Iran, Now Exporter of Petroleum Products

After the commissioning of the most technologically sophisticated refinery in the Middle East, Iran has become a net exporter of refined petroleum products.

The inauguration of the Bandar Abbas Gas Condensate Refinery, known generally as the Persian Gulf Star, has brought Iran's refining capacity to 2.1 mb/d, thereby raising national gasoline production to 100 ml/d.

Besides transforming Iran into a regional hub of petroleum products, the refiner also laid bare Iran's capability in manufacturing; more than 70% of the equipment used in the facility was made in Iran while commissioning of the project was handled at 95% by Iranian technicians.

An important point which came to the limelight against the backdrop of US sanctions targeting Iran's petroleum industry was that gone is the era of saber rattling. In a world headed towards convergence, cooperation and empathy on a daily basis, it would be impossible to reach objectives by imposing sanctions and resorting to military and economic power to stonewall the development and progress of independent nations.

Iranian policymakers and managers of the petroleum industry have made it clear that the doors of the country are open to all industrialists and capitalists. Islamic Republic of Iran welcomes any partnership with countries and companies based on mutual respect and interests. For Iran, global peace is tied to regional and global cooperation. Nonetheless, Iran will never step back in the face of excessive and illegitimate demands by policymakers and is not afraid of the threat of sanctions.

The commissioning of the Persian Gulf Star refinery highlighted Iran's firm determination to defeat sanctions. Iran remains committed to cooperation with the entire globe in light of political and economic independence and freedom.

Refining Projects Come on-Stream
Iran Gasoil Output Hits President Hassan Rouhani inaugurated, on February 18, the third
phase of the Bandar Abbas Gas Condensate Refinery as well as a
gasoline/gasoil quality improvement plant at the Bandar Abbas Oil
President Rouhani said the startup of the Persian Gulf
Star refinery, as the largest condensate treatment
facility in the world, meant self-belief, self-reliance,
resisting the enemy, overpowering sanctions, selfconfidence
and self-sufficiency. Iran Petroleum refinery The Bandar Abbascondensate refinery isknown as the PersianGulf Star refinery, derivedfrom the name of the PersianGulf Star Oil Company thathas developed the treatmentfacility.
The startup of the thirdphase of the Persian Gulf Starrefinery would bring Euro-5
grade gasoline production to45 ml/d, accounting for 50% ofIran’s gasoline needs. The firstand the second phase of thePersian Gulf Star refinery were
launched in 2017 and 2018,respectively.The Bandar Abbas oil refinery
gasoline/gasoil projectwould from now onwards beproducing 12 ml/d of Euro-5
gasoline and 15 ml/d of Euro-4gasoil.Self-Sufficiency in GasolinePresident Rouhani said thestartup of the Persian GulfStar refinery, as the largest
condensate treatment facilityin the world, meant selfbelief,self-reliance, resisting
the enemy, overpoweringsanctions, self-confidence andself-sufficiency.
He boasted that his first andsecond administrations hadmade Iran self-sufficient in
gasoline, gasoil, gas, and wheatand sugar production.Rouhani pointed to the
intensification of US sanctionson Iran, which he compared toan economic war.
He said: “Economic war istougher than military war,because in an economic battle,oil selling arrangements,transport, customer attraction,financial transactions and manyother such things are not seen.”He added that during theimposed war (1980-1988), oilflow from the Kharg terminalwas halted for three weeks, but
“we made efforts to the extentthat we were exporting oilduring the war.”
Oil Refining CapacityZangeneh said Iran’s gasolineproduction had recorded a
historic jump over the past fiveyears.“In 2012, Iran’s gasoline
production capacity was 52ml/d,” he said. “In February2019, it nearly doubled to 101ml/d and will keep rising toexceed 105 ml/d by” the endof the current calendar year inlate March, he added.Zangeneh said the capacityof feedstock intake at oil
refineries was about 1.7 mb/d,which has now reached 2.1mb/d due to the startup of thethird phase of the Persian GulfStar refinery.He touched on US oil sanctions
on Iran, saying: “Unlike theprevious decades when Iran’sgasoline imports were targetedby sanctions, we are no longerimporting gasoline. Ratherwe have become exporter ofgasoline and the Americanscannot say anything on thisissue.”
Zangeneh said Iran was nowable to export gasoline. “Butsince we intend to increase ourstorage capacity we will notexport gasoline for the time
being.”Products Quality Upgraden the quality of petroleumproducts supplied by Iranianrefineries, the minister said: “In2012, we were not producing
Euro-grade gasoline, but todayRefinery. The projects, whose inauguration was attended by Iran’s
Minister of Petroleum Bijan Zangeneh, would bring Iran’s gasolineproduction to 105 ml/d, thereby putting an end to Iran’s gasoline
imports. Minister Zangeneh noted that Iran could now export gasoline,
but it is our preference to fill our storage tanks.

thanks to the implementation of quality upgrade projects at Arak, Isfahan, Bandar Abbas,Persian Gulf Star and Tabrizrefineries, 76 ml/d of Euro-4and Euro-5 gasoline is beingproduced.”Zangeneh said: “The Eurogradegasoil production
capacity in the country was6 ml/d in 2012, which hasseptupled to 44 ml/d now.”
He added: “Implementationof refining projects whichmainly pertain to upgrading thequality of petroleum productsand environmental projects,which were mainly financedby the Europeans, have beenhalted due to the unlawful US
pressure. That will harm theenvironment on a large scale.”Zangeneh said basic agreementhad been reached for therefining of 2 mb/d of crude oil
and allocation of feedstock tothe private sector for new oiland condensate refineries.“600,000 b/d will be for therefineries whose processing
capacity is below 60,000 b/d,”he added.The minister said the
giant offshore South Parsgas field had two refiningand petrochemical chains,
adding that the Persian GulfStar refinery was part of therefining chain of the South Parsdevelopment project.Phase 3 Operational in One
YearAli-Reza Sadeq-Abadi, CEO ofNational Iranian Oil Refining
and Distribution Company(NIORDC), said bymerely reliance on
domestic resourcesPhase III of the PersianGulf Star refinery
had becomeoperational inone year.“One of ourmain
challenges after the startup ofPhase 1 of the Persian Gulf Starrefinery before entering Phase2 was financing. In the shortterm,we managed to provide
the necessary finance throughselling sour naphtha, dippinginto the National DevelopmentFund of Iran (NDFI) andreceiving facilities from Bank
Mellat,” he added.Sadeq-Abadi said Iran’sgasoline production averaged
97 ml/d last summer, addingthat Phase 2 of the Persian
Gulf Star refinery becameoperational to add 30ml/d to Iran’s gasoline
distribution network.Phase 3 was started upshortly after.
“With the startup of Phase 3 of the Persian Gulf Star refinery,in addition to a significant jump in gasoline, gasoil and liquefied petroleum gas
(LPG) production,we supplied the necessaryfeedstock to petrochemical
plants and helpedpetrochemical plants bring inmore hard currency,” he said.
He expressed hope that Phase3 of the refinery would increasethe refining capacity of thetreatment facility.Separately, addressingreporters, Sadeq-Abadi
said: “Currently, 76 ml/d ofEuro-grade gasoline is beingproduced on average in thecountry: 33 ml/d is supplied bythe Persian Gulf Star refinery,
12 ml/d by the Bandar Abbasoil refinery, 17 ml/d by theImam Khomeini refinery, 11ml/d by the Isfahan refineryand 3 ml/d by the Tabriz
refinery.”He added: “The average Eurogradegasoil production in the
country stands at 44 ml/d, 15ml/d of which is supplied bythe Bandar Abbas oil refinery.”Sadeq-Abadi said: “With theoperationof the product quality upgrade
project at the Bandar Abbasoil refinery, 12 ml/d of Euro-5gasoline and 15 ml/d of Euro-4 gasoil will be produced atthis refinery. Distribution ofthese products has started inthe provinces of Hormuzgan,Bushehr, Sistan Balouchestan,
Kerman and Fars.”He added that the Euro-gradegasoil supplied by the Persian
Gulf Star refinery was beingdistributed in the commercialports of Bushehr, Chabahar andBandar Abbas.Sadeq-Abadi said the andarAbbas oil refinery was a
green and environmentallyfriendly facility, adding that theinvestment made in the newproject at this treatment facilitywould return in four to fiveyears.
$ 800mn Annual Value-AddedSadeq-Abadi said the annualvalue-added generated fromthe Persian Gulf Star refinerywas $800 million, adding thatthe facility would guaranteeIran’s energy security.He reiterated Zangeneh’sremarks that Iran would
stop importing gasoline.“Until last October Iran

was a gasoline importer,but with the startup of thePersian Gulf Star refinery we
are not importing gasolinefor the first time,” he said,adding that other factors like
gasoline rationing, expansionof public transportation fleet,diversification of fuel mix andCNG industry development hadcontributed to efforts madeaimed at zeroing Iran’s gasolineimports.Sadeq-Abadi said Iran’sgasoline consumption averaged87 ml/d in the current calendaryear, adding that the figure evenhit 103 ml/d recently. “Thesefigures indicate the acceptabledistance between production
and consumption, resulting insustainable gasoline productionand storage in the country.”500,000 b/d CondensateProcessingSadeq-Abadi said the
Persian Gulf Star refinerywould provide feedstock forpetrochemical plants.
“With the improvement oftechnology in the operatingphases of the Persian Gulf Starrefinery and the startup ofthe fourth phase wewould be able to recover more
from the jointly owned SouthPars gas field, and this refinerywould then be able to processmore than 500,000 b/d of gascondensate,” he said.“Increasing the productioncapacity of the Persian GulfStar refinery after the startupof the fourth phase and thedebottlenecking of phases oneto three of this refinery andimplementing fuel oil reductionprojects at the Isfahan, BandarAbbas and Tabriz refineries forthe generation of value-added,are among the top priorities
and short-term plans of therefining industry in the country.Fuel oil reduction projects arevery complicated, requiringfinancing,” said Sadeq-Abadi.He said Iran would need tostart up one refining phasevery year in order to catch up
with 8-9% annual growth ingasoline consumption, but thatis impossible.
“Given the high pace offuel consumption, in casefuel efficiency plans are
not envisaged the currentideal gap between gasolineproduction and consumption
will disappear in two years,” headded.Bandar Abbas RefineryProfitability at $350mnHashem Namvar, CEO of theBandar Abbas oil refinery, toldreporters that the oil treatmentfacility was generating $350million a year in profits.“With the startup of this[quality improvement] project,gasoil sulfur content has beenslashed from 10,000 ppm toless than 50 ppm,” he said.“With the implementation
of the products qualityimprovement and capacityincrease, in addition toupgrading
the quality ofgasoline to theEuro-5 grade,the gasolineproduction at
this refineryincreased 4 ml/din quantity,” headded.Namvar saidmaintaining productionlevels, upgrading the qualityof petroleum products forenvironmental considerations,self-sufficiency in gasolineproduction, recording morethan 45 million persons-hourof accident-free work andgaining valuable experience
were among the achievementsof the product quality upgradeproject at the Bandar Abbas oilrefinery.“Once this project has beenfully operational, the refinery
would be producing 15 ml/d ofEuro-4 gasoil, 12 ml/d of Euro-5, 1.4 ml/d of LPG, 1.5 ml/d offuel jet and 3 ml/d of kerosene,”he added.Namvar said 65% ofequipment used in the newplant at the refinery wassourced domestically.
He added that the plantincorporated gasoildehydrogenation unit, light
naphtha purification,isomerization, aminepurification of sour gas,sour water treatmentunit, sulfur recovery unit,sulfur granulation unit,seawater desalination unit,azote production unit, powergeneration unit and 15 storagetanks. He said the projectcreated 650 permanent jobopportunities.Namvar said other
achievements of the newplant at the Bandar Abbas oilrefinery included a 2.83mb
capacity of feedstock andproduct storage, storage of3,000 barrels of isopentane,
granulation and packaging of250 tonnes a day of sulfur andsupply of fresh water at the rateof 250,000 l/d.The Bandar Abbas oil refineryis one of ten refining companiesin Iran. It is the only facility inthe Middle East to process
heavy crude oil. Therefinery was launchedat an initial capacity of232,000 b/d, whichincreased to 320,000b/d in 2008. Therefinery saw itscapacity increase
to 350,000 b/din 2012 byinjection of gascondensate tothe distillation
andvisbreakingsections.February

in Talks with Foreigners   Iran to Renovate
Caspian Sea Fleet
Ali Osooli, CEO of Khazar Exploration and Production Company (KEPCO),says the company is still in talks with leading European firms forcooperation in the Caspian Sea despite US threats to penalizethem. He, however, says KEPCO is also able to pushahead with its development activities in the Caspian
Sea even without cooperating with foreigncompanies, as was the case with the “Sardare-Jangal” oil find in 2012, when Iran wasunder tough oil sanctions. The impactof US sanctions on Iran’s oil industryis not ignorable, but the experience of
working four years under sanctionshas shown that Iran has never stoppedits activities. The following is the textof “Iran Petroleum” interview withOsooli about KEPCO’s activities:In the event of success of talks with foreigncompanies, shall they do platform overhaultoo?
Yes, one of our main items in talks with foreigncompanies is to carry out overhaul of platformsand vessels. If we planned to follow up on thereparation of talks alone we would have concluded acontract for development activities. Some renowned
companies had visited us and presented theirjob description, but NIOC policy has been doingoverhaul alongside developing oil fields of theCaspian Sea.
To what extent is the involvement of foreigncompanies necessary in the Caspian Sea?In any case, it would be impossible to disregardthe experience of leading internationalcompanies with experience in deep waters.Cooperation with such companies will reducethe required costs and time while boostingproductivity. There is currently ground forcooperation with foreigners in the Caspian Sea
thanks to the facilities made available by NIOC.We are also ready to negotiate with leadinginternational companies in deep waters in favorof national interests. Of course, there are talksunder way with top international firms.Do you mean that activitiesin the Caspian Sea nowdepend on the negotiationswith domestic and foreignfirms?No, not at all! We are currentlyconducting many activities in the
Caspian Sea. First and foremost,we are renovating KEPCO’smaritime fleet. This fleet isthe main and unrenewableasset of NIOC, which has to beprotected in the best possiblemanner to be used in necessarycases. Second, we continue our
negotiations with the companieswhich are experienced in deepwaters activities. We are notdisappointed with the talksand we hope that we wouldbe able to team up with somecompanies in the future.Third, we are following up onIran’s membership of deepwaterstechnology club. Tothat end, we have set out our
objectives by publishing reliabledocuments and training ourhuman resources. We have hadcooperation in oceanology andmeteorology with the Research
Institute of Meteorology andsome universities like the QazvinInternational University, Amir-Kabir University of Technology,Sharif University of Technology
and particularly TabrizUniversity with a view to meetingour scientific needs in deepwaterexploration, developmentand production activities. Fourth,given the agreement reachedbetween the five heads of state ofCaspian Sea littoral states and amemorandum of understandingsigned between the Iranianand Azeri presidents, we arecurrently following up on oil andgas cooperation agreements withAzerbaijan. Given the CaspianSea’s unique conditions and nobackground of cooperation atthis lake, the type of agreementand its related technical and
financial transactions has itsown complexities. But we hopeto achieve acceptable results byholding meetings regularly. Ofcourse Iran enjoys advantages in
these negotiations.Iran PetroleuminterviewIran Petroleuminterview
Have KEPCO activities in the CaspianSea been disturbed due to the US
withdrawal from the Joint ComprehensivePlan of Action (JCPOA)?KEPCO activities are not tied to political andinternational agreements. Both before and afterthe JCPOA and even after the US withdrawal fromJCPOA, KEPCO has been working in line withobjectives set by National Iranian Oil Company
(NIOC). The art of management is to make maximumuse of political, security and international tools anddiplomatic opportunities created by politicians. After
implementation of the JCPOA, we tried our best tobenefit from cooperation with international companiesfor the materialization of our objectives, i.e. application
of cutting edge technology and increasing productivityin the Caspian Sea. However, it does not mean thatour activities are bound to political and internationalagreements. As you know in 2012 amid toughinternational sanctions and restrictions, Iran madeoil exploration in the Caspian Sea for the first timewithout the presence of foreign companies and by onlyrelying on its own domestic potentialities and humanresources and logistics. That happened once more in2014beforethe JCPOAwas signed.We drilled asecond exploration well
up to the depth of 3,500 meters, which proved theprevious oil discovery and ended in the explorationof the “Sardar-e-Jangal” reservoir. One of the layers of
this oil field is estimated to contain 2 billion barrelsof oil in place. In case conditions for developmentand production become ready, we would be able to
recover 500 million barrels of oil. Given the CaspianSea features, including being deep and landlocked,and no precedent of Iran’s involvement in deepwater
exploration and development, it is necessary to havehigh-tech international companies in Iran due to thehigh risk of activities. We are set to benefit from such
opportunity. However, we do not confine ourselves tothe presence of foreign companies and in parallel withnegotiations with foreign firms we are working withdomestic companies for development activities in theCaspian Sea.
Experts at Azerbaijan’s SOCARhave confirmed the reliability of
Iranian manpower for operationsin the Caspian Sea. SOCAR,in partnership with Britain’sBP, has carried out extensiveactivities in the Caspian Seaover the past two decades. BPhas invested nearly $70 billionin this sector. SOCAR experts
initially imagined that Iranianexperts would not be experiencedenough in deep-water operationsdue to international sanctions,but after several meetings they
acknowledged the reliabilityof Iranian manpower as anadvantage of Iran. The secondadvantage is Iran’s platformand vessels in the Caspian Seaas a valuable asset. Azerbaijan,Kazakhstan, Turkmenistan andeven Russia have time and again
asked for renting the platform, butdue to the priority of operationin Iran we have no plan to rent itout to neighboring countries. Ourthird advantage is the possibility
of overhaul of platforms. TheCaspian Sea is a landlocked lakeand any company willing tobuild a platform at this lake hasto construct a shipbuilding yard
like Iran’s SADRA. Building sucha plant would cost billions ofdollars. That is while in Iran weave already such a plant.The general terms,structure and model
of Iran’s upstreamcontracts for oiland gas have alsobeen approvedby the council ofministers, whichclarifies ourexpectation interms ofWhich sector arethese advantagesin

