Lessons for Stability and Security

Iran is preparing to celebrate the 40th anniversary of the victory of the Islamic Revolution which toppled the Pahlavi regime.

Over these four decades, Iran’s petroleum industry, in parallel with other sectors, experienced a variety of developments. Despite all bottlenecks and challenges, Iran has made great achievements.In the wake of the 1953 coup, Iran’s petroleum sector was in the hands of non-Iranian companies. But after the Islamic Revolution, Iranian people restored their ownership of oil and gas reservoirs.

Since the triumph of the revolution, Iran has been subject to widespread US sanctions and experienced an eight-year-long imposed war. But during these years the country’s petroleum sector has learned to rely on local content and knowledge.

Training experienced and skillful manpower to join oil, gas, refining and petrochemical sectors along with self-sufficiency in the management of projects, design, engineering, installation and manufacturing of necessary items have long been among the main strategies of Iran’s Petroleum Ministry.

In this regard Iran’s Petroleum Ministry adopted and pursued major diplomatic strategies: resistance against US unlawful and unilateral sanctions and bullying tactics, drawing up attractive oil contract models while preserving national interests, upgrading interaction and cooperation with companies owning capital and technology based on mutual respect, coordination with fellow OPEC member states in favor of national interests of oil producing nations, cooperation with oil and gas producers and consumers aimed at creating and maintaining stability and security of supply and demand.

Relying on more than one century of experience and four decades of independent management, Iran’s petroleum industry has become a major player in the oil, gas and petrochemical sector.

We firmly believe that interaction and mutual respect as well as refraining from unilateralism and illogical and meddlesome policies would be the only way out to ensure security and stability in the entire energy market in favor of oil and gas producers and consumers all across the globe.

9 Deals Struck with Iranian Contractors

Iran Oil Fields to Raise Output

Two subsidiaries of National Iranian Oil Company (NIOC) have signed nine agreements with seven Iranian contractors for the preservation and enhancement of recovery from Iranian oil fields.

The nine agreements were signed in the presence of Iran's Petroleum Minister Bijan Zangeneh and CEO of NIOC Mehdi Karbasian. 

That was part of a total of 33 enhanced recovery projects, worth $6 billion and envisioned for a three-year period.

The projects, which include 29 onshore and 4 offshore ones, are aimed at utilizing the potential of Iranian companies.

The seven oil-rich provinces where these projects are to become operational are: Khuzestan, Bushehr, Fars, Hormuzgan, Kermanshah, Ilam and Kohguiluyeh Boyer Ahmad.

The implementation of these projects is hoped to boost national crude oil production by 300,000 b/d on average.

On January 22, National Iranian South Oil Company (NISOC) struck agreements with Pars Energy Gostar Drilling and Exploration Company (PEDEX), National Iranian Drilling Company (NIDC), Petro Gohar Farasahel Kish CO. (PGFK) and Dana Kish Drilling Company for the Kaboud, Gachsaran Khami, Lali Asmari and Nargesi projects, respectively. Furthermore, NISOC and Oil Industries Engineering and Construction Company (OIEC) reached agreement on the Mansouri Asmari and Ramshir projects.

Meantime, the Iranian Central Oil Fields Company (ICOFC) reached agreement with MAPNA, Global Petro Tech Kish Company and NIDC for the Danan, Saadatabad and Naftshahr projects.

Last October, the Iranian Offshore Oil Company (IOOC) had struck deals with the Petroiran Development Company (PEDCO) for Sivand and Esfand projects.

$1bn Contracts Signed

Minister Zangeneh said only Iranian contractors would be involved in the new projects, saying the objective was to use maximum local content in manufacturing.

“For that purpose, a long list of domestic manufacturers has been drawn up and the contractors are required to purchase their commodities from them,” he added.

Zangeneh said lifting oil production and empowering domestic contractors were among the major objectives of the projects.

“We hope that the contractors would start their work forcefully after providing for financing,” he added.

The minister said the agreements struck so far, were now worth more than $1 billion.

“We have postponed the implementation of these projects for about six months so that when they start production we would be able to sell the surplus oil on the market and use part of this petro-money for reimbursing loans and bonds,” he said.

Reconsidering Implementation Methods

Zangeneh said an advantage with the oil recovery enhancement projects was that the government or NIOC would not be responsible for financing.

“The issuance of fixed rate bonds are envisaged for the financing of these projects in the first phase. After one year, the necessary financing would be provided through oil recovery from the fields,” he added.

The minister said another objective sought in the oil recovery projects was to revise the methods of implementation.

He said that the method of implementation of projects was being switched to EPC and EPD for the first time, noting that most general contractors would be able to handle it.

Zangeneh said the framework defined for the implementation of projects should be such that it would boost quality, make spending reasonable and shorten the duration of implementation.

“This objective is achieved when the integrity, interconnectivity, significance and the economy of a project are taken into consideration,” he added.

Zangeneh said the implementation of these projects was aimed at creating jobs and pushing Iranian contractors.

“Implementing this plan sends a clear message to foreigners and some domestic circles who are trying to strike fears into people’s hearts with sanctions,” he added.

The minister said that social responsibility would have a 4% share in the contracts.

“In other words, $240 million would be allocated to social responsibility. That is a breakthrough which would bring about good relations between the petroleum industry and others,” he added.

Zangeneh said renovation of petroleum industry installations was a project for which NISOC was favored.

“Most of our oil installations look like museums, but they are still being run. We have selected consultants for the renovation of petroleum industry installations. They have done their job now,” he said.

“In implementing preservation and production projects we plan to generate money and wealth without squeezing public budget,” said the minister.

Zangeneh said reservoir engineering was under way in NISOC-run fields, adding: “Gathering information and hiring consulting engineers would lie within the framework of this project.”

Project Financing Details

Reza Dehqan, deputy CEO of NIOC for development and engineering, said there was nothing worrying for Iranian contractors.

He said that 80% of the financing of contracts would be provided by Saba Arvand Oil and Gas Development Company, serving in the project as the special purpose vehicle (SPV) company.

“The remaining 20% would be provided by contractors involved in the agreement,” he added.

To that end, he said, fixed rate bonds worth IRR 10,000 billion would be printed soon.

Dehqan said another IRR 20,000 billion of bonds would be printed before the end of the current calendar year for the financing of projects.

He said that the SPV company was required to finance the projects.

Dehqan said the idea of enhanced recovery in operating fields was first brought about by Minister Zangeneh in a bid to prepare the ground for the activity of domestic contractors and manufacturers.

“This project was on the agenda since last year and some working groups were established afterwards. The Economic Council approved it last July,” he said.

Dehqan further touched on the 33 packages defined in this project, saying: “A total of 26 packages pertain to NISOC-run fields, 4 to IOOC-run fields and 3 to ICOFC-run fields.”

Under these projects, 280 wells would be drilled while over 1,700 wells would be worked over. Offshore platforms would be also completed and installed.

$20bn Revenue

Dehqan said the total investment agreed upon for the preservation and enhancement of recovery from operating fields stood at $6.2 billion.

He added: “Another $979 million in financing would be provided by the government.”

The 33 projects are aimed at increasing oil output by 280,000 b/d, which would generate more than $20 billion in revenue.

Dehqan touched on the maximum use of local content in the projects, saying: “In order to use domestic manufacturers, two lists of domestically manufactured equipment have been drawn up and attached to the contracts.”

Foreign Investors Wooed for West Karoun Development

CEO of Iran’s Petroleum Engineering and Development Company (PEDEC) Touraj Dehqani has announced enhanced recovery from the South Azadegan oil field, saying foreign investment is welcome.

“As far as the West Karoun area is concerned, we welcome the presence of foreign companies in the development of fields, but we also place trust in the capabilities of Iranian contractors,” he said.

Dehqani referred to the strategy pursued by the Iranian Petroleum Ministry and National Iranian Oil Company (NIOC) for developing jointly owned oil and gas fields, saying: “The 11th and the 12th administrations have over recent years focused upon recovery from joint fields, leading to enhanced recovery from the jointly owned fields.”

“Therefore, we welcome any new method that would help raise production on the Iranian side of the joint fields,” he said.

Dehqani said NIOC planned to bring production from West Karoun fields to 1 mb/d.

“In this regard, we have considered gradual production increase from the fields. The implementation of these policies in recent years has brought production from the oil fields of West Karoun to an acceptable level. Therefore, gradual increase of oil production will continue,” he added.  

Dehqani said gradual oil recovery from oil field was a technical and economic matter that would boost output during the process of development. “That would also help us make decisions for further development and the capital would not remain dormant,” he said.

Mobile Processing Unit

Dehqani said a mobile processing unit would be launched in the South Azadegan oil field soon.

“The startup of this unit will bring oil production from South Azadegan by 50,000 b/d in the shortest possible time,” he said, adding: “If we consider each barrel of oil at $60 a 50,000b/d increase in oil output from the South Azadegan oil field would generate $1 billion in annual revenue.”

Dehqani said: “Normally, creating capacity for 50,000 b/d of oil production from a field would require $1 billion in investment,” he said. “Since Iran has big oil fields in West Karoun that can produce several hundred thousand barrels of oil a day we are mainly seeking to reach maximum output with minimum investment. We also intend to shorten the period a capital remains dormant.”

National Interests Prioritized

Dehqani said PEDEC was not entitled to sign agreements with foreign companies, noting: “However, in the development of the Yadavaran oil field, Iran’s interests top our priorities.”

“We welcome the contribution of foreign companies to development of fields, but in case we feel that negotiations are lingering on we will not wait for them and we will move to develop the fields by relying on domestic capabilities,” he added.

Quick Development of South Azadegan

Asked if work had been slowed in West Karoun following the US’s withdrawal from Iran’s 2015 nuclear deal with six world powers, Dehqani said: “No! That has not occurred in West Karoun.”

“In some sectors of South Azadegan, where domestic contractors are engaged in development, the work has by no means been slowed, on the contrary everything has accelerated,” he added.

Dehqani said talks were in the final stage with Persia Oil & Gas Industry Development Co. for the development of the Yaran field.

Regarding the second development phase of the Azar field, he said: “We are in talks with OIEC (Oil Industries Engineering and Construction Company) which had developed phase 1 of the field.”

Confidence in Iranian Contractors

Dehqani said phase 1 development of West Karoun was nearly over, adding that the second phase of development was on the agenda.

He said Petroleum Ministry would make arrangements for the participation of qualified foreign companies involved in enhanced oil recovery (EOR), while trying to empower Iranian companies operating EOR projects.

Development of field is not tough per se, he said. “We definitely need new technologies in EOR. In light of the enhanced production we would achieve, it is worth making efforts to acquire state-of-the-art knowhow.”

“Given our achievements in commodity supply, drilling, tubing, casing, etc., we can hire Iranian contractors in some sectors. In fact we can accelerate the development of fields by using domestic capacity,” said Dehqani.

“I am assured that the Petroleum Ministry pays due attention to hiring Iranian contractors to develop fields. Although talks are under way with foreign companies, the ministry is not ignorant of the capabilities of Iranian contractors,” he added.

The oil fields located in West Karoun are North Azadegan, South Azadegan, North Yaran, South Yaran, and Yadavaran. The area is estimated to contain over 67 billion barrels of oil in place.

Until 2013, Iran was recovering a total of 50,000 b/d from all these fields which it shares with Iraq. Now the figure has exceeded 300,000 b/d.

Kapeh Dagh Supplies Gas to 6 Provinces

Today, gas is as vital as water for economic development. This clean source of energy is flowing in most parts of the world. Households use gas for warming, while small and big industries use gas to keep their operations running. Ever since exploration, gas goes through a difficult process to reach the ground and be injected into pipes for transfer to destinations.

Various sectors of petroleum industry are engaged in the transfer of gas to points of consumption. These sectors are known as upstream sector and downstream sector. East Oil and Gas Production Company (EOGPC) is one of them. EOGPC is a subsidiary of the Iran Central Oil Fields Company (ICOFC) which is responsible for production, primary separation, transmission and injection of gas in northeastern Iran. Extremely tough winter and summer in northeastern Iran makes working in that area a tough job for Iran's petroleum industry. Iran's northeastern area is often compared with Assaluyeh in terms of toughness of job. In addition to sinuous routes stretching from Khorasan Razavi Province, exposure to one of the sourest and the most hazardous categories of gas (3.6% sulfur hydrogen and 6.5% sulfur dioxide) has doubled the toughness of work in the area. Furthermore, an outstanding feature of the Khangiran area is its uniqueness in northeastern Iran in terms of hydrocarbon reserves. Khangiran area is governed by EOGPC.

Abol-Hassan Mohammadi, CEO of EOGPC, says the gas produced by this company is treated at the Shahid Hasheminejad refinery before being delivered to six provinces. The area covered by EOGPC is 75 kilometers long and 25 kilometers wide. A total of 78 wells are operating. The Khangiran and Gonbadli gas fields are the main reservoirs run by EOGPC.

The Khangiran gas field is highly sensitive due to its 34,000 ppm hydrogen sulfide. Just inhaling 100 ppm could be lethal. The gas field has three formations known as Mozdouran, Shourijeh B and Shourijeh D.

Pollutant carbon dioxide is another gas in this area. It has to be separated from this gas in order to avoid any harm to human being and the environment. Therefore, certain arrangements are needed to guarantee a high level of safety in such environments. The equipment installed in wellhead and downhole installations are safe enough. That is a strong point for those working in such areas due to exposure to sour gas.

Reconstruction from A to Z

EOGPC authorities say the technical services division of the company offers wellhead and downhole services, as well as workover services for fields. At present, workover operations in the fields are done from A to Z in Iran without any dependence on foreign companies. As Iran has long been under sanctions, it has ended its dependence on outside services and most needs are supplied just by reliance on domestic manufacturers and producers.

Domestic manufacturers are now mature enough to be able to compete with foreign producers in terms of quality. That is the main strong point for Iran in this sector.

The Iranian manufacturers' self-reliance and self-belief is a reliable tool for dealing with unlawful and unilateral sanctions imposed by the US on Iran. That has cleared the way for Iran to respond to its industrial needs. Sanctions are nothing new and petroleum industry staff have understood it very well and countered it with their modern ways of thinking. In many sectors, dependence on foreign countries and companies has been down to zero.

Monopolies Broken

EOGPC engineers have recently developed a category of grease in partnership with an Iranian company that may be used in oil and gas wells. The same grease used to be supplied by US and British companies, but due to a switch to domestic manufacturing, production of that grease is currently being done in Iran at a high quality and lower price.

Meantime, after ICOFC conducted 3D seismic testing in the Khangiran field on 500 square kilometers of land, the interpretation and analysis of seismic data by the Directorate of Exploration of the National Iranian Oil Company has now ended. The results of data analysis have been provided to ICOFC, showing the area enjoys good potential for investment.

EOGPC managers always take pride in the fact that sour gas been produced in the area run by this company without causing any death. Regular monitoring of installations has prevented life-threatening accidents.

Maintenance of gas production is among top priorities of ICOFC. Every year, major efforts are made to upgrade the quality of gas delivered to the Shahid Hasheminejad refinery.

The Kapeh Dagh sedimentary area, the region operated by EOGPC, belongs to the second period of geology. The Iranian section of Kapeh Dagh covers 50,000 square kilometers of land in the Khorasan and Golestan provinces. The sedimentary rocks in Kapeh Dagh are over 7,000 meters thick. The thickness of sedimentary rocks and absence of volcanic eruption make Kapeh Dagh a proper place for the accumulation of gas hydrocarbons.    

