OPEC and Secretary General Post

 

Iran, a founding member of the Organization of the Petroleum Exporting Countries (OPEC), is expected to be more active in the global energy equations.

The post of OPEC Secretary General is a key post in the 12-member body.  An experienced and competent Secretary General with good knowledge of the oil market would be instrumental in OPEC’s dynamism in the global energy trading.

OPEC is an organization dealing with the most strategic product in the world. Oil production and exports are the Achilles’ heel of the OPEC member states. Therefore, an effective performance of the OPEC could help its members boost their economies.

The Secretary General is the legally authorized representative of the OPEC and the chief executive of the Secretariat. In this capacity, he administers the affairs of the organization in accordance with the directions of the Board of Governors.

OPEC appoints the Secretary General for a period of three years, which may be renewed once for the same period. This appointment takes place upon nomination by member countries.

The Secretary General is assisted in the discharge of his duties by a team of officers and staff including two directors responsible for the Research Division and Support Services Division, six heads of department, the General Legal Counsel, head of the Office of the Secretary General and the Internal Auditor who independently ascertains whether the ongoing processes for controlling financial and administrative operations at the Secretariat are adequately designed and functioning in an effective manner.

Iran’s Fouad Rouhani held the post of OPEC Secretary General from 1961 to 1964. He was succeeded by representatives from Iraq, Kuwait, Saudi Arabia and Venezuela. This trend continued up to 1983 as the Secretary General was appointed in an alphabetic order.

In the half a century of existence of the organization, the Secretariat has been run by 22 secretaries general, and five presidents who were asked to oversee the Secretariat’s work in the absence of consensus over electing a Secretary General.

Since 1988, the OPEC Secretary General is pocked based on qualifications and a Secretary General needs consensus to be elected to the post. It means that OPEC member states enjoy the power of veto.

Iran has so far nominated candidates for the post, but due to lack of consensus among MCs has not managed to get the top position in OPEC.

Some analysts say Iran-West dispute always poses an obstacle to the election of Iran’s candidate for the top post.

But such views are unfair and illogical. Iran which has taken great steps for the stability of the gas market and energy security is currently Secretary General of the Gas Exporting Countries Forum (GECF).

Kuwait has so far held the top position in OPEC twice, Libya three times, Nigeria three times, former member Indonesia three times and Venezuela four times.

Iran, Iraq, Nigeria and Saudi Arabia are currently running for the post held by Libya’s Abdalla Salem El-Badri. His term has been regularly renewed due to lack of consensus among OPEC members for a successor.

OPEC member states need to exercise solidarity and reach consensus to choose the most qualified Secretary General. The important factor is not the nationality of the Secretary General, but his commitment to the OPEC statute and securing MCs interests.

Picking an experienced and qualified secretary-general capable of pursuing OPEC’s collective interests is the main issue. Political considerations should be set aside so that the organization could take steps for the stability of prices in international markets.

Iran’s Petroleum Minister Bijan Namdar Zangeneh recently said that OEPC members’ national interests are more significant than political attitudes of some member countries. That indicates Iran’s commitment to the OPEC principles and collective interests.

New Chapter in Iran-Turkey Ties

 

Iran’s President Hassan Rouhani made a state visit to Turkey, the first by an Iranian head of state after eighteen years. The visit is expected to turn the page in Iran-Turkey relations.

Relations have improved between Iran and Turkey over the past six months. Rouhani’s visit to Turkey following Turkish Prime Minister Recep Tayyip Erdogan’s visit to Iran is proof of the willingness of the two countries to broaden their cooperation.

Iran and Turkey are long-time neighbors and such visits by top officials would definitely affect the future of their ties.

Energy was the main topic of talks between Iranian and Turkish officials during Rouhani’s visit. Iran is a major source of energy while Turkey increasingly needs energy due to its economic growth and industrial development.

Russia is currently a main supplier of energy to Turkey, but Ankara plans to diversify its energy sources so that it would not be dependent on a single country.

Turkey is currently importing oil and gas from Iran.

 

10 MoUs

 

During President Rouhani’s two-day visit on June 9 and 10, Iran and Turkey signed ten memorandums of understanding with Turkish President Abdullah Gul.

The 10 cooperation pacts signed between Iran and Turkey included agreement on joint film production, agreement on cultural, scientific and educational exchanges, tourism cooperation programs, cultural heritage program, cooperation between the two countries' post organizations and cooperation between the two countries' standard institutes.

During his two-day visit to Turkey, the Iranian president was accompanied by Foreign Minister Mohammad Javad Zarif, Road and Urbanization Minister Abbas Akhoundi, Peroleum Minister Bijan Namdar Zangeneh, Communications and Information Technology Minister Mahmoud Vaezi, Interior Minister Abdolreza Rahmani Fazli, Culture and Islamic Guidance Minister Ali Jannati, Economy Minister Ali Tayyebnia and Governor of the Central Bank of Iran Valiollah Seif.

After the signature of the agreements, Rouhani said at a joint news conference with Gul that Tehran and Ankara take steps in the interests of better ties between the two nations.

Rouhani said his administration is willing to “promote relations with friendly countries, particularly neighbors”, adding that Turkey enjoys a special status among Iran’s neighbors.

He underscored the significance of specific geopolitical position of Iran and Turkey in the region, adding that he and Gul have agreed on doubling Tehran-Ankara trade to 30 billion dollars a year. “Calculations of both sides show that this objective is achievable,” Rouhani said.

He also said that the two countries have reached agreement on expanding communications infrastructure, particularly railroad construction, through Bazargan border point in order to link the Persian Gulf and the Sea of Oman to the Black Sea and the Mediterranean.

Rouhani said the two countries also agreed to facilitate the activities of each other’s private sectors.

The Iranian president also said Iran and Turkey have agreed to broaden scientific, cultural and tourism cooperation.

Rouhani said Iran is open to Turkish investors for financing the construction of hotels.

He said Iran and Turkey have also agreed to expand banking transactions.

Gul said Iran and Turkey are determined to deepen relations in all areas.

He called Rouhani’s visit to Turkey of ‘historic significance’.

“Iran and Turkey enjoy historical and deep-rooted relations as two big regional countries,” Gul said.

Gul said he had ‘useful’ talks with Rouhani, adding they had conferred on different issues including, politics, economy, culture and so on.

The Turkish president predicted cooperation between private sectors of Iran and Turkey will witness further growth and underlined that expansion of ties between the two big regional countries will help restore peace, stability and welfare to the region.  Regarding Tehran’s nuclear program, Gul noted Turkey has always wanted the issue to be resolved through ‘political means’.

He said his country wants the Middle East region to be rid of weapons of mass destruction, but he noted no country should be deprived of its right to use nuclear energy for peaceful purposes.

Gul said Turkey hopes that all anti-Iran sanctions would be lifted soon.

He said the signature of ten MoUs between Iran and Turkey indicates the seriousness of the two countries to improve their ties.

The Turkish president said Iran-Turkey relations are not limited to ties between two countries, adding that further cooperation between these two influential countries will bring about stability and security as well as economic welfare for the entire region.

Gul said Iran and Turkey should follow the model of France-Germany cooperation in order to increase their transactions.

He said that since the time President Rouhani came to power of, Iran has cleared the way for more activities by the private sector.

 

Strategic Council

 

During Rouhani’s visit, Iran and Turkey established a high council for strategic cooperation for the first time in the history of mutual relations.

“Different topics pertaining to mutual issues were raised at the meeting of the High Council for Strategic Cooperation,” Rouhani told reporters.

After the victory of the Islamic Revolution in Iran in 1979, Tehran has always maintained good relations with Turkey as a strong neighboring Muslim country, “which is very important to us,” he added.

“The Islamic Republic of Iran and Turkey share common views on bilateral issues as well as other regional and international questions,” the Iranian president pointed out.

A joint Tehran-Ankara meeting, held in the Turkish capital, was presided by Iranian President Hassan Rouhani and Turkish Prime Minister Recep Tayyip Erdogan. At the meeting, the two sides outlined their future cooperation in a final statement.

In the statement, the two sides laid emphasis on their determination to strengthen their bilateral relations based on international law and good neighborly relations and on issues of mutual interest.

Iran and Turkey also reiterated improvement of economic and commercial relations, saying it will result in the prosperity of the two nations and help regional stability.

The two sides also agreed to study ways to strengthen the two countries' relations in the banking sector.

Tehran and Ankara also agreed to deepen their cooperation in the energy sector.

The two sides also reiterated their support for the activities of the Economic Cooperation Organization (ECO) and laid emphasis on deepening cooperation among the member-states through ECO Trade Agreement.

Rouhani said a growing number of world states are willing to increase investment in Iran, but investment by the Turkish nationals is Tehran's priority.

"Iran is one of the most secure regional states for investment and the trend of investment in Iran will further grow in coming years; in this line Iran gives the priority to the Turkish investors, while the Iranian private sector is also ready for reciprocal investments (in Turkey)," Rouhani said.

He also underlined the necessity for increased activity by the two countries' economic cooperation commissions to boost Iran-Turkey's trade balance to $30bln.

Rouhani referred to other fields of cooperation between Tehran and Ankara, and said, "We are ready for the transfer of the experiences of Iranian and Turkish companies in tourism and the two sides' investment in this sector."

He also called for removing certain banking problems in a bid to facilitate financial exchanges between the two sides.

Iran and Turkey have in recent years increased their cooperation in all the various fields of economy, security, trade, education, energy and culture.

The two sides have exchanged several politico-economic delegations during the last few months.

According to the figures released by the Turkish Statistical Institute (TurkStat), the Iran-Turkey trade turnover stood at $3.256 billion in the first quarter of 2014. The two countries are determined to increase their trade volume to $30 billion by 2015.

President Rouhani further said Tehran and Ankara have a common stance on the nuclear issue.

“The two countries see eye to eye on the fight against violence and extremism as well as [efforts] to rid the [Middle East] region of weapons of mass destruction because this issue is important not only at a regional level but at an international level,” he added.

He noted that Iran and Turkey share common goals on regional issues but have different views on certain topics and have agreed to resolve them.

A preferential trade agreement signed between Iran and Turkey will raise the two country’s trade exchanges by three to four billion dollars.

 

Gas Price

 

President Rouhani said Tehran and Ankara are in talks about the price of natural gas which Iran pumps to its neighbor.

“Views were exchanged about this issue. Iran’s petroleum minister and Turkish energy minister are to continue these talks to reach agreement,” Rouhani said in a joint press conference with Erdogan.

“Of course, the gas price depends on a variety of factors. All aspects of the issue must be taken into consideration before setting the price,” said Rouhani.

He said Iran and Turkey, two strategic partners, are determined to broaden their energy cooperation.

On January 23, Turkish Minister of Energy and Natural Resources Taner Yildiz said Turkey imported more than seven billion dollars worth of Iranian natural gas and crude oil in 2013.

Iran’s natural gas is of crucial importance to Turkey as the energy-hungry country uses a significant portion of imported Iranian gas to generate electricity.

Iran and Turkey held several rounds of talks about settling differences about gas price.

Turkey laid a formal complaint against Iran with the International Court of Arbitration in regards to the price of gas in March 2012.

Iran reportedly charges Turkey $490 for every 1,000 cubic meters of natural gas it exports to its western neighbor. This is while Turkey claims that the Republic of Azerbaijan and Russia supply gas to Turkey at $335 and $425 per 1,000 cubic meters, respectively.

Iranian Deputy Petroleum Minister for International Affairs and Commerce Ali Majedi said recently that negotiations about an increase in gas exports to Turkey and a possible price revision are ongoing.

He stated that Iran wants to have a share equal to Russia’s in the Turkish gas market.

Iran owns the world’s largest natural gas reserves after Russia, and is also Turkey’s second biggest gas supplier after Russia.

 

Private Sectors

President Rouhani said Tehran and Ankara can achieve their targeted $30 billion annual trade only through increased activity and stronger role of the two countries' private sectors.

"Targeting $30 billion of annual trade balance requires increased activity of the private sector," President Rouhani said addressing a meeting with Iranian expatriates and businessmen in Turkey.

The Iranian president explained that the time has arrived for the states to further cede their economic affairs to the private sectors, and said, "Today the Turkish economy is moving in the right direction by ceding economic affairs to the private sector and Iran's private sector should also feel responsible and step onto the scene of action in a proper way."

After Rouhani’s visit to Turkey, over 800 companies and business firms filed for registration in the country.

Rouhani and Head of Iran’s Chamber of Commerce, Shafei, discussed economic issues with Turkish counterparts in Ankara.

Iran and Turkey’s heads of Chambers of Commerce emphasized upon improving the current level of economic cooperation through exploiting every opportunity between the two countries.  

The meeting was held after eighteen years between Iran and Turkey and both sides emphasized on more cooperation in the private sectors.

Gholam-Hossein Shafei said that relations between Iran and Turkey should be on higher level and dubbed Turkey as Iran’s historical friend and said that the 11th cabinet sought better relations with neighbors and Muslim countries, especially Turkey. “The private sector is important for us, and barriers should be eliminated in the business between the two countries,” he added.

He pointed to the potentials of both countries such as Iran geographical position which make it the best option for transiting Turkish goods to Far East market and Turkey’s geographical condition as the best route for Iran’s goods to the Europe.

Head of Turkey’s Chamber of Commerce Rifat Hisarciklioglu also pointed to the geographical position of both countries and political conditions of the region, adding that Iran and Turkey cooperation could provide better access to the world markets.

He emphasized upon Iran’s progress in defense industries, petrochemical, oil and gas industries and also Turkey’s progress in construction and tourism industries and asserted that bilateral investments in such projects would be important step to increase cooperation between both countries.

Hisarciklioglu said that more than 800 new Iranian companies of private sectors registered in Turkey and added that businessmen of both countries with their unity should show ‘cooperation and development’ to the whole world.

According to the Turkish Statistical Institute, Iran was Turkey's third-largest goods export market in 2012. Turkish goods exports to Iran in 2012 were $9.9 billion, up 176 percent ($3.5 billion) from 2011, and up 2,652 percent from 2001. The top export categories for 2012 were: gold and golden plated silver ($6.528 billion), iron and steel ($629 million), textile yarn, fabrics ($226 million), land transportation vehicles ($209 million) and electrical machinery, apparatus and appliances ($171 million).

Iran was Turkey's sixth-largest supplier of goods imports in 2012. Turkey imported $11.4 billion worth of goods from Iran in 2012, up 1.324 percent from 2001. The top 5 imports categories for 2012 were, coal and raw petroleum materials, natural gas, plastics in primary forms ($456 million), metals other than iron ($432 million) and organic chemicals ($103 million).

Turkey was the sixth-leading trading partner of Iran in the previous Iranian calendar year, which ended on 20March 2014, according to the Iranian Customs Administration.

Annual non-oil trade between Iran and Turkey amounted to $5.286 billion in the previous Iranian calendar year. Turkey exported $3.646 billion of non-oil goods to Iran and imported $1.64 billion of nonoil goods from the country in Iranian year 1392 (March 2013-March 2014). On April 15, Tehran and Ankara set an annual trade target of $30 billion at the 24th meeting of the Iran-Turkey Joint Economic Commission, which was held in Tehran. In January, Iran and Turkey signed a preferential trade agreement, with the goal of boosting bilateral trade. The agreement was signed during Erdogan's visit to Iran.

New Chapter in Iran-Turkey Ties

 

Iran’s President Hassan Rouhani made a state visit to Turkey, the first by an Iranian head of state after eighteen years. The visit is expected to turn the page in Iran-Turkey relations.

Relations have improved between Iran and Turkey over the past six months. Rouhani’s visit to Turkey following Turkish Prime Minister Recep Tayyip Erdogan’s visit to Iran is proof of the willingness of the two countries to broaden their cooperation.

Iran and Turkey are long-time neighbors and such visits by top officials would definitely affect the future of their ties.

Energy was the main topic of talks between Iranian and Turkish officials during Rouhani’s visit. Iran is a major source of energy while Turkey increasingly needs energy due to its economic growth and industrial development.

Russia is currently a main supplier of energy to Turkey, but Ankara plans to diversify its energy sources so that it would not be dependent on a single country.

Turkey is currently importing oil and gas from Iran.