SP13, SP22-24 Ready to
Come Online As US sanctions have taken effect against Iran’s petroleum sector, the IslamicRepublic is recovering more than 600 mcm/d of gas from the giant South Parsgas field, outdoing Qatar with which it shares the offshore reservoir. As gascontinues to dominate the fuel mix for power plants, Iran has now a chance to
export gasoilince the current Iranian calendar year(22 March 2018), National Iranian OilCompany (NIOC) has been making effortsto increase its sour gas production fromSP13 and SP22-24 about 100 mcm/d for the 4thtime. To that end, against the backdrop of USand service workers are installing necessary
equipment in the Persian Gulf under toughconditions to extract, transfer, refine and injectgas into the national grid.It may be unimaginable for most of us to think ofworking long hours under 40-degrees centigradeand 95% humidity under searing sun. But 130kilometers from Bushehr Province’s coasts andnear the border with Qatar, Iran’s petroleumindustry is making efforts to increase its gas
production.Once all South Pars phases have becomeoperational, Iran’s gas production is forecastto exceed 1 bcm/d. That has already motivatedmajor gas consumers like Europe and the Indiansubcontinent to think of supplying part of theirneeds via Iran.Over the past decade, due to gas shortages and
the necessity of gas supply to the householdsector, gas supply to petrochemical plants andmajor industries was cut in winter and thepower plants had no option but to use liquidfuel instead of gas. However, since five yearsago, as new phases of South Pars have becomeoperational, there has been no serious problem
with gas supply to industrial facilities in Iran.Despite the restoration of US sanctions andoil price slump, Iran’s petroleum ministry hasprioritized projects and allocated funds to jointlyowned fields like the South Pars gas field. Asa result of such initiative, gas production hasincreased.New PhasesMastering cutting edge technologies hasalways been a major cause of concern f or thepetroleum industry. This issue was handledproperly during the previous tenures ofBijan Zangeneh as minister of petroleumin the 7th and 8th administrations. By thattime, technical knowhow as transferred fromleading offshore and onshore companies to
Iranian companies like the Iranian OffshoreEngineering and Construction Company (IOEC)and Petropars through their partnership withbig oil companies. These Iranian companiesare today able to perform big jobs in Iran’s
petroleum industry without reliance on foreigncompanies.
The 20-year-old history of development ofSouth Pars phases has been in ups and do wns,but it may be said that development of thisfield has experienced major changes over thepast six years. That picked up speed as soonas the first administration of President HassanRouhani took office in 2013. Prioritization
of South Pars phases led to the completionof SP12 just one year into the start of theRouhani administration. The project becameoperational in March 2015 in the presence ofPresident Rouhani. Later on, SP15 and SP16became operational in January 2018. SP17&18, SP19, SP20&21 were simultaneouslyinaugurated in April 2017. Inaugurating thisnumber of phases in a sing le day was a record.
Currently, SP13, SP22, SP23 and SP24 areclose to coming online. Several time ago, Iran’spetroleum minister visited these two projects.South Pars will undoubtedly be a significantpart of Iran’s petroleum industry history. Many
contractors and manufacturers won internationalfame, thanks to their activities in the South Parsdevelopment.SP13 Symbol of Self-BeliefNow that both onshore and offshore sectorsof SP13 have become operational, the chainof products at the refinery of this phase hasbeen completed and the production of valuable
products like propane and butane has started.In coincidence with the development of thisphase, four trains of gas sweetening, ethaneproduction units, gas condensate and granulatedsulfur units are in the production phase. As theaforesaid units become operational and liquefiedgas production starts, the refinery of SP13 is
completed.By launching the two remaining platforms andthe delivery of sour gas to the onshore refinery,all processing units would become operational.SP13 will reach its rated production capacity inthe stage of 13B.SP13, which is now 93.4% complete in theonshore and offshore sectors, has set records inmanufacturing, installation and operation sinceMarch 2017.Development of SP13 has picked up speed overthe past 20 months. Since March 2017, it hashad 11.4% progress in its entirety, 13% progressin the construction and operation of platforms,31% progress in the construction of pipelinesand 11.5% progress in the drilling sector.A 91.47% progress in construction, installationand operation of the four platforms of this
phase, load-out, installation and operation oftwo offshore platforms altogether alongside thecompletion of offshore pipeline constructionoperation indicates the increased level ofknowhow of Iranian oil and gas industryspecialists.

With the installation of the second platform inSP22-24 after load-out and transfer to the sea inFebruary, this phase is ready to reach maximumoutputOnce the four platforms of the offshore sectorof SP22-24 have become fully operational,each platform would offer 14.2 mcm/d of richsour gas.The offshore industry,learning from the past andstepping into designing,engineering, construction,operation and launch ofoffshore platforms withouthaving to seek assistance fromforeign experts, has entereda new era of blossoming andgrowth.SP13 development is aimedat producing 56 mcm/d ofrich gas, 75,000 b/d of gascondensate, 400 tonnes a day
of sulfur, as well as 1.1 mt/y ofliquefied petroleum gas (LPG)and 1 mt/y of ethane.SP22-24 Eye MaximumOutputWith the installation of thesecond platform in SP22-24after load-out and transfer tothe sea in February, this phaseis ready to reach maximumoutput. The operation ofthis platform would add14.2 mcm/d of gas to Iran’sgas output. In January, themain platform of SP22 withthe same capacity startedproducing and supplying gasto the refinery of this project.
Farhad Ijadjoo, manager of theSP22-24 development, said:“Platform 24A has had thehighest rate of progressn operation. It has beenmoved to the sea for
installation in South Pars.”He said that more than2.7 million persons-hoursof activity had been doneat platform 24A. “At thisplatform, about 31,000
inches (diameter) of pipelayingoperations, more than 90kilometers of power cable
and instrument operationsand 3,077 meters of tubingoperations have been carried
out,” he said. He added that allthe engineering, construction,installation and operationactivities at 24A had beenhandled by Iranian specialists.The bulk of necessarycommodities and equipmenthas been sourced domestically.Development of SP22-24 isunder way for the productionof 56 mcm/d of sour gas, 50mcm/d of methane, 2,900 t/dof LPG, 2,750 t/d of ethane,75,000 b/d of gas condensate
and 400 to/d of sulfur.The operator of this project is aconsortium comprising the IranMarine Industrial Company andPetro Sina Arya Oil & Gas Co.Meantime, offshore pipelayingoperations have been donefor a length of 220 kilometers
following the installation ofplatforms at SP22-24.Offshore pipelaying operations
for the route connecting theplatform of SP23 to the onshorerefinery and a glycol pipelineto the platform of this projecthav been completed.Once the four platforms of theoffshore sector of SP22-24have become fully operational,each platform would offer14.2 mcm/d of rich sour gas.In light of precise planning foraccelerating winter gas supply,all hookup and operationactivities for SP22 have beenhandled by Iranian specialistsin compliance with the qualityand security requirementswithin just 19 days, setting anew record in the operation of
The last sweetening trainin the refinery of SP22-24became operational after the
end of pre-commissioningand commissioning stages.The refinery of these phases iscurrently receiving part of itssour gas from SP6-8 and theplatforms 22 and 24A. Once therefinery of SP22-24 has becomefully operational, it would bepossible to sweeten 1.5 bcf/d ofsour gas. With the installationof three new platforms, each
of the three phases of SouthPars would have a productioncapacity of 28 mcm/d.
South Pars holds 40% ofIran’s total gas reserves. Thereservoir, which covers 3,700square kilometers, contains14.2 tcm of gas and 19 billionbarrels of gas condensate.Based on the current prices,South Pars currently holdabout $8,800 billion worth ofreserves. Over the past century,Iran’s revenue from crude oil
exports and sales has been$880 billion. Therefore, thegas contained in South Pars
is valued at 120 years of oilexports. That is why South Parsis instrumental in upgradingthe national, regional andinternational strength of Iran’s
petroleum industry.The second-priority phasesof South Pars are expected to
become operational over thecoming three years, whichwould raise Iran’s gas recoveryfrom this field to over 800mcm/d.

123 WellsDrilled in11 MonthsMohammad Al-e Khamis, asenior official at National IranianDrilling Company (NIDC), said123 wells had been drilled in
onshore and offshore oil-richareas during the first elevenmonths of the current calendaryear. “Over this period of time,123 wells were completed thanksto round-the-clock efforts byNIDC logistics and operationstaff,” he said. Al-e Khamis addedthat the drilled wells included57 development/appraisal wellsand 66 workover wells. He said88 wells were drilled in theareas run by National Iranian
South Oil Company (NISOC),ight wells in the areas run bythe Iran Offshore Oil Company(IOOC), two wells in the areasrun by the Iran Central OilFields Company (ICOFC),14 wells in the areas run bythe Petroleum Engineering
and Development Company(PEDEC) and 11 wells withinthe framework of drilling andcompletion projects. He saidthe drilling project for eightwells had been approved bythe Exploration Directorate ofNational Iranian Oil Company.
“Drilling of two wells is underway in compliance with the predeterminedplan and a heavyonshore drilling rig is expectedto be moved to the locationenvisaged for a third explorationwell,” said Al-e Khamis.24 Border Oil/Gas FieldsDiscovered in 40 YearsA performance report drawn up bythe Exploration Directorate of NationalIranian Oil Company (NIOC) indicatesthat exploration has always been ahead ofschedule. Currently, 45% of oil discoveriesand 77% of gas discoveries are yet toundergo development. After the 1979 IslamicRevolution, a total of 73 oil and gas fields– including 36 oil fields and 37 gas fields– were discovered, 24 of which has beenshared with neighboring nations. Duringthis time, 3 new layers have been discoveredin the previously discovered fields. Bydrilling extension wells, the volume of eightreservoir layers has increased over ths time.Also after the Islamic Revolution, more than161 billion barrels of crude oil as well as 67
billion barrels of gas condensate have beendiscovered. Add to this more than 999 tcf ofgas and more than 87 tcf of condensate.Gas Network
Management PrivatizedCEO of National Iranian Gas Company (NIGC)
Hassan Montazer Torbati has announced theprivatization of the gas network managementsystem in Iran. “Within the framework ofclean and safe energy supply management, wehave to upgrade our upgrading rules so thatin the near future, operation of refineries andpipelines, as well as distribution of gas in the
cities would be hived off to the private sector,”he said. Noting that NIGC was determined toconnect 3,000 villages to natural gas per year,Montazer Torbati said: “The villages to whichgas may be supplied would be connected tothe national gas grid within three years.”The official also said that the sweet gasproduction at gas refineries in Iran totaled800 mcm/d, which is equivalent to 5 millionbarrels of crude oil in thermal value.“We have currently about 37,000 kilometersof high-pressure pipelines in the country,Local Firm Produces47bcm Gas
South Zagros Oil and Gas ProductionCompany (SZOGPC) supplied a total of 47
bcm of gas during the first 11 months ofthe current calendar year, CEO of SZOGPCHamid Izadi said. He added that the companyalso produced 15.2 million barrels of gascondensate and 1.9 million barrels of oilover the same period. “In order to meet theoil and gas production target set for the nextcalendar year, particularly during the finalfour months, it would be necessary to makeeight wells operational,” said Izadi. He alsosaid SZOGPC would envisage drilling 12 wells
and installing wellhead equipment and layingline pipes over the coming five years. Giventhe fall-off in the natural pressure, as well asthe flow pressure of the Kangan, Naar, Varaviand Homa fields and in view of the necessityof Maximum Efficient Recovery (MER) andlaunching gas compressor stations,

Self-Sufficiency in Gas
Stations EquipmentCEO of Center for Gas Station Studies andPlanning Ali Maneshi has said that 90% ofthe equipment used in the fuel stations has
been manufactured domestically.He also said that Iran may even export such
equipment to neighboring countries.Maneshi said there are currently about 7,000
fuel stations in Iran, creating a lucrative labormarket for related industries. He said 70professions were related to the fuel stations,adding that investment opportunities in thisindustry start from the construction of fuelstation to the supply of different equipment.Maneshi said more than 75% of fuel stations
are more than 35 years old, requiringrenovation, reparation and replacement
of equipment. “Some equipment at fuelstations is fitted with simple technology andnot much investment is needed. That spursinvestment in this industry,” he said