Kapeh Dagh stretches into Iran, Turkmenistan, Uzbekistan, Afghanistan and Tajikistan, covering the Khangiran, Gonbadli and Toos gas fields. In Turkmenistan, two oil fields lie in the same sedimentary basin.

Foreign Investors Wooed for West Karoun Development

CEO of Iran’s Petroleum Engineering and Development Company (PEDEC) Touraj Dehqani has announced enhanced recovery from the South Azadegan oil field, saying foreign investment is welcome. “As far as the West Karoun area is concerned, we welcome the presence of foreign companies in the development of fields, but we also place trust in the capabilities of Iranian contractors,” he said.Dehqani referred to the strategy pursued by the Iranian Petroleum Ministry and National Iranian Oil Company (NIOC) for developing jointly owned oil and gas fields, saying: “The 11th and the 12th administrations have over recent years focused upon recovery from joint fields, leading to enhanced recovery from the jointly owned fields.”“Therefore, we welcome any new method that would help raise production on the Iranian side of the joint fields,” he said. Dehqani said NIOC planned to bring production from West Karoun fields to 1 mb/d. “In this regard, we have considered gradual production increase from the fields. The implementation of these policies in recent years has brought production from the oil fields of West Karoun to an acceptable level. Therefore, gradual increase of oil production will continue,” he added. Dehqani said gradual oil recovery from oil field was a technical and economic matter that would boost output during the process of development. “That would also help us make decisions for further development and the capital would not remain dormant,” he said.Mobile Processing UnitDehqani said a mobile processing unit would be launched in the South Azadegan oil field soon. “The startup of this unit will bring oil production from South Azadegan by 50,000 b/d in the shortest possible time,” he said, adding: “If we consider each barrel of oil at $60 a 50,000b/d increase in oil output from the South Azadegan oil field would generate $1 billion in annual revenue.”Dehqani said: “Normally, creating capacity for 50,000 b/d of oil production from a field would require $1 billion in investment,” he said. “Since Iran has big oil fields in West Karoun that can produce several hundred thousand barrels of oil a day we are mainly seeking to reach maximum output with minimum investment. We also intend to shorten the period a capital remains dormant.”National Interests PrioritizedDehqani said PEDEC was not entitled to sign agreements with foreign companies, noting: “However, in the development of the Yadavaran oil field, Iran’s interests top our priorities.”“We welcome the contribution of foreign companies to development of fields, but in case we feel that negotiations are lingering on we will not wait for them and we will move to develop the fields by relying on domestic We welcome the contribution of foreign companies to development of fields, but in case we feel that negotiations are lingering on we will not wait for them and we will move to develop the fields by relying on domestic capabilities,” he addedDehqani: NIOC planned to bring production from West Karoun fields to 1 mb/dcapabilities,” he added.Quick Development of South AzadeganAsked if work had been slowed in West Karoun following the US’s withdrawal from Iran’s 2015 nuclear deal with six world powers, Dehqani said: “No! That has not occurred in West Karoun.” “In some sectors of South Azadegan, where domestic contractors are engaged in development, the work has by no means been slowed, on the contrary everything has accelerated,” he added. Dehqani said talks were in the final stage with Persia Oil & Gas Industry Development Co. for the development of the Yaran field.Regarding the second development phase of the Azar field, he said: “We are in talks with OIEC (Oil Industries Engineering and Construction Company) which had developed phase 1 of the field.”Confidence in Iranian ContractorsDehqani said phase 1 development of West Karoun was nearly over, adding that the second phase of development was on the agenda. He said Petroleum Ministry would make arrangements for the participation of qualified foreign companies involved in enhanced oil recovery (EOR), while trying to empower Iranian companies operating EOR projects. Development of field is not tough per se, he said. “We definitely need new technologies in EOR. In light of the enhanced production we would achieve, it is worth making efforts to acquire state-of-the-art knowhow.”“Given our achievements in commodity supply, drilling, tubing, casing, etc., we can hire Iranian contractors in some sectors. In fact we can accelerate the development of fields by using domestic capacity,” said Dehqani. “I am assured that the Petroleum Ministry pays due attention to hiring Iranian contractors to develop fields. Although talks are under way with foreign companies, the ministry is not ignorant of the capabilities of Iranian contractors,” he added.The oil fields located in West Karoun are North Azadegan, South Azadegan, North Yaran, South Yaran, and Yadavaran. The area is estimated to contain over 67 billion barrels of oil in place. Until 2013, Iran was recovering a total of 50,000 b/d from all these fields which it shares with Iraq. Now the figure has exceeded 300,000 b/d.Foreign Investors Wooed for West Karoun DevelopmentFOCUSThe revision committee is discussing various options. Oil companies which enter high-risk oil trading activities are willing to be present in all stages of work. Oil projects are different from other businesses. Their inclination for presence in all stag

Kapeh Dagh Supplies Gas to 6 Provinces

Today, gas is as vital as water for economic development. This clean source of energy is flowing in most parts of the world. Households use gas for warming, while small and big industries use gas to keep their operations running. Ever since exploration, gas goes through a difficult process to reach the ground and be injected into pipes for transfer to destinations. Various sectors of petroleum industry are engaged in the transfer of gas to points of consumption. These sectors are known as upstream sector and downstream sector. East Oil and Gas Production Company (EOGPC) is one of them. EOGPC is a subsidiary of the Iran Central Oil Fields Company (ICOFC) which is responsible for production, primary separation, transmission and injection of gas in northeastern Iran. Extremely tough winter and summer in northeastern Iran makes working in that area a tough job for Iran’s petroleum industry. Iran’s northeastern area is often compared with Assaluyeh in terms of toughness of job. In addition to sinuous routes stretching from Khorasan Razavi Province, exposure to one of the sourest and the most hazardous categories of gas (3.6% sulfur hydrogen and 6.5% sulfur dioxide) has doubled the toughness of work in the area. Furthermore, an outstanding feature of the Khangiran area is its uniqueness in northeastern Iran in terms of hydrocarbon reserves. Khangiran area is governed by EOGPC.Abol-Hassan Mohammadi, CEO of EOGPC, says the gas produced by this company is treated at the Shahid Hasheminejad refinery before being delivered to six provinces. The area covered by EOGPC is 75 kilometers long and 25 kilometers wide. A total of 78 wells are operating. The Khangiran and Gonbadli gas fields are the main reservoirs run by EOGPC.The Khangiran gas field is highly sensitive due to its 34,000 ppm hydrogen sulfide. Just inhaling 100 ppm could be lethal. The gas field has three formations known as Mozdouran, Shourijeh B and Shourijeh D.Pollutant carbon dioxide is another gas in this area. It has to be separated from this gas in order to avoid any harm to human being and the environment. Therefore, certain arrangements are needed to guarantee a high level of safety in such environments. The equipment installed in wellhead and downhole installations are safe enough. That is a strong point for those working in such areas due to exposure to sour gas.Reconstruction from A to ZEOGPC authorities say the technical services division of the company offers wellhead and downhole services, as well as workover services for fields. At present, workover operations in the fields are done from A to Z in Iran without any dependence on foreign companies. As Iran has long been under sanctions, it has ended its dependence on outside services and most needs are supplied just by reliance on domestic manufacturers and producers.Domestic manufacturers are now mature enough to be able to compete with foreign producers in terms of quality. That is the main strong point for Iran in this sector. The Iranian manufacturers’ self-reliance and self-belief is a reliable tool for dealing with unlawful and unilateral sanctions imposed by the US on Iran. That has cleared the way for Iran to respond to its industrial needs. Sanctions are nothing new and petroleum industry staff have understood it very well and countered it with their modern ways of thinking. In many sectors, dependence on foreign countries and companies has been down to zero.Monopolies BrokenEOGPC engineers have recently developed a category of grease in partnership with an

Iranian company that may be used in oil and gas wells. The same grease used to be supplied by US and British companies, but due to a switch to domestic manufacturing, production of that grease is currently being done in Iran at a high quality and lower price.Meantime, after ICOFC conducted 3D seismic testing in the Khangiran field on 500 square kilometers of land, the interpretation and analysis of seismic data by the Directorate of Exploration of the National Iranian Oil Company has now ended. The results of data analysis have been provided to ICOFC, showing the area enjoys good potential for investment.EOGPC managers always take pride in the fact that sour gas been produced in the area run by this company without causing any death. Regular monitoring of installations has prevented life-threatening accidents. Maintenance of gas production is among top priorities of ICOFC. Every year, major efforts are made to upgrade the quality of gas delivered to the Shahid Hasheminejad refinery.The Kapeh Dagh sedimentary area, the region operated by EOGPC, belongs to the second period of geology. The Iranian section of Kapeh Dagh covers 50,000 square kilometers of land in the Khorasan and Golestan provinces. The sedimentary rocks in Kapeh Dagh are over 7,000 meters thick. The thickness of sedimentary rocks and absence of volcanic eruption make Kapeh Dagh a proper place for the accumulation of gas hydrocarbons. Kapeh Dagh stretches into Iran, Turkmenistan, Uzbekistan, Afghanistan and Tajikistan, covering the Khangiran, Gonbadli and Toos gas fields. In Turkmenistan, two oil fields lie in the same sedimentary basin

New Oil Find in Abadan

Iran’s petroleum minister, Bijan Zangeneh, has announced the discovery of a new oil reservoir in Abadan where Iran’s first oil refinery is located. “On 22 January 2019, an oil well which was under drilling in Minou Island reached oil. This is the first time we discover oil in Abadan,” he said. Zangeneh said the new oil discovery would raise hopes for increasing oil resources in Abadan. “This exploration well struck oil at the depth of 3,770 meters. According to the preliminary tests, the oil contained in this reservoir has an API gravity of 40 besides being very sweet,” said

the minister. Zangeneh said exploration activities would continue to make an accurate estimate of the reservoir’s volume. “Exploration operations in the oil sector are focused upon in Abadan. Once exploration is complete we will embark on development,” he added. Zangeneh refused to provide details about Iran’s oil production and exports. He said: “Speaking about such issues would mean providing the US with hints to impose more sanctions on us.”“We have to wait and see what would happen to the extension of sanctions waiver granted to some buyers of Iran’s oil by the United States,” he said. Asked about oil prices, the minister said: “The Brent oil traded at $61 a barrel and the OPEC oil basket price is almost near that figure.” He said that Iran’s crude oil was traded $3 to $4 lower than the OPEC basket price due to its quality.

Gachsaran, Gateway to Oil ExportsAhmad Mohammadi, CEO of National Iranian South Oil Company (NISOC), has said the Gachsaran Oil and Gas Production Company (GOGPC) was the gateway of oil exports in southern Iran. “The share of this company in the development of 28 NISOC-run reservoirs is remarkable,” he said. “With the development of 28 reservoirs, the potential and practical capacities of neighboring provinces have effectively been used and consequently it will bring about business prosperity in addition to urban and rural development.” Mohammadi said GOGPC had extended its activities in four provinces, provided feedstock to petrochemical plants and had established 46 processing installations and pipelines in treacherous areas. He said GOGPC staff had always resisted tough conditions to resolve problems, adding: “Heaping praise on these human resources is among the top priorities of NISOC.”

New Technologies a Must for Petchem

A senior petrochemical official has said Iran needed to benefit from cutting edge technologies. Qodratollah Farajpour, director of production control at National Petrochemical Company (NPC), said: “Iran’s petrochemical industry needs to use updated knowhow and state-of-the-art technologies for growth and development.”He said that Iran’s scientific and research potentialities would meet domestic needs for a variety of petrochemical grades. He added: “The prospect of using new grades for petrochemical production and promising plans is a new development.”“In light of market needs and the high price of some products which have higher value-added, certain measures have been taken by some companies about the new grades, and the preparations are under way for expanding these measures,” said Farajpour.

Iran, World 3rd Largest Gas Producer

Iran ranked third among the world’s largest natural gas producers by the end of 2017, according to the latest statistical report released by BP. Based on the country’s macroeconomic policy, the share of natural gas in the country’s energy balance will increase due to its many advantages, such as environmental sustainability, and distribution of social justice. Iran as the third largest gas producer in the world in recent years has focused on increasing its share in the global gas market. Based on this policy, Iran’s gas production capacity has been on the agenda since the 2000s. After the 1979 Islamic Revolution, natural gas production in Iran increased from 89 bcm in 1979 to over 3.75 bcm in 2018. The latest BP survey shows that by the end of 2017, Iran ranked third in the world in terms of natural gas production with over 223 bcm of natural gas, having a 6.1 percent share of the global gas market

Impossible to Drive Iran Out of Energy Market

Iran’s President Hassan Rouhani has said that the oil and gas-rich country could not be driven out of the energy market.“Thanks to its oil and gas strength, Iran is not a nation to be eliminated from the energy market,” Rouhani said.He said the enemies of Iran were pressuring Iran on the two issues of oil exports and banking.“On oil issues we are fortunately pursuing various methods and options to sell our oil and we easily circumvent the US sanctions,” he added.Rouhani said: “All countries know that these sanctions are unjust, unlawful and directed against the Iranian nation, and are not against any specific person or government entity. They would only ratchet up pressure on the Iranian people The president boasted that Iran’s discovered oil reserves had nearly doubled since the victory of the Islamic Revolution.“Compared with the early days of the Revolution, we have big oil and condensate reserves, indicating our success in the discovery of new reservoirs,” he added.Rouhani said: “I assure the people of Iran that all officials, particularly those at the Petroleum Ministry, will try their best to fulfill their lawful obligations and make their best efforts in the oil, gas and condensate production and sales and use the options we have in the best possible manner. Oil Exports Containment FailedIran’s parliament spokesman Ali Larijani also said the US failed in its attempt to cut Tehran’s oil exports to zero after restoring tough sanctions targeting the petroleum sector last November. “The US had the intention of zeroing Iran’s oil exports, but it failed and the plot was defeated,” he said. “We are selling our oil and we have good economic ties with our neighbors,” said Larijani.Under Iran’s national budget bill for the next calendar year, Iran is expected to export 1.5 mb/d of oil

NIDC to Drill South Azadegan Wells

National Iranian Drilling Company (NIDC) has been awarded a project to drill 10 wells in the giant South Azadegan oil field, CEO of NIDC Abdollah Mousavi said. NIDC has installed two drilling rigs in South Azadegan, which Iran shares with neighboring Iraq.Mousavi said 40 wells had been drilled and completed at South Azadegan by Iranian companies within the deadline set by the Petroleum Engineering and Development Company (PEDEC). “After these wells were completed, the project for drilling of more than 20 new wells was awarded to NIDC through a tender bid,” he added. He said that NIDC had won a tender bid held by NIDC for the drilling of another 10 wells. “Drilling more than 70 development wells at this joint field by NIDC indicates the competence of this company in EPD projects,” he added. Mousavi said: “NIDC is making efforts to be more involved in the implementation of domestic projects, particularly joint and regional fields. In this regard, drilling equipment is planned to be upgraded in order to enhance the efficiency of operations.”He touched on the toughness and hardships of drilling operations, stressing the need for the renovation of equipment, application of new technologies, accident-free work and compliance with international drilling standards based on the diversity of oil fields and the complexity of geological formations in Iran.

