Iran E&P Firms Close Ranks to Develop Fields
Ever since Iran and six world powers struck a historic nuclear deal in 2015, 100 memorandums were signed for conducting feasibility studies on Iranian oil and gas fields. But only four of these memorandums became agreements to allow for the signature of IPC deals for eight oil and gas fields.
Over recent years, in a bid to make maximum use of national potentialities and capacities, Iran has moved to establish E&P companies to develop projects. However, these companies have so far failed to meet their targets in the petroleum industry. Iranian and foreign experts say a major reason for the empowerment of these companies has been to create strategic alliances and establish cooperation between them. The value chain of upstream petroleum industry is not quick-impact but is highly efficient. E&P companies can now concentrate on exploration. The major cause of concern for these companies is financing. Even the most technically competent teams would not be able to take any step ahead without financing.
Meantime, oil and gas fields are no longer as accessible as they were all across the globe. However, due to a natural decline in production, there is a need for managing these fields, so as to maximize their current net value. Such an objective will be made possible only by applying modern enhanced recovery methods. On the other hand, most new fields are located in deep waters, deep layers with high temperature and pressure and dome-shaped locations. That will in turn highlight the necessity of applying modern technologies more than ever.
Under such circumstances, E&P companies whose life depends on the development of cutting edge technologies can turn out to be effective and instrumental in the management of reservoirs whose output has declined and also in the recovery of deposits from tight locations. Iranian E&P firms can establish joint ventures with foreign companies as outlined in the Iran Petroleum Contract provisions and benefit from mechanisms of technology transfer to acquire modern technologies in the petroleum industry.
Thanks to efforts made by the Iranian government, a legal framework is now ready in the petroleum industry for leading Iranian companies to get involved in exploration and development activities.
Regardless of all advantages and disadvantages noted by proponents and opponents, the new oil contracts have been instrumental, even though hardliners have not let them fully take effect. The outcome has been nothing but efforts for the establishment of E&P companies.
Iran’s Petroleum Minister Bijan Zangeneh had underscored the need for the establishment of E&P companies and noted a vacuum in the activities of these companies in the petroleum industry; IPC is a major step in the foundation of E&P companies. Brazil, Argentina, Spain, Malaysia, Vietnam, Africa, Kuwait and Angola have long invested in E&P companies which have been neglected in Iran.