Gasoline Self-Sufficiency;Sign of Sanctions FailurePresident Hassan Rouhani has said Iran’sself-sufficiency in gasoline production isindicative of the Islamic Republic’s abilityto overpower sanctions. “It’s an honor forthe administration to have doubled gasolineproduction over the past five years and thatindicates the government’s capability in theface of sanctions and pressure,” he said.
Rouhani touched on the commissioningof three phases of the Bandar Abbas Gas
Condensate Refinery over the past twoyears, saying this refinery is now producing
36 ml/d of Euro-5-grade gasoline. Headded that the Bandar Abbas oil refinery
would be soon producing 14 ml/d of Euro-5 gasoline. Rouhani heaped praise on thePetroleum Ministry for taking an effectivestep in favor of the environment in recentyears by upgrading the quality of gasolineand gasoil. “Today, more than 120 ml/dof Euro-4 and Euro-5 gasoil and gasoineis being distributed. That is a big step forsafeguarding the environment,” he said.Rouhani said the US had suffered failures inrapid succession, particularly on the politicalground. “Today, flex-muscling between Iranand the US is at its peak. In other words,they are using their maximum power againstthe nation of Iran and the nation of Iran isusing its maximum willpower, hope andconfidence against them.MIS Petchem’s Ammonia
Unit due Next Calendar YearThe head of National PetrochemicalCompany (NPC) has said that the urea/ammonia unit of Masjed Soleyman (MIS)petrochemical plant would come online inthe next calendar year. Behzad Mohammadisaid the urea/ammonia unit would reachstable production in the Iranian calendaryear starting in March 2021. “This projectis in its final months and the presenceof 4,500 persons is indicative of effortsmade by our colleagues to complete and
launch the projects,” he added.Mohammadigave an upbeat assessment of 14 millionpersons-hours of accident-free work in theurea/ammonia project, expressing hopethat the project would have a successfulpre-commissioning phase.He said thepresence of young manpower alongsideexperienced forces was instrumental in theproject, adding that such a model should begeneralized to other petrochemical plants.Construction of the MIS urea/ammonia plantstarted in March 2015 to produce 660,000tonnes a year of ammonia and 1,073 tonnes
a year of urea by consuming 861 mcm/y ofnatural gas as feedstock. It was built in MISin Khuzestan Province on a land with an areaof 50 ha. Switzerland’s Casale Suisse hasgiven the necessary technical knowhow forthe ammonia unit and Japan’s Toyo was incharge of the urea unit.40 CNG Stations Poisedto Be InauguratedA total of 40 compressed natural gas (CNG)stations are to become operational by lateMarch, a CNG project manager at NationalIranian Oil Products Distribution Company(NIOPDC) said. Hamid Qasemi said therewere already 2,449 CNG stations all acrossIran. He added that 128 new CNG stationsare under construction, 40 of which wouldsoon come online.He said four small-scaleCNG stations would be built in crowdedareas like taxi stands, groceries and public
transportation stations.“The investmentneeded for a small 600-cubic meter CNG
station of 600 is IRR 16 billion withoutconnections. This figure reaches IRR 37
billion in a 1,500-cubic meter small CNGstation,” said Qasemi. He also said that 400CNG stations would be digitalized by the endof the current calendar year, adding that 40CNG stations had already been digitalized ona pilot basis.Qasemi said the necessary budget forthe digitalization of CNG stations was IRR140 per cubic metr for a year. “We areopen to private sector investment in this
field. Digitization of fuel stations startedin Khorasan Razavi Province and so far
three stations in Tehran and two in Isfahanhave been digitalized,” he said.Qasemi saiddigitalization provided infrastructure forreplacing transportation sector fuel.
ICOFC Focused onWestern IranThe Iran Central Oil Fields Company(ICOFC) is concentrating its investmet onmainly western areas of Iran, the ICOFC chief
said.“Given the significance of development of joint oil fields and the necessity of f eeding the gas network of western Iran, the company’s investment and construction activities are to be concentrated mainly
on the areas run by the West Oil and Gas Production Company (WOGPC),” Ramin Hatami said.He said ICOFC remained the second largest producer of gas in Iran and the first onshore producer of gas. Hatami said three subsidiaries of ICOFC – WOGPC, East Oil and Gas Pr oduction Company (EOGPC) and South Zagros Oil and Gas Production Company (SZOGPC) – had produced 60 bcm of gas during 11 months. Referring to projects under way by WOGPC, he said: “In Tang Bijar, 3D seismic testing worth IRR 5,000 billion and development of the second phase of this field by drilling five wells and surface
facilities development worth $110 million are under way.” Other projects operated by WOGPC include an EPC contract for Danan (including seismic testing and hydraulic fracturing of two wells) and Naftshahr, worth between IRR 13,000 billion and IRR 14,000 billion. Exploration Block Study Awarded to Iran
Firm National I National Iranian Oil Company Exploration Directorate has
signed a memorandum of understanding with Tenco Exploration & Production
Corporation to study Toudaj oil and gas block in Fars Province.
It is the first time an Iranian company has been assigned the task of studying exploration blocks in Iran. The MOU was signed between Saleh Hendi,
director of exploration at NIOC, and Omid Asakareh, CEO of Tenco. Tenco, which specializes in drilling, seismic, refinery and upstream projects, is among
the 17 conglomerates approved by NIOC to develop oil and gas fields in the framework of Iran Petroleum Contract, Iran’s new model of tendering oil
and gas projects. The Toudaj exploration block covers 8,611 square kilometers in the southern Iranian province. It is located near the Sarvestan and Saadatabad oil fields. Exploration work started there well before the 1979 Islamic Revolution.
Private Sector Engagement Hendi laid emphasis on giving the bulk of activities to the private sector, saying: “In recent years, we have seen more effective measures regarding the engagement of the private sector in upstream petroleum industry,
including the qualification of Iranian E&P companies.” He said: “Although some of the qualified companies have already proven their competence in serving as contractor and service company in exploration, it is high time that they upgraded their presence.” Hendi said some of 14 exploration blocks envisaged for
awarding fit Iranian companies’ capabilities in terms of risks, as  well as financial and technical requirements. Reza Dehqan, deputy head of NIOC for development and engineering, said: “Tenco has been actively present in the maintenance
and upgrade of oil production potential and we hope that through good performance of this company in the Toudaj exploration block we would see
studies and exploration activities reach conclusion and economic
advantages would be created in Fars Province in the near future.” Post-JCPOA Initiatives  Asakareh offered gratitude  to NIOC for its confidence  in Tenco, saying: “Tenco has  assumed the risk of activity in  the Toudaj exploration block
with full knowledge and we  hope that we would offer an  acceptable performance in  response to the petroleum  industry’s trust.”

AOGPC to Operate West Karoun FieldsDarquain Output Set to Rise

rvandan Oil and Gas Production Company (AOGPC) is a nascent subsidiary of National Iranian Oil Company (NIOC). The reservoirs run by AOGPC are technically complicated and vast. AOGPC is tasked with operating the jointly owned Azadegan, Yadavaran, Yaran, Sohrab, Arvand and Khorramshahr oil fields, as well as the independent Darquain, Jofair, Sepehr, Band Karkheh, Susangerd, Omid and Moshtaq fields. Jahangir Pourhang, CEO of AOGPC, has said the targets set for the first ten months of the current calendar year had been met. Further talks are under way for development of the AOGPC-run fields. AOGPC was established with a view to reaching 1mb/d output by 2025. It was also assigned the mission to steer production activities and protect oil and gas facilities, feed refineries and power plants and export products to international markets. More than 50% of oil fields administered by AOGPC are shared with neighboring countries. Furthermore, they are spread on vast swaths of land, miscible gas injection has been applied to Darquain, and operations are under way near Hoor al-Azim Lagoon which requires environmental considerations. That underlines the significance of missions assigned to AOGPC. Pourhang is assured that AOGPC would touch the 1mb/d target. He says: “The West Karoun pumping station is able to carry 750,000 b/d of oil. Moreover, since the company is nascent we have already started equipping it in order to be able to lead operations in one of the fields.” Development of the oil fields located in West Karoun is upon the Petroleum Engineering and Development Company (PEDEC), but these fields will be transferred to AOGPC after they become operational. Pourhang said various development agreements had been signed over the past five years for the development of West Karoun fields. “In some of these agreements, the investor and the developer are required to manage production during the early years of startup before transfer to us,” he added. Pourhang said AOGPC was ready to steer developed fields, adding that it has already completed or worked-over 14 wells.Darquain Oil Output UpThe Darquain oil field is located 45 kilometers north of Khorramshahr and 85 kilometers south of Ahvaz in Khuzestan Province. Pourhang said: “The current output from this field stands at about 120,000 b/d with gas injection at 220 mcf/d. So far, about one-third of its recoverable oil has been extracted.” He noted that due to specific reservoir conditions, high pressure and high H2S content; drilling in this field is difficult. He said that miscible gas injection is a difficult task, adding: “Well No. 34 of Darquain is the first well that became operational after Italy’s Eni left. This well would in the near future add 5,000 b/d to the field output.” Pourhang said: “The completion string and foreign-made commodities purchased for the well were not sufficient. Through domestic manufacturing, we supplied the needs and National Iranian Drilling Company (NIDC) engineers installed the equipment and tested it successfully.”The Darquain oil is light with an API gravity of 38 degrees. The oil produced at this field is partly piped to the West Karoun pumping station to be finally exported.Minoo Island Oil FindIran’s Petroleum Minister, Bijan Zangeneh, announced in late January that oil had been found in Minoo Island in Abadan Province. He said that an exploration well reached oil at a depth of 3,770 meters, noting that the oil was known to be very light and sweet with an API of 40. Referring to this new oil discovery, Pourhang said: “We cannot provide exact figures about the reserves.”He added that AOGPC Technical Directorate had worked out all scenarios about production from this newly discovered reservoir and made need analysis about necessary equipment. “AOGPC has a clear plan. If more essential studies need to be done, a second exploration well will be drilled. If we have to start production we will do it,” said Pourhang.Talks Continue with Iran FirmsPourhang said AOGPC was in talks with Iranian companies for the development of some of its oil fields. “So far three Iranian companies have submitted their master development plan for Susangerd, which has been transferred to the "Reservoirs Supreme Council" for examination,” he said.He added that AOGPC was in talks with Germany’s Wintershall for the development of Sohrab field, which were suspended due to the US unlawful and unilateral sanctions.Higher Processing Capacity Chief among the activities carried out by AOGPC over recent years, are the construction and startup of a production and desalting unit in West Karoun, which has facilitated the processing of oil supplied from the joint fields in that area. Shahram Ardian, chief coordinator at AOGPC, said more than 80 million barrels of oil had so far been processed. The processing unit includes six desalters (two desalters at each row). The strong points of this unit are its regulation based on the flow of input oil and processing of oil at different pressures and with any amount of water and salt.Currently, 110,000 b/d of oil is being processed at this unit, which is then delivered as feedstock to the Abadan oil refinery or sent to export terminals. “We have informed PEDEC of our readiness to receive more oil for processing,” said Ardian. Yavar Ahmadi, director of the Azadegan and Jofair area, also touched on the production and desalting unit in West Karoun, saying: “This unit came on-stream in 2017 with a processing capacity of 165,000 b/d of crude oil. Its first phase had been launched in November 2015 and the second phase in 2016. The third phase was finally operational in 2017. This processing capacity can be effective in the processing of oil produced in West Karoun.” He said that the production and desalting unit had been fully built and made operational by Iranian contractors and technicians under AOGPC leadership. Farhad Sadeqzadeh, director of production engineering at AOGPC, said more than 100,000 b/d of oil was being processed at the unit. “The unit was built for processing oil supplied by West Karoun’s joint fields, and now the oil produced at South Azadegan, Yaran and Jofair is being delivered to this unit,” he added. Sadeqzadeh said that Sepehr, Jofair, Sohrab and Susangerd would also send their oil to this desalting plant for processing. Agreements within the framework of the newly developed Iran Petroleum Contract (IPC) have been signed for the development of the Sepehr and Jofair oil fields.

Doroud Awaiting Foreign Investment

ran’s 2015 historic nuclear deal with the West is known as the biggest important event in the petroleum industry in recent years. The agreement, which was achieved after 10 years of intensive diplomatic talks, cleared the way for the return of Iran’s oil to global markets. Iran intends to take advantage of this opportunity to relaunch ageing oil and gas fields, as well as decrepit petroleum industry infrastructure by attracting Western capital and expertise.Iran intends to raise its oil production to 5 mb/d by the end of its 20-year vision plan. In this regard, old onshore and offshore fields are instrumental.Doroud oil field, which is located in Kharg Island and northwest of the Persian Gulf, is among developed oil fields which the Iranian Offshore Oil Company (IOOC) presented to foreign investors within the framework of the new model of oil contracts – the Iran Petroleum Contract (IPC).Nearly 16 years have now passed since an agreement was signed for the development of the Doroud field. Enhanced recovery from the field has not been achieved despite gas injection since 2008.According to the Department for Economic and Financial Feasibility Studies of National Iranian Oil Company’s Directorate of Corporate Planning, the investment needed in the Doroud field over four years has been calculated, which would be secured through signing F, EPCF and EPDF deals. The project costs will be recouped over a six-year period from the increase in the crude oil production capacity.The package of investment for the integrated development of IOOC oil and gas fields has been drawn up in line with Iran’s law on removal of barriers to competitive production and upgrading the fiscal system. It will take effect after the acquisition of necessary permits from NIOC Board of Directors and the Economic Council and signing agreements with investors. This investment package takes into consideration compliance with Iran’s fifth five-year economic development plan for the prioritization of development projects including development of jointly owned oil and gas fields.Doroud oil field development project is along IOOC-run projects open to investment. IOOC is a leading company in applying ESP to wells and gas lifting in the country. It intends to focus on improving the rate of recovery from hydrocarbon fields nominated for investment.Over the past four decades, Doroud has been developed twice. It is now ready to undergo the third phase of development.Doroud is estimated to contain 7.6 billion barrels of oil in place. Due to 33-year recovery from this field and non-timely injection of water and gas, only 1.5 billion barrels of oil was recoverable from this field. But now due to development activities in this field, the recoverable amount is expected to rise to 2.5 billion barrels.Currently, Doroud is producing on average 15,431 b/d of oil from its offshore wells and 36,500 b/d from its onshore wells. In 1997, 42 wells were drilled in the oil field. Eighteen offshore wells and 23 onshore wells have been drilled and completed.The crude oil processing installations are used for treating 100,000 b/d offshore and 110,000 b/d onshore. About 1.6 billion barrels of oil has been recovered from this field over the past four decades. Oil production from Doroud came to a halt during the 1980-1988 imposed war.The first wave of enhanced recovery from the Doroud field started in 2002 at the rate of 15,000 to 16,000 b/d. In the following years, production increased as new wells were drilled in this oil field.When Iran signed an agreement with France’s energy giant Total in 1999 for the development of Doroud, each barrel of oil was $20. Total acquired Elf and Agip to make good investment in Iran. The French company failed to inject gas into Doroud on schedule and the project was halted mid-way. But it must be taken into consideration that in recent years as average oil prices have been at $40 a barrel, this project has been profitable for Iran with a quick rate of return on investment.Before the gas injection section of the Doroud oil field was launched in Kharg Island, many Iranian petroleum industry experts recommended that due to the unprecedented high pressure gas injection (6,000 psi) into the field and its unknown consequences, the gas injection section be transferred from Total to the client after completion of the water injection and oil production process. In the meantime, the geologically complicated structure of the Doroud field and the location of this oil field in Kharg Island slowed down the pace of drilling in the first years of development of this field as simultaneous onshore and offshore work was tough.