OPEC Focused on Averting New Oil Glut

OPEC and its allies do not rule out taking further action at their next meeting in April, should oil inventories build up in the first quarter, OPEC’s secretary general told Reuters.Worried by a drop in oil prices and rising supplies, the Organization of the Petroleum Exporting Countries and non-OPEC countries such as Russia agreed in December to return to production cuts in 2019.The producers meet on April 17-18 to review the pact. OPEC Secretary General Mohammad Barkindo, in comments to Reuters, did not rule out more action if industrialized nation stocks continued to rise above the five-year average. “We remain focused on the supply-demand balance,” Barkindo told Reuters TV at the World Economic Forum in Davos. “Our challenge is to maintain supply-demand balance.” “We have seen inventories rising beyond the five-year average. A couple of months ago we have seen a deficit. We intend to ensure stocks remain within the five-year average.” A recovery in oil prices this year will boost hopes among producers that the deal aimed to cut supplies, which began on Jan. 1, is working. Oil LCOc1 has risen to above $60 a barrel, after a dip below $50 at the end of 2018. But oil stocks in OECD nations - used as a yardstick by the producers to gauge the effectiveness of their supply cuts - were above the five-year average in November.

Hydrochloric Acid Produced for Refineries

Bandar Abbas oil refinery, for the first time in Iran, has produced hydrochloric acid (HCL) with high purity and pressure to be used at refineries and petrochemical plants.“Achieving this breakthrough will put an end to dependence on foreign countries for HCL supply in addition to saving money and accelerating refining processes,” Hashem Namvar, CEO of Bandar Abbas oil refinery, said. “The isomerization section is a vital and sensitive division at refineries, whose main product is isomerate, a key component of Euro-5 gasoline,” he said, adding that the most significant step in this section would be acidizing with HCL before using catalysts in reactors.Namvar said Bandar Abbas Oil Refining Company was the only producer of HCL for isomerization units. “Due to limited time for launching the isomerization unit and producing high-quality gasoline, the product was designed and produced within three weeks and without investment by a 50-member group of refinery experts,” he added. Namvar said in Asia, only China and India could produce the HCL complying with criteria set for oil refineries.

IRR 10,000bn Fixed-Rate Bonds Issued

The head of National Iranian Oil Company (NIOC) has announced the beginning of fixed rate bonds worth IRR 10,000 billion by the state-run firm to finance oil recovery enhancement projects. Masoud Karbaisan said the bonds, which are expected to finance partly oil production maintenance and enhancement projects, would have a 19% annual interest rates. The lock-up period is three years and the interests are paid every six months.“These bonds are printed by Saba Arvand

World’s Largest Methanol Plant Ready for Startup

The world’s largest methanol production plant in Iran’s southern Bushehr Province is ready to come on-stream. Built by the private sector, this plant is able to produce 7,000 tonnes a day of methanol. Foad Jaberi, CEO of the plant, has played down concerns over future product sales as US sanctions take effect. “There is nothing to worry about in selling our products,” he said. The high value-added of production at petrochemical plants and Iran’s access to low-cost feedstock have helped Iran’s petrochemical industry experience high growth in recent years. Iran is still far from its realistic status in the global petrochemical trade; however, it managed to export about $12 billion worth of petrochemical products by March 2018. Currently, 54 petrochemical plants are operational in Iran, supplying 53.6 million tonnes of petrochemicals. About 30.7 million tonnes of products would be ready for sale and the rest is consumed by and between the plants. Furthermore, 34 petrochemical projects have had over 20% progress. Once these projects have been completed, Iran’s petrochemical production would soar to 75 million tonnes by March 2022. If no more petrochemical projects commission, the output from the existing projects would exceed 100 million tonnes by March 2026. Kaveh PlantAmong petrochemical projects ready to come online, Kaveh Methanol Petrochemical Plant is the most outstanding. First and foremost, it is under construction by the private sector. Second, it has capacity to produce 7,000 tonnes a day of methanol – which is the largest amount in the world. Therefore, most equipment fitted in this plant is being used for the first time.The Kaveh plant is located on a large piece of land measuring 220 ha near the city of Dayer in Bushehr Province. It is the largest AA-ranked producer of methanol in North Pars. The license and basic engineering for the plant belong to Swiss Casale while detailed engineering has been done by Petrochemical Industries Design and Engineering Company (PIDEC) and necessary utilities have been designed by an Iranian company. The ground was broken for the construction of the Kaveh methanol  plant in 2004. The infrastructure was then prepared; however, due tointernational sanctions Iran could not purchase necessary equipment until 2014.The project accelerated after Iran signed the 2015 historic nuclear deal with six world powers, leading to the lifting of sanctions on the country. Different divisions of the plant started operation in 2017 and the entire plant is now ready for operation. Hassan Asbomahalleh, director of operation at the Kaveh plant, said: “Since this complex is the largest of its kind in the world, we have used unique equipment in its construction. For instance, the largest reformer and synthesis reactor, the largest ATR reactor and the largest air compressor have been installed at this complex.” The largest ASU unit with a capacity of 120,000 normal cubic meters per hour, including the world’s largest air compressor and three tanks for liquefied oxygen, argon and liquefied nitrogen is installed at the Kaveh plant. Furthermore, two 50MW steam turbine power plants and a 55MW gas power plant, four water desalinators, 14 diesel-fueled generators, seven boilers, and seawater pumping station with four pumps have been used at this complex. The seawater cooling tower system at the Kaveh methanol plant is the first of kind in Iran. It has four cells with different performance. They were purchased with 24 fans with a capacity of 80,000 tonnes per hour the largest synthesis reactor weighing 1,250 tonnes from Italy. There was initially no crane in Iran to install the purchased materials. This crane was designed and built at the Kaveh Industrial Group. Furthermore, a jetty was built for importing and exporting solid products and another one for carrying liquids and methanol from this plant.Another outstanding feature of the Kaveh petrochemical plant is its equipment with the largest reformer unit in the world. This unit converts natural gas to synthesis gas.Maximum Local ContentAs long as managers of the Kaveh plant had in their authority and the standards allowed, orders were placed with Iranian companies for the manufacturing of necessary equipment. For instance, distillation towers were built in Iran. Iranian manufacturers also built the world’s largest structure reformer. However, some materials whose production was not possible in Iran were purchased from leading European and Asian companies. To build the Kaveh methanol plant, the equipment needed for transducers and pumps were purchased from South Korea, reactors and reformers from Italy, piping materials from top European manufacturers and the compressors’ main parts from Siemens. “Since the complex was built under Swiss Casale license, we purchased our necessary equipment from the vendors confirmed by Casale,” said Ahmad Ahmadi, deputy CEO of the Kaveh plant. eferring to sanctions imposed on Iran, he said: “After the implementation

of the JCPOA (the nuclear deal) and prior to the US’s withdrawal [last May], we made our necessary purchases and we even purchased more than we needed.” “Meantime, the Kaveh Industrial Group produces most of its own equipment. Therefore, even if the sanctions are tightened we have enough spare parts and there is nothing to worry about,” he said.Countering SanctionsAfter the US withdrawal from the Iran nuclear deal and the ensuing imposition of unlawful and unilateral sanctions against Iran’s petroleum industry, managers of petrochemical plants have been concerned with selling petrochemical products and importing some sophisticated equipment. Behzad Mohammadi, CEO of Iran’s National Petrochemical Company (NPC), said that Iran’s current international conditions had recently created some restrictions for the petrochemical industry. “However, petrochemical companies have found very good options to resolve their issues and restrictions. Efforts will be made to avert any specific problem,” he said. Jaberi is also concerned with the sanctions. However, he said: “We know how to counter sanctions in selling our products.” Referring to the three licenses obtained for methanol, urea and ammonia, and carbonate, he said: “After this complex has been launched, the urea unit with capacity of 1.072 million tonnes a year, the ammonia unit with capacity of 726,000 tonnes a year, as well as two methanol units would be established.” Regarding compliance with environmental obligations, Jaberi said: “All sections of this complex have been built in compliance with environmental standards.” The methanol production capacity in Iran’s petrochemical plants currently stands at 5.16 million tonnes a year, which would reach 21.24 million tonnes once the new projects have become operational.What’s Methanol?Methanol, also known as methyl alcohol among others, is a chemical with the formula CH3OH (a methyl group linked to a hydroxyl group, often abbreviated MeOH). Methanol acquired the name wood alcohol because it was once produced chiefly by the destructive distillation of wood. Today, methanol is mainly produced industrially by hydrogenation of carbon monoxide. Condensation of methanol to produce hydrocarbons and even aromatic systems is the basis of several technologies related to gas to liquids. These include methanol-to-hydrocarbons (MTH), methanol to gasoline (MTG), and methanol to olefins (MTO), and methanol to propylene (MTP). These conversions are catalyzed by zeolites as heterogeneous catalysts. Production ProcessDesigning methanol units is done through one of the following methods: One method is conventional, through which the methanol synthesis gas is produced from reforming natural gas. The synthesis gas is then compressed in the methanol reactor to be converted into raw methanol, which would in turn be distilled to provide pure methanol. The method has already been used at the Shiraz, Kharg and Fanavaran petrochemical plants. The second method, which mainly applies to larger units with an output of over 1 mt/y, the bulk of synthesis gas reforming is done in the auto thermal reactor (ATR). That needs oxygen, which is directly injected into the ATR reactor along with the fist reformer’s exit gas. Due to

it via national trunkline,” Jaberi said. Until 1990 Iran had no methanol production unit and it had to ship in the necessary methanol. Following the 1979 Islamic Revolution and during the 1980-1988 imposed war, the NPC envisioned designing a methanol unit to produce 84,000 tonnes of methanol a year. The would-be methanol facility was decided to be built near the Shiraz Petrochemical Plant which is located near methanol consumption units. The facility was launched in 1990, followed by the Kharg, Fanavaran and Zagros methanol plants.The US is currently importing over 85% of its methanol needs, while European nations depend on imports from the Middle East and North Africa for more than 60% of their methanol needs.

Petchem Talks with Foreign Investors Continue

Hossein Ali-Morad, NPC investment chief, says no company has officially announced quitting cooperation with Iran. “Of course, cooperation has been suspended, but communications between these companies and NPC are still under way,” he added. “Under the current circumstances, foreign companies expect us to facilitate their presence [in Iran], but we have reminded them of the fact that our request is bilateral; if they believe that Iran is the best market for them they had better take steps and urge their own governments to create a better atmosphere for cooperation with Iran,” said Ali-Morad. Iran is determined to push ahead with the development of its petrochemical industry, without or without foreign companies. Iran’s relative advantage in hydrocarbon resources and big investment made in this sector in the past years have accelerated the rate of return on investment in the petrochemical sector. That, along with self-sufficiency in some sectors of this industry, has grown into the undeniable incentives of the petrochemical industry in Iran. Ali-Morad said 15 foreign companies rushed to Iran for negotiations immediately after Iran struck the 2015 deal with the world powers. “13 MOUs were signed by NPC and foreign companies for investment in this industry. Had these talks ended in agreement at least $15 billion in foreign direct investment would have been made in Iran’s petrochemical industry.” “But the US’s unilateral withdrawal from the JCPOA (the official title of the agreement) complicated the conditions for the presence of foreign companies in Iran,” said Ali-Morad. He said: “Asian nations like China and India did not follow the US government’s unilateral policy [of re-imposition of sanctions on Iran] in November and therefore Asian companies have not yet suspended their talks with Iran.” “However, European companies are still waiting for the outcome of their governments’ talks with Iran and are seeking mechanisms like SPV Despite the United States’ withdrawal from Iran’s 2015 nuclear deal with six world powers, negotiations between Iran’s National Petrochemical Company (NPC) and foreign companies are going onEconomic Risk ReductionIran says there are still many incentives for investment in the petrochemical sector despite the US imposition of sanctions. “As far as investment guarantees are concerned, apart from the issue of sanctions which is the political risk of a project, we have to help investors manage their economic risks and contain them. We create economic incentives for them in order to push them to invest in the petrochemical sector,” said Ali-Morad special purpose vehicle) in a bid to remain immune to the impact of US sanctions,” he added. Ali-Morad said some smaller European companies had remained silent under such circumstances and were looking for options to continue cooperation with Iran. The US sanctions waivers to eight countries to buy Iran’s oil would give green light to European companies that have set conditions for cooperation with Iran. “In other words, through their governments they can pressure the US government and win sanctions waiver,” he said.No AdieuAs soon as the US pulled out of the JCPOA, rumors swirled of the end of cooperation between NPC and foreign companies. “None of companies with which we were in talks have officially announced the end of their cooperation with Iran; however, they have either set conditions for their cooperation or suspended their cooperation,” said Ali-Morad. Asked if European companies would terminate

heir talks with Iran, he said: “I don’t think so. I feel that all of them are waiting to see what SPV-style mechanisms would be envisaged by the European governments for cooperation with Iran or privileges they would win or if they would be able to win US sanctions waiver.” “We and our foreign partners are looking for a way to skirt around the sanctions,” said Ali-Morad. He said both Iran and European companies had to make efforts to find facilitating mechanisms. “Some time ago, the manager of a foreign company had travelled to Iran to appoint his new representatives and introduce him to the CEO of NPC. I told him: ‘In our meetings, you constantly tell us you look at Iran’s market and you are trying to export chemicals from Iran to global markets. But how come you are only expecting us to find a way to circumvent the sanctions? You must also benefit from your own tools and negotiate with your own governments and ratchet up pressure on them to find a mechanism to get around the sanctions’.