 

10 MoUs

 

During President Rouhani’s two-day visit on June 9 and 10, Iran and Turkey signed ten memorandums of understanding with Turkish President Abdullah Gul.

The 10 cooperation pacts signed between Iran and Turkey included agreement on joint film production, agreement on cultural, scientific and educational exchanges, tourism cooperation programs, cultural heritage program, cooperation between the two countries' post organizations and cooperation between the two countries' standard institutes.

During his two-day visit to Turkey, the Iranian president was accompanied by Foreign Minister Mohammad Javad Zarif, Road and Urbanization Minister Abbas Akhoundi, Peroleum Minister Bijan Namdar Zangeneh, Communications and Information Technology Minister Mahmoud Vaezi, Interior Minister Abdolreza Rahmani Fazli, Culture and Islamic Guidance Minister Ali Jannati, Economy Minister Ali Tayyebnia and Governor of the Central Bank of Iran Valiollah Seif.

After the signature of the agreements, Rouhani said at a joint news conference with Gul that Tehran and Ankara take steps in the interests of better ties between the two nations.

Rouhani said his administration is willing to “promote relations with friendly countries, particularly neighbors”, adding that Turkey enjoys a special status among Iran’s neighbors.

He underscored the significance of specific geopolitical position of Iran and Turkey in the region, adding that he and Gul have agreed on doubling Tehran-Ankara trade to 30 billion dollars a year. “Calculations of both sides show that this objective is achievable,” Rouhani said.

He also said that the two countries have reached agreement on expanding communications infrastructure, particularly railroad construction, through Bazargan border point in order to link the Persian Gulf and the Sea of Oman to the Black Sea and the Mediterranean.

Rouhani said the two countries also agreed to facilitate the activities of each other’s private sectors.

The Iranian president also said Iran and Turkey have agreed to broaden scientific, cultural and tourism cooperation.

Rouhani said Iran is open to Turkish investors for financing the construction of hotels.

He said Iran and Turkey have also agreed to expand banking transactions.

Gul said Iran and Turkey are determined to deepen relations in all areas.

He called Rouhani’s visit to Turkey of ‘historic significance’.

“Iran and Turkey enjoy historical and deep-rooted relations as two big regional countries,” Gul said.

Gul said he had ‘useful’ talks with Rouhani, adding they had conferred on different issues including, politics, economy, culture and so on.

The Turkish president predicted cooperation between private sectors of Iran and Turkey will witness further growth and underlined that expansion of ties between the two big regional countries will help restore peace, stability and welfare to the region.  Regarding Tehran’s nuclear program, Gul noted Turkey has always wanted the issue to be resolved through ‘political means’.

He said his country wants the Middle East region to be rid of weapons of mass destruction, but he noted no country should be deprived of its right to use nuclear energy for peaceful purposes.

Gul said Turkey hopes that all anti-Iran sanctions would be lifted soon.

He said the signature of ten MoUs between Iran and Turkey indicates the seriousness of the two countries to improve their ties.

The Turkish president said Iran-Turkey relations are not limited to ties between two countries, adding that further cooperation between these two influential countries will bring about stability and security as well as economic welfare for the entire region.

Gul said Iran and Turkey should follow the model of France-Germany cooperation in order to increase their transactions.

He said that since the time President Rouhani came to power of, Iran has cleared the way for more activities by the private sector.

 

Strategic Council

 

During Rouhani’s visit, Iran and Turkey established a high council for strategic cooperation for the first time in the history of mutual relations.

“Different topics pertaining to mutual issues were raised at the meeting of the High Council for Strategic Cooperation,” Rouhani told reporters.

After the victory of the Islamic Revolution in Iran in 1979, Tehran has always maintained good relations with Turkey as a strong neighboring Muslim country, “which is very important to us,” he added.

“The Islamic Republic of Iran and Turkey share common views on bilateral issues as well as other regional and international questions,” the Iranian president pointed out.

A joint Tehran-Ankara meeting, held in the Turkish capital, was presided by Iranian President Hassan Rouhani and Turkish Prime Minister Recep Tayyip Erdogan. At the meeting, the two sides outlined their future cooperation in a final statement.

In the statement, the two sides laid emphasis on their determination to strengthen their bilateral relations based on international law and good neighborly relations and on issues of mutual interest.

Iran and Turkey also reiterated improvement of economic and commercial relations, saying it will result in the prosperity of the two nations and help regional stability.

The two sides also agreed to study ways to strengthen the two countries' relations in the banking sector.

Tehran and Ankara also agreed to deepen their cooperation in the energy sector.

The two sides also reiterated their support for the activities of the Economic Cooperation Organization (ECO) and laid emphasis on deepening cooperation among the member-states through ECO Trade Agreement.

Rouhani said a growing number of world states are willing to increase investment in Iran, but investment by the Turkish nationals is Tehran's priority.

"Iran is one of the most secure regional states for investment and the trend of investment in Iran will further grow in coming years; in this line Iran gives the priority to the Turkish investors, while the Iranian private sector is also ready for reciprocal investments (in Turkey)," Rouhani said.

He also underlined the necessity for increased activity by the two countries' economic cooperation commissions to boost Iran-Turkey's trade balance to $30bln.

Rouhani referred to other fields of cooperation between Tehran and Ankara, and said, "We are ready for the transfer of the experiences of Iranian and Turkish companies in tourism and the two sides' investment in this sector."

He also called for removing certain banking problems in a bid to facilitate financial exchanges between the two sides.

Iran and Turkey have in recent years increased their cooperation in all the various fields of economy, security, trade, education, energy and culture.

The two sides have exchanged several politico-economic delegations during the last few months.

According to the figures released by the Turkish Statistical Institute (TurkStat), the Iran-Turkey trade turnover stood at $3.256 billion in the first quarter of 2014. The two countries are determined to increase their trade volume to $30 billion by 2015.

President Rouhani further said Tehran and Ankara have a common stance on the nuclear issue.

“The two countries see eye to eye on the fight against violence and extremism as well as [efforts] to rid the [Middle East] region of weapons of mass destruction because this issue is important not only at a regional level but at an international level,” he added.

He noted that Iran and Turkey share common goals on regional issues but have different views on certain topics and have agreed to resolve them.

A preferential trade agreement signed between Iran and Turkey will raise the two country’s trade exchanges by three to four billion dollars.

 

Gas Price

 

President Rouhani said Tehran and Ankara are in talks about the price of natural gas which Iran pumps to its neighbor.

“Views were exchanged about this issue. Iran’s petroleum minister and Turkish energy minister are to continue these talks to reach agreement,” Rouhani said in a joint press conference with Erdogan.

“Of course, the gas price depends on a variety of factors. All aspects of the issue must be taken into consideration before setting the price,” said Rouhani.

He said Iran and Turkey, two strategic partners, are determined to broaden their energy cooperation.

On January 23, Turkish Minister of Energy and Natural Resources Taner Yildiz said Turkey imported more than seven billion dollars worth of Iranian natural gas and crude oil in 2013.

Iran’s natural gas is of crucial importance to Turkey as the energy-hungry country uses a significant portion of imported Iranian gas to generate electricity.

Iran and Turkey held several rounds of talks about settling differences about gas price.

Turkey laid a formal complaint against Iran with the International Court of Arbitration in regards to the price of gas in March 2012.

Iran reportedly charges Turkey $490 for every 1,000 cubic meters of natural gas it exports to its western neighbor. This is while Turkey claims that the Republic of Azerbaijan and Russia supply gas to Turkey at $335 and $425 per 1,000 cubic meters, respectively.

Iranian Deputy Petroleum Minister for International Affairs and Commerce Ali Majedi said recently that negotiations about an increase in gas exports to Turkey and a possible price revision are ongoing.

He stated that Iran wants to have a share equal to Russia’s in the Turkish gas market.

Iran owns the world’s largest natural gas reserves after Russia, and is also Turkey’s second biggest gas supplier after Russia.

 

Private Sectors

President Rouhani said Tehran and Ankara can achieve their targeted $30 billion annual trade only through increased activity and stronger role of the two countries' private sectors.

"Targeting $30 billion of annual trade balance requires increased activity of the private sector," President Rouhani said addressing a meeting with Iranian expatriates and businessmen in Turkey.

The Iranian president explained that the time has arrived for the states to further cede their economic affairs to the private sectors, and said, "Today the Turkish economy is moving in the right direction by ceding economic affairs to the private sector and Iran's private sector should also feel responsible and step onto the scene of action in a proper way."

After Rouhani’s visit to Turkey, over 800 companies and business firms filed for registration in the country.

Rouhani and Head of Iran’s Chamber of Commerce, Shafei, discussed economic issues with Turkish counterparts in Ankara.

Iran and Turkey’s heads of Chambers of Commerce emphasized upon improving the current level of economic cooperation through exploiting every opportunity between the two countries.  

The meeting was held after eighteen years between Iran and Turkey and both sides emphasized on more cooperation in the private sectors.

Gholam-Hossein Shafei said that relations between Iran and Turkey should be on higher level and dubbed Turkey as Iran’s historical friend and said that the 11th cabinet sought better relations with neighbors and Muslim countries, especially Turkey. “The private sector is important for us, and barriers should be eliminated in the business between the two countries,” he added.

He pointed to the potentials of both countries such as Iran geographical position which make it the best option for transiting Turkish goods to Far East market and Turkey’s geographical condition as the best route for Iran’s goods to the Europe.

Head of Turkey’s Chamber of Commerce Rifat Hisarciklioglu also pointed to the geographical position of both countries and political conditions of the region, adding that Iran and Turkey cooperation could provide better access to the world markets.

He emphasized upon Iran’s progress in defense industries, petrochemical, oil and gas industries and also Turkey’s progress in construction and tourism industries and asserted that bilateral investments in such projects would be important step to increase cooperation between both countries.

Hisarciklioglu said that more than 800 new Iranian companies of private sectors registered in Turkey and added that businessmen of both countries with their unity should show ‘cooperation and development’ to the whole world.

According to the Turkish Statistical Institute, Iran was Turkey's third-largest goods export market in 2012. Turkish goods exports to Iran in 2012 were $9.9 billion, up 176 percent ($3.5 billion) from 2011, and up 2,652 percent from 2001. The top export categories for 2012 were: gold and golden plated silver ($6.528 billion), iron and steel ($629 million), textile yarn, fabrics ($226 million), land transportation vehicles ($209 million) and electrical machinery, apparatus and appliances ($171 million).

Iran was Turkey's sixth-largest supplier of goods imports in 2012. Turkey imported $11.4 billion worth of goods from Iran in 2012, up 1.324 percent from 2001. The top 5 imports categories for 2012 were, coal and raw petroleum materials, natural gas, plastics in primary forms ($456 million), metals other than iron ($432 million) and organic chemicals ($103 million).

Turkey was the sixth-leading trading partner of Iran in the previous Iranian calendar year, which ended on 20March 2014, according to the Iranian Customs Administration.

Annual non-oil trade between Iran and Turkey amounted to $5.286 billion in the previous Iranian calendar year. Turkey exported $3.646 billion of non-oil goods to Iran and imported $1.64 billion of nonoil goods from the country in Iranian year 1392 (March 2013-March 2014). On April 15, Tehran and Ankara set an annual trade target of $30 billion at the 24th meeting of the Iran-Turkey Joint Economic Commission, which was held in Tehran. In January, Iran and Turkey signed a preferential trade agreement, with the goal of boosting bilateral trade. The agreement was signed during Erdogan's visit to Iran.

 

Private Sector Prioritized  

 

The chief of staff of Iranian President Hassan Rouhani has said that the Iranian government supports the private sector’s investment in the petrochemical sector.

“The unswerving position of the Iranian government is to support the contribution of the private sector in these [petrochemical] megaprojects. This support is not temporary and will be long-term and permanent,” Mohammad Nahavandian said in a meeting with Mohamed Thani Murshed Al Rumaithi, Chairman, Abu Dhabi Chamber of Commerce & Industry (ADCCI), in Tehran.

Nahavandian said a new chapter has opened in Iran’s relations with other countries since Rouhani took office last August.

“The relations between the Islamic Republic of Iran and the United Arab Emirates (UAE) are beyond neighborly ties and we look at the UAE government and nation as a Muslim brother with common interests and objectives,” he said.

Nahavandian said Iran and UAE share many points in terms of economic plans. “We believe that the economic relations between countries in the region should improve for peace and security to be established in the region,” he said.

Nahavandian said the main responsibility for the development of economic relations between the countries in the region falls upon the private sector and investors.

“The Iranian government believes that it should not administer the economy, but it has to let the private sector work. The government should provide support for business,” he said.

He added that Iran and the UAE should benefit from the present circumstances to broaden their trade exchanges.

Nahavandian said the two countries should make serious plans for joint venture projects.

He said that President Rouhani envisages megaprojects for the development of Iran. He referred to the planned development of Iran’s southern coasts from Chabahar to Khorramshahr, construction of coastal railroad and construction of highway for connecting southern ports to Kenarak free zone. Nahavandian said these projects require hundreds of billions of dollars in investment.

He said Iran’s southern coasts are expected to be connected to Central Asia.

Nahavandian gave a positive assessment of Iran-UAE relations, saying signs have emerged of strong ties between the two countries.

“I believe that by adopting the approach of developing and broadening economic relations, the countries in the region will help tensions subside greatly and clam will be created among Islamic states,” he said.

“Those who are fuelling flames of sectarian tensions in the region do not want Muslim countries to enjoy a good future and we hope that Iran-UAE relations would set an example of bilateral ties,” said Nahavandian.

For his part, Al Rumaithi said Iran and UAE chambers of commerce have agreed to establish Iran-UAE Cooperation Council in order to remove obstacles to commercial ties.

He said the UAE government is determined to improve cooperation with Iran through private sectors.

Al Rumaithi said the positive outcome of Iran’s nuclear talks with six world powers encourages the UAE government o make efforts for more cooperation with Iran.

He also called on the Iranian government to facilitate investment by the UAE private sector in Iran’s projects.

 

NIDC to Run Casing in South Azadegan

 

Iran’s Petroleum Minister Bijan Namdar Zangeneh said the drilling and completion of 40 wells in the massive South Azadegan oil field has been commissioned to National Iranian Drilling Company (NIDC).

The development follows the termination of contract with China National Petroleum Corporation (CNPC) due to the Chinese company’s foot-dragging.

“The drilling of 40 wells has already been assigned to NIDC and two tenders are set to be launched for the drilling of 40 more wells,” Zangeneh said.

The minister said the number of wells in South Azadegan, which Iran shares with Iraq, would reach 150 in the first phase and 185 in the second phase.

In the meantime, Iran is to put to tender construction of installations in South Azadegan field.

CNPC lost the project after it failed to meet a 90-day deadline set by Petroleum Ministry to fulfill its obligations with regards to drilling wells in South Azadegan field.

The initial project for the development of South Azadegan was awarded to CNPC by National Iranian Oil Company (NIOC) in 2009 under a 2.5-billion-dollar buy-back contract.       

 

NIGC Presents Investment Packages

 

Foreign investors welcomed opportunities for investment in Iran’s gas sector during the 21^st World Petroleum Congress in Moscow, a deputy petroleum minister said.

“Given [Iran’s nuclear] talks with the P5+1 and the expansion of energy diplomacy, different countries showed inclination for investment in Iran,” Hamid-Reza Araqi said.

Araqi, who is also managing director of National Iranian Gas Company (NIGC), said the meetings held on the sidelines of WPC in the Russian capital were about preparing the grounds for foreign investment in Iran.

He said that the NIGC offered packages for investment in pipeline, refining and storage, adding that Russia was among countries that welcomed investment in Iran.

He said he exchanged views with top Russian officials about investment in Iran.

“Russian investors, banks and contractors voiced readiness for presence in different sectors in Iran,” said Araqi.

He said that most participants that attended Tehran’s recent Oil and Gas Show were present in the WPC.

“Iran has defined projects for the private sector in order to attract them,” Araqi said.

He said that Iran is pursuing its privatization drive seriously.

 

Iran Oil Output Up as Nuclear Talks Go On

 

Iran’s President Hassan Rouhani said on Saturday the country’s oil production has increased as talks are under way with world powers over Tehran’s nuclear program.

“As negotiations go on with the P5+1 group, Iran’s oil production capacity has increased and this issue has nothing to do with the [Western] sanctions,” Rouhani told a press conference in Tehran.