Arvand Oil Field and $135mn Investment Potential

Until a couple of years ago, development of the oil and gas fields Iran shares with neighboring countries had been slowed due to financial and technical shortages in Iran, thereby helping neighboring nations make big gains. But after international sanctions were lifted on Iran following the 2015 nuclear deal with six world powers, hopes were raised for investment in the jointly owned fields. International oil companies endowed with financial resources, as well as advanced technology can come to Iran and develop joint fields. Iran has shifted its focus on the development of joint oil and gas fields located mainly in South Pars and West Karoun. In the West Karoun area, Iran shares oil fields with Iraq. Three West Karoun oil fields recently started production. The fields shared with Iraq have been proposed to foreign investors for future cooperation. Foreign companies can sign agreement with Iran based on the newly developed model of contract – Iran Petroleum Contract (IPC).One of these fields in question is Arvand. The Arvand oil field is located 50 kilometers south of Abadan in Khuzestan Province. It lies at the entry of Arvandroud River. The field is 42 kilometers long and 13 kilometers wide. Arvand is estimated to contain one billion barrels of oil in place with a recovery rate of 15%. Arvand also holds over 14 bcm of dry gas and 55 million barrels of gas condensate.Discovered in 2008, the Arvand field lies along Iran-Iraq border. Drilling had started in Arvand in 2006 for the purpose of estimating the hydrocarbon potential of the formations in the Khami and Bangestan centers. Four well logging operations were carried out in the Fahlyan formation to prove the existence of oil and gas in that formation. The Fahlyan formation holds light crude oil with API gravity at about 44. The Arvand oil field is administered by the Arvandan Oil and Gas Production Company (AOGPC) whose production is estimated to reach 1.4 mb/d by 2025. AOGPC is estimated to have the highest oil and gas production rate in the coming decade. A major facility inside this field is a 165,000-barrel-per-day processing unit. This treatment unit was built by National Iranian Oil Company during years when Iran was under sanctions. A variety of crude oil may be processed at this facility. Thanks to the existence of this treatment facility, the return of investment will be fast. Any investment in the development of the Arvand oil field will have a good rate of return. The short distance between the Arvand field and the treatment facility is an indicator of the fast development of the oil field.Several years ago, an agreement was signed between AOGPC and the Iranian Offshore Engineering and Construction Company (IOEC) for the development of the Arvand oil field, but the agreement was never implemented due to financial and other problems. The Arvand oil field is expected to produce 5,000 b/d of oil in the first phase, which would reach 20,000 b/d in the final phase. The investment needed for the development of this field stands at $135 million, which is likely to increase. The API gravity of oil contained in Arvand varies between 39 and 43. The Arvand oil is planned to be delivered to the Abadan refinery. Iran and Iraq share eight oil fields along their joint border with combined recoverable reserves of 14 billion barrels. The eight fields are Dehloran, Naftshahr, West Paydar, Azar, Azadegan, Yadavaran, Dehloran and Arvand. These fields have different names on the Iraqi side. Nine percent of Iran’s crude oil reserves exist in the fields shared with Iraq. As recovery from jointly owned fields leads to migration of hydrocarbon, NIOC officials are concentrating on the development of such fields

$100bn Investment in PSEEZRestrictions Relaxed for Investment Attraction

The Iranian Petroleum Ministry has invested over $100 billion in the Pars Special Economic Energy Zone (PSEEZ) since 1998. Majid Asgharian, director of PSEEZ Investment Attraction and Economic Development Division, says an ad hoc committee has been set up to accelerate the process of attracting investment. In an interview with “Iran Petroleum”, he said the committee would help streamline bureaucracy. The following is the full text of the interview he gave to “Iran Petroleum”.What will you do to streamline bureaucracy in the process of attracting investment?The cases of adverse possession and the shortage of fundamental infrastructure for investment in the downstream, semi-heavy and combined industrial sites and logistics, lack of environmental regulations, absence of installation corridor, existence of parallel divisions within PSEEZ and other factors have strengthened bureaucracy in the process of attracting investment.PSEEZ is determined to eliminate unnecessary activities and draw up suitable instructions and make arrangements between different sectors in a bid to reduce bureaucracy of investment attraction both before and after conclusion of agreement to prepare the ground for the effectiveness of such process. To that end, an ad hoc committee on investment attraction has been set up at PSEEZ to study issues related to this sector. How much investment has been attracted in PSEEZ from the private sector during the 2013-2017 period?From 2013 to 2017, a total of IRR 372,244 billion was invested in PSEEZ by the private sector, mainly in midstream petrochemical projects like propylene, ethylene glycol or refining projects.Importing commodities via special zones for domestic consumption would be subject to import and export regulations, while exporting commodities via these zones would be subject to no procedural formalitiesWhat policy has PSEEZ been following to attract private investment?Attracting investment into special zones is strongly affected by ever-changing internal and external conditions. Under circumstances where foreign exchange fluctuations have been causing turbulence in domestic economy investment all across the country would be naturally affected by foreign exchange and monetary fluctuations. Hopefully, relative stability has been back to the foreign exchange market after the adoption of effective measures in this sector. Therefore, investors are expected to be able to make long-term plans for investment. In this regard, midstream and downstream industrial sectors are in the spotlight for the attraction of investment in case conditions remain stable. The policy pursued by PSEEZ is to benefit from domestic or foreign investors and finance projects with a view to strengthening national economy and blunting the impact of sanctions. For this purpose, at stake is hard currency generation by the projects. In other words, attracting investors to supply national needs for commodity and services and export commodity and services at the same time could prove effective in the status quo. Assisting investors in attracting domestic and foreign financial contribution and establishment of financing consortiums within the boundaries of PSEEZ authority is another policy pursued by PSEEZ. Benefiting the technical and financial capacities of petrochemical giants for the purpose of implementing economically viable and advantageous projects is an effective policy envisaged by PSEEZ authorities

What are PSEEZ potentialities which would be instrumental in attracting the private sector’s investment?

the country would equal the commercial profits granted to raw materials and imported parts.Importers of commodities into zones can assign their commodities wholly or in part to others against negotiable separate warehouse deposit receipt which would be issued by PSEEZ Directorate, in which case the holder of the receipt would be considered as the owner of goods.The directorate of each zone is authorized to issue origin certificates for the goods which are exported from the zone upon request and after confirmation by the Iran Customs Administration. All commodities which are imported into the zone for production or services are exempt from general regulations on imports and exports. Transferring such commodities to other parts of the country would be subject to imports and exports regulations.The commodities manufactured in special economic zones, as well as raw materials and spare parts imported into the mainland from these zones are not subject to pricing regulations.PSEEZ, located near the Persian Gulf, was established in 1998 to expedite the construction of refineries as well as giant oil and gas facilities in Assaluyeh, enhance Iran’s gas and condensate exports and also to facilitate attraction of domestic and foreign investment.PSEEZ incorporates Pars 1 (South Pars), sprawling on 14,000 ha of land where Assaluyeh is located, Pars 2 (Kangan), covering 16,000 ha of land, and Pars 3 (North Pars) covering 16,000 ha of land.The South Pars zone is home to 16 gas processing phases, 15 petrochemical plants as well as downstream petrochemical facilities. Pars 2 is home to eight refinery phases and a liquefied natural gas (LNG) project. Pars 3 supports development of some hydrocarbon fields. The North Pars, Golshan, Ferdowsi, Farzad A and Farzad B gas fields are located in Pars 3

Petroleum Self-Sufficiency

Ever since its exploration, oil has been tied to the fate of every single Iranian. A review of the political, economic and social history of Iran lays bare fateful periods of petroleum development over the past four decades when the Islamic Republic was established following the 1979 revolution. A comparison of petroleum industry before and after the Islamic Revolution shows that Iranian government’s oil policies were in conflict with national interests before the revolution. But following the revolution, the situation has drastically changed and Iran’s national interests are now prioritized. As Iran’s dependence on the West and the East has vanished, the country’s petroleum industry has emerged winner in all areas. In such context, by relying on domestic knowhow and capabilities, oil has become the main pillar of economy and life for the people. The following is a brief review of the journey, so far, we have gone through.Oil and Gas Finds in 40 YearsOffshore oil and gas discovery started in Iran a century ago. The bulk of these deposits have been discovered and used. The exploration of oil and gas was in fact the base of following activities in the oil and gas value chain. In the second decade of the Islamic Revolution and particularly following the end of the imposed war, the pace of oil exploration in Iran picked up speed.The discovery of the giant offshore South Pars gas field and the giant Azadegan and Yadavaran oil fields in post-revolution years are among the main achievements in the exploration sector.A review of major oil and gas exploration activities shows that the priority for oil and gas exploration has been given to the jointly-owned fields with neighboring states. The main activities including drilling and seismic testing have been done in those areas.Oil/Gas Fields DevelopmentConcurrently with exploration work and discovery of more oil and gas deposits in the years that followed the Islamic Revolution, hard work was put into the development of hydrocarbon fields with the main focus having been on the jointly owned ones. National Iranian Oil Company (NIOC) has so far applied a variety of contractual frameworks ranging from buyback to finance. As production maintenance projects have been carried out and oil field development has been under way, desalting plants have been built and “Maximum Efficient Recovery” projects have been implemented. Water and gas injection into oil fields have helped make up for the natural decline in the output of reservoirs.Development of gas fields for replacing natural gas with liquid fuels and injecting gas into oil fields for enhancing the final recovery rate are among the other achievements of the Ministry of Petroleum in the aftermath of the Islamic Revolution.H/C ProductionStudies show that prior to the Islamic Revolution, oil production in Iran was in the interest of major IOCs and for the purpose of providing low-cost fuel for industrialized nations.Such high volume of production is in total contrast with “Maximum Efficient Recovery” rules and would not justify production based on the principle of optimization and sustainable output.Until before the Islamic Revolution, Iran’s petroleum industry was under control of foreign companies. At that time, regardless of the properties of Iranian oil reservoirs, the foreign firms were applying substandard methods of recovery to plunder the Iranian nation. As a result, Iranian oil reservoirs matured day by day.Gas Injection to Oil FieldsGas injection into Iranian oil reservoirs was a must for the purpose of “Maximum Efficient Recovery” and enhancing their output. Gas injection to the oil fields in 2017 increased more than 30 times compared with that of 1978. Gas has already been injected into nine onshore oil fields – Bibi Hakimieh, Parsi, Aghajari, Koupal, Gachsaran, Maroun, Karanj, Narguesi and Haftgol – while operations are under way for bringing gas back into the Pazanan field and miscible gas injection into the Darquain oil field.Gas and CondensateIran’s natural gas production averaged 110 mcm/d in 1978, which soared past 846 mcm/d in 2018. That is indicative of the development of gas fields in the post-revolution years.Given the significance of natural gas production in the global energy supply, more production would give rise to strategic advantages in Iran’s foreign diplomacy.Subsequent to the increased natural gas production after the revolution, gas condensate production has also increased. Statistics show a 20-fold increase in the condensate output from 1978 to 2017.Joint Fields DevelopmentA major policy pursued by the Ministry of Petroleum with regard to Iran’s resilient economy has been concentration on the development of jointly owned oil fields, particularly those located in the West Karoun area along the border with Iraq. So far, production has started from Yadavaran (Phase 1) and North Azadegan (Phase 1). North Yaran is also under development, while South Yaran started production in 2017. South ParsSouth Pars is shared by Iran and Qatar in the Persian Gulf. It is located 100 kilometers from Iran’s southern coasts. Gas was proven to exist in South Pars in 1990 after the drilling of the first exploration well there and the analysis of seismic data. The field is 9,700 kilometers in total, 3,700 km of which belongs to Iran.According to the latest estimations, South Pars holds 14.2 tcm of gas, as well as 19 billion barrels of condensate in place.Given the vastness of this field, its development in different phases topped the agenda of the Ministry of Petroleum in compliance with Iran’s five-year economic development plan and with a view to supplying the growing domestic needs for domestic consumption and injection into oil fields, as well as gas exports.Natural gas production at South Pars started at the rate of 2 mcm/d in 2001. Now, Iran’s rich gas recovery from South Pars is equal to that of Qatar. Thanks to the capabilities of domestic companies, manufacturers and contractors to the development of most South Pars phases has been fulfilled. SP15 and SP16 were developed with more than 70% of domestic manufacturing. That is the highest ever share of domestic manufacturing in the South Pars development. SP12 development was the largest project in terms of natural gas refining capacity. The share of domestic manufacturing in the SP12 development was 67%.

Post-Revolution Oil Refining Developments

The present report reviews the measures taken by Iran’s refining industry since the 1979 Islamic Revolution. In broad terms, they include self-sufficiency in refinery construction like the building of the Bandar Abbas Gas Condensate Refinery, and mastering technical knowhow for some catalysts and compressors.

n the aftermath of the Islamic Revolution, a large number of projects became operational by the National Iranian Oil Refining and Distribution Company (NIORDC). Chief among them are the construction and startup of three phases of the Bandar Abbas Gas Condensate Refinery, development and optimization of the Imam Khomeini oil refinery in Shazand, optimization and upgrading petroleum products quality and gasoline production section at the Shahid Tondguyan refinery of Tehran, gasoline production at the Isfahan oil refinery, startup of the development and optimization project at the Lavan refinery, gasoline production and renovation project at the Abadan oil refinery, startup of gasoline production at the Tabriz oil refinery, startup of CCR plant at the Bandar Abbas oil refinery and the systemization of the Mahshahr export port.Euro-4-grade gasoline production and distribution has been growing at Iranian refineries over recent years. In the Iranian calendar year to March 2018, roughly 29 ml/d of Euro-4 gasoil was produced for motorists. Furthermore, Euro-4 gasoil production started at Iran’s oil refineries in the years that followed the revolution. In the calendar year to March 2018, Euro-4 gasoil production stood at 22 ml/d. The construction of eight 60,000-b/d condensate mini-refineries also got under way by eight Iranian companies for $3 billion in Assaluyeh without any government funds.Significant Jump in ExportsProduction of the five core petroleum products (gasoline, gasoil, kerosene, fuel oil and liquefied petroleum gas) averaged 100 ml/d in 1978, but after the startup of new refining facilities and the upgrade of older oil treatment facilities following the Islamic Revolution, the figure reached 252 ml/d in 2017. Iran did not export any refined petroleum products prior to the Islamic Revolution, but currently Iran is exporting fuel oil and gasoil in large quantities.Fuel Production UpIn 1978 Iran’s gasoline and gasoil production averaged 14.4 ml/d and 25 ml/d respectively, but the figures are now 67% up thanks to renovation of old facilities and construction of new refineries.A major achievement in the downstream oil sector after the Islamic Revolution is the construction of the Bandar Abbas Gas Condensate Refinery, commonly known as the Persian Gulf Star refinery. Gasoline production started at this refinery in March 2017. Phase 1 of the refinery was inaugurated in May 2017 and the second phase in July 2018. Phase 3 of the refinery has become operational in February2019. The facility has made Iran self-sufficient in the production of Euro-4 gasoline and higher grades gasoline. Gasoline Quality UpgradeThe implementation of gasoline production enhancement and quality upgrade projects at the Bandar Abbas oil refinery with a view to increasing gasoline production and upgrading the quality of gasoline and gasoil was an effective step for gasoline self-sufficiency in Iran. The project began in 2007 and was over in 2018, creating 2,500 job opportunities. The tangible results of the project include the gasoil hydro-treating unit (separating sulfur from gasoil) and improving the quality of gasoil at the Bandar Abbas oil refinery at the capacity of 50,000 b/d.The startup of light naphtha hydrotreating (LNHT) section helped pre-treat the light naphtha flowing into the section and remove pollutants particularly sulfur, nitrogen and oxygen at the rate of 133 cubic meters per hour. Meantime, the startup of the isomerization unit has helped the Bandar Abbas oil refinery enhance the octane number of light naphtha with a view to upgrading the quality of gasoline. The sour gas amine-treatment section has removed hydrogen sulfide and sulfur compounds like mercaptans from gas at the rate of 863 normal cubic meters per hour. Through launching the sulfur recovery unit, the acid gas produced at the sour gas treatment unit and the sour water treatment unit will be transformed into molten sulfur to be transferred to the sulfur recovery unit for sulfur production at the rate of 4,380 normal cubic meters per hour.Construction of 17 cylindrical and spherical storage facilities is another brilliant record in the history of the Islamic Revolution.Air Pollution Control and Environment ProtectionThe Lavan Oil Refining Company was established in 1976 under the name of Lavan Distillation Complex with a capacity of 20,000 b/d of crude oil. It was built jointly by National Iranian Oil Company (NIOC) and a Yugoslav company. After the victory of the Islamic Revolution, given the existing potential and strategic position of Iran, development and optimization projects were placed on the agenda. As the Iraqi war started a number of refineries including the Abadan

