wrote a letter to NIOC, targeting companies that need investment of less than $1 billion, and we have asked them to sign memorandums of understanding with Petropars for studying these fields.
Q: Why have you chosen projects worth below $1 billion?
A: Because major international companies rarely volunteer to develop such fields; therefore, we can claim to be operator in these fields, and financing is easier for us. Moreover, we can present more diverse models for investment.
Q: NIOC has recently selected Petropars as management consultant (MC) in the development of Farzad B gas field. How does Petropars plan to do this job?
A: In December 2011, an agreement was signed with Petropars for the development of Farzad-A field to conduct MDP studies and drill an appraisal well. The project was done two years later. Since the Iranian Ministry of Petroleum did not reach an agreement with India’s ONGC for the development of Farzad-B and given Petropars’ experience in the Farzad-A studies, upon an instruction by the Iranian minister of petroleum, Petropars was selected as the MC for Farzad-A and Farzad-B fields. We will be obligated to drill two appraisal wells in each of these fields. Petropars will also keep tabs on the management of the project. This agreement is for 15 months and we intend to hire two international consultants while preparing EPC and EPCF packages. We cannot be the contractor in this project because Petropars is the MC.