ncentivesThe projects offered for investment are set to be implemented in areas where domestic and

foreign investors would benefit from maximum discounts. For instance, if the rate of return in a project is 18%, the figure could be increased to 20% by offering discount in the feedstock price. That would encourage foreign investors to envisage investment in Iran’s petrochemical industry because outside Iran they may even be content with half that figure.The discount in feedstock prices considered for investors would be in line with regulations.In case investors invest in underdeveloped or underprivileged areas, they would enjoy a 30% discount, which is the maximum discount granted.Another possibility for foreign investors is that they can present their own plans in light of domestic, regional and international markets. “Of course, such facility is also available for domestic investors,” said Ali-Morad. Another option, he said, would be to provide infrastructure in areas where petrochemical projects would be implemented. “Following fulfillment of such infrastructure in the hubs with potential for petrochemical development, investors would be assured that the government favors development of that particular area and implementation of petrochemical projects,” he said. “For instance, Iran’s Petroleum Ministry is managing the projects so as to accelerate the creation of infrastructure. Domestic and foreign investors also push ahead with their activities in light of the infrastructure,” he added.Ali-Morad said either the Petroleum Ministry or NPC could fund the infrastructure. “In case any investor is ready to build infrastructure in a specific area, it would be supported by NPC or the Petroleum Ministry. The required facilities would be provided to that company and it could finally generate revenue through these services,” he added.Projects Ready for InvestmentA total of 105 projects have been envisioned for investment in the petrochemical industry, 41 of which are new. “Unfortunately, over 90% of these 41 projects have had less than 10% progress due to numerous problems including financing,” said Ali-Morad. These projects are estimated to need about $55 billion in investment for completion. “If we assume that domestic investors would account for 20% of the aforesaid sum, i.e. $11 billion, the remainder has to be financed by the private sector through our planning and assistance,” he added.Another 64 projects have had over 20% progress. NPC is looking for short-term and mid-term mechanisms and is focusing upon domestic financial resources in order to finance these projects and help investors complete them. The top priority goes to the 15 projects which have had over 70% progress. “My colleagues are focusing on the management of these projects in order to enhance and assist the Iran’s economy,” said Ali-Morad. “If our negotiations with 13 foreign companies yield results, at least $15 billion in foreign direct investment would be attracted into this industry,” he added. Asked about how much investment had been attracted into the petrochemical industry since President Hassan Rouhani took office in 2013, he said: “Over this time, about IRR 200,000 billion plus $10 billion has been invested by the private sector in the petrochemical industry and the projects are currently under way.”Financing and Investment Ali-Morad said financing by foreign companies would not be considered as foreign investment.“I personally do not see financing as foreign investment,” he said. “Of course, at present $4-5 billion in Asian financial credit line has become effective, which private sector projects are using,” he added, noting that the credit lines became effective under the Rouhani administration.Domestic vs. Foreign Investment Iran’s top priority for financing and implementing projects is attracting foreign investment. Petrochemical industry is no exception and the reason is clear as domestic resources would have the least engagement in the implementation of projects. Ali-Morad also touched on another reason for favoring foreign investors over domestic investors, saying: “Foreign investors automatically do civil defense work for us in the region because the presence of foreign investors would reduce the possibility of threats.” Asked if the presence of foreign investors would zero threats, he said: “No, the likelihood of threats will not be reduced to zero, but it will be reduced because a foreign investor comes with capital and that reduces the possibility of international threats.” “We look differently at domestic and foreign investors. We give some privileges to foreign investors, but that does not necessarily mean that domestic investors are of lower significance to us. It must be taken into consideration that under the current circumstances our top priority is to rely upon domestic resources and investors,” added Ali-Morad. “However, we are looking at foreign investors differently and we try to encourage them in the first place to account for the implementation of projects by themselves and then to implement projects in partnership with Iranian investors,” he said.Diversity in Projects Iran’s rich gas resources and gas-based technological progress in the petrochemical sector provides Iran’s petrochemical industry with the chance to envisage a variety of projects for implementation. That empowers investors to choose between the projects based on their objectives for investment. Naturally, the projects which are based on gas feedstock are welcomed further for investment. However, the Petroleum Ministry has mainly focused on the completion of value chain in its projects. NPC is pursuing the same strategy. That means NPC’s top priority is to finance projects feeding the petrochemical industry, including liquefied natural gas (LNG) projects. In fact, implementation of these projects results in feeding several petrochemical plants. However, a project may be 30% complete, but it is prioritized by NPC in implementation due to its benefits for other petrochemical units. Ali-Morad referred to his talks with foreign companies for transferring value chain technology like methanol, saying: “At present, with the assistance of Petrochemical Research and Technology Company (PRTC) and a foreign company, we have made good progress in bringing in the technology to continue the methanol chain and we hope that the technology for this product would be indigenized in Iran soon so that we would no longer depend on importing it.”Absolute HopefulnessThe US’s unlawful and unilateral sanctions have slowed the pace of attraction of investment in Iran. However, Ali-Morad said: “I am 100% hopeful in the future of investment in the petrochemical industry.” “We are currently under US unlawful and unilateral sanctions. Anytime I am in talks with domestic banks, they say the petrochemical sector is the only industry which can reliably and sustainably generate hard currency,” he said. “They are assured of the return of resources engaged in this industry and that means the future of investment in this industry is bright in light of the high rate of return on investment and reliance on domestic resources,” said Ali-Morad

                            Iran Poised to Become Gasoline Exporter

The startup of Phase 3 of the Bandar Abbas Gas Condensate Refinery, commonly known as the Persian Gulf Star refinery, will bring production from the world’s largest condensate treatment facility to 45 ml/d. Once fully operational, the refinery will help Iran become self-sufficient in domestic gasoline supply and even become an exporter. in the calendar year to March 2018 with the Tehran refinery accounting for 7 ml/d, Lavan refinery for 2.5 ml/d, Isfahan refinery for 2.5 ml/d and Shazand refinery for 11 ml/d. Sadeq-Abadi said Iran’s Euro-grade gasoil production had reached 40 ml/d, adding that Iran produced 34 ml/d of Euro-grade gasoil last December. He said the Tabriz refinery had increased its gasoil production by 3 ml/d, while the Bandar Abbas oil refinery had seen its gasoil output grow 14-16 ml/d. Sadeq-Abadi said Iran’s Euro-grade gasoil production capacity increased from 23 ml/d to 40 ml/d. “By the end of the current calendar year [in March], 12 ml/d of more gasoil would have been supplied by Phase 3 of the Persian Gulf Star refinery, which would bring the gasoil output to 52 ml/d,” he added. NIORDC has projects on the agenda to increase Iran’s gasoil production capacity. One of them targets the Isfahan refinery which would supply an extra 16 ml/d of Euro-grade gasoil by March 2019. That would cover the bulk of transportation sector needs. Gasoil treatment sections at Iran’s refineries have slashed the sulfur content of gasoil from 10,000 ppm to 50 ppm, which would significantly reduce sulfur-related environmental pollution. Exporting Surplus Petroleum ProductsAlthough crude oil refining capacity has significantly increased in the country, Iran remains a country with high gasoline consumption. As Sadeq-Abadi said, if Iran’s gasoline consumption growth is assumed at 7%, the gap between gasoline production and consumption would reach 190 ml/d by 2033. To counter this challenge, a variety of policies must be envisioned, including diversification of fuel mix, expanding public transportation network, using low-consumption vehicles, diversifying the fuel mix of vehicles and even using hybrid cars. Sadeq-Abadi said that would need $100 billion in investment to build refineries and related industries including pipelines and pumping stations. “Or we would need to import gasoline worth $100 million. Neither is possible because that would cut Iran’s crude oil exports and foreign exchange revenue,” he added. “To resolve this problem, we need to reform our consumption pattern in order to create a safety margin which would be converted into wealth,” said Sadeq-Abadi. He said that NIORDC would be focusing on using the surplus capacity of petroleum products in exports and also trade on the Iran Energy Exchange (IRENEX). “There are important opportunities for investment in the refining industry. For that purpose, we can use foreign investment or foreign financing and tap the National Development Fund of Iran (NDFI),” said Sadeq-Abadi.The refinery is the first of one designed to run on condensate with a capacity of 360,000 b/d. The main sections of the facility are distillation, liquefied gas treatment, catalytic conversion, naphtha treatment, isomerization, kerosene and gasoil treatment. The objective of the refinery has been to produce gasoline, gasoil, liquefied petroleum gas (LPG) and jet fuel alongside the existing Bandar Abbas oil refinery. Phase 1 of this refinery came on-stream in January 2018 and Phase 2 become operational six months later. More than 75% of the equipment used at the condensate refinery is made in Iran. Ali-Reza Sadeq-Abadi, CEO of National Iranian Oil Refining and Distribution Company (NIORDC), said Iran produced on average 67.8 ml/d of gasoline in the calendar year to March 2018, which reached 87.9 ml/d this calendar year. Phase 3 of the Persian Gulf Star aside, Iran’s gasoline production averages 88 ml/d. During the first two months of the current calendar year, four Iranian refineries – Shazand, Arak, Isfahan and Abadan – were overhauled. Sadeq-Abadi said Iran’s gasoline production capacity was 95-97 ml/d in the current calendar year. He said that Iran’s gasoline consumption peaked in summer 2017. He said Iran’s average gasoline consumption stood at 87 ml/d. “Once fully operational, each phase of the Persian Gulf Star refinery added 12 ml/d of Euro-grade or 15 ml/d of regular gasoline to national production, bringing the country’s gasoline production capacity to 105 ml/d,” he told reporters at the inauguration ceremony of Phase 3 of the Persian Gulf Star refinery. He said that Iran had stopped importing gasoline since last October.Euro-Grade Gasoil Output UpSadeq-Abadi said Iran’s gasoil production stood at 94 ml/d on average in the calendar year to March 2018, 21 ml/d of which was Euro-grade gasoil. He added that the figures stood at 100 ml/d and 28 ml/d, respectively for the current calendar year. The official said Iran’s Euro-grade gasoil production capacity was 23 ml/d

Isfahan Refinery Supplies 24% of Iran Refined Products

Isfahan Oil Refining Company (IORC) which started out in 1979 is currently supplying 25% of refined petroleum products needed across Iran. Since 2015, IORC has managed to produce one of the most sophisticated refining catalysts used in its gasoline production section. The refinery is currently producing 11 ml/d to 12 ml/d Euro-4 gasoline, 18 ml/d to 20 ml/d gasoil and about 10 ml/d fuel oil. Isfahan refinery is also the main supplier of feedstock to Sepahan Oil Company, Isfahan Petrochemical Plant, Arak Petrochemical Plant, Jey Oil Refining Company and Iran Chemical Industries Company. Isfahan refinery was designed jointly by an American and a German company in 1973 in order to refine crude oil and petroleum products and feed downstream industries. It came on-stream in 1979 by Iranian engineers. The treatment facility comprises two almost identical refineries, the most significant of which incorporates distillation, liquefied petroleum gas (LPG) production, viscosity reduction, catalytic conversion, hydrogen production, isomax, gasoline production, special solvents, utilities and steam, and amine and sulfur recovery divisions. The crude oil needed by the refinery is supplied from Maroun oil center, located 70 kilometers from Ahvaz. A 430-kilometer pipeline, dotted with seven compressor stations, provide the required oil. A comprehensive processing improvement project is currently under way at Isfahan refinery as one of the most significant environmental plans at this giant refining facility, aimed at upgrading the quality of petroleum products and reducing fuel oil output.Complex CatalystsMorteza Ebrahimi, CEO of IORC, said the core products supplied by this company were gasoline, gasoil and fuel oil. “Given the requirement for the refineries to reduce environmental pollution and upgrade the quality of refined products, we are currently implementing projects to upgrade the quality of our three major products (gasoline, gasoil and fuel oil), which make up the bulk of our production,” he said. Gasoline is a strategic refined product in Iran. Over recent years, Iran’s Petroleum Ministry has obligated all crude oil refining units to upgrade the quality of their gasoline. That requires the supply of necessary catalyst. IORC had such policy on its agenda, but the implementation of this policy coincided with tough sanctions against Iran’s petroleum industry, which barred any entry of catalysts into Iran for different sections of the refining industry. Ebrahimi said: “Upgrading the quality of gasoline produced at this company started during sanctions, but when the project was 90% complete the sanctions were toughened such that we were not allowed to buy rotary equipment to keep catalysts running. Foreign companies did not come to install and launch the compressors either. Therefore, we decided to hire domestic companies to design this catalyst and launch compressors.” Therefore, Isfahan refinery produced the most sophisticated refining catalyst in the world for gasoline production, which was monopolized by American and French giants, and launched the gasoline plant in 2015. By supplying an average 11 ml/d of Euro-4 gasoline, the facility has largely contributed to reducing air pollution in Isfahan and other megacities. Furthermore, gasoil refining units for Euro05 gasoil production are 93% complete now. Operation of this project would help Isfahan refinery supply more than 20 ml/d Euro-5 gasoil. Currently, 1.5 ml/d of Euro-5 gasoil is being supplied for daily use in cities. Meantime, some units are under construction at the refinery to remove about 100,000 b/d of heavy fuel from the facility’s mix and rather than that add environmentally friendly products. IORC is supplying the gasoline needed in12 provinces across Iran, Ebrahimi said. “By operating quality upgrade projects at this company, gasoil pollution will be reduced next [calendar] year and we will be producing Euro-4 and Euro-5 gasoil.”No Sanctions-Caused HaltFuel oil is among highly polluting products. Upgrading the fuel oil unit was among IORC plans and to that effect an agreement was signed with South Korea’s Dailem. But due to US sanctions against Iran’s petroleum industry, the Korean company left Iran. “Given the capabilities of domestic companies, arrangements have been made to continue the project with domestic companies,” said Ebrahimi. He said IORC’s fuel oil production capacity stood at 30 ml/d, adding the current output varied between 10 ml/d and 18 ml/d. “Based on environmental obligations, fuel oil production will be zeroed. Furthermore, given the fuel oil quality upgrade project we plan to bring fuel oil production to zero in four years,” he added. Ebrahimi referred to the sulfur production unit of IORC, saying: “This unit whose capacity stands at 630 tonnes a day is to come online by the end of the current [calendar] year.”Phase III Distillation UnitThe refining capacity of IORC was 200,000 b/d at startup. The figure has now nearly doubled to 378,000 b/d. That is why separating towers are supplying a variety of products. This traffic of products will be reduced once the distillation section of the refinery comes online. Furthermore, the quality of other refined products will be upgraded. The startup of the distillation unit will significantly cut pollution caused by the refined petroleum products. Consequently, the refinery’s fuel oil output will decline. The IORC chief said the refinery’s distillation capacity is beyond the current 145,000 b/d. “Therefore, when the distillation units are overhauled our production capacity does not fall,” he added. IORC will bring its operation to an optimum level with the startup of Phase III distillation unit. Distillation units 1 and 2 will be producing 120,000 b/d of petroleum products while the viscosity units of the refinery will switch from crude oil fractioning cycle to fuel oil fractioning

Iran Collects Iraq Gas Debt

CEO of National Iranian Gas Company (NIGC) Hassan Montazer Torbati has said Iran continues to export gas to neighboring Iraq. He also said that Iran had been compensated for all its gas exports to Iraq, noting that Iraq had settled its debt in euros. Montazer Torbati said Iran could process 800 mcm/d of gas. Citing gas recovery from new phases of the South Pars gas field, he said Iran had reached a balanced status in gas production and consumption. Therefore, he said, Iran was a reliable gas supplier. He underlined Iran’s geographical position for exporting gas to Iraq, saying: “Since we currently have necessary tools in Iran to export gas, there is nothing worrying for exporting gas to neighboring countries.” “Furthermore,” he said, “the proximity of destination nations for gas exports prioritizes gas exports via pipeline.”