The Bandar Abbas oil refinery started building a section to desalt water for the supply of 250,000 liters/hour of fresh water. The project was completed in 2018
refinery had to supply more gasoil and fuel oil to power armored personnel carriers and tanks. That was when the Lavan refining complex was established in order to supply products of higher quality. The Merax unit was designed in 1989 by UOP with a capacity of 6,000 b/d. It was launched by Chyoda in order to produce sweet naphtha. In 1994, with the implementation of crude oil distillation unit capacity enhancement and kerosene rotary pumping system, the crude oil distillation unit saw its capacity rise from 20,000 b/d to 30,000 b/d. In parallel, more products were supplied and volume of losses was reduced. The Lavan oil refining company started building a light naphtha hydrotreating and isomerization unit in 2007, which ended in 2018. The major objective sought in this project was to improve the process and quality of products and optimize capacity. Reducing air pollution and safeguarding the environment were among other achievements of the project.Anti-Freeze ProductionThe Tehran oil refining company was established before the Islamic Revolution. The first unit of this facility was launched in 1967 with a capacity of 85,000 b/d. The second unit of the refinery was launched in 1973 with a capacity of 100,000 b/d. After the Islamic Revolution, the refinery was improved in two phases. The facility currently processes 250,000 b/d of crude oil. It has already started producing Euro-4 and Euro-5 gasoil. In parallel with improving the quality of products, the Tehran oil refinery has also sought to become self-sufficient. Currently between 80% and 90% of equipment used at the refinery is sourced domestically. Most old equipment like pumps and turbines are being repaired by local engineers. The refinery has also managed to produce anti-freeze in air fuel.Water Production and RecoveryWater is a basic need for development in human societies. Iran is among nations where water supply for various uses is a major cause of concern for politicians looking for sustainable development. That is why the major refineries in Iran, including Bandar Abbas, Tehran, Isfahan and Abadan, have put water production and recovery projects on the agenda. The Bandar Abbas oil refinery started building a section to desalt water for the supply of 250,000 liters/hour of fresh water. The project was completed in 2018, creating 2,500 jobs-days. This refinery will be also engaged in sour water stripping. The sour water stripper removes hydrogen sulfide and ammonia from the sour water generated in the refinery. The sour water is received from the refinery in the flash drum, where light hydrocarbons are flashed off. The sour water is then fed to the feed prep tank, where the feed is mixed and stabilized. Liquid hydrocarbons entrained in the sour water are removed in the feed prep tank.The sour water is then heated in the feed/bottoms exchanger and fed to the stripper column. Steam, generated in the reboiler, heats the water and strips the hydrogen sulfide (H2S) and ammonia (NH3) from the water. The stripped water from the column is cooled in the feed/bottoms exchanger and in the stripped water cooler, and returned to the refinery. The H2S and NH3 removed from the sour water is cooled in the pump-around cooler system or in an overhead condenser system and sent to the sulfur recovery unit for further processing. The Tehran oil company has contributing to saving 200 cubic meters per hour of water and supplying fresh water to 24,000 persons. The Isfahan oil refining company has established a pumping station to save 150 cubic meters per hour of water and supply fresh water to 18,000 persons. Among other objectives sought at this pumping station are production of industrial water, adoption of policies to recycle urban wastewater for industrial purposes and checking provincial water resources dipping. NIOPDC AchievementsDuring the four decades following the victory of Islamic Revolution, numerous measures have been taken by National Iranian Oil Products Distribution Company (NIOPDC). A brief review of them sheds light on the extent of activities in this sector of petroleum industry. Startup and operation of a 22-million-subsrcibrer smart fuel system megaproject;Startup and development of CNG industry with 2,489 CNG stations and capacity of 2.886 mcm; Distribution of green fuel (CNG), creating safety in the fuel mix and reducing gasoil and gasoline production;Allocating a 19% share to CNG in the fuel mix of vehicles;National distribution of Euro-4 and Euro-5 gasoil and gasoline at gas station in big cities and major routes for the purpose of mitigating environmental pollution; Multiplication of the number of gas stations from 328 in 1978 to 3,724 in 2018; and Founding and implementing an environmental megaproject to gather gasoline vapors at gas stations, oil tankers and oil storage facilities and the recovery of 360,000 liters a day of gasoline
 

900km Gas Pipelines Built Domestically

as pipelines, as the vital artery of sustainable supply of gas, has witnessed significant development over recent years. In the last calendar year to March 2018, a total of 1,000 km of pipes was connected to the national gas grid. Over 900 kilometers of pipe was installed during the first 11 months of the current calendar year. Capacity building for gas exports to neighboring countries and boosting the sustainability of gas supply to various parts of the country through 100 percent reliance on domestic manpower and domestically manufactured equipment are among the major objectives of designing and building pipelines in Iran. That, along with many other relevant issues, has been discussed with Farhad Hassani, manager of gas pipelines at the Iran Gas Engineering and Development Company (IGEDCO).Would you please explain about projects under way this year?At the beginning of the current calendar year, the 45-kilometer-long Simakan pipeline was supplied with gas. Later on we fed gas into the 300,000-cubic meter Tang Lateh gas station in Sari. Thanks to the latter, we boosted gas supply to Mazandaran Province, particularly Sari, Babol and Amol. Thanks to this project, no gas shortage was seen in the province this year. That was a big honor in gas supply to the residents of northern Iran. The project was conducted by designers at IGEDC. Very recently, the Jiroft gas pipeline became operational, supplying gas to local residents. The pipeline laid in Jiroft was 71km long with a diameter of 20 inches. Has Jiroft been supplied with gas entirely?No, not yet. The provincial gas supply company is now tasked with extending the network and connections in the city. Our task involved laying out the pipeline and its CGS and we performed our task. In Jiroft, the urban gas supply grid has been partly built. Since gas has been brought to this city I hope that gas supply to the entire city would be prioritized so that more customers would have access to gas next calendar year. This issue pertains mainly to the gas officials in Kerman Province. Of course, the company is doing its best for gas supply to the city. We have already accomplished our tasks with regard to the project, and now it’s up to Kerman provincial gas company to continue providing services.Do you plan to inaugurate any projects by the end of the current calendar year?We have the Kamfirouz gas pipeline project in Marvdasht, which we hope would come online this year. The pipeline is 31 km long with pipes of 12-inch in diameter. We have also the Bayrom gas pipeline in Lar in Fars Province under way. It is about 25 kilometers long with pipes of 6-inch in diameter. The pipeline is also to come online by the end of the current calendar year.Do you expect any projects to come online next calendar year?We have the Darreh Abbas gas pipeline project under way in Mahshahr. We will make arrangements before the year ends. The project has made good progress and we hope to be able to operate this project next spring. The pipeline is 63 km long and 36 inches in diameter. It is aimed at upgrading Mahshahr’s petrochemical industry. We are working on it.What is the progress rate of the pipeline?Almost 27 km of this pipeline has been completed and 55 km of pipe has been carried for this project. The project has been going on at a high speed. The compressors’ valves are ready and we are optimistic that this project would come online next spring. The pipeline is being built to enhance the volume of feedstock supply to the Mahshahr and Shadegan petrochemical plants. We have also the Juyon Banarouyeh pipeline under way in Fars Province. The pipeline is 105 kilometers long and 10 inches in diameter. Outsourcing has been done for the project and the contractor has been chosen to start work. The pipeline is being built to supply gas to urban areas and industries in the province.To what extent have you met the pre-determined targets?In the current calendar year, given foreign exchange rate fluctuations and disturbances in the road transport fleet, we lagged behind our projections. However, we sought to make up for delays and we are seriously implementing projects in order to be on schedule. Meantime, the forex rate fluctuations are slowing down the projects.What has the Petroleum Ministry done with regard to the forex rate fluctuations in such National Iranian Gas Company contracts?No plan has so far been implemented. The directive issued recently does not concern these projects and this issue may not be discussed easily. Implementation of plans is time-consuming and the contractors have to bear costs in the hope of recouping them.Is there any note in the contract to predict forex rate fluctuations?Since we modify the contracts such issues are not integrated. From 2013 to 2017 everything was going on smoothly as we had no forex fluctuations. The sudden change in the forex rate occurred in 2018, which proved to be very effective. Those who were signing contracts two years go could never predict such forex rate changes. We take this issue into consideration in the new contracts. What projects are expected to start up next calendar year?Next year, we will have the detailed design of the Iran Gas Trunkline 10 (IGAT10) on the agenda. We are expected to complete the detailed design of this pipeline next year. This pipeline starts from Pol Kaleh to reach Qom. It is 243 kilometers long and 56 inches in diameter. Basic design for the project is under way and the detailed design will be done next year so that the project would be ready for outsourcing. We also plan to complete the Juyon Banarouyeh pipeline, and the steel Boutia pipeline in Kerman. The latter will be 40 kilometers long. Construction has already started and we are preparing the yard and the delivery of our pipes, to start the work on schedule.What kind of sheets is used in the pipe manufacturing?The pipeline project was the first one in which x60 slabs were supplied by the Mobarakeh Steel Mill. That caused the domestic manufacturing of x60 slabs which we used in the Jiroft project. I fully ensure you that the Jiroft gas project is totally Iranian and I offer my gratitude to the contractor and the consultant. In the current year we have made efforts to use Iranian-made commodities. That is now an advantage of this project compared with other projects. What kind of other sheets was used in the pipe manufacturing?The sheet that used to be manufactured in Iran was x52. X60 was among sheets that were purchased from abroad. After their domestic manufacturing any export was banned. We were the first buyer of these products from Mobarakeh Steel Mill. In terms of quality, the sheet is no different from foreign ones. All tests have been conducted on the pipes in which these sheets have been used and there has been no problem.Have you faced any problems in local communities for land allotment?There are such problems, but we follow up on them via NIGC Legal Affairs Department based on official prices. For instance, we had to build a gas pipeline in Kuhdasht and Khorramabad. Due to the high prices of land, we faced problems. That is inevitable.What are your plans for extending Iran’s gas pipelines in the current calendar year?A total of 200 kilometers was added to IGEDCO’s pipeline plan. In other projects activities are under way for new extensions.

The US Geological Survey estimates show that Venezuela’s recoverable 513 billion barrels of oil is contained in the Orinoco Oil Belt. Venezuela has twice Saudi Arabia’s oil reserves

he death of Hugo Chavez in 2013 and then re-election of Nicolas Maduro in Venezuela was proof of the victory of anti-US Leftists in the Latin American nation. However, Washington never steered clear of his decision for regime change in Venezuela. The major tool used by US for intervention in Venezuela has been the lumbering economy of this country whose inflation rate has hit millions in percentage.Amid growing crisis in Venezuela, Maduro and his allies accuse the opposition, the United States and some American nations of having caused tough economic conditions in that country. That is while the opposition accuses the Maduro government of following wrong policies and rampant corruption.Given the significance of Venezuela’s standing in the oil market and OPEC, the present article reviews the impact of Venezuela’s political crisis on its own petroleum industry, as well as on the world energy markets.Best in Western HemisphereVenezuela, a major crude oil exporter, is a founding member of the Organization of the Petroleum Exporting Countries. Venezuela is not only the largest producer of oil in South America, but also it owns the largest oil reserves in the world. According to an OPEC report, Venezuela accounts for 24% of the Organization’s oil reserves.The US Geological Survey estimates show that Venezuela’s recoverable 513 billion barrels of oil is contained in the Orinoco Oil Belt. Venezuela has twice Saudi Arabia’s oil reserves.Venezuela produces ultra-heavy crude oil that has its own customers. In addition to the US, India and China are among nations whose refineries were built to process heavy crude oil. That is why they are among buyers of Venezuela’s oil.In late 2018, Venezuela recorded its lowest crude oil exports in three decades. Venezuela exported 1.245 mb/d of crude oil, which was the lowest since 1990. The drop in Venezuela’s oil production and exports drove global prices up lightly, which mainly affected the US market.Over recent months, despite the reduction in US oil imports from Venezuela, it continues to be a major buyer. According to the US Energy Information Administration (EIA), Venezuela exported 500,000 b/d of crude oil to the US in 2018. That constitutes 20% of Venezuela’s oil exports.Chavez, the former Venezuelan president, nationalized the petroleum industry in 2007 and seized all oil facilities. Two years later, he tasked the Army with taking control of all companies providing services to the petroleum industry. As a result, 8,000 people working for private companies and their vessels, tugboats and ports came under authority of government. Chavez’s move to nationalize the Venezuelan petroleum industry, which used to be controlled by US companies, drew angry reaction from the White House. Immediately after the nationalization of the petroleum industry in Venezuela, the two American oil companies of ExxonMobil and ConocoPhillips had to leave Venezuela.Oil CalamitiesOil has been a major source of income in Venezuela for years, bringing about progress in its economic policies. However, the black gold may be blamed for ongoing political crisis for the two following reasons: First and foremost, Venezuela’s economy totally depends on oil revenues. According to estimates, the government receives about 95% of its revenue from petroleum exports. Therefore, any fluctuations in the oil prices may harm Venezuela’s economy. As long as the crude oil prices were high in the global markets, the Venezuelan government was able to run state affairs, but it saw its economy harmed since 2014 due to the oil price slump. Second, rich oil reserves in Venezuela have always been coveted by the US. A major consumer of Venezuela’s oil, the US tends to expand its dominance over this country’s petroleum industry. That is in conflict with the existence of a Leftist political regime which considers any relationship with the US to be harmful. The US has been meddling with Venezuela’s state affairs since Chavez was in power. By creating chaos, the US has sought to push Venezuela to choose political elite. Consequently, oil has become a major source of dispute in US-Venezuela relationship. For instance, the first step the US took after recognizing opposition leader Juan Guaido as Venezuela’s president was to impose sanctions on the country’s oil.Oil Equations FutureAlthough economic woes, decrepit facilities and US sanctions have undermined Venezuela’s oil production and exports in recent years, the country has sought to renovate equipment and attract foreign investment. For example, Russia and its companies have invested more than $17 billion in Venezuela over the past 20 years, mainly in the oil sector. The bulk of Russia’s investments in Venezuela has been done by Russia’s state-run Rosneft company. Russia has been involved in five investment agreements struck by Venezuela’s state-run oil and gas company PDVSA. In 2017, Russia signed a deal to sell PDVSA’s oil. In the same year, Russia sold 8% of Venezuela’s oil production, i.e. 59 million barrels. That is why when tensions escalated in Venezuela, the CEO of Rosneft announced that his company would never leave Venezuela. For its part, China is both a leading importer of Venezuela’s oil and a big investor there. State statistics show that China imported 340,000 b/d of oil from Venezuela in 2018. China is estimated to have invested about $70 billion in Venezuela in return for importing oil. Furthermore, China’s state oil company China National Petroleum Corporation (CNPC) purchased about 10% of shares in oil joint venture Sinovensa from Venezuela to become a 49% stakeholder.Despite the fact that US oil sanctions have harmed Venezuela’s oil industry in the short term, Caracas, backed by such partners as China and Russia, is looking for a way out of the current situation. It has to renovate its oil industry. Undoubtedly, such approach is in conflict with the US policies in Venezuela. US National Security Advisor John Bolton has clearly said that if US companies manage to invest in Venezuela’s petroleum industry that would largely affect the US economically.Nonetheless, the current US policies have enlarged the distance between the US and Venezuela while persuading such rivals as China and Russia to increase investment in Venezuela.Meantime, the US oil sanctions could not continue forever because such sanctions would spur demand and finally drive heavy crude oil prices up to the dismay of consumers. US sanctions can also directly affect the price of energy carriers inside the US. It is noteworthy that Venezuela’s PDVSA owns the US-based Citgo refinery and therefore any sanctions on the part of Washington against Venezuela’s oil would trigger a crisis in the energy supply on the US territory.When in August 2017, the Trump administration banned the sale of US oil companies’ stocks in the US leading to the closure of Citgo petrochemical company, Maduro announced that the US economic sanctions on Venezuela would bring a halt to US oil exports. Therefore, the US oil sanctions on Venezuela are likely to have a boomerang effect and backfire on the US.