The president said Iran is now ready to attract 200 billion dollars in investment, adding that Iran’s oil sector enjoys great potentials for such investment.

Rouhani also said that Iran would no longer face tough sanctions even if no agreement is reached with the six powers.

“Iran will continue enrichment... and the sanctions have to be lifted,” he said.

Rouhani said his administration is making efforts to cut Iran’s inflation rate to 25 percent by the end of the current calendar year in March 2015.

He said unemployment rate has been reduced to 10.5 percent and month-on-month inflation has been slashed from 43 to 16 percent.

 

 

Iran, World Petchem Hub

 

Development of downstream oil sector is the only way for Iran to reduce its crude oil sales. Establishment of petrochemical plants in Iran and location of new petrochemical hubs in Lavan Island, Chabahar Port and Iranshahr create opportunities for potential investors. Iran is the only country enjoying all tools, potential sand resources for a lucrative petrochemical industry.

To that effect, Tehran hosted the annual Iran Petrochemical Forum (IPF) on June 7 and 8 in order to exchange views with other countries and attract investment. A total of 330 Iranian companies, 50 foreign companies as well as 70 foreign guests from 23 countries attended the forum.    

 

Petchem Investment Fund

 

Iran’s Petroleum Minister Bijan Namdar Zangeneh announced plans for the formation of a petrochemical investment fund.

“In order to help the presence of low-income classes in future profitable petrochemical industry projects, Petroleum Ministry is determined to take action for the establishment of petrochemical investment development fund,” Zangeneh told the inauguration of IPF.

“The private sector should be significantly present in Iran’s petrochemical industries, and we know quite well that proper business environment and investment along with good feedstock price and necessary infrastructure are prerequisites for the presence of domestic and foreign private sectors in this industry,” he said.

Zangeneh said the ministry feels obliged to encourage the private sector to investment in lucrative petrochemical projects. “To that effect, Petroleum Ministry has provided the required facilities for the private sector, while preventing any allocation of illegal rake-offs.” 

He said diversity in petrochemical products supplied on international markets would spur investment in this sector. 

Zangeneh said Iran has raised the value of its petrochemical sales from one to 22.5 billion dollars from 1989 to 2014.

“In late 2013, Iran’s petrochemical industries managed to export 12.8 million tons of products valued at 9.9 billion dollars to world markets and 14.5 million tons was supplied on domestic markets,” he said. 

Zangeneh said Iran’s petrochemical products mainly include polyethylene, PET, polystyrene, PP and paraxylene.

He said Iran has won toehold in petrochemical markets across the globe over recent years.

“The latest estimates indicate that in the upstream and downstream sectors, we will need 70 billion dollars, 30 percent of which will be needed in the downstream sector,” he said.

Zangeneh also said that Iran holds around 33.6 tcm of natural gas with a daily gas processing capacity of 600 mcm which is expected to rise to 1,000 mcm/d.

He said the completion of phases 12-27 of offshore South Pars gas field will let Iran recover 650,000 b/d of gas condensate, 6.7 mt/d of liquefied petroleum gas (LPG) and 4 mt/year of ethane.

 

Gov’t Facilitating Petchem Investment

 

The Iranian government is ready to facilitate petrochemical development projects, Iran’s first vice-president said.

“Anywhere in the country (particularly special economic zones) where conditions are good for the development of petrochemical industry, the required permits will be granted for investment in this industry,” Es’haq Jahangiri told the opening of IPF.

He said the government would offer such facilities as reduced customs duties and insurance premiums in order to encourage potential investors.

“Iran is currently one of the most secure countries for investment in the petrochemical sector and those interested in investing in this industry must be assured that the Iranian government will provide full support for the participation of domestic and foreign private sectors,” he said.

Jahangiri said the government plans to construct petrochemical hubs in the Persian Gulf and the Sea of Oman.

He said Iran is currently producing 60 million tons a year of petrochemical products, adding that the output is expected to more than double in the near future.

Jahangiri said Iran, which holds 11 percent of the world’s oil reserves and 17 percent of its gas reserves is able to supply feedstock to petrochemical plants across the world on the long-term.

 

 

180 mt/y Petchem Output Targeted

 

Iran expects to raise its annual petrochemical production capacity to 180 million tons as new projects are hoped to come on-stream, the managing director of National Petrochemical Company (NPC) said.

“With the completion of 60 incomplete projects remaining from the previous administrations and the implementation of 36 new methane-fed projects, Iran’s annual petrochemical production capacity will soar past 180 million tons,” Abbas Sheri-Moqaddam told IPF.

 “At present, Iran enjoys a 60-million-ton petrochemical production capacity, and due to a variety of reasons including feedstock shortage, only 68 percent of this capacity is used,” he said.

Sheri-Moqaddam said the new 36 petrochemical projects need 41 billion dollars in investment.

He said Iran will see its petrochemical production rise by two million tons a year by March 2015.

He said that four petrochemical hubs are to be established in Parsian Special Economic Zone in the east of Assaluyeh off Persian Gulf waters, Jask Free Zone off the Sea of Oman, Chabahar Free Zone and Iranshahr Special Zone in southeastern Iran.

Iran is determined to become the biggest petrochemical producer in the Middle East.

The country has significantly expanded the range and volume of its petrochemical production over the past few years, and the NPC has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.

 

 

Petchem Investment Opportunities

 

Iran is a unique country in the world in terms of opportunities for petrochemical investment, the head of Iran Petrochemical Forum said at the opening of the two-day event.

“Everyone knows that Iran is unique in the world in terms of holding hydrocarbon reserves for the establishment of petrochemical industry,” Mohammad-Hassan Peyvandi said.

He called on First Vice-President Es’haq Jahangiri and Petroleum Minister Bijan Namdar Zangeneh to prepare the necessary infrastructure for the development of petrochemical industry.

Peyvandi said a “new and rare opportunity” has been created for Iran to develop its petrochemical industry.

Iran is determined to become the biggest petrochemical producer in the Middle East.

The country has significantly expanded the range and volume of its petrochemical production over the past few years, and the National Petrochemical Company (NPC) has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.

 

Naphtha Exports to Resume

 

Iran is to resume exporting naphtha, a deputy head of National Iranian Oil Refining and Distribution Company (NIORDC) said.

Shahrokh Khosravani said the naphtha delivered to Bandar Imam Petrochemical Plant is to be exported.

He said naphtha exports will generate revenues for Iran, adding that marketing for naphtha exports has already been done.

Khosravani said similar plans are under way for the naphtha delivered to Nouri Petrochemical Plant to be exported.

Naphtha is a component of natural gas condensate or a distillation product from petroleum, coal tar, or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the lightest and most volatile fractions of the liquid hydrocarbons in petroleum. Naphtha is a colorless to reddish-brown volatile aromatic liquid, very similar to gasoline.

 

Methanol Output Rise

 

A deputy head of National Petrochemical Company said that Iran plans to raise its methanol production in the coming five years.

Mohammad-Hassan Peyvandi told the Iran Petrochemical Forum that Iran is to produce 10 million tons of methanol in five years. “Almost every six months, a project starts production,” he said.

He said Iran’s petrochemical production capacity reached 60 million tons in 2013.

He acknowledged that due to international sanctions Iran’s petrochemical sector faced hurdles over recent years. 

“We plan to speed up the development of petrochemical industry with a new approach,” said Peyvandi.

“Seven methanol projects are under way in South Pars with Chinese finance,” he said.

Peyvandi said Iran’s polyethylene production is to increase by one million tons by the end of 2015.

 

Bank Mellat Ready to Finance Petchem Projects

 

Iran’s state-run Bank Mellat is ready to contribute to the finance of petrochemical development projects, managing director of the bank said.

“As the second largest bank in Iran, Bank Mellat is fully ready to cooperate in the development projects of Iran’s petroleum industry, particularly in the petrochemical sector,” Farzad Saroukhani said.

He said that Iran’s massive oil and gas reserves promise a bright perspective for the country, adding that Iran’s economy could be revamped by funding oil, gas, refining and petrochemical development projects.

“By 2035, the share of oil in global energy supply will reach 36 percent and that of gas will reach 29.9 percent. These figures underscore the significance of investment in the energy sector,” he said.

Saroukhani said financial bodies in Iran are expected to support petrochemical industry.

“By 2025, 500 billion dollars must be invested in Iran’s petroleum industry, 74.5 billion dollars of which in the petrochemical sector,” he said.

Saroukhani said the establishment of energy fund in Bank Mellat is a major step in favor of Iran’s petroleum industry.

He said that another fund is to be established with the collaboration of National Petrochemical Company (NPC).

 

IPF Proves Energy Diplomacy Success

 

Iran Petrochemical Forum (IPF) which wrapped up on Sunday showed the success of Iran’s energy diplomacy, the head of the forum said.

“The successful organization of this forum showed that Iran’s petrochemical sector enjoys a special status at the international level,” Mohammad-Hassan Peyvandi said.  

He said the coincidence of this year’s IPF with Iran’s nuclear talks with six world powers would bring about positive achievements for Iran’s petrochemical industry.

Peyvandi said Iran is willing to turn the page in its petrochemical activities, as more sanctions are hoped to be lifted.

He said 50 foreign companies from 23 countries attended this year’s IPF in which also participated 1,300 340 Iranian companies.

Peyvandi said positive talks were held on the sidelines of the two-day forum between Iran and foreign companies.

“A good opportunity has been created for further cooperation with international companies and this opportunity should not be lost,” he said.

 

$5b Investment Needed

 

Iran's Industry, Mine and Trade Minister Mohammad Reza Nematzadeh said the country needs at least $5 billion in investment per annum to reach petrochemical development plans by 2025.

In an address to the 11^th IPF, Zangeneh said Iran has hydrocarbon-rich reservoir with ethane, methane, propane, and butane. He urged officials to provide the feedstock needed for petrochemical units.

 He also urged the private sector to get involved in the petrochemical projects actively and underlined the need for officials to pave the ground for such an involvement.

“Feeding is an important issue which can be addressed by private investors,” Nematzadeh said. “Given the existing infrastructure, we need to have a comprehensive plan to supply feedstock, optimize oil and gas fields, and expand LNG plans,” he added.

 The minister underlined the need to develop the petrochemical sector as an industry that could help develop downstream industries.

Iranian Deputy Petroleum Minister Mansour Moazzami said the NPC plans to export products worth $12 billion by the end of the year (March 2015), up from $10 billion in the previous year.   

 He said the recent sanctions relief "is going to be felt gradually," as the US-led sanctions have already affected two major issues: financing projects and providing technology.

 To develop a petrochemical project, Iranian officials need to consider whether the site is near either a consumption market or a major feedstock center, Moazzami said.

It's not a true policy to create a petrochemical site in order to develop a city or province, he said, adding that every project needs to be economically viable.

 

Foreign Companies Eager for Cooperation 

 

Aldo Belloni, member of the executive board of Germany's Linde Group, said his company can offer cracker technology for Iranian plants of up to 2 million MTA ethylene capacities.

Belloni said such units could be executed in the well demonstrated cooperation with local partners based on a split allowing significant work in Iran and a smooth execution as demonstrated before.

He said Linde will start cooperation with Iran as soon as sanctions are lifted.

Education and training of the operating staff as well as operational support is also offered by Linde for upcoming projects.

In addition, Linde can offer new technologies for petrochemical products, Belloni said.

Given the fact that Iran enjoys outstanding human resources and is number 2 in proven gas and number 4 in oil reserves, the country guarantees a sustainable advantage over competitors on the international petrochemical market, he stated.

Jorgen Nergaard Gol, executive committee member and vice president of Denmark's Haldor Topsoe A/S said his company will invest in Iran's petrochemical sector as soon as anti-Iran sanctions are lifted.

Gol said Iran can enjoy Haldor Topsoe's 74 years of experience in providing advanced solutions based on catalysis.

"The R&D efforts of Topsoe have always been distinguished by our strong focus on achieving fundamental scientific understanding – and our unique ability to continuously transform this knowledge to concrete benefits that provide our customers real competitive advantage," he noted.

Being a private company focused solely on catalysis, "we have the freedom to take the long-term perspective and we continuously work to approve our understanding of catalysis right down to the molecular level," he said.

Ragnar Berg, the business development director at Eastport Maritime Pte Ltd, said he is very "optimistic" about the future of the Iranian petrochemical sector as the quality of the Iranian-made products is acceptable in the world.

 There is a great opportunity in the sector for Western investors, Berg said in an interview on the sidelines of the international petrochemical forum held in Tehran.

 He said his company has been active in Iran since 2000, providing Iran with "suitable vessels" that help it "distribute its products in the Asian and European markets."

 He touched on the "limitation of ship owners" in the country describing it as the biggest challenge the Iranian petrochemical industry has been facing. "We still have insurance problems with ship owners," he added.

 He expressed hope that the political atmosphere will improve, as nuclear negotiations between Iran and the P5+1 – the five permanent members of the UN Security Council plus Germany continue to resolve a decade-long dispute over Tehran's nuclear energy program.

Executives of Axens, a leading French petrochemical company, have respected US-led sanctions against Iran so far, but they are now hoping that the ongoing nuclear talks will end up reaching a comprehensive deal between Iran and the P5+1 group so that the company can resume work at the Iranian petrochemical sector, said the company's CEO Jean Sentenac.

Sentenac noted that petrochemicals demand growth is set to continue to be higher than demand for oil demand.

"The high demand for petrochemicals is pushing refining industry to produce more and more petrochemical feedstock," he said.

"Integration between refining and petrochemical industries is today required to create opportunities as for example the higher valorization of molecules with low value either on refining side such as naphtha, propylene, BTX, or on petrochemical side Pygas and excess hydrogen," he said.

The general manager of Denmark’s Haldor Topsoe A/S said his company provides high quality catalysts that help enhance ammonia and methanol capacity.

 “Increasing demand for larger ammonia and methanol plant capacities requires superior performance from synthesis catalysts,” said Henrik Surow Larsen.

Topsoe’s catalysts provide “this level of quality, proving through many references to have the highest activities on the market,” he said. “With our products, plant owners can expect efficient and profitable production as well as reliable plant performance.”

“The new magnetite-based catalyst [KM 111] is developed for optimal performance in the lower beds of the ammonia converter,” he said adding that the new product “in conjunction with our industry-leading catalyst KM1 increases the profitability of ammonia production through record high production levels, as well as savings in energy consumption.”

The company’s recent contributions also include a new methanol synthesis catalyst, MK151-FENCETM, whose qualities benefits to methanol producers – extended catalyst lifetimes for longer turnaround cycles, energy savings, and very high production levels with a minimum of by-product formation.

Andrea Borruso, president of Switzerland’s Borruso Polymers Gmbh, reviewed the increasing price divergence between natural gas and crude oil, particularly in the US.

 He also talked about how the availability of ethane in the US, thanking to shale gas developments, has fueled a massive capacity expansion in North America.

 “To complete the petrochemical feedstock revolution, the development of large coal based investments in China, sustained by the Coal-to-Olefin technology is creating a new geographical pole of petrochemical production,” he said.

 

Iran, World Petchem Hub

 

Development of downstream oil sector is the only way for Iran to reduce its crude oil sales. Establishment of petrochemical plants in Iran and location of new petrochemical hubs in Lavan Island, Chabahar Port and Iranshahr create opportunities for potential investors. Iran is the only country enjoying all tools, potential sand resources for a lucrative petrochemical industry.

To that effect, Tehran hosted the annual Iran Petrochemical Forum (IPF) on June 7 and 8 in order to exchange views with other countries and attract investment. A total of 330 Iranian companies, 50 foreign companies as well as 70 foreign guests from 23 countries attended the forum.    

 

Petchem Investment Fund

 

Iran’s Petroleum Minister Bijan Namdar Zangeneh announced plans for the formation of a petrochemical investment fund.

“In order to help the presence of low-income classes in future profitable petrochemical industry projects, Petroleum Ministry is determined to take action for the establishment of petrochemical investment development fund,” Zangeneh told the inauguration of IPF.

“The private sector should be significantly present in Iran’s petrochemical industries, and we know quite well that proper business environment and investment along with good feedstock price and necessary infrastructure are prerequisites for the presence of domestic and foreign private sectors in this industry,” he said.