He said: “At present, in light of Iran’s construction of the bulk of pipeline meant to carry gas to Pakistan, the infrastructure for exporting gas to this country is ready.” “But on the Pakistani side, the government and the private sector should tell us whether or not they want to receive gas from Iran,” he added. “We hope that the [Pakistani] private sector would make necessary investments for receiving gas from Iran. However, this issue has yet to be raised formally on the part of Pakistan,” the NIGC chief said. He expressed hope that Iran’s gas exports to Pakistan would be finalized because Iran is determined to pump gas to its neighboring state. Referring to the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, Montazer Torbati said: “In case TAPI crosses Iran, it would be more suitable and more secure for all nations engaged in it both economically and in terms of security.” “Iran has a quicker access route and given the form of Iran’s gas transmission network, there would be no need for full implementation of the pipeline in the early years of the operation of the project as Iran is ready to pump this gas by relying on its own facilities,” he said.No Need for Gas ImportsMontazer Torbati also said the Iran-Turkmenistan gas dispute had been “referred to arbitration and we are following up on it”. “We had to import gas from Turkmenistan due to serious gas shortage in northern Iran in previous years, but today this dependence is gone and we have no problem with gas supply to northern areas in cold seasons,” he said.“However, we can establish good relations with gas-rich Turkmenistan and broaden these ties,” he added. Montazer Torbati said Iran’s private companies were swapping Turkmenistan’s gas. “Of course, we have capacity to swap more gas. We can swap 35 mcm/d to 40 mcm/d of gas,” said Montazer Torbati. On liquefied petroleum gas (LPG) exports, he said: “Our LPG production and exports may fluctuate during various months; however, this product is still being loaded and exported. Furthermore, we are seeking to preserve our markets in this sector.” Regarding gas exports to Armenia, he said: “Gas exports to this country are under way based on the terms of the agreement and we are able to lift gas exports to this country.”No Problem with Gas ExportsAsked about a would-be Turkmenistan-Iran-Azerbaijan-Europe gas pipeline, Montazer Torbati said: “Throughout gas exports, both the capacity of gas production in the country and destination markets are envisaged.” “As far as gas production and domestic consumption balance is concerned, Iran is currently in desirable conditions. That is whey European nations have concluded that Iran would have no problem with its domestic gas supply,” he said. “But potential European buyers of Iran’s gas can determine the gas export route.”800mcm/d Gas ProcessingIn 2017, power plants accounted for 37%, household sector 25%, industries 30% and compressed natural gas (CNG) 4% of gas consumption. CNG consumption is estimated at 20 mcm/d to 23 mcm/d, which is a good alternative to gasoline. CNG consumption has been instrumental in curbing gasoline consumption and Iran’s gasoline self-sufficiency.Montazer Torbati said Iran’s gas processing stood at 800 mcm/d, adding: “Development of domestic gas supply in Iran will be over in coming years and we will then shift towards gathering associated gas, supplying feedstock for industries and exports.”Noting that the share of household sector among consumers of gas is such that sufficient time has been provided for gas supply to industries and power plants, he said: “We have been increasing gas production level in order to meet consumption, but in the coming years we need to manage the gas consumption of the country in order to generate higher value-added from gas.”750mcm/d Gas TransmissionMontazer Torbati said Iran’s gas transmission capacity was more than 750 mcm/d. He added: “Given the development of gas transmission pipelines, we are no longer worried about production hike.”“We will be able to transmit as much gas as we will be producing in Assaluyeh. Furthermore, the gas transmission network is resilient enough and we are not worried about connections,” he said. The official said that gas had been recently injected into the Iran Gas Trunkline 9 (IGAT-9). “Therefore, the gas industry is increasing its records so that we would comfortably produce and transmit gas,” he added.Montazer Torbati said liquid fuel had been used as feedstock of power plants in recent years, adding that gas supply to power plants would have soared to 70 bcm by the end of the current calendar year.

Two Platforms Operational atSP13Two

platforms at Phase 13 of the giant South Pars gas field have become ready for operation within four days, the manager of SP13 development project has said.Payam Motamed said the two platforms became ready for production immediately after hook-up and startup. “This is a new record in Iran’s offshore industry,” he said. After the inauguration of ten SP phases since President Hassan Rouhani took office in 2013, the second round of SP development trend has started for developing the remaining phases. Mohammad Meshkinfam, CEO of Pars Oil and Gas Company (POGC), has put the South Pars rich gas production capacity at 600 mcm/d. “Except for SP11, the border blocks of this field shared [with neighboring Qatar] are operational,” he said, adding that the sour gas production they are now skilled enough to install and launch such facilities without having to hire foreign experts. Motamed said the startup of 13B and 13D platforms would lead to the production of 1 bcf/d (28 mcm/d) of rich gas from SP13. Platforms 13B and 13D were loaded out from Bushehr Yard of Iran Offshore Industrial Park and were installed under suitable weather conditions. According to Motamed, the operation of the two platforms ahead of schedule indicates the seriousness of the Petroleum Ministry and National Iranian Oil Company (NIOC) in operating SP gas projects and boosting production from this supergiant reservoir. The SP13 output has increased in the shortest possible time with the assistance of Iranian contractors and technicians throughout the stages of manufacturing, installation and startup of oil and gas projects. In the offshore sector of SP13 located in the northwestern part of the gas field, 38 offshore wells have been drilled.By sending the sour gas obtained from the two platforms of SP13 to the onshore refinery via a 32-inch pipe for processing, a variety of products including sweet gas, ethane, propane, butane, gas condensate and sulfur products would be produced.4th Sweetening TrainFurthermore, in coincidence with the startup of the fourth train of gas sweetening and injection into national grid, the SP13 treatment facility has become ready to sweeten gas in four processing units at a nominal capacity of capacity in developing phases of this field (SP13, SP14, SP22-24) would increase by next March. Motamed said the two platforms started work thanks to efforts made by the client and contractors including SADRA and Tesco. “The flares of the two platforms were switched on after the end of construction and installation operations, the activation of all F&G safety systems and the opening of the first wells,” he added. Motamed said delivery of gas to the onshore refinery will start when an offshore pipeline becomes ready to transmit gas. The simultaneous startup of two major gas platforms in the Persian Gulf by Iranian contractors is unprecedented in Iran’s offshore industry. Until recently, Iranian contractors were not able to carry out such sophisticated operations without foreign help. However,  2 bcf/d.Achieving full gas sweetening capacity at SP13 treatment facility has materialized after the startup of the fourth, which is also the last, train of sweetening at this phase. At this sweetening train, 6 mcm/d of rich gas is being processed before being fed into the national network. Motamed said each of the four processing units would sweeten 500 mcf/d of gas for injection into national trunkline. The four trains are currently operational by receiving sour gas from SP6 to SP8. Half of these processing units, including the first and the second trains, are expected to receive 1 bcf/d offshore gas of SP13 to be processed for injection into gas grid.Production and injection of sweet gas from the fourth sweetening train of SP13 treatment facility is taking place at a time the first train of sulfur recovery unit of this phase has become operational by supplying 6 tonnes per hour of acid gas to the reaction furnace. The first and the second trains of sweetening at the SP13 refinery are currently supplying 25 tonnes per hour of 20% hydrogen sulfide to the sulfur recovery unit of the refinery so that an important environmentally friendly section of a refining project would come on-stream with the completion of sweetening trains and the refinery’s readiness to receive offshore rich gas. Once four offshore platforms of SP13 come online and supplying rich gas to this phase starts, 2 bcf/d of rich sour gas would be sweetened in the processing units of this phase

Europe SMEs Ready to Invest in Iran Oil

Exhibitions all across the globe provide a platform for every nation to show off its industrial potential. Therefore, putting industrial capabilities on display could stimulate competitiveness among producers. Iran’s petroleum industry is no exception to this rule.

114 Foreign Firms Ready to Work in IranReza Padidar, head of Energy Committee of Tehran Chamber of Commerce, said 114 foreign SMEs had registered to operate projects in Iran.“We plan to benefit from their potential in technology transfer and partnership in investment projects,” he said.“Over the past nine months, 57% of national revenue has been produced from oil and hydrocarbon products and it can be concluded that Iran’s economy is oil-dominated. Therefore, the energy sector needs government support,” he added. “We identified European SMEs that were willing to invest in Iran. We plan to invite them to Iran later this year in order to familiarize them with projects and potentialities in Iran in a bid to prepare the ground for joint development projects,” said Padidar.Khuzestan to Launch Petchem SaleAli Mazaheri, CEO of Petrochemical KALA Company (PKC), announced the startup of the largest industrial shopping center for Iranian petrochemical commodities in Khuzestan Province. He said that PKC had signed an agreement with the Society of Iranian Petroleum Industry Equipment Manufacturers (SIPIEM) for the latter to account for the domestic manufacturing of items needed at petrochemical plants and their supply in the shortest possible time. Mazaheri said the industrial shopping center would be launched in Mahshahr, a strategic zone known as the heart of Iran’s petrochemical industry.The KPC-SIPIEM agreement would end Iran’s dependence on imports and empower domestic manufacturers to supply national needs. “Effective steps have so far been taken for the implementation of the project, including warehousing and transportation. However, effective interaction with manufacturers is essential,” said Mazaheri.“KPC has always supplied the needs of petrochemical manufacturers and the company has so far identified the mostly consumed items of petrochemical plants,” he said. Mazaheri expressed hope that about 80 main products would be stockpiled in the warehouses in one year. Petrochemical plants depend on imports for their raw materials. That is while due to international sanctions and restrictions, the purchase of equipment from abroad has become problematic. Prior to the imposition of the sanctions, KPC was an importer of spare parts from European companies. But now thanks to reserve engineering, it is possible to develop many of such spare parts.110 European SMEs Eye Iran OilReza Khayamian, CEO of SIPIEM, said 110 European SMEs were ready to operate oil and gas projects in Iran.“The Europeans’ participation in the petroleum industry development projects needs the full launch of the special purpose vehicle (SPV) between Iran and Europe,” he said.Referring to US unlawful and unilateral sanctions on Iran, he said: “Definitely, major oil companies like Shell, Total and BP, whose stocks are held by American companies, could not easily work in Iran amid US sanctions. Therefore, Iran’s oil and gas industry should not depend on major international companies.”“The best thing we can currently do and for which a proposal has been submitted to the presidential office is to let Iranian and European SMEs jointly operate oil and gas projects,” Khayamian said.“Talks have already been held with the European Union’s Energy Commissioner. Once SVP has been launched, European SMEs with no interest in the US would be ready to invest in Iran’s oil and gas projects. Big companies can place orders with SMEs and we can directly engage with small-sized companies,” he added.

2019 OPEC Market Forecast 

Amid growing uncertainty over the global economic growth rate, energy prices have largely been affected by concerns about crude oil supply glut. However, OPEC Reference Basket (ORB) price was up 33% or 417.35 in 2018 year-on-year. This growth was partly due to agreement between OPEC and non-OPEC allies, which largely rebalanced global markets. Studies conducted on the global economic growth show that the world economy grew 3.7% in 2018 and is set to grow 3.5% this year. So there would be no significant difference in growth year-on-year.The US economic growth has also remained almost unchanged over recent years. It experienced 2.9% economic growth in 2011 and 2016. The euro-zone economic growth rate stood at 1.9% in 2018, which would reach 1.7% this year. There is a similar scenario in Asia’s emerging economies. China, India and Japan have not seen their economic growth rate change year-on-year. This estimate of global economy in 2019 indicates that energy consumption, particularly oil, would remain almost unchanged. Therefore, OPEC will see no significant increase or decrease in oil consumption. Therefore, the oil market situation in 2019 would be largely similar to the oil  market in 2018.Meantime, despite the fact that unchanged economic growth in major importers would bring about recession, which would subsequently lead to lower oil consumption, there are other reasons to justify future growing demand for oil in Asia, particularly in India and China. Furthermore, the US is highly likely to face growing demand and the main reason is that strategic oil reserves in US storage tanks have declined. Because when oil prices increased these countries saw their stocks drop. Therefore, in the future, lower oil prices would encourage major buyers to depend on imports.OPEC Obligations According to estimates about financial markets and energy consumption in the countries that buy significant volumes of oil, OPEC has no option but to comply with the following points in order to manage  the energy market in the world:Making Efforts for Balance in Global Energy Market: One of OPEC’s objectives in recent years has been to create stability and balance in global markets with a view to serving the interests of producing nations. In light of the decline in oil prices over recent years, OPEC has tried its best to restore balance to the markets and is making efforts to shore up prices through controlling production. Due to the persistence of this policy among OPEC member states and non-OPEC allies, the year 2019 may see full balance in the energy markets. Of course, it depends on a variety of political and economic factors. In case no unpredicted events occur, prices and production levels will see stability. Continued Cooperation with Non-OPEC Producers: Over recent years, OPEC has had close cooperation with non-OPEC major oil producers with a view to controlling production and bringing oil prices as much closer to their real levels. Given the success of such cooperation, OPEC and non-OPEC are likely to reach a longer-term agreement on oil production to formalize cooperation.Shale Oil Production: OPEC member states seeking oil price hike are sensitive to shale oil production in the light of their plans for better oil prices. Most producers of oil favor oil price hikes to the levels that US shale oil production would no longer be economical because the traditional producers of oil are well aware that in case they experience a significant price hike, shale oil production will become cost-effective for such nations as the US, and that is likely to strip them of any control on the oil market.Effective FactorsBased on the current developments, the OPEC oil basket price is likely to vary between $60 and $70 a barrel for all the 15 member states in 2019. However, a number of factors are likely to affect the future of OPEC oil production this year: Impact of US oil sanctions on Iran; Return of political stability to Venezuela; Violation of production cut agreement by some nations like Saudi Arabia; Upward or downward trend in production by some OPEC member states; Higher production by Nigeria and Libya that had been exempted from the global oil production cut agreement; Compliance of non-OPEC producers with production cut agreement; Consensus between OPEC and non-OPEC oil producers on production cut; Occurrence of military confrontation or unpredicted tensions in the strategic oil export shipment routes like the Persian Gulf, Strait of Bab-el-Mandeb; Disturbance in the economic growth of major buyers of oil in Asia; and US political equations with some nations to pressure Iran, Venezuela and Russia.

Algeria Oil and Refining Industry

Algeria started oil production in 1958. It joined the Organization of the Petroleum Exporting Countries (OPEC) in 1969. Sitting atop 12.2 billion barrels of oil in place, the African nation comes 16th in the world in terms of oil reserves. With an output of 1.058.7 mb/d, Algeria is the third largest African oil producer, behind Nigeria and Angola. Algeria is also producing 280,000 b/d of condensate and 340,000 b/d of natural gas liquid (NGL). Algeria’s refining capacity also stands at 651,000 b/d. Algeria depends on oil sales for 95% of its exports. Twenty-five percent of its GDP and 65% of revenues envisioned in its budget come from crude oil sales. In other words, oil is the pillar of Africa’s economy Official data show that Algeria’s crude oil production has seen ups and downs during the past two decades. Algeria’s crude oil production reached its highest level in April 2008 (1.408 mb/d), while the lowest level was recorded in February 2002 (775,000 b/d).Algeria hopes to invest 453 billion in its upstream oil sector up to 2022 and lift its crude output 30%. Algeria Oil Output (2002-2018) Algeria’s national oil and natural gas company (Sonatrach) holds about 80% of hydrocarbon production in this country. Sonatrach is responsible for exploration, production, transfer, refining, marketing and sale of oil in Algeria.Sonatrach was established on 31December 1963 by the then Algerian government. In the first agreement signed for oil exploration, Sonatrach had only a 4.5% share. France’s energy giant Total owned a 67.5% share. Sonatrach is currently Africa’s largest oil company and the world’s 11th largest. Sonatrach also operated projects outside the Algerian territory to become an international oil company. It is investing in Africa (Mali, Niger, Libya and Egypt), Europe (Spain, Portugal, Italy and Britain), Latin America (Peru) and the United States. The main foreign companies involved in Algeria’s oil and gas projects are Cespa, BP, Eni, Repsol, Statoil and Anadarko. Algeria’s oil is of good quality due to low sulfur content. The ageing oil fields in this country are mainly located in the eastern zones near the border with Tunisia and Libya. Algeria’s largest oil field is Hassi Messaoud with 3.9 billion barrels of oil in place. Located near the border with Libya, it covers an area of 800 square kilometers. With an output of 500,000 b/d, Hassi Messaoud makes up about 70% of Algeria’s oil production. Other important oil fields in Algeria are Hassi R’Mel with 3.7 billion barrels and Ourhoud with 1.9 billion barrels. Algeria’s crude oil exports currently stand at 633,000 b/d. Europe receives 76% of Algeria’s crude oil. The rest goes to America (17%) and Asia and Oceania (7%). The main crude oil in Algeria is Sahara Blend, which is a combination of categories of crude oil recovered from Hassi Messaoud. The US was Algeria’s main destination for crude oil exports up to 2013. But after increased shale oil production in the US from the Bakken and Eagle Ford fields whose oil spec is similar to Algeria’s, the US oil imports from Algeria dropped significantly, falling from 443,000 b/d in 2007 to 31,000 b/d in 2015.Algeria Oil DestinationsAlgeria currently operates five refineries

Zama Appraisal Well on SchedulePremier Oil says the first appraisal well on the Zama field in Mexico’s offshore block 7 well has encountered the main Zama reservoir and is currently drilling ahead as planned. Zama-2, spud at the end of November to the north of the exploration well, should determine the depth of the oil/water contact. The well will then be deepened to test the Marte prospect and finally side tracked up-dip and flow tested. Thereafter, the rig will drill the Zama-3 appraisal well to the south, with the program set to be completed during 3Q. This spring, Premier expects 3D seismic acquisition to get under way across offshore block 30, awarded last March under Mexico’s Round 3.1 in March. The concession includes the potentially high-impact Wahoo and Cabrilla prospects.