Petrobras Brings Onstream Third Búzios Field Floater

Petrobras has started oil and natural gas production through the P-76, the third FPSO installed on the Búzios field in the presalt Santos basin offshore Brazil. The FPSO is located about 180 km (112 mi) off the coast of the state of Rio de Janeiro, in a water depth of 2,030 m (6,660 ft). The P-76 can process up to 150,000 b/d of oil and compress up to 6 MMcm/d of gas. It will be connected to 10 production wells and seven injector wells. Mozambique Group to Supply LNG to PertaminaMozambique LNG1 Co. Pte. Ltd., the jointly owned sales entity of the Mozambique Area 1 co-venturers, has signed a sale and purchase agreement (SPA) with Pertamina.According to Area 1 operator Anadarko Petroleum Corp., the SPA is for 1 MM metric tons per annum (MTPA) for a term of 20 years. BrazilVIEWDeepwater Geotechnical Campaign Completed off MalaysiaBenthic and partner Asian Geos Sdn Bhd have completed a geotechnical investigation at the Limbayong field offshore east Malaysia for Petronas Carigali. Petronas Carigali contracted Asian Geos for the provision of soil investigation services for the deepwater Limbayong development.‘Fasttrack’ Rig Service Center in NorwayPSW Group and Wergeland Holding have signed an agreement on commercializing a new drydock in western Norway for accommodating drilling rigs. The accord covers a wide range of activities related to inspection, repair and maintenance of drilling rigs, drillships,

UAE Seals $4bn Pipeline Infrastructure Deal

Abu Dhabi National Oil Company (ADNOC) has sealed a $4 billion midstream pipeline infrastructure deal with U.S. investment firms KKR and BlackRock, the government-owned company said. ADNOC has been expanding through strategic partnerships since 2017. Last month it won a combined $5.8 billion investment from Italy’s Eni and Austria’s OMV for a stake in its refining business to establish a new trading operation owned by the three partners. The latest deal follows ADNOC’s capital markets debut with its Abu Dhabi Crude Oil Pipeline bond, the IPO of ADNOC Distribution and other initiatives. A new entity called ADNOC Oil Pipelines will lease the oil company’s interest in 18 pipelines, transporting crude oil and condensates across ADNOC’s upstream concessions for a 23-year period, ADNOC said in a statement. The 18 pipelines have a total length of over 750 km and capacity of 13 million barrels per day. Funds managed by KKR and BlackRock will form a consortium to hold a 40 percent stake in the entity, with ADNOC owning the rest. ADNOC will have sovereignty over the pipelines and management of pipeline operations. The deal, expected to close in the third quarter of 2019, will result in upfront proceeds of some $4 billion to ADNOC. The statement cited Sultan al-Jaber, ADNOC group CEO, as saying the deal validated ADNOC’s approach of “unlocking value from its portfolio of assets while retaining control over their ownership and operation”.BlackRock is investing through its Global Energy & Power Infrastructure Fund series while KKR’s investment is through its third Global Infrastructure Investors Fund, the statement said.Shell plans to enter Britain’s offshore wind market by acquiring seabed leases or taking stakes in existing projects, despite the country’s impending departure from the European Union, the head of the company’s New Energies division said.Oil firms are increasingly building portfolios of clean energy projects to satisfy investor demands that they reduce their carbon footprint. Shell previously said it would spend $1 billion to $2 billion a year on green technology. “We absolutely would like to get a position in the UK offshore (wind) market,” Mark Gainsborough, executive vice president at New Energies, told Reuters in an interview.Many international firms, such as automakers and nuclear plant developers, have shied away from fresh UK investment with Brexit creating uncertainty over the future of the country’s economy. But Gainsborough said Britain’s plans to leave the EU next month would not dampen the company’s interest in its offshore wind industry.“The thing that is more important is there continue to be supportive government policies,” he said. Britain is the world’s biggest offshore wind market, hosting almost 40 percent of all globally installed wind capacity, and the government is this year expected to outline planned support for the offshore wind industry. Gainsborough said the company could seek to buy a stake in or acquire an existing British offshore wind project and that it planned to take an “active role” in bidding for a British seabed offshore wind lease expected to be tendered this year. Shell has been successful in similar seabed lease sales in the United States.

Shell, PetroChina Row Holds Up Gas Project

Royal Dutch Shell and PetroChina are at loggerheads over gas sales pricing at their Arrow Energy joint venture, holding up development of Australia’s biggest coal seam gas resource, three industry sources said.Shell and PetroChina acquired the Surat gas resource in a A$3.5 billion ($2.5 billion) takeover of Arrow in 2010, and had expected to reach a final investment decision in 2018, with first production around 2020.That was after the Arrow Energy venture signed a 27-year deal in December 2017 to supply natural gas from Surat to the Queensland Curtis LNG plant (QCLNG), which is operated by Shell.

Norway Oil Sector Lowers 2019 Investment ForecastOil

and gas companies working in Norway have lowered their investment forecasts for 2019 to 172.7 billion crowns ($20.1 billion) from 175.3 billion crowns seen in November, a survey by the country’s statistics agency (SSB) showed. In 2020 investments are expected to fall to 158.5 billion crowns, according to initial forecasts, though the forecasts could be revised upwards in the months to come, it added. “Several plans for development and operation are expected to be submitted to the government in both 2019 and 2020,” the agency said in a statement. “If the schedules for these plans are realised, the accumulated investment costs in 2020 from these projects will increase the investment in field development compared to the present estimate.

”India Overhauls Oil/Gas Exploration Rules

India revamped rules for future exploration and production of oil and gas blocks in its efforts to attract private investment and increase domestic production. India imports four out of every five barrels of crude oil it consumes and is likely to shell out more than $100 billion on oil purchases in 2018/19. “The emphasis of the new rules is for raising hydrocarbon production,” Dharmendra Pradhan, India’s oil minister said in New Delhi.Under the new rules, producers will be given pricing and marketing freedom that is currently non-existent in natural gas blocks in India. Explorers will also be given financial incentives for early production from their blocks, Pradhan said.

Mexico’s Pemex Crude Output Lowest Since Records Began

Mexico’s Pemex produced 1.62 million barrels of crude per day in January, less than any month in almost three decades, the state-owned oil company said, underscoring the challenges facing a government that vows to pump far more in a few years. The company’s crude output for the month was the lowest since at least 1990, when Pemex’s publicly available records begin.The firm’s crude oil output has declined for 14 consecutive years since hitting a peak of 3.4 million bpd in 2004, as Mexico’s most prolific fields have dried up and new ones to replace them have not been discovered.

Investor Demands Affect U.S. Shale Executives

Weak returns at U.S. shale producers could cost more executives their jobs and lead to increasing battles with activist investors, analysts said following changes at two producers. After years of outspending cash flow to expand oil and natural gas production, executives are under pressure to pull back on spending and deliver higher returns. Investors have sold shares in companies that increased their drilling budgets, and some have avoided the sector altogether. Pioneer Natural Resources Co Chief Executive Tim Dove retired after a two-year stint in the job, with founder and former CEO Scott Sheffield returning to the top role. Halcon Resources Corp CEO Floyd Wilson and two other executives - finance chief Mark Mize and Steve Herod, executive vice president of corporate development - resigned the same day. The company said it began the search for a new CEO. “It’s a what-have-you-done-for-me-lately scenario,” said Jason Wangler, analyst with Imperial Capital in Houston. “Not only are investors holding people accountable, they’re watching every move.” He expects management and board changes at other companies this year. Activist investor Fir Tree Partners this month called for Halcon to appoint independent board directors, cut costs and sell itself. Fir Tree in a statement called the management changes “important first steps.”Kimmeridge Energy Management Co announced an activist stake in PDC Energy Inc and urged the producer to cut expenses and pay a dividend. PDC in response said it was focused on capital discipline

Canadian Regulator Backs Oil Pipeline Expansion

Canada’s National Energy Board (NEB) regulator recommended Ottawa approve expansion of the government-owned Trans Mountain oil pipeline, but made new, nonbinding recommendations to mitigate harm to Pacific Ocean killer whales. The pipeline is in the national interest as it will create jobs and allow Canadian oil to reach more markets, the NEB said in a report. But expanding it is likely to significantly harm the killer whale population off the coast of British Columbia and increase greenhouse gas emissions from ships, the board said in its report. A “worst-case” spill, while unlikely, would also be damaging, it said. The NEB made 16 new recommendations, ranging from offsetting increased underwater noise to reducing greenhouse gas emissions from ships. The recommendations constitute nonbinding advice to the government. Ottawa in September directed the board to conduct a new review of its application to nearly triple the capacity of Trans Mountain, which the government bought for C$4.5 billion ($3.43 billion) last year from Kinder Morgan Canada to ensure it gets built. The move came after Canada’s Federal Court of Appeal overturned the Liberal government’s 2016 approval to expand the pipeline, which runs from Alberta to the British Columbia coast. The court ruled that the NEB failed to consider marine impacts and that the government did not adequately consult indigenous groups. The NEB’s ruling is a political win, albeit with mixed implications, for Prime Minister Justin Trudeau, ahead of a fall election

Pertamina Eyes Doubling Refinery Capacity

Indonesian state energy company PT Pertamina is planning capital expenditures of $4.2 billion this year and will raise it to $7 billion in two years as part of plans to double its oil refinery capacity, chief executive Nicke Widyawati said.Pertamina is under pressure from the government to expand its downstream production to reduce imports of refined oil products, which creates a trade deficit that weighs on the Indonesian rupiah. “Starting from 2021, we will invest around $7 billion per year as these refineries (developments) are in progress,” Widyawati said in a meeting with journalists.Pertamina plans to double its refining capacity to 2 million barrels per day (bpd) in 2026 from around 1 million bpd currently, Widyawati said, to meet national fuel demand of around 1.4 million bpd.Pertamina expects to import 351,000 bpd of gasoline this year, up from 324,000 bpd in 2018, according to a company presentation during the meeting. The company is currently working on at least seven refinery projects, including the new Bontang and Tuban refineries and the upgrading of the Balikpapan and Cilacap plants. To finance the investment, Finance Director Pahala Mansury said Pertamina has the capacity to raise funds through borrowing, but the company is actively looking for partners for certain projects. “We are looking for investment partners. These are big investments and the return may take a while,” Widyawati said. Meanwhile, Pertamina is targeting $58.85 billion in revenue in 2019, up from $56.06 billion in 2018.

Saudi Aramco Agrees $10bn Project in China

State-owned Saudi Aramco has signed an agreement to form a joint venture with Chinese conglomerate Norinco to develop a refining and petrochemical complex in Panjin city, saying the project is worth more than $10 billion.Aramco and Norinco, along with Panjin Sincen, will form a new company called Huajin Aramco Petrochemical Co as part of a project that will include a 300,000 barrels per day (bpd) refinery with a 1.5 million metric tonnes per annum (mmtpa) ethylene cracker, Aramco said.The deal was signed during a visit by Saudi Crown Prince Mohammed bin Salman to Beijing as part of an Asia tour.Aramco will hold 35 percent of the new company, with Norinco and Panjin Sincen owning 36 percent and 29 percent respectively, the statement said.Aramco will supply up to 70 percent of the crude feedstock for the complex, which is expected to start operations in 2024. The value of the project means it is the largest Sino-Foreign joint-venture, Aramco said. The agreement “is a clear demonstration of Saudi Aramco’s strategy to move from beyond a buyer-seller relationship, to one where we can make significant investments to contribute to China’s economic growth and development,” Aramco CEO Amin Nasser said in the statement. It said there were also plans to establish a fuels retail business. Saudi Aramco, North Huajin and Liaoning Transportation Construction Investment Group are expected to form a three-party marketing joint-venture company by the end of 2019, it said

Some US Congress members believe that OPEC has kept oil prices high in its own interest by monopolizing the oil production

OPEC or NOPEC:This is the Question

Ever since having taken office as president of the United States, Donald Trump has made surprising decisions by reversing previously-adopted treaties and pulling the US out of international pacts. He has been pursuing a new approach vis-à-vis nations. This trend is not limited to political, military and security affairs. The Trump administration has also targeted the economy. He has already put into trouble the US’s trade deals with China, the European Union, American and Asian nations. A controversial issue is the oil market and forcing changes into traditional equations and existing structures like the Organization of the Petroleum Exporting Countries (OPEC). Trump has openly opposed OPEC decisions and sought to persuade some member states to work in favor of US interests by overruling any consensus within the oil producer group. Legislation that aims to prevent the 14-nation OPEC from coordinating production — and influencing oil prices — is once again advancing on Capitol Hill. The House Judiciary Committee recently passed the No Oil Producing and Exporting Cartels Act, commonly known as NOPEC, clearing the bill for a vote before the full House of Representatives. US Vs. OPECSome US Congress members believe that OPEC has kept oil prices high in its own interest by monopolizing the oil production. In their view, the high oil prices are putting a strain on American gasoline consumers. The bill was first introduced in 2000, and Congress has revived it several times since then — most recently in the last Congress, where it stalled after getting approval of House Judiciary Committee. The full House and Senate passed NOPEC legislation in 2007. The House passed it again in 2008, when oil prices hit an all-time high at nearly $150 a barrel. However, the bill languished under threat of veto from former President George W. Bush. Former President Barack Obama also opposed NOPEC, but analysts have speculated the measure could find support in the Trump White House. The bill would essentially make it illegal for foreign nations to work together to limit fossil fuel supplies and set prices. They would authorize the U.S. Justice Department to sue oil producers for antitrust violations by stripping foreign actors of sovereign immunity protections. President Donald Trump repeatedly blamed OPEC on Twitter last year for driving up the price of oil. At the UN General Assembly in September, he told world leaders the group was ripping them off. Still, there are signs the fresh NOPEC push in Congress has unnerved OPEC. The group reportedly advised member countries against mentioning oil prices when discussing production policy. In January, The Wall Street Journal reported the group

is considering undertaking a campaign to influence U.S. perception of OPEC. It comes as some members of OPEC are trying to extend the group’s two-year alliance with Russia and nine other producers. In 2016, the so-called OPEC+ coalition reached a historic agreement to cut production in order to drain a global crude glut and end a punishing oil price downturn.OPEC FunctionAny anti-OPEC action for reducing fuel prices in the US may win Trump and other US politicians popularity, but the fact is that oil prices hikes are partly due to the US policies, as well. For instance, the Trump administration’s move to impose oil sanctions on Iran and Venezuela has undermined supply and increased prices. Furthermore, gasoline prices in the US, like every other oil importing nation, are related to fuel taxation. Therefore, the high gas prices in the US are an immediate outcome of the taxation system and the pro-sanctions foreign policy of this country. Accusing OPEC of manipulating oil prices is just a politically-motivated electoral campaigning attempt.The fact is that OPEC quota system, which was established in 1982 following a price crash, brought stability into international markets. Although oil production without any legal constraints and quota system may initially reduce prices, it would give rise to destructive consequences, too. For instance, when oil prices are low, firms are not persuaded to envisage long-term investment. Therefore, after some time, oil production will fall. Furthermore, low oil prices would not make oil recovery economical in such places as Alaska, the Gulf of Mexico, the North Sea and western Canada. In short, low oil prices would spell an end to recovery from many oil fields and reservoirs. The important point is that when oil prices are low the US – as the largest holder of shale oil reserves – would suffer losses the most, because low prices would not compensate for shale oil extraction and the US will have to stop investing in oil recovery projects. OPEC, as a body which has managed to strike a balance to oil supply and demand, has never acted against the interests of consumers. Even on the contrary, it has prevented any drop in supply and strain on consumers like the US. NOPEC to Cause US HarmOPEC is a must for market stability and secure energy supply. The attempt made by some Congress members in the US to vote for the NOPEC legislation would destabilize the oil market, because on one hand OPEC has prevented oil price slump to attract more investment into the petroleum industry and increase supply across the globe, and on the other, it has created an extra production capacity in order to keep the prices from a sharp jump in case of supply disruptions. Therefore, in case NOPEC is signed into law, oil producing nations would no longer be motivated to control their oil supply surplus. Over recent years, OPEC’s extra production capacity has been a safety valve to prevent a supply glut in the market and keep oil prices from growing sharply.An adoption of the NOPEC bill would pit Washington against OPEC members while it may harm the US’s ties with some of its longtime allies like Saudi Arabia. Despite their dependence on the US, the Saudis believe that undermining or dissolving OPEC would be an action against their main source of income. Saudi Arabia will by no means favor such bills as NOPEC. Furthermore, NOPEC would affect Russia-OPEC ties, thereby pitting Russia against the US in the energy sector.Last but not least, approval and implementation of NOPEC would not only target the economy and harm energy supply, it would also affect the US’s political ties with many nations. Therefore, NOPEC is an unreasonable and illogical bill whose approval by the Trump administration is likely