Zangeneh said the ministry feels obliged to encourage the private sector to investment in lucrative petrochemical projects. “To that effect, Petroleum Ministry has provided the required facilities for the private sector, while preventing any allocation of illegal rake-offs.” 

He said diversity in petrochemical products supplied on international markets would spur investment in this sector. 

Zangeneh said Iran has raised the value of its petrochemical sales from one to 22.5 billion dollars from 1989 to 2014.

“In late 2013, Iran’s petrochemical industries managed to export 12.8 million tons of products valued at 9.9 billion dollars to world markets and 14.5 million tons was supplied on domestic markets,” he said. 

Zangeneh said Iran’s petrochemical products mainly include polyethylene, PET, polystyrene, PP and paraxylene.

He said Iran has won toehold in petrochemical markets across the globe over recent years.

“The latest estimates indicate that in the upstream and downstream sectors, we will need 70 billion dollars, 30 percent of which will be needed in the downstream sector,” he said.

Zangeneh also said that Iran holds around 33.6 tcm of natural gas with a daily gas processing capacity of 600 mcm which is expected to rise to 1,000 mcm/d.

He said the completion of phases 12-27 of offshore South Pars gas field will let Iran recover 650,000 b/d of gas condensate, 6.7 mt/d of liquefied petroleum gas (LPG) and 4 mt/year of ethane.

 

Gov’t Facilitating Petchem Investment

 

The Iranian government is ready to facilitate petrochemical development projects, Iran’s first vice-president said.

“Anywhere in the country (particularly special economic zones) where conditions are good for the development of petrochemical industry, the required permits will be granted for investment in this industry,” Es’haq Jahangiri told the opening of IPF.

He said the government would offer such facilities as reduced customs duties and insurance premiums in order to encourage potential investors.

“Iran is currently one of the most secure countries for investment in the petrochemical sector and those interested in investing in this industry must be assured that the Iranian government will provide full support for the participation of domestic and foreign private sectors,” he said.

Jahangiri said the government plans to construct petrochemical hubs in the Persian Gulf and the Sea of Oman.

He said Iran is currently producing 60 million tons a year of petrochemical products, adding that the output is expected to more than double in the near future.

Jahangiri said Iran, which holds 11 percent of the world’s oil reserves and 17 percent of its gas reserves is able to supply feedstock to petrochemical plants across the world on the long-term.

 

 

180 mt/y Petchem Output Targeted

 

Iran expects to raise its annual petrochemical production capacity to 180 million tons as new projects are hoped to come on-stream, the managing director of National Petrochemical Company (NPC) said.

“With the completion of 60 incomplete projects remaining from the previous administrations and the implementation of 36 new methane-fed projects, Iran’s annual petrochemical production capacity will soar past 180 million tons,” Abbas Sheri-Moqaddam told IPF.

 “At present, Iran enjoys a 60-million-ton petrochemical production capacity, and due to a variety of reasons including feedstock shortage, only 68 percent of this capacity is used,” he said.

Sheri-Moqaddam said the new 36 petrochemical projects need 41 billion dollars in investment.

He said Iran will see its petrochemical production rise by two million tons a year by March 2015.

He said that four petrochemical hubs are to be established in Parsian Special Economic Zone in the east of Assaluyeh off Persian Gulf waters, Jask Free Zone off the Sea of Oman, Chabahar Free Zone and Iranshahr Special Zone in southeastern Iran.

Iran is determined to become the biggest petrochemical producer in the Middle East.

The country has significantly expanded the range and volume of its petrochemical production over the past few years, and the NPC has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.

 

 

Petchem Investment Opportunities

 

Iran is a unique country in the world in terms of opportunities for petrochemical investment, the head of Iran Petrochemical Forum said at the opening of the two-day event.

“Everyone knows that Iran is unique in the world in terms of holding hydrocarbon reserves for the establishment of petrochemical industry,” Mohammad-Hassan Peyvandi said.

He called on First Vice-President Es’haq Jahangiri and Petroleum Minister Bijan Namdar Zangeneh to prepare the necessary infrastructure for the development of petrochemical industry.

Peyvandi said a “new and rare opportunity” has been created for Iran to develop its petrochemical industry.

Iran is determined to become the biggest petrochemical producer in the Middle East.

The country has significantly expanded the range and volume of its petrochemical production over the past few years, and the National Petrochemical Company (NPC) has become the second largest producer and exporter of petrochemicals in the Middle East after Saudi Arabia.

 

Naphtha Exports to Resume

 

Iran is to resume exporting naphtha, a deputy head of National Iranian Oil Refining and Distribution Company (NIORDC) said.

Shahrokh Khosravani said the naphtha delivered to Bandar Imam Petrochemical Plant is to be exported.

He said naphtha exports will generate revenues for Iran, adding that marketing for naphtha exports has already been done.

Khosravani said similar plans are under way for the naphtha delivered to Nouri Petrochemical Plant to be exported.

Naphtha is a component of natural gas condensate or a distillation product from petroleum, coal tar, or peat boiling in a certain range and containing certain hydrocarbons. It is a broad term covering among the lightest and most volatile fractions of the liquid hydrocarbons in petroleum. Naphtha is a colorless to reddish-brown volatile aromatic liquid, very similar to gasoline.

 

Methanol Output Rise

 

A deputy head of National Petrochemical Company said that Iran plans to raise its methanol production in the coming five years.

Mohammad-Hassan Peyvandi told the Iran Petrochemical Forum that Iran is to produce 10 million tons of methanol in five years. “Almost every six months, a project starts production,” he said.

He said Iran’s petrochemical production capacity reached 60 million tons in 2013.

He acknowledged that due to international sanctions Iran’s petrochemical sector faced hurdles over recent years. 

“We plan to speed up the development of petrochemical industry with a new approach,” said Peyvandi.

“Seven methanol projects are under way in South Pars with Chinese finance,” he said.

Peyvandi said Iran’s polyethylene production is to increase by one million tons by the end of 2015.

 

Bank Mellat Ready to Finance Petchem Projects

 

Iran’s state-run Bank Mellat is ready to contribute to the finance of petrochemical development projects, managing director of the bank said.

“As the second largest bank in Iran, Bank Mellat is fully ready to cooperate in the development projects of Iran’s petroleum industry, particularly in the petrochemical sector,” Farzad Saroukhani said.

He said that Iran’s massive oil and gas reserves promise a bright perspective for the country, adding that Iran’s economy could be revamped by funding oil, gas, refining and petrochemical development projects.

“By 2035, the share of oil in global energy supply will reach 36 percent and that of gas will reach 29.9 percent. These figures underscore the significance of investment in the energy sector,” he said.

Saroukhani said financial bodies in Iran are expected to support petrochemical industry.

“By 2025, 500 billion dollars must be invested in Iran’s petroleum industry, 74.5 billion dollars of which in the petrochemical sector,” he said.

Saroukhani said the establishment of energy fund in Bank Mellat is a major step in favor of Iran’s petroleum industry.

He said that another fund is to be established with the collaboration of National Petrochemical Company (NPC).

 

IPF Proves Energy Diplomacy Success

 

Iran Petrochemical Forum (IPF) which wrapped up on Sunday showed the success of Iran’s energy diplomacy, the head of the forum said.

“The successful organization of this forum showed that Iran’s petrochemical sector enjoys a special status at the international level,” Mohammad-Hassan Peyvandi said.  

He said the coincidence of this year’s IPF with Iran’s nuclear talks with six world powers would bring about positive achievements for Iran’s petrochemical industry.

Peyvandi said Iran is willing to turn the page in its petrochemical activities, as more sanctions are hoped to be lifted.

He said 50 foreign companies from 23 countries attended this year’s IPF in which also participated 1,300 340 Iranian companies.

Peyvandi said positive talks were held on the sidelines of the two-day forum between Iran and foreign companies.

“A good opportunity has been created for further cooperation with international companies and this opportunity should not be lost,” he said.

 

$5b Investment Needed

 

Iran's Industry, Mine and Trade Minister Mohammad Reza Nematzadeh said the country needs at least $5 billion in investment per annum to reach petrochemical development plans by 2025.

In an address to the 11^th IPF, Zangeneh said Iran has hydrocarbon-rich reservoir with ethane, methane, propane, and butane. He urged officials to provide the feedstock needed for petrochemical units.

 He also urged the private sector to get involved in the petrochemical projects actively and underlined the need for officials to pave the ground for such an involvement.

“Feeding is an important issue which can be addressed by private investors,” Nematzadeh said. “Given the existing infrastructure, we need to have a comprehensive plan to supply feedstock, optimize oil and gas fields, and expand LNG plans,” he added.

 The minister underlined the need to develop the petrochemical sector as an industry that could help develop downstream industries.

Iranian Deputy Petroleum Minister Mansour Moazzami said the NPC plans to export products worth $12 billion by the end of the year (March 2015), up from $10 billion in the previous year.   

 He said the recent sanctions relief "is going to be felt gradually," as the US-led sanctions have already affected two major issues: financing projects and providing technology.

 To develop a petrochemical project, Iranian officials need to consider whether the site is near either a consumption market or a major feedstock center, Moazzami said.

It's not a true policy to create a petrochemical site in order to develop a city or province, he said, adding that every project needs to be economically viable.

 

Foreign Companies Eager for Cooperation 

 

Aldo Belloni, member of the executive board of Germany's Linde Group, said his company can offer cracker technology for Iranian plants of up to 2 million MTA ethylene capacities.

Belloni said such units could be executed in the well demonstrated cooperation with local partners based on a split allowing significant work in Iran and a smooth execution as demonstrated before.

He said Linde will start cooperation with Iran as soon as sanctions are lifted.

Education and training of the operating staff as well as operational support is also offered by Linde for upcoming projects.

In addition, Linde can offer new technologies for petrochemical products, Belloni said.

Given the fact that Iran enjoys outstanding human resources and is number 2 in proven gas and number 4 in oil reserves, the country guarantees a sustainable advantage over competitors on the international petrochemical market, he stated.

Jorgen Nergaard Gol, executive committee member and vice president of Denmark's Haldor Topsoe A/S said his company will invest in Iran's petrochemical sector as soon as anti-Iran sanctions are lifted.

Gol said Iran can enjoy Haldor Topsoe's 74 years of experience in providing advanced solutions based on catalysis.

"The R&D efforts of Topsoe have always been distinguished by our strong focus on achieving fundamental scientific understanding – and our unique ability to continuously transform this knowledge to concrete benefits that provide our customers real competitive advantage," he noted.

Being a private company focused solely on catalysis, "we have the freedom to take the long-term perspective and we continuously work to approve our understanding of catalysis right down to the molecular level," he said.

Ragnar Berg, the business development director at Eastport Maritime Pte Ltd, said he is very "optimistic" about the future of the Iranian petrochemical sector as the quality of the Iranian-made products is acceptable in the world.

 There is a great opportunity in the sector for Western investors, Berg said in an interview on the sidelines of the international petrochemical forum held in Tehran.

 He said his company has been active in Iran since 2000, providing Iran with "suitable vessels" that help it "distribute its products in the Asian and European markets."

 He touched on the "limitation of ship owners" in the country describing it as the biggest challenge the Iranian petrochemical industry has been facing. "We still have insurance problems with ship owners," he added.

 He expressed hope that the political atmosphere will improve, as nuclear negotiations between Iran and the P5+1 – the five permanent members of the UN Security Council plus Germany continue to resolve a decade-long dispute over Tehran's nuclear energy program.

Executives of Axens, a leading French petrochemical company, have respected US-led sanctions against Iran so far, but they are now hoping that the ongoing nuclear talks will end up reaching a comprehensive deal between Iran and the P5+1 group so that the company can resume work at the Iranian petrochemical sector, said the company's CEO Jean Sentenac.

Sentenac noted that petrochemicals demand growth is set to continue to be higher than demand for oil demand.

"The high demand for petrochemicals is pushing refining industry to produce more and more petrochemical feedstock," he said.

"Integration between refining and petrochemical industries is today required to create opportunities as for example the higher valorization of molecules with low value either on refining side such as naphtha, propylene, BTX, or on petrochemical side Pygas and excess hydrogen," he said.

The general manager of Denmark’s Haldor Topsoe A/S said his company provides high quality catalysts that help enhance ammonia and methanol capacity.

 “Increasing demand for larger ammonia and methanol plant capacities requires superior performance from synthesis catalysts,” said Henrik Surow Larsen.

Topsoe’s catalysts provide “this level of quality, proving through many references to have the highest activities on the market,” he said. “With our products, plant owners can expect efficient and profitable production as well as reliable plant performance.”

“The new magnetite-based catalyst [KM 111] is developed for optimal performance in the lower beds of the ammonia converter,” he said adding that the new product “in conjunction with our industry-leading catalyst KM1 increases the profitability of ammonia production through record high production levels, as well as savings in energy consumption.”

The company’s recent contributions also include a new methanol synthesis catalyst, MK151-FENCETM, whose qualities benefits to methanol producers – extended catalyst lifetimes for longer turnaround cycles, energy savings, and very high production levels with a minimum of by-product formation.

Andrea Borruso, president of Switzerland’s Borruso Polymers Gmbh, reviewed the increasing price divergence between natural gas and crude oil, particularly in the US.

 He also talked about how the availability of ethane in the US, thanking to shale gas developments, has fueled a massive capacity expansion in North America.

 “To complete the petrochemical feedstock revolution, the development of large coal based investments in China, sustained by the Coal-to-Olefin technology is creating a new geographical pole of petrochemical production,” he said.

 

Majlis Ready to Finance South Pars

 

Spokesman of Iran’s parliament (Majlis) Ali Larijani has said that the Majlis is ready to provide the necessary budget for the development of the giant offshore South Pars gas field.

“If necessary, more extensive measures will be taken in the Majlis for budgeting for South Pars phases,” Larijani said during a visit to the massive field in southern Iran.

He said that Iran has to focus on the development of oil and gas fields, adding that no foot-dragging would be acceptable.

 

Gas Output to Rise 100mcm/d

 

Iran’s Petroleum Minister Bijan Namdar Zangeneh said the country’s gas production is expected to rise by 100 mcm/d this year to March 2015.

“This [calendar] year, with the operation of phases 12 and 15-18 of [South Pars] gas field, over 100 mcm/d will be added to the country’s gas production capacity,” Zangeneh said at the site of the offshore field.

He said more than 10 billion dollars has been invested in ten operating phases of the massive field, adding that more than 30 billion dollars has been spent on the development of 17 other phases.

Zangeneh said 20 billion dollars more is also to be invested in this field in the coming three years, including 10 billion dollars in the current year.

“Qatar [which shares the field with Iran] is currently recovering more than 600 mcm/d of gas from South Pars, while Iran is producing only 320 mcm/d on average,” said the minister.

Zangeneh said South Pars, Iran’s main source of gas production, is vital to Iran’s economy.

The minister expressed hope that all phases of South Pars would have been developed by 2017.

The entire South Pars covers an area of 9,700 square kilometers, 3,700 square kilometers of which are in Iran’s territorial waters (South Pars) in the Persian Gulf. The remaining 6,000 square kilometers, referred to as the North Dome, are in Qatar’s territorial waters.

The Iranian oil and gas field contains 14 trillion cubic meters of natural gas, about eight percent of the world’s reserves, and more than 18 billion barrels of LNG resources.

 

$3.8b per Phase

 

Each phase of the giant South Pars gas field in southern Iran could earn the country 3.8 billion dollars in revenues, a deputy petroleum minister said.

Rokneddin Javadi said during a visit to the offshore field that Iran direct revenues from South Pars development topped 235 billion dollars up to March 20.

He said the field has produced 324 mcm/d of gas, which is planned to reach 820 mcm/d in the coming three years.

Javadi said the field’s production reached 92 bcm in the last calendar year to March, adding that the output is expected to exceed 100 bcm this calendar year.

“Based on contacts signed for [the development of] South Pars, 43 billion dollars has to be invested in this field, 34 billion dollars of which has already been paid,” he said.

 

India to Clear Some Oil Payments to Iran

 

India plans to clear some pending oil payments to Iran under a new framework which involves the US Federal Reserve and the central bank of the United Arab Emirates.