Ghana Deepwater Production UpTullow Oil expects average oil production this year from the Jubilee and TEN fields offshore Ghana to increase to around 179,000 b/d in total.Last year’s development drilling program involved the use of two rigs operating in tandem across both fields, with results from the well in some cases exceeding pre-drill expectations

Norwegian Gas Exports Remain StrongGassco transported 114.2 bcm last year to continental Europe and the UK through the Norwegian offshore trunkline network.Exports were the second-highest ever, said Gassco CEO Frode Leversund, and the delivery of 36.8 bcm between May and August set a record for summer deliveries to Europe.“Availability for delivering gas in the transport system was over 99%,

U.S. Refiners Scramble as Venezuela Sanctions Eyed

U.S. refiners are bidding up prices for scarce types of crude oil needed for their most sophisticated plants as the United States reconsiders harsher sanctions on Venezuela that could further reduce imports of the country’s oil. Trump administration officials in recent days met with U.S. oil company executives to lay out potential actions in response to the Jan. 10 inauguration of Venezuelan President Nicolas Maduro in an election it considered illegitimate. Among other steps, U.S. officials have recognized the opposition-run Venezuelan congress as the only legitimately elected authority. But the proposals that would most affect the energy industry involve banning U.S. exports of refined products or limiting oil imports - a move that, until now, the White House has not taken even after sanctioning individuals and barring access to U.S. banks. “It’s more serious than I’ve heard before,” said a refining industry executive familiar with the White House discussions. “They are setting the table to pull the trigger if they have to.” U.S. refiners have few supply alternatives if the Trump administration were to cut off crude imports from that country. Supplies of the heavy oils preferred by Gulf Coast refiners have been harder to secure in recent months because of cutbacks and production curbs in Western Canada, Mexico and Venezuela. U.S. oil companies that depend on Venezuelan oil have opposed past proposals that would halt imports and did so again this week, said several people close to the talks. Two big refiners, Phillips 66 and PBF Energy, cut their dependence on the South American country last year, according to U.S. Energy Information Administration data.

Germany Should Stick to Nord Stream 2

Germany should finish the Russian-backed Nord Stream 2 gas pipeline despite U.S. opposition and growing domestic concerns, but future energy projects should be coordinated by the European Union, a veteran German diplomat said.Wolfgang Ischinger, chairman of the Munich Security Conference, said the initial “birth defect” of the $11 billion project was the fact that European treaties had allowed the German government to deem the project as purely commercial. In fact, he told reporters, it was clear that such a large project clearly had a political nature, particularly given Russia’s annexation of the Crimea region of Ukraine in 2014 and other actions in recent years. The pipeline, which would carry gas straight to Germany under the Baltic Sea, has been criticized in some quarters because it would deprive Ukraine of lucrative gas transit fees, potentially making Kiev more vulnerable in the future.Germany and Russia have been at odds since Moscow annexed Crimea, but both countries have a common interest in the pipeline, which will double capacity of the current route.Russian gas giant Gazprom is building the project jointly with Western partners Uniper, Wintershall , Engie, OMV and Shell.Ischinger cautioned against abandoning the project as it neared its completion date of late 2019, citing German foreign policy’s focus on consistency and sustainability. “Saying ‘forget it’ now would not be good German foreign policy.”

Driftwood LNG Gets Final Environmental Nod

Tellurian Inc’s proposed Driftwood liquefied natural gas (LNG) project in Louisiana took a major step forward as the U.S. federal energy regulator issued a final environmental report clearing the way for the company to seek a permit to build the export terminal. The company said it now needs an instruction from the Federal Energy Regulatory Commission (FERC) allowing the construction and operation of the 27.6 million tonne per annum (mtpa) liquefaction plant aimed at meeting growing global demand for the supercooled fuel. “Tellurian will then stand ready to make a final investment decision and begin construction in the first half of 2019, with the first LNG expected in 2023,” said Tellurian Chief Executive Meg Gentle in a statement

Schlumberger to Manage Brazil Offshore Rig

Schlumberger signed a contract worth over $200 million with oil major Equinor to manage an offshore rig as part of a drilling program in Brazil’s offshore Campos oil basin, a person familiar with the matter said. The deal would be the first time an oil services company replaces a drilling-rig contractor, the person said, adding pressure to offshore drillers still reeling from an industry-wide contraction. “Schlumberger will provide the full scope of well construction services, drilling management services, and advanced digital technology solutions,” according to a company document seen by Reuters ahead of its scheduled publication. A Schlumberger spokeswoman declined to comment. Equinor did not immediately respond to a request for comment.

Germany Gas Imports Down Month-on-Month

Germany imported 9 percent less natural gas in November 2018 than the same month in 2017 but imports for the first 11 months to November were still 9 percent higher than the same period a year earlier, official data showed. The volume of imports from January to November 2018 was 3.99 million Terajoules (TJ) or 113 billion cubic metres (bcm), according to trade statistics office BAFA, which releases data with a time lag. German importers paid 21.2 billion euros ($24.1 billion) for gas in the year to November, up 23.3 percent on a year earlier and mirroring the rise in oil prices. Traders of gas, power and carbon watch winter gas imports as possible imbalances in supply and demand can drive up prices and volumes in all three markets

Petrobras to Restart Stake Sales for TAG Pipeline

Petroleo Brasileiro SA (Petrobras) will reopen the bidding process for stakes in its Transportadora Associada de Gas (TAG) pipeline unit and Araucaria fertilizer factory, Brazil’s state-controlled oil company said. Petrobras, as the company is known, will also renew efforts to look for partnerships in refining, it said in a securities filing. The oil company had been targeting a sale of a 90 percent stake in TAG, which operates about 4,500 kilometers (2,800 miles) of gas pipelines. The pipeline operator is the largest divestiture in Petrobras’ asset sales program. Prior to the TAG sale being blocked in court, France’s Engie SA had been in talks to purchase the pipeline business and had submitted the highest bid, worth more than $7 billion.

Brazil Petchem Buyout Plan Delayed

Brazil’s recent change of government has further delayed the long-awaited finalization of LyondellBasell Industries NV’s plan to buy Brazilian petrochemical company Braskem SA, three sources with knowledge of the matter said. Netherlands-based LyondellBasell first said it had entered into exclusive talks to acquire control of Braskem from Brazilian conglomerate Odebrecht SA in June. However, the deal’s price depends on a long-term naphtha supply contract with state-controlled Petroleo Brasileiro SA, which also owns shares in Braskem.The current contract with the state-controlled oil company, known as Petrobras, expires in December 2020. The sources, who requested anonymity to discuss private talks, said a draft naphtha supply agreement was reached in December under former Petrobras Chief Executive Officer Ivan Monteiro. But Monteiro declined to ratify the deal when it became clear he would be replaced under the newly elected administration of far-right President Jair Bolsonaro, the people said.Lyondell representatives are now waiting to hear whether there will be any changes to the Petrobras team that was negotiating the contract and for the talks to resume, one of the sources added. Jorge Celestino Ramos, Petrobras’ refining and natural gas director, who had headed the team, was replaced earlier this month by Anelise Lara. Odebrecht and Petrobras expect a premium on the value of their stakes. Braskem’s current market capitalization on the Sao Paulo stock exchange is around $38.5 billion reais ($10 billion)

Indonesia’s state-owned energy company, Pertamina, expects to sign a production sharing contract for the Rokan oil block, after paying a $784 million signature bonus for its bid in December, a company director said. Indonesia’s energy ministry announced in July that Pertamina will take over operation of Rokan, the country’s second-biggest oilfield block, once Chevron’s operating contract there expires in 2021. The Rokan block occupies 6,000 square km (2,300 square miles) on the Indonesian island of Sumatra. It contains 96 oilfields and has been a focus area for Chevron, but a proposal by the U.S. oil major earlier in 2018 for an extension of its Rokan contract beyond 2021 came in far below Pertamina’s offer. Pertamina has formed a subsidiary named Pertamina Hulu Rokan that will take over operations from Chevron Corp. unit Chevron Pacific Indonesia in 2021, Pertamina upstream director Dharmawan Samsu told reporters. Pertamina is in discussions with Chevron on the transition, and hopes to start drilling in Rokan this year, Samsu said. The company has been “directed to seek a partner” for Rokan by the state-owned enterprises ministry, he said without elaborating. Pertamina will open a tender this year to install new pipelines to transport crude from Rokan, as existing pipelines were already 40 years old, and had decided to begin work immediately, Samsu said. “If we wait until 2021 to replace them, building pipelines takes two years or 18 months, so there would be a period where we’d face high risks that those pipes may not function because they need maintenance.”

India’s Reliance Posts Record Profit

India’s Reliance Industries posted record quarterly profit driven by its telecoms, retail and petrochemicals businesses, which offset the impact of a weaker refining margins due to volatile crude prices. The results saw the conglomerate making progress in its drive, announced last year, to make its consumer businesses eventually as large as its core energy operations, which are also struggling with slowing growth in China. “Consumer business now contributes more than 25 percent of the EBITDA (earnings before interest, tax, depreciation and profit),” V Srikanth, joint chief financial officer said, referring to the telecoms and retail businesses.The businesses contributed around 12 percent to EBITDA in 2017. Net profit on a consolidated basis rose to 102.5 billion rupees ($1.44 billion) in October-December, beating analysts’ average estimate of 96.48 billion rupees, according to Refinitiv Eikon data. Consolidated revenue grew 56.4 percent to 1.60 trillion rupees. Gross refining margin (GRM) - the profit earned on each barrel of crude processed - was $8.8 per barrel for the quarter, the lowest for 16 quarters but outperforming the benchmark Singapore complex margin by $4.5 per barrel. Operating profit from refining fell 18 percent year-on-year, despite a 47 percent jump in revenues from that business. Srikanth said that while there would be short-term weakness in refining, the company could cope due to its ability to process a wide variety of crudes and a diversified business portfolio.

OPEC Cuts Offset Headwinds from Slowing Economy

Oil traders seem increasingly convinced OPEC’s prompt action in cutting production will be enough to offset the impact of rising shale production and slowing global growth. Brent futures prices have stabilized around $60 per barrel in recent sessions, well below the peak of over $85 at the start of October, but significantly higher than the trough of less than $50 in late December. More importantly, Brent’s six-month calendar spread has strengthened from a contango (discount) of almost $1.80 per barrel to just 35 cents over the same period. Calendar spreads have been correlated with the changing balance between production and consumption, alternating between contango and backwardation as the market cycles between over- and under-supply. The narrowing discount on futures for early delivery in recent weeks indicates traders expect the market to be less oversupplied than before. Stronger spreads suggest OPEC’s cuts have succeeded in shifting market expectations about the outlook for 2019. Saudi Arabia and its OPEC and non-OPEC allies have implemented substantial reductions in production and exports during December and the first part of January.OPEC crude production declined by 750,000 barrels per day in December, according to industry sources surveyed by the OPEC secretariat.Most of the reduction came from Saudi Arabia (470,000 bpd), but there were also substantial cuts from Iran (160,000 bpd) and Libya (170,000 bpd) as a result of U.S. sanctions and domestic unrest, respectively.

How OPEC Turned Page in 2018

more than a century has passed since the first petroleum seep in Iran’s Masjid Soleiman, the first in the Middle East, and ensuing oil production. Initially people used crude oil for lighting purposes. But today one can see the impact of crude oil and petroleum products in almost every industry. Over this time, researchers have conducted studies on the applications of crude oil

Two key ministerial meetings of the Organization of the Petroleum Exporting Countries convened in 2018were the among the most significant oil developments of last year.In 2018, when US President Donald Trump pulled out of the 2015 nuclear deal with Iran and caused headaches for OPEC through his tweets, Iran managed to make acceptable achievements. Here we briefly review how Iran’s representatives to OPEC managed to make developments play in Iran’s favor.The Declaration of Cooperation, signed by OPEC and non-OPEC allies, took effect in January 2017. It achieved its objectives in March and April the following year. The excess oil stocks, besides the five-year average, in the Organization for Economic Cooperation and Development (OECD) – an indicator of oil market imbalance – dropped to zero (down 326 million barrels), OPEC basket oil price rallied from $52.5 a barrel in January 2017 to $63.17 a barrel in April 2018 and call on OPEC crude oil increased on par with growing global oil demand. The monthly oil market review by the International Energy Agency (IEA) in April 2018 proved the accuracy of all such developments. All these positive developments were outcome of OPEC and non-OPEC oil producers’ commitments in the Declaration of Cooperation signed in December 2016 for cutting their output 1.8 mb/d to shore up oil prices. The agreement came into effect in January 2017, restoring stability to the market. Nonetheless, this successful trend and acquisition of maximum interests by OPEC and volunteer non-OPEC producers was disrupted by President Trump’s meddlesome tweets which were endorsed by some OPEC member states. It was May 8, 2018 when President Trump pulled the US out of the Joint Comprehensive Plan of Action (JCPOA), as is formally known Iran’s historic nuclear deal with six world powers. Consequently, he began re-imposing sanctions lifted earlier under the deal. Trump had said he planned to impose the toughest ever economic sanctions on Iran. Trump’s anti-Iran stance and policy drew condemnations worldwide; however, some OPEC producers, showing support for the US decision and hoping to drive Iran out of the market, supplied extra barrels of oil on the market, which had earlier been removed  and had brought stability to the market under OPEC-non-OPEC agreement. The extra barrels of oil undid all achievements of the 2016 agreement. In the run-up to such events, Iran had notified OPEC Secretariat in advance in words and in deeds. Iran’s Minister of Petroleum Bijan Zangeneh wrote six key letters to the OPEC Secretary General Mohammad Sanusi Barkindo and OPEC rotating President Suhail al-Mazrouei, indicating Iran’s oil market forecasts.Forty-four days after the US pulled out of the JCPOA, the 174th OPEC Conference was held (June 22, 2018) at a time Trump called in his tweets for OPEC oil production hike, while the oil market had reached stability in supply and demand. Trump formulated his demand in the hope of finding replacement to Iran’s oil which he expected to be eliminated due to the oil sanctions he would place back on Iran in August. As President Trump called for OPEC output hike, OPEC Secretariat’s estimates of oil supply and demand changed, contrary to other reliable sources like IEA. OPEC Secretariat presented a strange image of oil supply shortage and growing demand for OPEC crude oil for the third and fourth quarters of the year. The Iranian delegation dismissed the estimates on the ground that the oil market was not undersupplied. Iranian delegates had expressed their opposition during the Economic Commission Board (ECB) meeting in June and in the Joint Technical Meetings (JTC) held earlier. OPEC, later on when oil prices had dropped by $20 a barrel acknowledged that Iran was right in its estimates of oil market stability.One day before OPEC 174th ministerial meeting in Vienna, Minister Zangeneh asked: “Please someone explain me why we should raise production in a balanced market?” The Iranian minister knew quite well that there was no shortage in the oil market and that OPEC Secretariat had presented an unreal image of oil shortage in the market due to increased production by Saudi Arabia, the United Arab Emirates (UAE), Iraq and Kuwait. Zangeneh said firmly that Iran would veto any decision by OPEC member states to raise output by 1 mb/d. Saudi Arabia, UAE and non-OPEC Russia favored oil output hike, but the final outcome was exactly opposite. The OPEC 174th ministerial meeting called on the member states to make their best for full compliance with the production ceiling set earlier.Saudi Arabia and its OPEC allies had started increasing production since June. They had also taken advantage of the OPEC/non-OPEC Joint Ministerial Monitoring Committee (JMMC) to attach legitimacy to their illegal output hike under the pretext of executing OPEC decisions. That is why Iran’s Zangeneh addressed a letter to the OPEC rotating president in August, warning that the JMMC was not authorized to and should not readjust any extra production between OPEC and non-OPEC producers. “OPEC’s attempts to preserve the market stability and realize objectives... are very significant. All OPEC member states are required to follow up on and implement these decisions,” wrote Zangeneh in his letter. The letters addressed to OPEC Secretariat by Iran’s minister showed Tehran’s firmness in preserving its interests by any means at its disposal.Several days prior to the JMMC meeting on September 23, pro-Saudi media started spreading rumors about alleged plans for a 1 mb/d output hike by OPEC and non-OPEC partners. However, the Iranian delegation to OPEC did not stand idle and it expressed Tehran’s position

