signing of MOUs and cooperated with them in studying of the fields.
Q: How was your involvement in the project?
A: Ever since the new model of oil contracts were presented by NIOC, we knew that we didn’t just want to be a silent partner and aimed for a balanced partnership. Hence, Dana Energy established an expert team to review the legal, contractual, commercial, technical and financial aspects of this agreement and to become proficient with IPC (Iran Petroleum Contract). We knew that this will be to our advantage and we can play an effective role in saving time and helping our foreign partners in understanding this new model. This combined with our deep knowledge on Iran and International standards, allowed us to have a significant contribution in these studies.
For instance, alongside our foreign partners, we played an imported role in designing the model of reservoir, in geological studies, risk studies, revision of studies and how to achieve the better results. Or regarding cost, our knowledge on the market and its trends allowed us to estimate the precise investment costs for these projects.
You can appreciate how essential these contributions are to a foreign partner.
Q: Are Iranian and foreign companies' cost estimations very different?
A: In some aspects, yes. Foreign companies base their approximation on international database and this information is not compatible for estimating cost in Iran. Therefore, Iranian companies' data would be very helpful to foreign companies. However, this isn’t always easy to come by and what would benefit a foreign company is a partner that knows the Iranian market and understands its trends.
Q: Can you an example of the effective presence of Dana Energy in the technical and engineering studies for the development of fields?
A: Yes, for example in Changuleh field, we found and evaluated geological evidence, which helped the operator for reassessments. The finding were that Changuleh was significantly bigger than initially thought.
Q: What do you plan to do for financing in case you want to serve as operator or non-operator of project?
A: Financing is one of our major concerns, as we need to seek financing from abroad due to the uncertainties in Iran. Our corporate finance team recently went to Europe to study the market there and find leads for financing. I am positive about our approach despite the challenges and optimistic with financing deals following through.
Q: In addition to these projects, are you in talks with any other project?
A: Not at this stage. We are focusing on the projects at hand and will consider others upon gaining financial resources.
Q: How hopeful are you to sign agreements up to the end of the year?
A: Very hopeful, since in projects where we are non-operators, technical talks have been concluded and NIOC has agreed with the proposals. Therefore, it is likely that we sign at least three contracts by March 2018. Regarding, Sepehr and Jufayr, it seems their tender will be held next year.
Q: How do you think relations between NIOC and Iranian E&P companies should be?
A: In my view, NIOC should define a specific strategy regarding Iranian E&P companies, which I don’t think such a strategy exists now. The E&P sector is a naturally risky and capitally intensive field, especially now with the down turn in crude oil prices and decline in investment in the upstream sector. Iranian E&P companies face further challenges as well, like the financial restrictions and the unclear relationship between Iranian and foreign parties in JOAs. NIOC can be very supportive to Iranian E&P companies in these regards.
Q: Do you expect any financial assistance from NIOC? Under IPC, NIOC has no financial obligation and the contractor is required to provide its share of finance. Now if NIOC is to provide financial assistance will it operate the projects too?
A: The IPC roles are clear and no one expects financial help, however, we expect NIOC’s support in drawing up regulations and obtaining licenses to ease the challenges Iranian E&P companies are facing.
Q: In designing the joint operating agreement (JOA), what is your expectation from NIOC?
A: My expectations are that the JOA model is designed in a way that is mutually beneficial to both parties and the role of the Iranian companies are defined clearly so that they can play an effective role in their cooperation with foreign companies.
Q: What is your own strategy on this route?
A: As a fully private entity, we aim to be the leading Iranian E&P Company and this is reflected in our strategy and approach. As I mentioned earlier we are seeking a balanced partnership, one that we aren’t just a partner but an effective player. To achieve this, two years ago we started a management program to equip ourselves technically and financially. These preparations have paid off and it is evident in foreign companies' willingness to partner with Dana Energy.
Q: How do you think the relationship between Iranian E&P companies and their foreign partners must be?
A: This framework of cooperation and relationship must be mutually beneficial with clear defined regulations. Both sides should play an effective role and not be a silent partner but be present in the projects.
Q: Given the fact that you are a private company and activity in E&P is a new experience, are you planning to be present in large scale projects?
A: At this stage, no. The scale of our presents and expansion depends on many criterial. Hence, we are keeping to the small – medium size project to maintain a profitable management portfolio. E&P is new to all of us in Iran. We believe that we can be effective in Iran's petroleum industry by operating small-Medium scale projects for the time being.