Under the proposed arrangement, the Reserve Bank of India (RBI) would transfer Iran’s money in dollars to the UAE central bank’s account in the United States, Reuters reported.

Under the November 2013 interim nuclear deal between Iran and six world powers, Tehran has access to its 4.2 billion dollars in frozen funds globally.

The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury has reportedly informed India of Iran’s intention to receive 1.65 billion dollars of the pending payment in three equal installments.

“It is indeed a complex mechanism but it has been devised to bring in transparency in the money transfer to Iran,” Reuters quoted an informed source, whose name was not mentioned, as saying.

The Central Bank of Iran (CBI) has so far received five portions of the frozen oil revenue agreed to be released under the nuclear deal.

Iran and the six world powers – the United States, France, Britain, Russia, China and Germany – sealed the interim deal in Geneva on November 24, 2013, to pave the way for the full resolution of the decade-old dispute with Iran over the country’s nuclear energy program. The deal came into force on January 20.

 

Iran Tops World Gas Reserves

 

In its latest annual report, British Petroleum (BP) announced that Iran’s gas reserves have grown by 200 bcm.

The report announced in view of this growth, Iran’s natural gas reserves rank first in the world.

Iran has maintained this rank for the second consecutive year.

The report puts Iran’s gas reserves at 33.8 tcm by the end of 2013.

The world’s proven gas reserves amounted to 185.7 tcm in 2013, which will last for another 55 years, it said.

BP released its first annual report in 1951 and put the world’s proven gas reserves at 185.3 tcm in its 2012 report.

Russia’s gas reserves increased by 300 bcm in 2013, to reach 31.3 tcm from 31 tcm in 2012. Its reserves used to rank first in the world for a long time, before Iran overtook the country in this regard.

Also, in 2013, the US reserves increased by 0.6 tcm compared with the figure for 2012 and reached 9.3 tcm.

Turkmenistan’s gas reserves in 2013 remained the same as the figure for 2012, which was 17.5 tcm.

Gas reserves of Kazakhstan, Uzbekistan and Azerbaijan have not changed compared with the figures of last year.

The report put the world’s proven oil reserves at 1687.9 billion barrels in 2013, up by 6 million compared with the figure for 2012.

Iran intends to boost gas production by increasing foreign and domestic investments, especially in the South Pars gas field in Bushehr province. It can play a significant role in providing gas to Europe and the region.

At present, Iran produces over 700 million cubic meters of sour gas daily, which is used by petrochemical units, power plants, domestic industries, household sectors and for injecting gas into oil wells.

By launching new South Pars phases, Iran’s gas production is expected to grow by 200 million cubic meters per day.

 

 

 

OPEC Rolls Over Production Ceiling

 

The Organization of the Petroleum Exporting Countries (OPEC) said it will maintain its current 30-million barrels per day (b/d) oil output level.

The decision was made in Vienna where OPEC oil ministers held their 165th meeting.

Iran’s Petroleum Minister Bijan Namdar Zangeneh said the OPEC ministerial meeting was held “without any important challenge” regarding the rollover of the “current level of OPEC production.”

“The situation in market is very well.... The supply and the price are very good and all is acceptable for the supply side and the demand side of the market,” Zangeneh said, adding that the oil market is unlikely to experience any “significant change” in the coming years.

The Iranian minister also stated that the oil market is forecast to remain “stable.”

Zangeneh said the OPEC will continue to play an influential role in the oil market despite investment by some countries in the shale oil reserves.

The 12-member body, which accounts for one third of the world’s oil production, has held its production ceiling at 30 million b/d since December 2011.

After the announcement of OPEC’s decision, Brent North Sea crude for delivery in July soared to $109.97 a barrel, up 45 cents, in London midday transactions.

WTI for July reached $104.51 a barrel after a 16-cent gain.

OPEC members had said they were happy with current price levels at above $100 a barrel.

The group, whose members produced 29.6 million b/d in April, forecasts a demand of 30.4 million b/d over the coming six months.

 

Zangeneh Meets OMV

 

Zangeneh who travelled to Vienna for an OPEC meeting said he had met with Austrian oil and gas group OMV and other foreign oil companies, as Tehran prepares to offer oilfields, projects and its final investment contract in November.

He declined to name the other firms involved in the talks, held on the executive floor of an international hotel cleared of reporters.

"The companies are coming and visiting. At least they are showing that they are keen on exploring these possibilities, to get prepared for what they want to do," a source close to the matter said.

Zangeneh had met some Western oil executives at OPEC's previous meeting in December, including Italy's Eni and Royal Dutch Shell.

The main priority for Iran will be rehabilitation of mature oilfields - Ahwaz, Aghajari, Gachsaran, Marun and Bibi Hakimeh which together make up more than 80 percent of its total output, Zangeneh had said.

When asked how Iran would react if sanctions were not lifted, Zangeneh replied: "We entitle ourselves to increase our output in whatever way we can."

 

2014 Oil Market Balanced for

 

Oil markets should be balanced during the second half of this year with extra production sufficient to meet growing demand, OPEC said on June 12, suggesting oil prices may be fairly stable despite worries over lost supply.

Oil prices rose sharply the same day with Brent crude climbing above $112 for the first time since March on worries that violence in Iraq could disrupt supplies.

But the Organization of the Petroleum Exporting Countries, which supplies a third of the world's oil, said rising oil production should be more than sufficient to meet demand.

The organization of 12 exporters said global oil inventories were comfortable. US stockpiles were high and commercial stocks in the large developed economies were sufficient at the end of April to meet almost two months of consumption.

"Overall, the ongoing rise in supply would be adequate to satisfy the growth in oil demand in H2 2014, resulting in a well-balanced market," OPEC said in its monthly market report.

A day before, OPEC agreed on to keep its oil production ceiling at 30 million barrels per day (b/d) for the second half of this year. The grouping is happy with oil prices above $100 a barrel and its members are pumping enough oil to cover their spending needs.

According to the OPEC report, output from the United States and Canada and other non-OPEC countries would add 1.44 million b/d of extra oil to world markets this year, 60,000 b/d more than OPEC's previous forecast.

This would outstrip its projection of a rise of 1.14 million b/d in global oil demand and mean less demand overall this year for oil from OPEC.

OPEC cut its forecast of demand for its own crude in 2014 to 29.69 million b/d, down 70,000 b/d from its previous estimate.

The report, citing secondary sources, said total OPEC oil production rose 142,000 b/d to 29.76 million b/d in May, led by increased production in Angola, Iraq and Saudi Arabia.

 

Iran Crude Oil Price up $1.08

 

Iran sold crude oil at $105.40 per barrel in May, a $1.08 rise compared to April, the Organization of Petroleum Exporting Countries (OPEC) said in its latest report.

 The country’s crude oil price was $104.72 on average during the first five months of 2014, the report added.

 Iran's crude oil exports increased in May after a decline in April, according to sources who track tanker movements, moving above the level allowed by November's interim deal on Tehran's nuclear program.

 The increase appears to be led by higher sales to China in particular.

 Iran's exports have averaged 1.38 million bpd in May. That represents an increase from 1.1 million bpd in April, as estimated by the International Energy Agency.

Total OPEC crude oil production averaged 29.76 million bpd in May, an increase of 142 thousand bpd over the previous month, according to secondary sources.

Crude oil output increased from Angola, Iraq, Saudi Arabia, Iran, UAE, Nigeria, and Ecuador, while production decreased in Libya, Kuwait, and Algeria.

Preliminary data indicates that global oil supply increased by 0.20 million bpd to average 90.99 million bpd in May 2014, compared with the month before. The increase in May came from non-OPEC supply and OPEC production. The share of OPEC crude oil in total global production stands at 32.7 percent in May.

 

 

Iran Attends WPC

 

A high-level Iranian delegation participated in the 21^st World Petroleum Congress (WPC) which was held from June 15 to 19 in Moscow, Russia.

Held every three years, WPC is a key event in the global petroleum calendar, bringing together industry leadership and government representatives to discuss application and transfer of latest technology.

The World Petroleum Council was set up to catalyze and facilitate dialogue among stakeholders (both internal and external to the petroleum industry) on key technical, social, environmental and management issues in order to contribute towards seeking solutions to those issues.

 

Unfair Sanctions

 

The event opened with messages affirming the unfairness of energy sanctions, a senior Iranian oil official said. 

“The unfairness of sanctions was affirmed in the messages read out to the first day of the World Petroleum Congress,” Mohammad-Ali Emadi, director of research and technology at National Iranian Oil Company (NIOC), said.

“Even the representatives of the United States to the WPC stressed the point that sanctions harm world energy security and pose challenge to the role of energy as a sector effective in establishing social justice and respecting human rights in the world,” Emadi said.

He said that participants in the event stressed the need for stability in the energy market and the end of crises. 

 

$100b in Oil Projects

 

The National Iranian Oil Company has introduced 41 projects, valued at $100 billion, to foreign investors at the 21st World Petroleum Congress.

The projects entail the development of oil and gas fields, the establishment of natural gas liquid (NGL) plants, and the collection of associated gas at oilfields, Mehr news agency reported.

Associated gas is a form of natural gas which is found with deposits of petroleum. Due to the remote location of many oilfields, in the past, this gas was simply flared. The gas can be utilized in a number of ways after processing. It can be sold and included in the natural gas distribution networks, used for on-site electricity generation with engines or turbines, re-injected for enhanced oil recovery, or used as feedstock for the petrochemical industry.

Iran has tried to bring more foreign companies into its energy sector since securing limited sanctions relief from a November interim agreement over its nuclear activities.

On March 1, Iranian Petroleum Minister Bijan Namdar Zangeneh said that Iran’s oil industry would head forward, with or without sanctions.

The sanctions have not hindered the trend of progress of Iran’s oil industry, he stated, adding that the new model of contracts would help the country circumvent the sanctions.

The Iranian government said in April that it would revise how it regulates oil and natural gas contracts, though sanctions must be lifted for their full utilization.

Iran, under the terms of the previous buy-back contracts, paid contractors a set price for oil and natural gas produced. Under the planned new system, state-run energy companies will establish joint ventures with their international counterparts, which will be paid with a share of the output.

 

Iran- Russia Deal Revived

 

National Iranian Oil Company (NIOC) and Russia’s OAO Tatneft have revived a memorandum stalled due to Western sanctions against the Islamic Republic’s energy sector.

The development came as NIOC director of research and technology Ali Emadi held talks with the Russian company’s officials in Moscow.

Tatneft had agreed to develop heavy crude oil reservoirs in Iran, introduce new recovery enhancement methods and carry out seismic testing.

“Fruitful talks were held with this company’s officials and cooperation with this company will continue based on the previous memorandum,” Emadi said.

He said that all foreign companies are waiting for sanctions to be lifted under the aegis of Tehran’s nuclear talks with six world powers.

In 2011, Tatneft signed an accord valued at $1 billion with Iran to develop the Zagheh oil field in Iran.

A preliminary deal was signed in Tehran earlier between Tatneft, which is based in Russia’s Tatarstan region, and Iran’s Petroleum and Engineering Development Company.

The Zagheh field, located in southwestern Iran, will start production within 24 months with a volume of about 7,000 barrels a day of heavy crude and output will eventually rise to 55,000 barrels a day.

 

West Karoun Oil Civilization

 

Oil is likely to gush out wherever you step. That is the simplest description of potentials and attractions in Wet Karoun oil region in western Iran. Massive oil fields including North Azadegan, South Azadegan, Yadavaran, North Yaran and South Yaran – all shared with neighboring Iraq – are located in West Karoun region. Some experts say, Iran’s new oil civilization will surface in West Karoun.

Petroleum Engineering and Development Company (PEDEC) administers West Karoun oil reservoirs. PEDEC Managing Director Abdorreza Hosseinnejad says 10 billion dollars in investment is estimated to be needed for the full development of West Karoun fields. In an interview with Iran Petroleum, Hosseinnejad explains the latest conditions of West Karoun fields.

 

Q: West Karoun is always viewed as one of the most important oil-rich regions in the country. The significance of development of the oil fields in West Karoun has been underscored over recent years. Would you please explain about these fields?

A: West Karoun enjoys great potentials and it can cause a revolution in Iran’s oil recovery enhancement. The significance of this oil-rich region is such that the President [Hassan Rouhani] and Petroleum Minister [Bijan Namdar Zangeneh] have designated the development of West Karoun oil fields as the most prioritized projects in Iran’s petroleum industry; however, this oil region has not been handled appropriately in recent years. Major efforts have been undertaken for attracting investment, but no important step has been taken due to certain restrictions.

According to Iran’s Petroleum Ministry’s plans, oil production from West Karoun fields is expected to reach 700,000 b/d in three years. We are trying to realize this objective.

The most outstanding feature of West Karoun fields is low-risk investment. The investment will return in less than three years.

 

Q: South Azadegan oil field is the most important in West Karoun. What happened after the expulsion of China National Petroleum Corporation (CNPC) following its failure to fulfill its obligations with regard to the development of South Azadegan?

A: CNPC’s several years of foot-dragging on the development of South Azadegan ended in the termination of cooperation with this contractor. Based on new decisions, South Azadegan oil field will be developed by National Iranian Oil Company (NIOC)’s financial assets. In the meantime, Iran welcomes the presence of qualified and committed foreign investors. In the first phase of the development of South Azadegan field, 320,000 b/d of crude will be recovered. For that purpose, 385 wells need to be drilled in this field. So far, 12 wells have been drilled. The initial budget approved for the development of South Azadegan is 500 million dollars plus 500 trillion rials.

After the Chinese contractor pulled out, National Iranian Drilling Company (NIDC) started operating two drilling rigs in this field. Ten more drilling rigs are to be installed in South Azadegan field by the end of July. Since the [Chinese] contractor had not correctly designed processing installations in this field, these substandard designs are being reviewed. So far, costs have been cut by 50 million dollars and this figure is forecasted to rise.

 

Q: Is South Azadegan field development being awarded to a new contractor?

A: Given the capabilities of NIDC and its affiliation with NIOC and also due to the installation of several rigs in West Karoun, the drilling of 50 wells in West Karoun have been assigned to NIDC. Moreover, a tender bid is to be held for the EPC or EPCF-based drilling of 40 wells in two months.

 A tender bid has already been held for the purchase of downhole and wellhead equipment and the contractor for this section of the project will be soon picked. In order to accelerate the development of this field, some necessary commodities are purchased before the tender bid has been held. More than 80 percent of the commodities and equipment needed [for this project] is manufactured domestically and it accelerates activities.

 

Q: Would you please tell us about South Azadegan’s production capacity and its initial production?

A: This field’s production capacity is 600,000 b/d. In the first phase, it will be producing 320,000 b/d and the rest will be produced in the second phase. The initial production of this field is 50,000 b/d, but it can also produce 60,000 b/d.

 

Q: What should CNPC do after the termination of the contract?

A: Since the objectives set in the contract have not been realized and due to several years of delay, CNPC has to pay back all it has received. A contractor is paid when the project is done.

 

Q: Development of North Azadegan field has been also commissioned to CNPC. Would you please tell us about that?

A: The development of North Azadegan is 67 percent complete and the contractor of this field plans to supply the necessary equipment and commodities up to mid-July. We hope that this project will come on-stream next [calendar] year despite more than two years of delay.

The termination of contract with CNPC in South Azadegan field seems to have pushed this [Chinese] company to be more serious in the development of North Aadegan which would add 75,000 b/d of oil to the country’s production capacity.

 

Q: What are the plans PEDEC pursuing for the second phase of North and South Azadegan fields?

A: For the second phase of North and South Azadegan fields, we will use potential foreign and domestic investors. In the meantime, Petroleum Ministry is working out a mechanism to dip into the National Development Fund (NDF). The petroleum minister has held serious talks with the president and the first vice-president to that effect. We hope that we would reach conclusion in the first half of the current [calendar] year.

 

Q: What about the development of Yadavaran field?

A: China Petroleum & Chemical Corporation (Sinopec) is the contractor of Yadavaran field which is currently producing 25,000 b/d. Its production is planned to soar to 85,000 b/d in five months. But due to delays in the project, such a target looks unachievable. At present, 49 wells have been drilled with each well’s average production varying between 2,000 and 3,000 b/d.

 

Q: What about the second phase?