in clear terms. It was noted that the oil market did not face any supply shortages and that the market was even oversupplied. Iran strongly opposed attempts by some OPEC member states to leave the organization’s share to non-OPEC oil producers. Hossein Kazempour Ardebili Iran’s governor for OPEC said OPEC’s share should not be given to non-OPEC countries. Thanks to the Iranian delegates’ legal interpretation of the decisions made by the OPEC 174th ministerial meeting, which was then endorsed by OPEC Secretariat, it was proven that the JMMC was not competent to readjust the excess production. Following this development, the issue of readjustment of excess production by OPEC and non-OPEC was put off to the December meeting.Increased production by some OPEC member states and Russia at a time the oil market was oversupplied significantly affected the prices. From May to October, OPEC and non-OPEC producers had increased their output by 768,000 b/d and 275,000 b/d, respectively. Saudi Arabia, UAE, Iraq and Russia had respectively lifted their output by 644,000 b/d, 384,000 b/d, 190,000 b/d and 458,000 b/d over the same period. Totally, during months following June, Saudi Arabia, UAE, Iraq and Russia had violated their quota obligations. For instance, in October OPEC plus Russia produced 1.8 mb/d of oil above their quota, 1.4 mb/d of which came from the six JMMC members (Saudi Arabia, UAE, Algeria, Kuwait, Russia and Oman). The JMMC members were supposed to monitor the proper implementation of the Declaration of Cooperation, but they themselves had violated the terms of the agreement!The increased oil production was not limited to Saudi Arabia, UAE, Iraq and Russia. From May to October, US crude oil production increased 1 mb/d as global prices grew. The increased oil output along with lower demand for oil due to the US-China trade war and the dollar appreciation caused OECD stocks to increase about 56 mb/d, well beyond its five-year average levels. That was a sign of new disturbance in the oil market. It would be important to keep in mind that illegal production by JMMC states was a factor impacting the oil market balance. That is while during the 175th ministerial meeting, the same nations were making every effort to engage all signatories to the Declaration of Cooperation in oil production decline. That is why Kazempour Ardebili Iran’s governor for OPEC said the nations that destabilized the market had to restore stability to it. Due to the new conditions and inaccurate estimates by OPEC Secretariat of oil supply and demand for the third and the fourth quarters of 2018, as well as increased oil supply by OPEC and Russia from May, the oil price slumped. It is noteworthy that ever since the implementation of OPEC-non-OPEC agreement in January 2017 up to the end of September 2018, the average price of OPEC Reference Basket (ORB) increased about $25 per barrel to reach $77. That was while from the first week of October until the closing week of November 2018, the ORB price reached $65, down $18 a barrel. That means about 72% of the price growth caused by the OPEC-non-OPEC agreement over 21 months was lost in less than two months. Of course, one should keep in mind that the US increased oil production over that period due to higher oil prices reduced call on OPEC, thereby reducing the OPEC market share. Even worse was that OECD five-year stocks exceeded the five-year average. Should OPEC continue with its current policy, OECD oil stocks would have increased about 400 million barrels by the end of 2019. Furthermore, oil prices will keep falling and OPECmarket share will drop by 900,000 b/d to reach 31.3 mb/d. The oil market was destabilized one month before the OPEC 175th ministerial meeting due to JMMC’s lack of prudence. Such conditions prompted Minister Zangeneh to write a strongly worded letter to OPEC President al-Mazrouei, demanding that the JMMC activities be stopped. Analysts say Zangeneh’s letter firmly called into question the very foundations of this committee. In his letter, Zangeneh said: “To our dismay we witnessed that some members attempted to redistribute over-conformity in production adjustment level among themselves, and made attempts to hand over OPEC countries’ over-conformity to non-OPEC countries. I ran participated at the 18th JTC without any voting right, and [witnessed] that some members attempted to redistribute over-conformity in production adjustment level among themselves, and made attempts to hand over OPEC countries’ over-conformity to non-OPEC countries. This very procedure is totally in contradiction with the monitoring task of both JMMC and JTC, and indicates misinterpretation by the JMMC over its mandate, as well as disregarding the decision of the 174th Meeting of the OPEC Conference. Given the performance of the JMMC and JTC over recent months, we have regrettably noticed that these two committees have deviated from their initial objectives for which they were established, and some OPEC members of these two committees have clearly taken side with the US in imposing its unilateral and unlawful sanctions against Islamic Republic of Iran, and are turning these two committees into political tools in support of the US policies against Islamic Republic of Iran.” Amid such conditions, OPEC and non-OPEC partners returned to the negotiating table.The 15 OPEC member states stepped into the 175th ministerial meeting against the backdrop of a $30 fall in oil prices over three months. However, Iran’s position was crystal clear from the very beginning: “As long as Iran is under sanctions it will not join any agreement”. Iran had regularly favored OPEC production cut, but it refused to cut its own output during the November meeting. However, many sought to engage Iran in this agreement. For instance, it was suggested that the reference for Iran’s oil production cut, unlike fellow OPEC states, not be October 2018 and the April-May average be set as the basis. Or it was suggested that the basis for Iran’s oil production decline be set the maximum output after the OPEC-non-OPEC Declaration of Cooperation. Iran was even asked to symbolically join the production cut agreement. In a bid ratchet up pressure on Iran, it was said that since Iran and Russia were equally facing sanctions Russia would not join an agreement from which Iran would be exempted. Russia’s Minister of Energy Alexander Novak was totally unaware of such pressure and he declined to confirm such news after his meeting with Zangeneh ended inconclusively. The definite outcome was deadlock.The tactic chosen by Saudi Arabia and UAE for engaging Iran in a production cut agreement did not come to fruition on the first day of OPEC meeting which was extended into a second day. The ECB had suggested that OPEC cut its output by either 1.3 mb/d or 2.1 mb/d. In the end, OPEC and non-OPEC participating countries in the DoC agreed on 1.2 mb/d cut. OPEC had to account for 800,000 b/d while Iran, Venezuela and Libya were granted exemption. That constituted a big victory for Iran. Iran’s exemption from production cut meant maintaining its December 2016 production ceiling (3.797 mb/d) and not losing its oil market share.OPEC’s tough year in 2018 ended with some OPEC states violating the decisions of the Organization and their alignment with the US to harm fellow members. Two OPEC members teamed up with US to strike a heavy blow at minor producers and inflicted heavy financial harms on them. Under such tough conditions, Iran kept its flag flying high and the Iranian delegation struggled for maximum benefits for the country, while it managed to keep OPEC, comprising Third World nations, afloat. What conditions Iran would have had the country not opposed the 1mb/d output cut suggested at OPEC in June? Undoubtedly, Iran is facing many buts and ifs in the current year. Extension of US sanctions waivers to the traditional buyers of Iran’s crude oil is one of those challenges. However, Iran is expected to go through a new critical period as it did during the second half of last year. The year 2019 started with OPEC basket price at about $52 a barrel.

BARKINDO:There Can NeverBe another OPEC

“There can never be another OPEC; our Organization is unique,” Barkindo told Shana, the official news agency of the Iranian Ministry of Petroleum, on the sidelines of the 175th ministerial meeting of the Organization of the Petroleum Exporting Countries.The full text of the interview is as follows:

During its 58-year-old life, OPEC has gone through many ups and downs; it is now in one of its historic downturns. What steps should the organization take to restore its glorious days?Iran was one of the OPEC Founding Members back at the historic ‘Baghdad Conference’ in September 1960. The five Founding Members representing their oil-producing nations joined together around the premise of cooperation, with a commitment to safeguard their legitimate national interests and to ensure order and stability in the international oil market. When OPEC was set up in 1960, there were some who predicted that the Organization would not last long. Yet, little by little, OPEC began to make its mark. In this light, the formation of OPEC was a pioneering act, an act that demonstrated that even developing countries had rights. That initial small group of developing countries has now evolved into a much larger group that is respected far and wide as an established part of the international energy community and has overcome many challenges, and it continues to prosper.There is widespread recognition that what OPEC, and its non-OPEC partners, put together in December 2016, and which is now known as the ‘Declaration of Cooperation’, has benefitted us all. I think it is important to picture what our Member Countries, and the oil industry, would have to suffer if we had not gathered together to help restore balance and stability to the market.All our Member Countries agreed to be part of the ‘Declaration of Cooperation’. The ‘Declaration’ has had a transformational impact on the global oil industry. Moreover, the unanimous decisions taken at the 175th Meeting of the OPEC Conference and the 5th Meeting of the OPEC and non-OPEC Ministerial Meeting underscore the commitment of all our Member Countries to the Organization. The last two years have been characterized by successes for the Organization and Iran has been an important part of this. The change we have seen over the last two years or so is like night and day. I also believe that our best days are still ahead. We continue to evolve; we continue to listen to the viewpoints of all our Member Countries; and we continue to strive for balance and stability in the market, in the interests of both producers and consumers.A drop of about $20 in the price of oil over the past six months makes one suspect that the Secretariat of the organization has miscalculated the supply and demand (market fundamentals) for the oil market. Is this true?The OPEC Secretariat has management and analysts from all our Member Countries, including Iran. They work together; discuss together; and make decisions together. This is how the OPEC Secretariat comes up with figures in its outlooks. I think we can all admit that forecasting is not an exact science. Our forecasts are made on the best available information we have at that time. We will continue to monitor market fundamentals on a daily basis, and provide all of our Member Countries with impartial, objective and reasoned projections. It has been evident over the last six months or so we have seen a number of shifts in market sentiment. Back in October, there was talk in the market of there not being enough supply in the market, while only a month later in November the focus was on there being too much supply.It should also be noted that the expected surge in non-OPEC supply in 2019 has taken all forecasting agencies by surprise, not only OPEC. This reflects the fact that in the long history of oil, new factors and unexpected developments emerge. In your opinion, what is the main reason for the fall in world crude oil prices since June?It is evident that a significant amount of the swing in market sentiment since June has been driven by non-fundamental factors that are beyond the oil industry’s control. They can have compound effects and are a major source of uncertainty. On the fundamentals side; however, we also recognize that we have started to face some more headwinds. The broad consensus on the prospects for 2019 suggests higher supply growth than global requirements, taking into account prevailing uncertainties. In addition, the global economic growth outlook for 2019 is slightly lower than that of 2018, which combined with the implications of macroeconomic policies and associated uncertainties could potentially have ramifications for global oil demand next year.These issues were behind the OPEC Conference deciding on December 7 to adjust OPEC overall production by 0.8 mb/d from October 2018 levels, effective as of January 2019, for an initial period of six months. This was then complemented by non-OPEC participants in the ‘Declaration of Cooperation’ agreeing to voluntarily adjust by 0.4 mb/d from October 2018 levels, over the same period.Has any share of OPEC Members in the oil market been offered to non-OPEC producers and, if so, what has been the role of the OPEC and non-OPEC output production adjustment agreement in creating this situation?At the OPEC Secretariat, and within the entire Organization, we believe in transparency and fairness. All Member Countries have an equal say, and our decisions are taken by consensus. We fully respect all of our Member Countries. Many experts believe Russia is the real winner of the 2016 OPEC-non-OPEC output cut deal, because its share in the oil market is on the rise. What is your opinion about this?I truly believe we were all winners from the OPEC Secretary General Mohammad Sanusi Barkindo has highlighted the uniqueness of the oil producer organization, dismissing the idea of emergence of any other such organization.It should also be noted that the expected surge in non-OPEC supply in 2019 has taken all forecasting agencies by surprise, not only OPEC. This reflects the fact that in the long history of oil, new factors and unexpected developments emerg