51 contracts worth €597 million plus IRR 4,330 billion have been exchanged with the private sector.”Falahatian said

Iran Oil Industry to Rely on Domestic Manufacturing

The sixth drilling industry and the third E&P congress was held in Tehran Feb 23-24. This event comes against the backdrop of US unilateral sanctions against Iran’s petroleum sector following President Donald Trump’s withdrawal from Iran’s nuclear deal with six world powers – the Joint Comprehensive Plan of Action (JCPOA).Iranian officials say the country’s petroleum industry is experiencing its toughest days ever. Some also believe that the US unilateral sanctions have been a declaration of economic war against Iran. In light of tough sanctions against Iran’s petroleum industry, the executive committee of this round of drilling and E&P congress laid emphasis on the necessity of reforming governance in the petroleum industry and further support for the private sector. This year’s congress included 30 panel discussions, five training workshops and more than 100 presentations about the technical aspects and requirements of oil recovery, financing, legal aspects of contracts, insurance and risk management, as well as business strategies at E&P companies, general contractors, drilling companies and technical services under conditions of sanctions. The event was attended by more than 1,200 key stakeholders from the state-run and private sectors.Gasoline Export CapacityHoushang Falahatian, the deputy minister of petroleum for planning, said: “Switching from selling crude oil resources to selling products of higher value-added and shifting from an oil-dependent government to an oil-based economy represent the necessity of changing approaches at higher levels of the petroleum industry.”Noting that Iran’s current gasoline consumption averages 88 ml/d with output being a little bit higher than 100 ml/d, he said: “Under the present circumstances, we have capacity to export gasoline.”Falahatian said: “If no remedy is found to fuel consumption in coming years and fuel prices do not increase and the quality of car manufacturing is not upgraded, we will be facing problems with gasoline supply in the coming two years.”He said the development of West Karoun fields, onshore fields like Azar, maximum gas condensate recovery from South Pars, upstream equipment of South Pars, among other projects, are part of Petroleum Ministry’s plan for the oil upstream sector.Falahatian said commercialization and manufacturing of widely consumed petroleum industry items were important issues, adding: “In this regard, 51 contracts worth €597 million plus IRR 4,330 billion have been exchanged with the private sector.”Revising GovernanceRokneddin Javadi, head of the policymaking council of the congress, said the event started out in 2008 upon an initiative by National Iranian South Oil Company (NISOC). He expressed hope that the congress would help work out new mechanisms to open a new horizon for the drilling industry, upstream oil sector development and linkage with modern technology in Iran.“In light of economic sanctions resulting from the imposition of sanctions, it would be instrumental to convince [everyone] that Iran’s petroleum industry could stay afloat in partnership with the state and private sectors,” he added. Javadi, a former deputy minister of petroleum, recalled that Iran sits atop the world’s largest gas reserves, as well as the world’s fourth largest oil reserves. “If we add new discoveries in sand layers and future gas hydrates to the existing reserves, we are likely to jump to the top rank in the oil sector as well,” he added.Javadi stressed the need for investment in the petroleum industry, saying: “A long-term horizon is lying ahead of Iran’s petroleum industry and we have to invest as much as we can in the development of this industry.” He said he hoped Iran would continue with the development of petroleum industry regardless of international restrictions. Javadi said “startup activities” would guarantee the acceleration of petroleum industry development.Noting that governance in the oil and gas industry constitutes a major topic of the congress, he said: “Reconsidering the issue of governance would create good opportunities for the development of the petroleum industry and therefore it would be necessary to take it into consideration.”Petroleum Industry ReconsiderationSaleh Hendi, director of Exploration Directorate at National Iranian Oil Company (NIOC), said: “In the oil sector, in light of our oil production and exports, we have still as much recoverable oil as we had in 1978.”He added that Iran’s gas conditions have improved since 1978, noting that 80% of Iran’s gas deposits were discovered after the 1979 Islamic Revolution.Hendi said Iran was in good conditions in identifying unconventional reserves like shale oil, shale gas and gas hydrate, noting that they were not NIOC priority. “The private sector is needed to enter this sector,” he added.“In the development and production sectors, despite all bottlenecks faced with by the petroleum industry over the past 40 years, the flow of oil exports was never halted under the toughest economic conditions and even during the imposed war, and it has been continuing,” said Hendi.He said Iran could have still done better in terms of petroleum industry development. “Of a total of 250 oil reservoirs which we have now, 120 are yet to undergo development, and of the existing 130 gas reservoirs, 100 remain undeveloped,” Hendi said.“Iran’s petroleum industry conditions is not yet suitable despite the existence of the largest hydrocarbon reserves in the country, and the process of decision-making and policymaking needs to improve,” he added.Hendi said: “We need to make

Gholam-Reza Manouchehri, said following the 2015 nuclear deal, more than 120 master development plans were submitted by mainlyinternational companies

changes in NIOC planning based on business units, project management and financial management.”Iran E&P FirmsAddressing a panel on the perspectives of Iran’s oil and gas industry, Hendi said the promotion of a number of Iranian companies to E&P status in recent years was a major step in empowering the private sector in the upstream oil sector.He said a major requirement for empowering Iranian E&P companies was to create strategic alliances and merge them. “The value chain of upstream oil sector will take time to yield, but the yield is high and E&P companies can team up to focus on exploration more than before,” Hendi said. “For this purpose, the Exploration Directorate has got permission from NIOC Board of Directors to hold a tender bid for a number of Iranian exploration blocks to be awarded to Iranian companies.”He said that many Iranian E&P companies were financially able to bid for the development projects. 120 MDPs SubmittedGholam-Reza Manouchehri, CEO of Oil Industries Engineering and Construction Company (OIEC), said following the 2015 nuclear deal, more than 120 master development plans were submitted by mainly international companies.Manouchehri, a former deputy CEO of NIOC, said various negotiating teams had been set up at NIOC. “In a certain period of time, negotiations were held simultaneously for 15 contracts and even 10 cases were nearing finalization, but they were halted due to the problems arising from the US withdrawal from the JCPOA,” he said, referring to the acronym used for Iran’s nuclear deal with six world powers. He pointed to the negotiations with Denmark’s Maersk for the South Pars Oil Layer and Ab Teymour oil field, finalization of talks with Austria’s OMV in Band Karkheh, talks with Norway’s DNV in Changouleh, talks with Russia’s Gazprom Neft in the Azaf field, with Royal Dutch Shell in Kish and with China’s Sinopec in the Yadavaran oil field.He said: “The talks for the development of Azadegan were under way with three consortiums. It was expected to be awarded to a consortium of [France’s] Total, [China’s] CNPC and an Iranian company. After the [US] withdrawal from the JCPOA, the talks have got under way with CNPC.”Manouchehri said: “Had the post-JCPOA talks come to fruition, the ground would have been prepared for $200 billion investment in the country.”He said Iran was enduring tough conditions due to the US sanctions. He added: “Under such circumstances, we need to make efforts to change paradigms, hire young specialists, focus on startup activities and knowledge-based companies and we hope to be able to take steps on the path of growth and development by relying on the potentialities in Iran.”Manouchehri said European or Asian companies may not be interested in working with Iranian companies, as they did in the past due to the sanctions. “However, we can cooperate with smaller Asian or European companies as investor or financer,” he added.Manouchehri said: “The present period is a period of transition, but we don’t know how long it will last. Therefore, there are good conditions for the Iranian E&P companies to move ahead. We should not step back and avoid any halt in the petroleum industry activities.”“Iranian companies are experienced in executive and engineering activities, but they need to upgrade themselves in financial management and financing. They are also required to build financial capacity because without such capacity building they would not implement projects,” he said.Manouchehri said: “Iran’s energy sector enjoys high potential for growth. Therefore, we can diversify and multiply approaches of capital attraction in a bid to pave the ground for the development of this sector even under the current tough conditions of sanctions.”Iran Among Top Gas SuppliersMohammad Hossein Adeli, former secretary general of Gas Exporting Countries Forum (GECF), gave a positive assessment of the future share of gas in Iran’s energy mix. He said: “Currently, gas makes up 22% of world energy supply, which would reach 26% in 2040. That is while demand for oil would decline from 32% to 29%.”Adeli said gas would be traded in the future in the form of liquefied natural gas (LNG), adding: “Currently, the share of LNG in the global trade stands at 33%, which would reach 45% by 2040.”He said one reason for focus on LNG trade was to skirt around the existing political restrictions.“Therefore, Russia – as the largest pipe gas exporter – has been rapidly moving towards LNG trading. It is necessary for Iran to move in such direction,” he added.Adeli touched on the growing demand for gas, the increasing gas prices, the increase in the LNG share and growing inclination for gas trading as the perspectives of the gas market. He said: “Iran’s approach in the gas market must be in such a direction.”He said the world population would grow by 1.7 billion in 2040, including 1.6 billion in urban areas. When the urban population rises, he said, demand for energy would grow. Noting that the global demand for gas would increase about 50% (1,718 bcm) by 2040 to reach 5,427 bcm, Adeli said: “According to statistics, fossil fuels will remain dominant in the world over the coming 30 to 40 years. Furthermore, in 2040, 76% of fuel used in the world would be fossil-based.”“In 2017, fossil energies met 81% of the global energy needs. At worst, it will fall to 56% within 23 years,” he said.Adeli said estimates showed that China, Iran, Russia and the United States would be the four major gas suppliers in the world in 2040, adding that Russia and the US were currently the top suppliers

5352February 2019February 2019Iran PetroleumpetchemIran PetroleumpetchemIran’s petrochemical industry was born in 1963 after a chemical fertilizer production unit was launched at Shiraz Petrochemical Plant. One year later, a law was ratified for the establishment of National Petrochemical Company (NPC) under authority of National Iranian Oil Company (NIOC) to focus on every single activity of this sector. Up to the 1979 Islamic Revolution, the main objectives of the industry were limited to supplying domestic needs for chemical fertilizers and some basic chemicals like carbon black, sulfur, liquefied gas, sodium hydroxide, sodium carbonate and bicarbonate, PVC, and plasticizers.The establishment of the Razi, Abadan, Pazargad, Carbon Ahvaz, Kharg and Farabi petrochemical plants and development of Shiraz Petrochemical Plant, as well as partial construction of the Bandar Imam Petrochemical Plant have been the result of efforts made in the years following the Islamic Revolution. According to statistical data for 1978, Iran’s rated petrochemical production capacity was recorded at 3 million tonnes. Iran’s petrochemical production stood at 1.6 million tonnes from 17 products. Domestic petrochemical sales were at 1.52 million tonnes and petrochemical exports were at 0.6 million tonnes for $0.05 billion. But owing to the growth and blossoming of this industry following the Islamic Revolution, the rated capacity has increased 21-fold, the number of petrochemical plants is up 9 times, and petrochemical output has increased 37-fold now.Providing logistics to warfronts during the imposed war (1980-1988), designing and engineering and allotment of land for the Arak and Isfahan petrochemical plants, completion of Shiraz petrochemical plant development, startup of Shiraz methanol projects, Arak Petrochemical Plant and Razi phosphate di-aluminum unit, and establishment of Petrochemical Industries Design and Engineering Company (PIDEC) within the framework of the first methanol project in Shiraz were among the major petrochemical industry activities from 1979 to 1987. In 1987, Shiraz Petrochemical Plant reached its highest output following the Islamic Revolution. Meantime, production resumed in the first and second phases of Razi petrochemical plant. In that year, Iranian petrochemical plants’ output totaled 880,000 tonnes. As a result, NPC exported 270,000 tonnes of sulfur worth $26 million and sold 430,000 tonnes domestically for IRR 5 billion.Reconstruction of War-Affected PlantsFrom 1989 to 1994, the first phase of post-war reconstruction plans started. NPC followed up on the damaged plants seriously and they became operational gradually. Meanwhile, some basic projects like Isfahan Petrochemical Plant, Arak Petrochemical Plant (Phase 1) and Bandar Imam Petrochemical Plant were completed and operational. Iran’s first five-year economic development plan included 10 new projects. During that period of time, IRR 7,085 billion was invested in the petrochemical sector and new projects came online. Therefore, NPC’s production capacity grew from 5.3 million tonnes in 1989 to 10.3 million tonnes in 1994 after experiencing an average annual 13.5% growth. Iran’s petrochemical production reached 7.5 million tonnes and exports hit 1.9 million tonnes a year by 1994 when petrochemical exports earned Iran $271 million. NPC 2nd Five-Year PlanNPC started implementing the second five-year development plan with a view to boosting profitability, increasing exports, developing privatization, increasing and diversifying products. By the end of the second five-year plan, the projects that had remained from the first plan helped bring petrochemical production to 11 million tonnes a year. Under the second plan and in compliance with the objectives set therein, the necessity of benefiting from the relative advantages of Iran including access to high seas, huge oil and gas reserves, facilities and infrastructure, new projects became operational in Bandar Imam. In order to materialize the policy of attracting foreign investment and increasing non-oil exports, a special economic petrochemical zone was established in Bandar Imam zone in line with implementing projects in the petrochemical sector and relevant industries.Under the second five-year plan, NPC recorded significant growth in petrochemical sales. In 1999, domestic sales grew to 3.8 million tonnes for IRR 4,300 billion, while petrochemical exports hit 2.9 million tonnes for $580 million, registering an annual 16% growth. The share of petrochemical sector in Iran’s non-oil exports was up to 17.2%, while its share of Iran’s exports came to 30.7%.Higher Status for Iran in MarketsNPC’s third five-year development plan was the start of a new phase towards globalization of the company’s activities. The main objectives sought under the third plan included implementing the remaining projects of the second five-year plan, optimal use of existing capacities, renovation of older units, supply of products of higher value-added, maximum use of domestic techno-engineering capacities, equipment of special economic zones, expansion of exports, privatization, supporting private sector investment and expansion of R&D. Under this plan, implementing new plans with the objective of supplying products of higher value-added and maximum use of ethane and gas liquids was incorporated. In order to implement these projects, the Pars Special Economic Energy Zone (PSEEZ), where is located the giant South Pars gas field, was chosen as a suitable place for the new petrochemical projects.With a total investment of IRR 115,400 billion and implementation of the projects NPC’s annual production capacity reached 18 million tonnes by March 2005. Petrochemical production increased from 11 million tonnes in 1999 to 15 million tonnes in 2004 when NPC’s 5.3-million-tonne exports yielded $1,726 million, while domestic sale of petrochemicals hit 4.8 million tonnes generating IRR 12,600 billion.Preparations for privatizing and transforming NPC into a regulatory body started in 2007 A number of companies and plants were privatized individually, but establishment of holdings and the continuation of NPC’s activities in the form of a governing and regulatory organization was adopted in 2009.The main objectives sought in the fourth five-year development plan included implementation of petrochemical development projects with a focus on using gas resources to expand the value chain of petrochemical production with a higher value-added and more reliance on domestic capabilities, attracting private sector investment and expanding R&D. Throughout the fourth plan (2005-2010), 40 projects with a total capacity of 34.3 million tonnes were started up. By March 2011, the production capacity was recorded at 51 million tonnes, production at 40.1 million tonnes and exports at 16.2 million tonnes.Since the start of the fifth five-year development plan up to March 2017, 26 petrochemical projects have been implemented, mainly by the private sector, adding about 10.5 million tonnes to the country’s petrochemical industry production capacity. By March 2017, Iran’s petrochemical production capacity was recorded at 62 million tonnes, production at 50.6 million tonnes and exports at 20.4 million tonnes worth $9.5 billion. Under the 6th five-year development plan, a policy was adopted to minimize selling raw materials, complete the value chain and increase investment. By starting up 34 petrochemical projects which are over 20% complete, Iran’s petrochemical production, which reached 53.6 million tonnes by March 2018, is expected to record significant growth. In the last calendar year to March 2018, Iran’s installed capacity of petrochemical industry was 64 million tonnes. Petrochemical plants reached 84% of their nominal capacity. As a result, of 30.7 million tonnes of sellable products, 22.4 million tonnes were exported for $12 billion. Since the beginning of the 6th five-year development plan, a petrochemical production project and a utility services project have become operational, adding about 7 million tonnes to the capacity of this industry.Petrochemical YearIran’s Petroleum Minister Bijan Zangeneh said at a press conference recently that the next Iranian calendar year would be devoted to the petrochemical industry. “For the first time, Iran’s ethane production will reach 10 million tonnes a year and the surplus ethane would go to petrochemical plants. Therefore, startup of olefin plants has to pick up speed,” he said. Zangeneh expressed hope for the startup of the first phase of the Bushehr petrochemical plant’s olefin, Ilam’s olefin, Sabalan’s methanol, Lordegan’s chemical fertilizer, Miandoab’s petrochemical, ASPR of Assaluyeh, Kaveh’s methanol and Bidboland’s gas refinery in the next calendar year to add 12 million tonnes to the country’s petrochemical production capacity.