A: We don’t face any serious problem with regard to the second phase of the development of Yadvaran field and by drilling 10 wells; production rate of 85,000 b/d could be achieved.

Due to the possibility of massive oil in place in Yadavaran, PEDEC plans to find a qualified consultant to conduct accurate geological and reservoir studies. It seems that this field could be connected to other fields in West Karoun, including Azadegan.

 

Q: How much has North Yaran field progressed?

A: North Yaran field has progressed 16 percent, while it was expected to progress 36 percent. We are currently recovering some 3,000 b/d of oil from the first well of this field. A second well is being drilled to increase the production to 5,000 b/d.

North Yaran is being developed by Persia Oil and Gas Industries Development Company. The field will finally add 30,000 b/d of oil to the country’s oil production capacity.

But in South Yaran, we are a bit behind the schedule and we have to take action. Development of this field is 16 percent complete. A contract has been signed with NIDC for 22 wells. A tender bid is also to be held for construction of onshore facilities in South Yaran.

 

Q: Darkhoein is the sole independent field in West Karoun. Is its development under way?

A: Following the termination of contract with a former contractor due to its financial problems, several domestic and foreign investors have voiced readiness for presence in this project. The total investment needed for this project is 1.6 billion dollars. Only one installment has still to be paid to Italy’s Eni.

 

Q: What about other priority projects of PEDEC? Would you please tell us about Azar field as well as Omidieh and Goureh storage projects?

A: In Azar field, five wells have been drilled and if the necessary finance is provided, 30,000 b/d could be recovered from this field in nine months. Physical progress in Azar field is 20 percent, below the planned 36 percent. Dana Energy Group, along with its Taiwanese partner, has offered to develop this oil field.

In Omidieh project, we have had 90 percent progress and we are trying to implement this project this year. Omidieh storage capacity may be one million barrels. Goureh storage project is 85 percent completed. Its capacity is four million barrels. We predict to finish this project late this [calendar] year or early next [calendar] year.

 

Q: Kish gas field development is also a PEDEC priority project. How is work going on there?

A: So far, 600 million dollars has been invested in Kish field. We are planning for the recovery of 25 mcm of gas from this field.

In Kish field, 13 wells have so far been drilled and NIDC is to complete these wells. Earlier, the Kish gas was supposed to be transferred to Siri and then to Assaluyeh. But based on the recent talks between the petroleum minister and Akbar Torkan, secretary of Iran Free Zones Supreme Council, the gas is to be transferred to Goureh (Bandar Aftab) for primary processing before being fed into national pipeline.

The construction of infrastructure for this project like roads and ports has so far cost too much. The developer of Kish has been asked to reduce the number of processing units as much as possible and use new technology for desulfurization.

We are to hold a tender bid for the construction of onshore and offshore pipelines for this project. The necessary electricity is also being supplied by a 25-MW power plant with the cooperation of MAPNA Company.

Kish will produce as much gas as five phases of South Pars gas field. According to Iran’s petroleum minister, the project is expected to come online in October 2015.

West Karoun Oil Civilization

 

Oil is likely to gush out wherever you step. That is the simplest description of potentials and attractions in Wet Karoun oil region in western Iran. Massive oil fields including North Azadegan, South Azadegan, Yadavaran, North Yaran and South Yaran – all shared with neighboring Iraq – are located in West Karoun region. Some experts say, Iran’s new oil civilization will surface in West Karoun.

Petroleum Engineering and Development Company (PEDEC) administers West Karoun oil reservoirs. PEDEC Managing Director Abdorreza Hosseinnejad says 10 billion dollars in investment is estimated to be needed for the full development of West Karoun fields. In an interview with Iran Petroleum, Hosseinnejad explains the latest conditions of West Karoun fields.

 

Q: West Karoun is always viewed as one of the most important oil-rich regions in the country. The significance of development of the oil fields in West Karoun has been underscored over recent years. Would you please explain about these fields?

A: West Karoun enjoys great potentials and it can cause a revolution in Iran’s oil recovery enhancement. The significance of this oil-rich region is such that the President [Hassan Rouhani] and Petroleum Minister [Bijan Namdar Zangeneh] have designated the development of West Karoun oil fields as the most prioritized projects in Iran’s petroleum industry; however, this oil region has not been handled appropriately in recent years. Major efforts have been undertaken for attracting investment, but no important step has been taken due to certain restrictions.

According to Iran’s Petroleum Ministry’s plans, oil production from West Karoun fields is expected to reach 700,000 b/d in three years. We are trying to realize this objective.

The most outstanding feature of West Karoun fields is low-risk investment. The investment will return in less than three years.

 

Q: South Azadegan oil field is the most important in West Karoun. What happened after the expulsion of China National Petroleum Corporation (CNPC) following its failure to fulfill its obligations with regard to the development of South Azadegan?

A: CNPC’s several years of foot-dragging on the development of South Azadegan ended in the termination of cooperation with this contractor. Based on new decisions, South Azadegan oil field will be developed by National Iranian Oil Company (NIOC)’s financial assets. In the meantime, Iran welcomes the presence of qualified and committed foreign investors. In the first phase of the development of South Azadegan field, 320,000 b/d of crude will be recovered. For that purpose, 385 wells need to be drilled in this field. So far, 12 wells have been drilled. The initial budget approved for the development of South Azadegan is 500 million dollars plus 500 trillion rials.

After the Chinese contractor pulled out, National Iranian Drilling Company (NIDC) started operating two drilling rigs in this field. Ten more drilling rigs are to be installed in South Azadegan field by the end of July. Since the [Chinese] contractor had not correctly designed processing installations in this field, these substandard designs are being reviewed. So far, costs have been cut by 50 million dollars and this figure is forecasted to rise.

 

Q: Is South Azadegan field development being awarded to a new contractor?

A: Given the capabilities of NIDC and its affiliation with NIOC and also due to the installation of several rigs in West Karoun, the drilling of 50 wells in West Karoun have been assigned to NIDC. Moreover, a tender bid is to be held for the EPC or EPCF-based drilling of 40 wells in two months.

 A tender bid has already been held for the purchase of downhole and wellhead equipment and the contractor for this section of the project will be soon picked. In order to accelerate the development of this field, some necessary commodities are purchased before the tender bid has been held. More than 80 percent of the commodities and equipment needed [for this project] is manufactured domestically and it accelerates activities.

 

Q: Would you please tell us about South Azadegan’s production capacity and its initial production?

A: This field’s production capacity is 600,000 b/d. In the first phase, it will be producing 320,000 b/d and the rest will be produced in the second phase. The initial production of this field is 50,000 b/d, but it can also produce 60,000 b/d.

 

Q: What should CNPC do after the termination of the contract?

A: Since the objectives set in the contract have not been realized and due to several years of delay, CNPC has to pay back all it has received. A contractor is paid when the project is done.

 

Q: Development of North Azadegan field has been also commissioned to CNPC. Would you please tell us about that?

A: The development of North Azadegan is 67 percent complete and the contractor of this field plans to supply the necessary equipment and commodities up to mid-July. We hope that this project will come on-stream next [calendar] year despite more than two years of delay.

The termination of contract with CNPC in South Azadegan field seems to have pushed this [Chinese] company to be more serious in the development of North Aadegan which would add 75,000 b/d of oil to the country’s production capacity.

 

Q: What are the plans PEDEC pursuing for the second phase of North and South Azadegan fields?

A: For the second phase of North and South Azadegan fields, we will use potential foreign and domestic investors. In the meantime, Petroleum Ministry is working out a mechanism to dip into the National Development Fund (NDF). The petroleum minister has held serious talks with the president and the first vice-president to that effect. We hope that we would reach conclusion in the first half of the current [calendar] year.

 

Q: What about the development of Yadavaran field?

A: China Petroleum & Chemical Corporation (Sinopec) is the contractor of Yadavaran field which is currently producing 25,000 b/d. Its production is planned to soar to 85,000 b/d in five months. But due to delays in the project, such a target looks unachievable. At present, 49 wells have been drilled with each well’s average production varying between 2,000 and 3,000 b/d.

 

Q: What about the second phase?

A: We don’t face any serious problem with regard to the second phase of the development of Yadvaran field and by drilling 10 wells; production rate of 85,000 b/d could be achieved.

Due to the possibility of massive oil in place in Yadavaran, PEDEC plans to find a qualified consultant to conduct accurate geological and reservoir studies. It seems that this field could be connected to other fields in West Karoun, including Azadegan.

 

Q: How much has North Yaran field progressed?

A: North Yaran field has progressed 16 percent, while it was expected to progress 36 percent. We are currently recovering some 3,000 b/d of oil from the first well of this field. A second well is being drilled to increase the production to 5,000 b/d.

North Yaran is being developed by Persia Oil and Gas Industries Development Company. The field will finally add 30,000 b/d of oil to the country’s oil production capacity.

But in South Yaran, we are a bit behind the schedule and we have to take action. Development of this field is 16 percent complete. A contract has been signed with NIDC for 22 wells. A tender bid is also to be held for construction of onshore facilities in South Yaran.

 

Q: Darkhoein is the sole independent field in West Karoun. Is its development under way?

A: Following the termination of contract with a former contractor due to its financial problems, several domestic and foreign investors have voiced readiness for presence in this project. The total investment needed for this project is 1.6 billion dollars. Only one installment has still to be paid to Italy’s Eni.

 

Q: What about other priority projects of PEDEC? Would you please tell us about Azar field as well as Omidieh and Goureh storage projects?

A: In Azar field, five wells have been drilled and if the necessary finance is provided, 30,000 b/d could be recovered from this field in nine months. Physical progress in Azar field is 20 percent, below the planned 36 percent. Dana Energy Group, along with its Taiwanese partner, has offered to develop this oil field.

In Omidieh project, we have had 90 percent progress and we are trying to implement this project this year. Omidieh storage capacity may be one million barrels. Goureh storage project is 85 percent completed. Its capacity is four million barrels. We predict to finish this project late this [calendar] year or early next [calendar] year.

 

Q: Kish gas field development is also a PEDEC priority project. How is work going on there?

A: So far, 600 million dollars has been invested in Kish field. We are planning for the recovery of 25 mcm of gas from this field.

In Kish field, 13 wells have so far been drilled and NIDC is to complete these wells. Earlier, the Kish gas was supposed to be transferred to Siri and then to Assaluyeh. But based on the recent talks between the petroleum minister and Akbar Torkan, secretary of Iran Free Zones Supreme Council, the gas is to be transferred to Goureh (Bandar Aftab) for primary processing before being fed into national pipeline.

The construction of infrastructure for this project like roads and ports has so far cost too much. The developer of Kish has been asked to reduce the number of processing units as much as possible and use new technology for desulfurization.

We are to hold a tender bid for the construction of onshore and offshore pipelines for this project. The necessary electricity is also being supplied by a 25-MW power plant with the cooperation of MAPNA Company.

Kish will produce as much gas as five phases of South Pars gas field. According to Iran’s petroleum minister, the project is expected to come online in October 2015.

NGL Mini-Refineries Attractive for Private Sector

 

Every country bases its economy on certain attitudes which may bring about economic growth and improve welfare for people.

In Iran, Supreme Leader Ayatollah Ali Khamenei instructed officials with the policy of “economy of resistance” in order to help the country become self-reliant. These policies could be of great help at a time the world countries are facing economic recession.

Crude oil sale has constantly been criticized by Iranian economic officials for more than 100 years. The issue has come further to the limelight in the past couple of years. Ayatollah Khamenei’s economy of resistance is not limited to crude oil sales. It is also about management of petrodollars. An option for preventing crude oil selling is to make investment in projects for converting crude oil to oil products. Iran’s Petroleum Ministry is currently focusing on this issue because oil products and petrochemicals are not blacklisted by Western governments. The Western sanctions target only light and heavy crude oil.

Iran’s Petroleum Minister Bijan Namdar Zangeneh has been a promoter of development of downstream facilities for generating value from hydrocarbon resources.

“Raising production and export of oil products is one of our objectives. In the first phase, we plan to convert all gas condensate produced in the country into products in gas condensate refineries and our objective is to bring our  crude oil refining capacity to 2 mb/d and that of gas  condensates to nearly 1 mb/d,” the minister said recently.

Experts say development of refineries is the best way for Iran’s economic self-reliance. In this way, Iran will get rid of crude oil exports restrictions and will be able to produce enough gasoline for domestic use.

By converting crude oil in domestic refineries, a number of objectives could be realized. The first important objective will be the privatization of large-sized industries in order to streamline government’s hold on enterprises and clear the way for economic growth in the country.

The second advantage will be creating jobs in the country so that thousands of young university graduates will find jobs. The unemployment rate will be significantly cut.

Iran sits atop the world’s largest gas reserves. Nearly 40 percent of Iran’s gas reserves are in South Pars gas field shared with Qatar. Each phase of South Pars produces around 40,000 b/d of gas condensate besides its gas production. Around 60 percent of this volume of gas condensate could be converted into gasoline at refineries. The difficulties of gas condensate exports as well as gasoline imports give enough impetus for converting condensate into gasoline in refineries.            

By implementing new phases of South Pars, Iran’s gas condensate production will increase from the current 400,000 b/d to 1.2 mb/d. Along with the construction of Persian Gulf Star Refinery; new gas condensate refineries were also required to be built in Assaluyeh.

As part of its economy of resistance, Iran plans to build eight gas condensate refineries.

“God willing, we start the construction of eight 60,000-barrel gas condensate mini-refineries this year. All eight refineries are to be commissioned to the private sector. This 480,000-barrel refining capacity will bring us to the point that we will have no longer to export our gas condensates and we will be able to process all our gas condensates, which is more than one million barrels, inside the country,” Zangeneh said recently.

“That is a good opportunity for the private sector. We have planned small units so that the private sector would come forward. We have also won agreement for loans from the National Development Fund (NDF). The private sector would be required only to provide 30 percent of the costs because the remaining 70 percent will be provided by NDF. The infrastructures like water, electricity and access to ports are constructed by the petroleum industry in South Pars and some units could be built jointly,” he added.

Construction of gas condensate refineries will be economically viable and will attract investors. The use of naphtha in petrochemical plants in Assaluyeh and the possibility of gasoline and gasoil exports provide good opportunity for private organizations involved in the construction of such refineries.

Each gas condensate mini-refinery will cost around 300 million dollars. These planned eight refineries will have a centralized utility. National Iranian Oil Company (NIOC) will provide 20 percent of the investment needed for utility.

The conditions are ripe for the contribution of private companies to the construction of eight gas condensate refineries in Assaluyeh. The investors can expect high rate of return on their investment.

Studies have been conducted and preliminary plans have been made for the construction of eight 60,000-barrel mini-refineries in Assaluyeh. Of course, the 350,000-barrel Anahita oil refinery in the western province of Kermanshah and the 120,000-barrel Pars gas condensate refinery in the southern city of Shiraz are other projects currently under way with a view to preventing crude oil and gas condensate sales. In the meantime, projects are under way for boosting the capacity and quality of the existing refineries.

Eight Iranian financiers have so far voiced readiness for the construction of these refineries and five of them have already got permits to that effect.

Economic studies and the profitability of these projects indicate that the total investment will be returned after three to five years. These projects are estimated to produce more than 35-percent profit. The capacity of these refineries is put between 10,000 and 150,000 b/d. These eight refineries will also produce gasoil, gasoline, naphtha and bitumen of different grades.  

Potential investors will enjoy a five-percent discount in the price of feedstock. That is why these projects are attractive. All stages including refinery construction, marketing, sales and export of products will be handled by the private sector. Gas condensate, consumed as feedstock in these refineries, will be sold based on daily market prices.

The low capacity of these refineries justifies the cost-effectiveness of the project. Moreover, the private sector can get involved in this sector and domestically manufactured equipment could be used in these refineries.

Over recent years, the Research Institute of Petroleum Industry (RIPI) has managed to master technological knowhow for designing oil and gas condensate refineries. The basic design of refineries is up to international standards and the products of these refineries enjoy such benefits as quality and conformity with environmental standards.

The first industrial unit of an oil and gas condensate refinery at Kharg Petrochemical Unit has been installed by RIPI. It is to produce 500 tons a day of propane, 500 tons a day of butane and 4,000 b/d of naphtha.