decisions taken at the end of 2016, and through the historic ‘Declaration of Cooperation’. We should never underestimate how severe and potentially ruinous the last downturn was in 2015 and 2016. It impacted all of our Member Countries, many of them severely.Back in December 2016, we all agreed that something had to be done to stem the hemorrhaging. Globally, nearly one trillion dollars in industry investments were frozen or discontinued, many hundreds of thousands of jobs lost and a huge number of companies in filing for bankruptcy. It was one of the most calamitous downturns in the long history of oil. We all want a sustainable oil market stability. This has always been the long-term commitment of OPEC, and it has been the focus of the ‘Declaration of Cooperation’. This was evidently on view at the 175th Meeting of the OPEC Ministerial Conference and the 5th OPEC and non-OPEC Ministerial Meeting. Thus, it is vital we retain OPEC’s cohesiveness; and continue with our cooperation with non-OPEC participants in the ‘Declaration of Cooperation’. What have been the achievements of OPEC-non-OPEC agreement for OPEC members since 2016?In terms of OPEC, there is no doubt that it has caused a significant change in industry-wide and public perceptions of OPEC. The Organization has ably demonstrated its credentials as a body committed to international cooperation, working with other producers, honoring its commitments and promoting mutual respect among all nations. Bringing together so many sovereign producing nations is unparalleled in the history of the oil industry. Moreover, the importance of the ‘Declaration’ has also received backing from other producers, as well as from consumers. It has also had a positive impact on the global economy, and trade worldwide has increased, helped by the stimulus provided through the Declaration. It has reintroduced a long-absent element of stability to the market – there is now far more optimism and confidence in our industry, compared to two years ago. Consequently, it facilitated the upsurge in the global economic recovery seen in 2017-18.Yes, we do face some headwinds as we look to 2019, but we believe given the decisions taken by OPEC and its non-OPEC partners at the start of December 2018 we can look to maintain balance and stability in the market; and accomplish far more through a constructive, continuous and fully committed approach to helping achieve a sustainable oil market stability.What structure or methods do you consider for continuing OPEC and non-OPEC cooperation?How we move forward with the ‘Declaration of Cooperation’ is an issue that continues to be addressed and discussed. In this regard, every country in the ‘Declaration of Cooperation’ has a voice; every country will be able to have a say in how we move forward. This issue was noted in the press communique of the 175th OPEC Ministerial Conference, with all Member Countries pledging to further strengthen its cooperation with non-OPEC participants within a framework under the draft Charter of Cooperation between Oil Producing Countries, which was endorsed in principle and which is to be finalized and ratified by participating countries.Although, the non-political nature of OPEC’s decisions has been emphasized repeatedly times and again, the behavior of some Members of this Organization regarding Iran’s sanctions contradicts this. What have you done for instilling or restoring the non-political management of OPEC since the beginning of your post as OPEC Secretary General, and have you succeeded in this area?When I assumed the position of OPEC Secretary General back in August 2016, my focus was on being impartial; an arbitrator; a bridge between all of our Member Countries. I have looked to visit all our Member Countries, including Iran. I listen to the views of all our Member Countries. I should also reiterate that every Member Country has an equal say in the Organization. All countries have one vote. This is how the Founders correctly set it up back in 1960, and this is how it continues today. Of course, at times we have differences of opinion. This is natural for any international organization. But we always look for a consensus; a pathway forward. This was clearly evident at the 175th OPEC Ministerial Conference in early December, when a unanimous decision was reached.Regarding the current circumstances, serious doubts have been raised about OPEC’s survival and effectiveness. To make things worse, there is even talking about creation of a new organization as an alternative to OPEC. What exactly are the threats to the future of this organization?I firmly believe that OPEC’s best days remain ahead of it. We are at our best when we work together; are strong; and all look to pull in the same direction. Again, we may not always agree, but history has shown that it is in all our mutual interests when we work towards helping achieve balance and stability in the oil market.Let me also stress that there can never be another OPEC; our Organization is unique. I also firmly believe that Iran will remain at the forefront of OPEC’s future, just as it has been central to its long history. It is vital that as an Organization, we also look beyond the short-term. This is in all of our interests. We must work together to ensure that oil remains a fuel of choice for the foreseeable future. There are some who believe that oil and gas should be consigned to the past, particularly given the issue of climate change. But this is not borne out in any reputable energy outlook. In OPEC’s World Oil Outlook 2018 (WOO), oil and gas still make up over 50% of the global energy mix in 2040. This underscores that we need to continually highlight that all energies are required in the future. It is not about a race to renewables alone; it is about a race to lower greenhouse gas emissions. For oil and gas, we need to recognize that the environmental challenge is not oil and gas themselves. It is the emissions that come from burning them. Together, we need to continue to look at ways and means to lighten the environmental footprint of oil. I am a believer that solutions can be found in technologies that reduce and ultimately eliminate these emissions.Iran, since the 174th OPEC Summit, has written several letters to you regarding the incorrect interpretation of the decisions of the OPEC Conference and that JMMC was not mandated to grant production permission to anyone beyond the 100% commitment endorsed by the OPEC Secretariat. As OPEC Secretary General, what have you done in this regard?I have worked with and have known HE Bijan Namdar Zanganeh, Iran’s Minister of Petroleum and Hossein Kazempour Ardebili, Iran’s Governor for OPEC for many years. I have a deep and full respect for their professionalism, for defending their country’s interests, and also for their continued support of OPEC. As I have already said, I look to reach out to all our Member Countries. To be the bridge that all our Member Countries can travel across. I should also stress that the OPEC Conference remains the highest level of decision making within our Organization. This is embedded in the OPEC Statute. This was why it was the OPEC Conference that unanimously decided on December 7 to adjust OPEC overall production by 0.8 mb/d from October 2018 levels, effective as of January 2019, for an initial period of six months.

Haftkel, 2nd Petro-City in Mideast

To the southeast of Masjid Soleiman (MIS), which is the birthplace of Middle East petroleum industry, is located the Haftkel oil field. Discovered two decades after MIS, Haftkel grew into a major producer of oil in Iran in a very short period of time. Haftkel was named the second oil-rich city in the Middle East, just behind MIS

Even before the discovery of oil, Haftkel and its surroundings were in the spotlight as one of the most attractive nomadic zones inhabited by the Qashqai and Bakhtiari tribes. Green plains in Haftkel are covered with captivating flowers in both spring and winter. Zard River flows along Haftkel whose surrounding paddy fields are still active. Water streams in seasonal rivers keep watermills running in most time of the year. The remnants of rocky water dams built with lime concrete bear signs of Iranians’ longtime knowledge of watershed management.The Anglo-Persian Oil Company (APOC) did not limit its exploration activities to MIS mines; rather it pushed ahead with exploration and search in Qeshm Island, Dehloran and several other spots including Haftkel that is located 35 miles southeast of MIS. APOC discovered oil in Haftkel in 1928, which included significant natural reservoirs.A remarkable point with Haftkel is that technically speaking; the formation and oil reservoir of Haftkel is named Asmari, which also refers to a tall mountain located on the road connecting MIS to Haftkel. Asmari formation is among the largest oil humps in Iran. The reason for choosing this name is the category of rock found in this mountain in Iran for the first time. Following the installation of industrial and operational equipment, Haftkel became the largest producer of oil in Iran for years. Every year, millions of tonnes of oil was being extracted from the 25 oil wells drilled in Haftkel.Since the discovery of oil in Haftkel in 1928 until 1951, more than 130 million tonnes of oil was extracted from that area. After the discovery of an oil field in Aghajari, Haftkel was ranked the third among Iranian oil fields. The decline in ranking was indicative of pressure fall-off in the oil reservoir of Haftkel. As oil exploration continued in Iran, Haftkel saw its ranking drop further. In 1967, Haftkel was ranked the sixth behind Aghajari, Gachsaran, Maroun, Ahvaz and Karanj. As oil production decline in Hafkal, the city lost its happiness and joy further. That led to mass migration. Shortly after, Haftkel was like an abandoned city. Gas injection into Haftkel started in 1976 in order to keep production rate afloat. The gas was supplied from the nearby Naft Sefid field. Despite such operations, the oil output from Haftkel did not improve sufficiently. In the 1979 rankings, the Haftkel production was ranked the 20th among a total of 23 oil production areas all across Iran. Today production from Haftkel is continuing thanks to gas injection. Haftkel is now run by MIS Oil and Gas Production Company. Home to hospitable residents, Haftkel is an area where every visitor can see the history of petroleum industry. Even if oil reservoirs run dry there, Haftkel can become a museum of petroleum industry equipment and history, which would generate revenues through tourism.Abadan, Petro-IslandAbadan is noted for having hosted the first oil refinery in the Middle East region. Abadan is still among the important cities of Khuzestan Province. It is surrounded by Khorramshahr and Karoun River to the north, Bahmanshir River and marshlands to the east, and Arvandroud River to the south and west. Abadan is located at an altitude of five meters with hot and humid weather conditions. Abadan is among Iran’s border cities. The railway connecting Abadan to the capital Tehran is 1,606 kilometers long. There is historical evidence of habitable land in Abadan during the first Islamic era. The name of Abadan has been cited in a number of travelogues. Ptolemy is quoted as having written that Abadan was a place where people combated pirates. The travelogues belonging to explorers like Yaqut Hamavi, Estakhri, Moqaddasi, Ibn Hougal and Ibn Batouta have cited the name of Abadan.Nasser Khosrow has also crossed Abadan in 438 AH. “We arrived in Abadan and people stepped out of ships. Abadan is located near the sea. It is like an island where a river is divided. It is impossible to reach Abadan without going through water. The southern part of Abadan is bound by sea,” writes Nasser Khosrow in his travelogue. Until 1909 when oil installations were mounted in Abadan, there was no sign of civilization but there were some palm trees and tents used mainly by Arab Bedouins. The name of Abadan, which had an Arabic spelling, got a Persian spelling in 1935. In Iran’s administrative division and documents, it has since had the Persian spelling.When petroleum industry came to Iran, Abadan was ruled by Sheikh Khazal, the governor of Mohamareh, today known as Khorramshahr. The sheikh was fighting for autonomy and he had embarked on his independence campaign under Nasser ad-Din Shah Qajar. Throughout 1903-1909, Sheikh Khazal had communicated with British diplomats stationed in the Persian Gulf and Bushehr. Negotiations started with Sheikh Khazal on April 23, 1909. The talks were held between Haj Raeis, the senior advisor to Sheikh Khazal, and Reynolds, the top representative of William Knox D’Arcy and APOC. In July that year, an agreement was reached between APOC and Sheikh Khazal for the construction a refinery in Abadan. An engineer named Davidson was the first one to head APOC in Abadan. When he arrived in Abadan, he hardly found even stones. In his first letter to his family, Davidson described Abadan as the land of sun and flower. Builders, carpenters as well as a few technicians working under the leadership of Indians were the only Iranian technical staff. Welfare facilities were very few there. But gradually Abadan turned into Iran’s most industrialized city and following the construction of Abadan Refinery, won international fame

Gachsaran, Naft Omidiyeh Win Water Polo Titles

Water polo emerged in Britain in the 1870s. Its first rules were developed in Scotland and England. The British capital, London, hosted the first international water polo games in 1890 with Scotland becoming the champion. Water polo was the first group sports to enter Olympic matches in 1900. Britain was the first winner of Olympics water polo championship. Iran introduced water polo in 1939 by establishing the Swimming Committee which remained in effect until 1946. After that Iran’s Swimming Federation was established. From the very beginning the federation had three separate committees dealing with swimming, diving and water polo.Later on, water polo put on an official form. Iran’s water polo team competed in the Asian games, which were held in Bangkok in 1970, and finished fourth.Compared with many other sports disciplines in Iran, the country’s water polo league has an old history. The first round of water polo league in Iran was held in 1983 amid the imposed war on Iran. Since then, water polo matches have been regularly held. Throughout all these years, many well-known teams found their way into Iran’s water polo premier league. Teams affiliated with Iran’s Petroleum Ministry were among active teams at water polo league. Petrochimi Mahshahr, Petrochimi Bandar Imam, Palayesh Naft Abadan, Naft Ahvaz, Naft Omidiyeh, Naft o Gas Gachsaran, and Petrochimi Tehran are among top Petroleum Ministry affiliated clubs at the water polo league. Many of such teams have won titles and even won honors in Asia. Since early 2000s, Naft Omidiyeh and Naft o Gas Gachsaran have been among top candidates for championship title. The Gachsaran team was the first to kick off Iran’s entry into the Asian water polo championship games.Naft o Gas Gachsaran water polo has long been a popular and widely supported sport discipline in Gachsaran. It finished runner-up in Iran’s water polo league in 2007 and 2008 to find its way into Asian matches in Kuwait.In 2008, the Gachsaran water polo team witnessed a significant jump. The then sports managers moved to attract players from local players, as well as those who were national and international players. After that, they managed to win the super league and playoff matches cup titles in a pro league championship season before having their name recorded as the most rewarded water polo team in Iran and take part in the Asian clubs cup matches 

Signing European Poloists

Water polo began officially in Naft o Gas Gachsaran in the early 1970s with the participation of children of petroleum industry staff. After official and club games emerged in Iran, water polo made progress in Gachsaran. One could say that Naft o Gas Gachsaran has one of the deepest-rooted water polo teams in Iran. This team has been regularly present at the professional water polo league. It has recorded championship titles in the pro league; playoff matches cup, as well as super league. Besides acquiring championship titles in the league and official matches, the Gachsaran club has been one of the best teams in identifying and breeding talents to join the national team. Members of Gachsaran Naft o Gas Club have also been instrumental in signing contracts with international players and trainers. Among them are Slovakian Roman Poláčik, who was titled the best player of Europe and the world, and served as Iran’s water polo team coach. Furthermore, the head coach of young water polo players of Hungary was a key figure in the Gachsaran water polo team. The most significant result of their presence in the Gachsaran team was to train qualified and skilled trainers and players at different levels. Owing to their training of technical issues related to water polo in the world, they managed to create interest in a large number of Iranians, most of which were introduced as national players

Asia Runner-up Title

The Gachsaran Naft o Gas Club has been present in the Asian clubs championship cup twice. The Gachsaran club won the pro league title in 2006 to reserve a place in the Asian clubs matches in Kuwait. Between 2008 and 2010, it won a championship and a runner-up title. They went into Asian matches once more, recording a runner-up and a third-place title. The Gachsaran team finished runner-up in 2008 and claimed the top spot in 2009 in the water polo pro league championship matches. In the 2010s, the Gachsaran team failed to exceed the third place. A third-place, a fourth-place and a fifth-place title have been among the best results they have recorded in the past seven years. As the Gachsaran team went on the decline, Naft Omidiyeh emerged as a qualified team to win titles in the pro league and Asia. Established in 1986, the Naft Omidiyeh water polo team claimed the top spot in the 1999 first league matches hosted by Arak in central Iran. With a 19-year background in the pro league championship, this team has so far finished champion once, runner-up four times and third-place twice. Furthermore, it won a championship title in the playoff matches cup among national clubs. In 2010, when the 21st round of this league was held, Foolad Mahan Sepahan claimed the champion title, while Naft Omidiyeh came second. The following year, Naft Omidiyeh finished runners-up again behind Foolad Mahan Sepahan. But in 2013, Naft Omidiyeh became champion after overpowering Shahbazi team of Zanjan in the 22nd round of pro league championship matches. The Gachsaran Naft o Gas water polo came in the fourth place this time. In 2014, during the 24th round of water polo matches, Naft Omidiyeh finished third. At the Asian level, Naft Omidiyeh won one championship title, two second-place titles among Asian clubs when matches were held in Kuwait. In the matches hosted by Saudi Arabia, Naft Omidiyeh came third among Asian teams. It also recorded a fourth-place title throughout its activity. Ever since its establishment up to now, the Naft Omidiyeh water polo team has introduced more than 23 players of various ages to Iran’s national team. In the new season of Iran’s water polo pro league, which is the 28th round, the Naft Omidiyeh team is being led by Reza Jafari, while the Naft o Gas Gachsaran team is led by Arash Hatami. In the current round of the Iranian clubs pro league, the Gachsaran and Omidiyeh teams are drawn in the same group with Fallah and Saipa of Tehran. A review of the current rankings of these teams shows that Naft Omidiyeh is once more likely to win the championship titl

Shahroud, Small Continent

6160Shahroud in a major city in the northern province of Semnan. It is known by some ancient names like Hanchareh and Shakhareh. Shahroud has humid weather in the north and arid weather in the south, which makes climate conditions favorable in the city.There are a variety of animal species in Shahroud

Cloud Jungle

The Cloud Jungle is among the oldest and the most intact woods in Iran. For most of the year, it is covered with masses of cloud. That is why it is known as "Jangal-e Abr" in Persian, literally meaning the Jungle of Cloud. In the jungle, one may think the sky and earth are meeting. Walking through this jungle gives a feeling of riding on the clouds. The jungle is home to certain live organisms dating from 3.3 million years. There are also rare fauna and flora species giving a beautiful landscape of this jungle.

Khartouran National Park

Khartouran National Park is better known as Iran’s Africa zone. It is the second most important protected zone in Iran, behind Naybandan wildlife shelter in the desert city of Tabas. The outstanding features of this park include special flora, diverse ecosystem and rare fauna species.

Shah Abbasid Caravanserais

The Shah Abbasid Caravanserais are located 110 kilometers east of Shahroud, on the road linking Sabzevar to Shahroud. There are three caravanserais interconnected together. Two of them date from the Qajar dynasty and one from Shah Abbas I. The caravanserais house water reservoirs, bathroom and post office.