Legacy of Bahregan Oil Platform

Historians are accustomed to reenacting Iran’s contemporary history by searching through file photos and journals as reliable documents. The archive section of Iran’s petroleum industry museums has in recent years made great contribution to historians. Old documents have been gathered from dust-covered bags packed in warehouses and sheds to be available to researchers

One of the places frequently cited in the documents is Bahregan where one of the oldest oil platforms is located. Bahregan is located 40 kilometers northwest of Guenaveh Port in southern Iran. It used to be known with other names in ancient time. Bahregan was long a center for exporting fabrics, lamp oil and wax (derived from petroleum). The name of Bahregan has been cited in some history books authored by Estakhri, Ibn Hawqal and Hamdullah Mostofi. The oil streams running around Bahregan were used by industrialists to insulate vessels, sewerage systems and buildings located nearby, as well as to light alleys and streets in Siraf, Hormuz, Gomboroun, Bushehr and adjacent areas. It took many years for the Persian Gulf region to reach oil and gas production in industrial scale. The first attempt for oil extraction was in Qeshm Island in 1914, but it failed. In 1957, the then Iranian government decided to extract oil from sea and offshore areas. Bahregan was the first place in the Persian Gulf to undergo development. In a significant rivalry with Saudi Arabia, it produced large amounts of oil. The only thing remaining from the events running from 1957 until 1964 are a few photos and documents, Well No. 1 and Bahregansar platform. In 2017, the Directorate of Petroleum Industry Museums and Documents had the platform registered as national heritage to serve as an offshore petroleum museum. Thanks to efforts by the Directorate, this platform was safeguarded from destruction and negligence. Restoration work is set to start at the platform to become a museum. The project is financed by the National Iranian Oil Company (NIOC). Manpower is another invaluable legacy alongside documents, equipment and petroleum industry journal. These veteran oil service workers and employees once represented the young and strong labor force of the country’s petroleum industry. From time to time, they answer questions and retell stories about that ancient period. Oil was first recovered in Bahregansar in 1962 at the rate of 6,290 b/d. Before production, Iran’s monarch –Mohammad Reza Shah Pahlavi – travelled to Bahregan and inspected the equipment installed by Iranian-Italian petroleum company SIRIP, including the oil and gas separator, as well as residential and recreational facilities.Combating Oil CartelsEnrico Mattei was the founder of SIRIP in Iran. Three movies and two TV series have so far been produced about his life and activity. Mattei died in a suspicious plane crash in 1962 when he was onboard to Africa to sign an oil deal. Mattei grew into an oil legend in Italy’s political culture. He was determined to fight oil cartels.Today few remain from SIRIP and Iranian manpower who transformed Bahregansar into an oil production platform. Every time they are asked about the history of Bahregansar, they hesitate for minutes before relating full stories which are really captivating. Shirinu, a local resident, has kept in memory everything about the presence of Italian technicians as if her brain were a camera. She is a living legacy of the events that have transpired Iran over the past six decades. Besides her, there are veterans like Behrouz Behbahani, Ahmad Salemi and Amir Hossein Hayat Davari, who can all serve as talking documents.Italians FriendlinessShirinu recalls everything about the efforts and activities of Iranians and Italians in building onshore and offshore facilities and drilling rigs.“The Italians and local residents were friendly to each other,” she says. “Some local people were involved in agriculture and some of them were waiting in front of SIRIP in the hope of vacancies to find a job.” Shirinu says the monthly salary paid to SIRIP workers was IRR 30 to IRR 40, which is risible today. “My mother and I were the only women in the village to work for them. My mother washed their clothes and I gave her a hand,” she recalls. She also baked bread for SIRIP employees, saying the company provided her with necessary firewood. “I often stayed up the whole night to prepare the bread for breakfast. I had also to bake bread for lunch and dinner because there was no baker’s in the village,” says Shirinu. “The salary we were paid was not too much, but it helped us make ends meet,” she adds. “Gradually, the life became prosperous in the village and the conditions improved. A school was built at the village. Stationary was distributed. Festive ceremonies were held. General practitioners came to visit people gratuitously,” says Shirinu. SIRIP saw its oil production increased to 25,000 b/d in 1965 and to 60,000 b/d in 1971. The Shah used to ask regularly about SIRIP’s oil output. The Shah was very sensitive to SIRIP and Iran Pan-American Oil Company among companies operating in the Persian Gulf area. The SIRIP activities were more interesting to him because he had ordered the signature of SIRIP agreement amid heated debate following the Consortium Pact. Iran’s oil industry was nationalized in 1951. In the run-up to the consortium formation, Eni managers had sent messages to the Shah asking for partnership, but the British and American ambassadors had agreed only to the presence of the French and the Dutch. In 1955, Eni managers invited the Shah to Rome. Three years later, an agreement was signed. Under an agreement reached in 1954, the Western consortium has been operating the industry for half its profits. Consortium members are British Petroleum, Shell, Exxon, Mobil, Standard Oil of California, Texaco, Gulf, Compagnie Frangaise des Petroles, and a small group of United States independents called Iricon.Economic EntenteAddressing Eni managers and Italian officials in Rome, the Shah said: “Neither you nor I have forgotten the agreement signed between NIOC and Italy’s oil company based on mutual understanding. All of us know how this agreement set a precedent for cooperation between us.” He added: “We have since taken new steps for effective economic cooperation, a clear example of which is the agreement for the development of the vast province of Baluchestan with an Italian institute and the establishment of a major Italian industrial exhibition in Tehran.”The Italians moved to establish fishing enterprises in Zahedan, Chabahar, Bandar Abbas, Siri Island and some other coastal ports in the 1960s and 1970s. The Italians are always remembered with sweet memories as they never shown any Anglo-Saxon-style behavior nor did they show any colonial behavior. Bahregan was developed following the 1979 Islamic Revolution. Its population grew at a large pace and a small village turned into a city. In the 1990s, several schools, a healthcare center, a sport club and paved roads were built there. Thanks to the Iran Offshore Oil Company (IOOC), a large number of residents could find jobs. However, unemployment and reliance on IOOC as the only place of working continues to constitute a major challenge until today

Naft Omidiyeh Weightlifters Finish Runners-up

Weightlifting is among sport disciplines in which National Iranian Oil Company (NIOC) has heavily invested. This discipline has won NIOC numerous awards. Among major weightlifting teams affiliated with NIOC are those belonging to National Iranian Drilling Company (NIDC) and National Iranian South Oil Company (NISOC). This year another team won a title in the weightlifting championship.

Naft Omidiyeh team won 682 scores to finish runners-up in the weightlifting games for Iranian adults.The weightlifting matches in the Iranian adults’ category were held across the 29 provinces of Iran with 181 weightlifters bidding for titles. The Tehran team won the championship title with 692 scores while the Naft Omidiyeh team came second.Naft Omidiyeh weightlifters bagged titles in five of 10 weight categories to win honors for team. The second-place title prompted us to review the history of the Naft Omidiyeh team.Five Decades of WeightliftingThe Naft Omidiyeh weightlifting team has been an active one for five decades now. Its history shows a brilliant background with numerous titles. Top weightlifters from Naft Omidiyeh have already joined Iran’s national weightlifting team.The Aghajari Oil and Gas Production Company is among the major hubs of weightlifting teams in the oil-rich southwestern Khuzestan Province. The team financed by this company is often known as Naft Omidiyeh. Weightlifting at the Aghajari company dates from 1949, when it was founded by Khosrow Bahrami.At this club, the idea has not been merely championship. Rather, the focus has been on educating and training the youth in Khuzestan Province. In the past decade, the Aghajari oil and gas firm remained the champion of pro league in the youth category for seven years since 2003. The team also claimed the top rank in the young category in 2016.In the adult category, Naft Omidiyeh has been always among top teams, but the presence of NIDC and NISOC teams in weightlifting did not let them become the top team. In 2018, it represented Khuzestan Province in the pro league championship matches and finally finished runners-up.Renowned Champions and AthletesNaft Omidiyeh weightlifting team has in recent years nominated well-known athletes who have won honors at the national and international levels. One of them is Nasrollah Dehnavi, who became the Asian champion in 1970, 1971 and 1977. He won a bronze medal in the Manila matches in 1974. He finished in the 4th rank in the 1968 Olympic games which were held in Mexico. Dehnavi also served as a coach untill 1995. He was heading Iran’s national weightlifting team. Mohammad Reza Kazeminejad, Gholam Reza Kamyar (the runner-up in the category of world laborers in 1975), Darioush Rahimian (Asian champion in 1995), Ali Valipour (record-setter of Iranian youth and Asia’s champion in 1997), Abdorreza Fooladi (Asian champion in 2000), Matin Raki and Milad Raki (Asian champions in 2000), Mehdi Mohammadi (Asian champion), Ali Reza Dehqan (the world champion in the youth category) and 15-year-old Abolfazl Jome’pour (finishing third in Asia) are other members of Naft Omidiyeh weightlifting team with international awards and honors over the past decades.

Interview with Naft Omidiyeh Weightlifting Coach:We Enjoy Potential to Challenge International Competitions The head coach of Naft Omidiyeh weightlifting team maintains that his weightlifters have more potential to demonstrate. Abdorreza Fooladi says they can even win titles in international matches.After Naft Omidiyeh weightlifting team finished runners-up, we conducted an interview with him. The full text of the interview is as follows:

Did you ever think of winning such a title?All teams are bidding for championship. Everyone was thinking of this and I had no other objective than that. Our team was in suitable technical conditions for presence in these competitions. Our intention was to win the championship title. But the second-place title in the country was also good for our team. I reiterate that our weightlifters were very good and if we were a bit luckier or we made more efforts, we would become the champion. Of course, I personally was thinking of championship, but I am happy with the second-place title, too.Were you happy with the runners-up title and the performance of weightlifters?Definitely that is so. I am happy with all of them. The second-place title is good, too. Their potential is beyond that.To what extent your host position contributed to winning this title?It was definitely instrumental. However, I have to say that it was a big step for us to upgrade the weightlifting team in the province and the city, and particularly Naft Omidiyeh team. Hosting this team was fascinating for us and we hope that we would become the champion in the country and even in the world.What do you think of the level of competitions?The level of matches was very good in terms of both quantity and quality. The competition between the participants was at a level that in some weight categories, the difference was one or two kilograms between the top and the second-placed weightlifters. Through these competitions, one could pick competent weightlifters for the national team. We really discovered good talents in these competitions.You just highlighted the potentialities of your team. Do you think you will perform better if you attend international or Asian competitions?The level of international matches is much higher. Also attending in Asian matches requires high strength. My trainees enjoy high potential, but we need to be supported to guarantee our success and so that our teams would become stronger. Clearly if we are strengthened we would be able to become a good standard-bearer outside Iran.Do you have national weightlifters?Some of them were in the national teams, in the junior and youth categories. Now they are able to join the adult category. The competitions were not limited to national championship, rather it was some sort of selection for the national team. Therefore, most of my trainees – particularly those who became champion or were among the top three – are competent to join the national team. What did you mean by support when you raised it in your answer?The runners-up title was not achieved by just the weightlifting of my trainees. We are a national team, part of which is outside the weightlifting platform. They are in fact the managers of the club, as well as oil managers and other contributors. If we managed to win this title it was due to being supported by the CEO of Aghajari Oil and Gas Production Company, the governor and other entities in the city. I ask them to provide more support for this highly potential team in order to bid for the championship title in future matches

Shahroud,a Paradise in Desert

Shahroud, which is the largest city in Semnan Province, has long been known as the small continent or a paradise in the desert owing to its specific climate conditions.Home to intact areas, Shahroud is located in a zone where the distance between the desert and the jungle is the shortest. As done in the previous issue, we continue to introduce some other tourist attractions of Shahroud.Sunflower Plain The Sunflower Plain is one of highly visited places in Shahroud, particularly in September. Millions of budding sunflowers give a fascinating view to every visitor.

BayzidBastami Tomb

BayzidBastami, a renowned Sufi, used to live in the 3rd century AH. The Bastami complex, which is located six kilometers north of Shahroud, was built between the Seljukid and Qajar dynasties. The complex houses mosques, tombs, schools, monasteries and mausoleums. The Bayzid tomb is among the most fascinating architectural works there. This tomb has no decoration and is protected by a window

Shahroud Museum

This museum used to house the municipality and the governor’s office. It has been repurposed to serve as a museum now. Artefacts unearthed during archeological excavations are on display at this museum. There are also such things as needle and safety pin made from animal bone

Yaghmaees Domicile

This old domicile in Shahroud, which is the only one equipped with wind catcher, houses the Shahroud Department of Cultural Heritage and Tourism. Renowned architect Mehdi Hedyarian, originally from the city of Yazd, had built this domicile in 1925. During official working hours, this house could be visited by tourists. Prune trees have been planted in the yard and beautiful birds are heard signing from time to time.