At Shahriar Refinery in the northwestern city of Tabriz, a 72,000-barrel gasoil purification unit has been designed by the RIPI. The demercaptanization unit in phases 2, 3, 4, 5, 9 and 10 of South Pars gas field has also been designed by RIPI.

Construction of mini-refineries will have such advantages as the proper quality of product, rapidity of transfer and distribution of products in remote regions, reducing harmful impacts on the environment and low costs. Therefore, they can be attractive for the private sector.

Pakistan’s Double-Standards Policy on IP Project

 

Gas accounts for more than 60 percent of Pakistan’s energy mix. But the country’s gas production is on the decline and its gas shortage is so serious that some parts of the country are facing serious load shedding problems.

Energy shortage has always had destructive impacts on Pakistan’s economy and the country’s industrial facilities have had to operate far below their production capacity. As a result, many job opportunities have been lost in this country.

Pakistan Industrial and Traders Associations Front (PIAF) has called on the Islamabad government to ensure the completion of the multi-billion-dollar gas pipeline under construction from Iran to Pakistan.

In a statement on Monday, PIAF Chairman Malik Tahir Javed said implementation of the project before 2014 would greatly help Pakistan overcome its energy shortages.   

Pakistan’s Water and Power Federal Minister Khawaja Asif has said that load shedding in the country would not end by 2018.

Asif said Pakistan was incurring Rs1, 000 billion in annual loss from power generation. He continued saying government institutions in Sindh are defaulters of Rs53 billion, Azad Kashmir Rs5 billion, Punjab Rs4 billion and Khyber Pakhtunkhwa Rs1 billion.

The water and power minister said it was expected that Punjab, Balochistan and Khyber Pakhtunkhwa would clear their electricity defaults by June. The federal minister, however, expressed reservations over Sindh and Azad Kashmir clearing their defaults.

Khawaja Asif added that the federal government had directed provinces to appoint a time for the early closure of markets.

Pakistan’s energy demand has been rising sharply since 2005. The country is currently producing 4.3 bcf of gas, still below its 6-bcf demand. In order to preserve its economic growth, Pakistan has to find a solution to make up for its gas shortages in the coming years.

For years, the issue of balancing Pakistan's supply against the demand for electricity has remained a largely unresolved issue. Pakistan faces a significant challenge in revamping its network responsible for the supply of electricity. Pakistan's electricity producers are now seeking parity in returns for both domestic and foreign investors which indicate it to be one of the key unresolved issues in overseeing a surge in electricity generation when the country faces growing shortages.

As of 2013 massive long-standing electricity shortages continued with long-standing failure to provide reliable service and rampant corruption being met by public protests, unauthorized connections, and refusal by consumers to pay for intermittent service. Electricity generation in Pakistan has shrunk by up to 50% over recent years, due to an over-reliance on fossil fuels.

In 2008, availability of power in Pakistan falls short of the population's needs by 15% .Pakistan was hit by its worst power crisis in 2007 when production fell by 6000 Megawatts and massive blackouts followed suit. Load shedding and power blackouts have become severe in Pakistan over recent years. The main problem with Pakistan's poor power generation is intensifying political instability, together with rising demands for power and lack of efficiency.

Provincial and federal agencies, who are the largest consumers, often do not pay their bills. China, India, Central Asia, and Iran have been offering to export electricity to Pakistan at subsidized rates but the government of Pakistan has not yet responded to the offers for unknown reasons.

Experts say Pakistan’s demand for electricity is forecasted to reach 36,000 MW in 2015, 54,000 MW in 2020, 80,000 MW in 2025 and 113,000 MW in 2030. The average annual growth rate is eight percent.

Due to rising demand and a failing power infrastructure severe electricity shortages have occurred in Pakistan. This has led to widespread rolling blackouts that have paralyzed industry and led to protests and rioting. Power outages can last 6–8 hours a day in the cities and many more in the rural areas.

According to Mahnaz Parach of "Network for Consumer Protection ",children can't do their homework. Housework doesn't get done, as washing machines and other appliances cannot work. When you go home from work, you have no idea whether there will be electricity at home. Your whole life is disturbed."

Pakistan is already running short of nearly 8,000 MW of electricity and its power plants are short of 400 mcf/d of natural gas to run.

Pakistan started talks with Iran two decades ago in the hope of importing gas. Initially, India was a party to talks. A peace pipeline stretching from Iran to India while cutting through Pakistan was to be built. After some time, India dropped out of the project under pressure from some governments. But Pakistan continued talks with Iran due to its serious gas need. Iran and Pakistan finally signed an agreement in 2010 for the construction of a 907-kilometer pipeline from Assaluyeh in southern Iran to Chabahar Port in southeastern Iran. The pipeline was expected to be then extended into Pakistan’s territory for gas delivery to Iran’s eastern neighbor.

Iran immediately started building its own section of the pipeline and finished it last year. But Pakistan took no action after so many years and it continues to demand more time from Iran. Under a contract signed between Tehran and Islamabad, Pakistan has to finish the construction of its own section of the pipeline for receiving gas from Iran by December this year.

Pakistani officials continue to claim that they have failed to build the pipeline under the pretext of sanctions slapped on Iran by Western governments over its disputed nuclear program. But analysts say the pipeline has not been built due to financial problems in Pakistan.

 

Affordable Price

 

Pakistan is studying several other options including liquefied natural gas (LNG) imports from Qatar, India-Pakistan pipeline and Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline to overcome its energy crisis. But the important point is that gas purchase from Iran is the most economical option, while purchase of LNG from Qatar and TAPI would be costly for Pakistan. For buying LNG from Qatar, Pakistan would have to build LNG terminals and storage tanks and this country is not in a position to do so now. Contribution to TAPI project does not sound logical because of security challenges in Afghanistan. The project is still on the paper despite many rounds of talks. Gas imports from India will also cost Pakistan too much because India has no surplus gas to sell to Pakistan and it will have to convert imported LNG into gas before piping to India. LNG prices are high in Asian markets and Pakistan will never be able to pay for gas imports from India.

No practical action has been taken for these projects, while Iran-Pakistan pipeline is half-finished.

 

 

Iran Committed to Pipeline

 

While Pakistan has been for other options to replace Iran’s pipeline project, the Islamic Republic has sincerely completed its own section of the Iran-Pakistan (IP) project. Pakistan continues to drag its foot on the construction of its own section of the pipeline, while it will legally have to pay penalties for delaying the project. Pakistan’s Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi continues to claim that international sanctions are blocking the project. But Pakistani Commerce Minister Khurram Dastgir recently acknowledged that financial problems are the main obstacle to the project.

However, Pakistan cannot easily ignore gas purchase from Iran due to its growing need for energy.           

The former Pakistani government examined four options for financing its own section of the pipeline and finally decided to propose the construction of the pipeline to Iran. But after President Hassan Rouhani took office, Petroleum Minister Bijan Namdar Zangeneh rejected the idea. The Iranian minister once said that even the Pakistanis have acknowledged that they cannot pay for the gas project.

Since Pakistanis are unlikely to finish their section of the project on schedule, they have on several occasions demanded extension of the deadline. Representatives from both countries have so far held talks to that effect.

 

Deadline Extension

 

Pakistani Prime Minister Nawaz Sharif visited Iran last May. During his meetings with Iranian officials including President Hassan Rouhani, Sharif underlined the necessity of completion of the IP project. Zangeneh recently told Iranian lawmakers that the Pakistani premier has demanded that the deadline for the completion of the pipeline be extended several months.

What’s clear is that the project will not come on-stream on schedule as Pakistan will not be able to have built its own section of the pipeline by December. The future of the pipeline remains unknown.

Full construction of a pipeline to transmit natural gas from Iran to Pakistan could become a corridor for energy transmission from the Middle East to Far East. The world is looking at Iran’s 34-tcm gas reserves. Iran should take advantage of this opportunity to win the 10-percent share of global gas trade required by the country’s national development plan. Realization of this objective requires infrastructure and identification of target markets. Regarding infrastructure, more than 34,000 kilometers of transmission line has already been laid out. Under Iran’s development plan, 70,000 kilometers is needed.

IPF Specialized Seminars

 

Seven specialized seminars were held on the sidelines of the 11^th Iran Petrochemical Forum (IPF) in Tehran. The seminars focused on the status of Iran’s petrochemical industry, petrochemical market and products, investment and financing.

The first panel discussion was attended by Mohammad Hassan Peyvandi, forum chairman and vice president of the National Petrochemical Company (NPC), Jean Sentenac, CEO France’s Axens, Volfgang Hoppman, technical director at Germany’s Karl Schmidt Spedition GmbH & Co. KG, and Andrea Borruso, president of Switzerland’s Borruso Polymers GmbH.

 Peyvandi opened the session, which was the first panel discussion of the forum on Saturday, giving an outlook from Iran’s petrochemical activities.

 “In 2013, Iran’s petrochemical production capacity reached around 60 million metric tons. In the 5th Development Plan, the sector experienced a jump in growth but the pace slowed down in the years after,” he said.

 “We are planning to make a change in the petrochemical sector, applying a new approach,” he added.

 Peyvandi predicted that the sector will produce as much as 10 million tons of methanol within the next five years.

 He expressed hope that the country can earn $26 billion from the export of 55 million metric tons of petrochemical products in the near future. To achieve the goal, the sector needs $33 billion in foreign investment, he added.

Sentenac urged Iranian officials to have “a cohesive strategy” that could guarantee capital return. He suggested Iran should use modern technologies that help it achieve set objectives.

An analyst of the Asian petrochemical markets discussed methanol prices in the region.

Asia methanol prices have recently been lower than the rest of the world in general, supporting the flow of methanol from Asia to the West, NG Bao Ying, a senior editor with Asia Petrochemicals, Platts said.

 

She said however that the shale boom in the US may tip the scales, pushing feedstock natural gas prices lower and supporting higher methanol production.

 Currently, she said, more than 11 million metric tons a year of new methanol capacity is slated to come on stream by 2019.

 "There are not as many new plant start-ups in Asia, although Iran has announced a slew of projects to come on stream," she said. There is talk that the methanol trade flow may reverse, with shipments from the West coming into Asia.

 Overall, she said, strong US methanol production capacity growth is likely to see a reduction in Asia methanol volumes heading westward, especially if Asia demand increases.

Countries all over the world should cooperate with one another to recover from the 2008 financial crisis and to support the energy sector, said Issa Mashayekhi, the managing director and board member of the NPC international LTD.

 “Superiority of Iran’s gas resources is a strategic strength for ability to supply reliable and affordable required feedstock for petrochemical complexes,” he said.

Mashayekhi said he believes the growth of the petrochemical industry in Iran “is not only beneficial to the region but it contributes to the growth and prosperity of the world as a whole.”

The lower the weight factor of political aspects of issues affecting the industrial sector the higher the possibility to turn the world to a better place to live for everybody by appropriately using resources of all parts of the world.

“The large oil and gas reserves available in this part of the world [Iran] shall be regarded as a divine gift for the well-being of all mankind,” he said.

An Asian journalist said the methanol produced in Iran is used in a variety of downstream products all over the world, including in China.

 “Iran has been a key play in supplying the world’s methanol demand, especially to major economies such as China and India,” said Yu Guo, a senior editor with ICIS in Singapore.

 Iran’s petrochemical firms have the capacity to produce more than 5 million metric tons of methanol of which nearly 90% is exported, meeting a major part of the global demand, she said.

 

She said the country’s methanol production capacity is to be increased by another 2 million metric tons by 2016, she said. “Therefore, it is very important to know the trade flows and factors that are influencing methanol prices in Asia.”

 ICIS Methanol editors will compile a comprehensive presentation, making sense of the major markets in Asia.

 

Propylene Market

 

A specialized meeting of the forum attended by Mohammad-Hassan Peyvandi, deputy managing director of National Petrochemical Company (NPC) and foreign guests from France, Switzerland and Germany focused on the market of propylene and its derivatives.

Peyvandi provided general figures about Iran’s petrochemical industry and said that Iran’s petrochemical production capacity reached 60 million tons in 2013.

He said Iran’s petrochemical industry grew quickly at the beginning of the country’s Fifth Five-Year Economic Development Plan (March 2005-March 2010), but the pace of progress slowed down over recent years.

Peyvandi said Iran’s petrochemical industry is set to make progress due to huge reserves of South Pars gas field.

He said seven methanol projects, financed by Chinese companies, are under construction, adding that 10 million tons of ethanol will be produced over the coming five years.

Peyvandi said 55 million tons of petrochemicals are planned to be produced, adding that Iran is estimated to sell 26 billion dollars of petrochemical exports every year.

Petrochemical projects currently under way have had 20 percent progress and they need 33 billion dollars in investment to become operational, he said.

The official added that some 1 million tons of polyethylene will be added to the country’s production capacity when phases 15&16 and 17&18 of South Pars become operational.

He said an objective pursued by Iran’s petrochemical industry is to produce propylene, adding that good plans have been made to that effect.

In the same session, Axens CEO Jean Sentenac urged Iranian officials to have “a cohesive strategy” that could guarantee capital return.

He suggested Iran should use modern technologies that help it achieve set objectives.

Sentenac said Iran should consider options in which the rate of return on investment would be favorable.

He said that fuel and petrochemical production in oil and gas-rich countries is cost-effective.

Wolfgang Hoppman, technical director at Germany’s Karl Schmidt Spedition GmbH & Co. KG, stressed the need for the establishment of logistic petrochemical hub in Iran.

He added that the German company is even ready to help Iran set up a logistic hub in order to win more customers.

Hoppman said millions of tons of petrochemicals exported from the Middle East countries require intelligent logistic planning. 

Iran plans to turn the Sea of Oman’s costal region into the country’s petrochemical hub. The coastal region has enormous potential for the establishment of petrochemical complexes.

Iranian Petroleum Ministry is pursuing the policy of developing new petrochemical hubs to avoid excessive reliance on Iran’s current petrochemical powerhouse.

It is planned to establish petrochemical hubs in areas such as Jask, Chabahar and Iranshahr, which are located across or near the Sea of Oman.”

The southeastern town of Iranshahr has the highest potential to turn into Iran’s petrochemical hub due to its proximity to the Sea of Oman and the Iran-Pakistan gas pipeline.

Compared with other petrochemical complexes such as Assaluyeh and Mahshahr, Iranshahr is 1,000 kilometers closer to destination markets such as India and China.

The water needed by the planned petrochemical complex in Iranshahr will be provided from the Sea of Oman and the required natural gas will be transferred through Iran-Pakistan pipeline.

 

Investment in Iran Petchem Sector

 

One of seminars held on the second day of the IPF focused on investment and finance. The gathering was attended by Mohammad-Reza Saroukhani, managing director of Bank Mellat, Issa Mashayekhi, managing director of the international branch of National Petrochemical Company, Shahryar Hakimi, managing director of Silk Road Strategic Consulting Company and Mohammad-Hadi Rahbari, managing director of Pasargad Energy Development Company.

Iran’s state-run Bank Mellat is ready to contribute to the finance of petrochemical development projects, managing director of the bank said.

“As the second largest bank in Iran, Bank Mellat is fully ready to cooperate in the development projects of Iran’s petroleum industry, particularly in the petrochemical sector,” Farzad Saroukhani said.

He said that Iran’s massive oil and gas reserves promise a bright outlook for the country, adding that Iran’s economy could be revamped by funding oil, gas, refining and petrochemical development projects.

“By 2035, the share of oil in global energy supply will reach 36 percent and the gas share will reach 29.9 percent. These figures underscore the significance of investment in the energy sector,” he said.

Saroukhani said financial bodies in Iran are expected to support petrochemical industry.

“By 2025, 500 billion dollars must be invested in Iran’s petroleum industry, 74.5 billion dollars of which in the petrochemical sector,” he said.

Saroukhani said the establishment of energy fund in Bank Mellat is a major step in favor of Iran’s petroleum industry.

He said that another fund is to be established with the collaboration of National Petrochemical Company (NPC).

 

Shahryar Hakimi , the managing director of Silk Road Strategic Consulting, says Iran Foreign Investment ACT supports international investment in the country.

Hakimi praised Iranian government for encouraging foreign investment, saying “the current situation in the country is very positive.”

He introduced to the forum a number of Iranian rules and regulations that help reduce investment risk in the country.

He said Iran Foreign Investment ACT has been updated now, so that foreign investors are able to hold the ownership of the projects they are in charge in Iran. But, he added, the law has remained unknown due to external restrictions, including US-led sanctions.

The law is “a viable gateway for investment,” which has “added guarantees and benefits” for international investors, he said.

Indian ambassador to Tehran D.P. Srivastava says his country will continue petrochemical trade with Iran, hailing Tehran's decision to hold a petrochemical conference.

 On the sideline of the 11th international Iran Petrochemical Forum in Tehran, the ambassador said in an interview on Sunday that his country prefers to import petrochemicals from Iran, which is “very close” to India. In the meantime, he said, India “lacks feedstock” therefore, it needs to import petrochemical products from an oil and gas rich country like Iran.

He also said it was “an excellent idea” to hold such a conference in Tehran as it gathers consumers and producers together. “The exchange of views was very helpful.”

The ambassador expressed hope that the political and economic relations between the two sides will improve.

 Regarding the pending oil payments, he said that the Indian government already announced that Tehran can use the payments to buy “pharmaceuticals and food.”

Iran should create a logistic hub to complete a value chain in the petrochemical sector, said a petrochemical expert.

“According to a client, it costs a businessman only $30 to transfer a container full of polymer from Jebel Ali [Free Zone in the UAE] to Shanghai. And we want to have clients in Iran and Saudi Arabia, and we are ready to help Iran create a logistic hub,” said Wolfgang Hoppman, technical director of Germany’s Karl Schmidt Spedition GmbH & Co. KG.

He encouraged a “smart planning” that would help Iran’s petrochemical sector to more easily export millions of tons of products per annum, while prices will remain competitive and shipments will be safe and fast at the same time.

 He said transportation of a shipment should take 7 to 10 days maximum. “So Iran needs giant warehouses, where products can be stored for 10-15 days before they are exported.”

Before the start of the forum, a deputy head of National Petrochemical Company had said that US-led sanctions against Iran's petrochemical sector have also hurt European companies over past years.

"In my opinion, sanctions against Iran's petrochemical industry severely hurt Europeans, who could benefit from providing finance and technical support for the Iranian industry," said Mohammad Hassan Peyvandi.

He said the forum this year host more foreign guests compared to previous years. He also expressed hope that the Iranian petrochemical sector will grow rapidly if Iran and the P5+1 group – the five permanent members of the UN Security Council plus Germany – reach a comprehensive deal, which is believed to lift all existing sanctions.

 "We can't expect a jump in exports immediately after the Geneva deal, because issues like money transfer and insurance must first be addressed, as agreed, during the negotiation process," he said, referring to an interim nuclear deal reached in November between Iran and the P5+1. The deal eased the sanctions which have been imposed on Tehran over a decade of dispute with the West.

 Peyvandi said the NPC did not wait for the final outcome of the negotiations and a possible relief of sanctions. "We decided to hold the forum while the [nuclear] talks continue."

 The forum, he said, is also aimed at encouraging private investors to get actively involved in the Iranian petrochemical sector. "According to law, the NPC is only able to invest in deprived areas," so it is a great opportunity for the private sector to fill the gap and help develop the sector.

Petchem Market Outlook

 

The market and future of petrochemical products was the focus of another specialized meeting of IPFwhich was chaired by Abbas Taeb. The seminar noted and discussed the necessity of technical support for refining and petrochemical industries, polyethylene and polypropylene market in the Middle East as well as the global supply chain of plastics.

An analyst from Dubai said he believes that several issues, including Iran’s economic situation and a key housing plan in the United Arab Emirates and even football matches in Qatar, can all affect petrochemical markets in the Middle East over the next few years.

 “Should US-led sanctions be fully lifted in 2014, more PE supply from Iran will likely be exported into the region and into the key Europe and Asia markets,” said Muhamad Fdhil Bin Abdul Rahim, ICIS Middle East chief correspondent.

He predicted that Borouge 3 will come on-stream in 2014. “In 2015 Sadra Chemical Company is expected to operate its new facility,” he added, arguing that both incidents will affect prices of PE and PP in the Middle East.

Even Qatar World Cup 2022, he said, could affect the markets.

ICIS will examine the impact of key challenges facing Middle East producers and the expected demand uplift from Qatar World Cup 2022 and the Dubai Expo 2020 and.

The analyst said Dubai housing projects aimed at providing residents for visitors of the 2020 world event will also affect petrochemical markets in Asia in the next few years.

Prema Viswanathan, Platts Associate Editorial Director, said the shale boom in the United States petrochemical industry will increase US exports targeted mainly at Latin America, Europe and even Asia, offering competition to Middle East players.

 “The shale boom will have a significant impact on aromatics production,” she said.

“As shale gas typically has a very negligible yield of pygas and aromatics, this may result in the US being an importer of aromatics on a bigger scale,” she added.

 

She said despite the challenge posed by shale gas, “the Middle East is expected to continue maintaining its edge, being lowest on the cost curve.”

 Asian countries including China, she added, will continue to be a major consumer of petrochemicals in the coming years. “China is pushing ahead with its CTO and MTO projects because of its coal feedstock advantage, as the cost of coal is almost one-third of the cost of naphtha.

 

Petrochemical Trend

 

The fifth specialized seminar of IPF focused on petrochemical trend. It reviewed advanced catalytic solutions for Iran’s petrochemical industries, air separation units, methanol markets in Asia and Oceania and innovation in the petrochemical industry.

The main points discussed by foreign guests attending this roundtable are as follows:

Better catalysts would be needed, as demand rises for bigger urea and ammoniac units.

New catalyst enhances productivity by 20 percent; as a result less catalyst will be needed for methanol production.

Catalysis is the enhancement in the rate of a chemical reaction of one or more reactants due to the participation of an additional substance called a catalyst. Unlike other reagents in the chemical reaction, a catalyst is not consumed by the reaction. With a catalyst, less free energy is required to reach the transition state, but the total free energy from reactants to products does not change. A catalyst may participate in multiple chemical transformations.

Although catalysts are not consumed by the reaction itself, they may be inhibited, deactivated, or destroyed by secondary processes. In heterogeneous catalysis, typical secondary processes include coking where the catalyst becomes covered by polymeric side products. Additionally, heterogeneous catalysts can dissolve into the solution in a solid-liquid system or sublimate in a solid-gas system.

Downstream petrochemical units, particularly methanol production units, need energy and oxygen. Therefore, air separation units are vital.

Crude oil prices in 2015 will affect China’s petrochemical imports notably methanol purchase.

China imported 4.8 million tons of methanols in 2013. 

In China, methanol is used as a motor fuel in various blends ranging from 5% methanol in gasoline (M5) to 100% methanol (M100). Methanol accounts for 7-8% of China’s transportation fuel pool.

Methanol is produced naturally in the anaerobic metabolism of many varieties of bacteria, and is commonly present in small amounts in the environment. As a result, there is a small fraction of methanol vapor in the atmosphere. Over the course of several days, atmospheric methanol is oxidized with the help of sunlight to carbon dioxide and water.

The largest use of methanol by far is in making other chemicals. About 40% of methanol is converted to formaldehyde, and from there into products as diverse as plastics, plywood, paints, explosives, and permanent press textiles.

Methanol is a traditional denaturant for ethanol, the product being known as "denatured alcohol" or "methylated spirit". This was commonly used during the prohibition to discourage consumption of bootlegged liquor, and ended up causing several deaths.

Methanol is also used as a solvent, and as antifreeze in pipelines and windshield washer fluid.

In some wastewater treatment plants, a small amount of methanol is added to wastewater to provide a carbon food source for the denitrifying bacteria, which convert nitrates to nitrogen to reduce the nitrification of sensitive aquifers.

During World War II, methanol was used as a fuel in several German military rocket designs, under the name M-Stoff, and in a roughly 50/50 mixture with hydrazine, known as C-Stoff.

Methanol was used as automobile coolant antifreeze in the early 1900s.

Methanol is used as a denaturing agent in polyacrylamide gel electrophoresis.

Methanol is readily biodegradable in both aerobic (oxygen present) and anaerobic (oxygen absent) environments. Methanol will not persist in the environment. The half-life for methanol in groundwater is just one to seven days, while many common gasoline components have half-lives in the hundreds of days (such as benzene at 10–730 days). Since methanol is miscible with water and biodegradable, it is unlikely to accumulate in groundwater, surface water, air or soil.

Shale Gas and Petchem Feedstock

 

The last meeting held on the sidelines of IPF was question-and-answer session about shale gas. 

The participants in this forum said US shale gas projects and China’s coal are among factors that would cause a revolution in the petrochemical feedstock in the near future.

The main points discussed in this forum are as follows:

Growing differences in the crude oil and natural gas prices in the US and easy access to ethane in North America have boosted investment and paved the ground for the markets to increase ethylene exports to Europe.

Iran’s economy will be ready to rival big economies like China and India in the coming years.

Growing population, per capita income, industrial developments and environmental impacts affect supply and demand.

The US has still to invest heavily in liquefied natural gas (LNG) terrains, while having to lay more pipelines to carry petrochemical products and gas to exports terminals which are both time taking and costly.

Huge investment has been made in the US downstream oil sector, while Persian Gulf littoral states have been slow in this regard.

China is investing in transforming coal to olefin, thereby opening a new chapter in petrochemical production.

Production of propylene from coal in China would raise this country’s petrochemical production by 50 percent and make the country self-sufficient.

A major cause of concern with shale gas recovery is its detrimental impacts on the environment. However, Japan and South Korea have managed to develop methods that would minimize environmental impacts of shale gas recovery.       

Shale gas is natural gas that is found trapped within shale formations. Shale gas has become an increasingly important source of natural gas in the United States since the start of this century, and interest has spread to potential gas shale in the rest of the world. In 2000, shale gas provided only 1% of US natural gas production; by 2010 it was over 20% and the US government's Energy Information

 

Administration (EIA) predicts that by 2035, 46% of the United States' natural gas supply will come from shale gas.

Some analysts expect that shale gas will greatly expand worldwide energy supply. China is estimated to have the world's largest shale gas reserves. A study by the Baker Institute of Public Policy at Rice University concluded that increased shale gas production in the US and Canada could help prevent Russia and Persian Gulf countries from dictating higher prices for the gas they export to European countries.

A 2013 review by the United Kingdom Department of Energy and Climate Change noted that most studies conducted on the subject have estimated that life-cycle greenhouse gas (GHG) emissions from shale gas are similar to those of conventional natural gas, and are much less than those from coal, usually about half the greenhouse gas emissions of coal; the noted exception was a 2011 study by Howarth and others of Cornell University, which concluded that shale GHG emissions were as high as those of coal.

 

China’s shale gas ramp-up may surprise the skeptics. Beijing wants drillers to increase output from a standing start to a third of current US levels – around 270 bcm annually – by 2020. That’s a stretch. But on plausible assumptions, the People’s Republic could get there within a decade. New discoveries and further joint ventures with the likes of Texas-based FTS International would help.

 

Shale Gas and Petchem Market

 

The sixth meeting held on the sidelines of IPF discussed shale gas and its impact on the market.

The main points addressed by participants in this gathering are as follows:

Iran, which has the world’s largest gas reserves, should try to minimize gas sales level and instead, sell products of higher value.

The US has become an energy exporter thanks to shale gas reserves it has recovered. It is expected to become a major player in the world chemical industry.

The issue of shale gas has been the centre of attention since five years ago.

Middle East remains the largest producer of polyethylene and it will be the focal point of world energy supply.

Shale gas revolution in the US has created both opportunities and threats for producers of petrochemicals. Iran can benefit from these opportunities by boosting its aromatics production.

The shale gas revolution mainly affects olefins and polymers and it will not have significant impacts on other products.

The petrochemical industry in North America suffered recession for a certain period of time, but it grew again and the US has become a global rival due to its shale gas recovery.

The US petrochemical industry will also grow due to its shale gas recovery, but it may have to import aromatics. That would be a good chance for the Middle East countries.

Iran has largely contributed to aromatics production in the world. Iran can develop its petrochemical industry by benefitting from its advantages like easy access to natural gas and specialized manpower.

Despite sanctions, Iran has continued exporting petrochemicals and China, which is Iran’s largest trading partner, is a major customer of Iran’s petrochemical products particularly methanol and polyethylene.

Asia and Middle East have always sought to boost production due to low-price feedstock. China is also moving towards self-sufficiency and plans to use coal in petrochemical production. That would be more cost-effective given its huge coal reserves.

The price and demand volatility has inevitably affected the aromatics business over recent years. The weak downstream demand is mainly attributable to economic uncertainty around the world. Asia continued to dominate aromatics consumption driven by new derivative production capacities, while a decline in demand was seen in North America and Western Europe.

The complexity in upstream factors provided a challenging environment for aromatics. Benzene supply from pyrolysis gasoline (pygas) is highly dependent on the economics and feedstock type of ethylene production.

US pygas supply has been reduced as a result of shale gas exploitation. LPG also gained in popularity as cracker feedstock in Western Europe to mitigate the effect of high crude oil prices.

On the reformer side, demand for transportation fuels continues to be effected by high crude oil prices, biofuels, renewables and electric vehicles. Nevertheless, most aromatics players continued to approach their maximum capacities, following high margins for paraxylene, driven by the strong demand from the fiber and packaging sectors.

Iran Plast Scheduled in September

 

The manager of the 9^thInternational IRANPLAST Exhibition has announced the required arrangements were made for online registration from late May.

He said: “So far, some companies from European countries, Turkey, China, India, Taiwan, and some Persian Gulf countries have confirmed their participation in the exhibition.”

According to the executive committee of the 9^thIRANPLAST Exhibition report, Hadi Zonouzi Asl said: “The necessary arrangements for online registration have been made and those willing to take part in the exhibition can refer to the website to register in accordance with the scheduled program.”

“Interested parties could have pre-registered on the website from May 24, 2014, and within two to three weeks the financial situation of applicants will be evaluated,” he said.

The Public Relations general manager of the National Petrochemical Company (NPC) affirmed that all the applicants would have an equal opportunity in registration and booth selection.

“The online registration of the 9^th IRANPLAST Exhibition will cover most of the exhibition booths,” he added.

“Some associations and guilds of the petrochemical downstream industries were permitted to manage some of the exhibition halls” he said, adding: “In case some interested parties fail to register online  in the due time and get a booth, the exhibition halls can be extended, since no other exhibition will be held in the Tehran International Fairground during the IRANPLAST 2014.”

He said the 9^thInternational IRANPLAST Exhibition will be held in 4 categories.

“Eight halls will be allocated to petrochemical downstream industry products (categories of finished and semi-finished products), four halls to machinery and equipment, three halls to raw materials and services and one hall to foreign exhibitors.”

“According to the country’s present situation, contribution to the exhibition by foreign countries is estimated to be increasing,” said the exhibition manager.

He also announced the commencement of the 9^th IRANPLAST Exhibition news and executive committees and said: “The required arrangements for the exhibition catalogue are finalized and some decisions about exhibition newsletters have been taken.”

 “We will do our best to hold a successful and magnificent exhibition by organizing public forums, and benefitting from contribution of active guilds and associations.” He affirmed that the 9^thInternational IRANPLAST Exhibition would be held on September 25-29, 2014 in Tehran.

For further information, applicants may visit the exhibition website: www.iranplast.ir

More space Needed for Polymer Machinery

The head of the board of the Polymer Machinery and Equipment Manufacturers Association, Mohammad-Reza Shakeri, said: “We are currently engaged in registering and locating the members. Halls 6, 7 and 27 are allocated to our association and we are consulting with our members for their positioning. In locating the members we will give priority to members who have registered first. For highly demanded booths, we will give priority to the members according to their brand, background and sales rate in the market. Even factors like being a manufacturer or importer and the quality of the imported machines have been taken into account in the priority setting.”
“The space allocated to our association is less than our request. We are negotiating with the exhibition organizers to merge some booths, because there is a high demand for big booths. In addition, we should solve some problems our members have faced in their payments. The rule according to which the machinery importers should pay part of the booth cost in foreign currency, should be clarified,” he added.
Shakeri said that in the previous exhibition the Polymer Machinery Manufacturers Association was present in the policy-making sessions. “In the current exhibition by formation of a consulting committee a good contribution is made” he added and continued: “we will try to benefit from opportunity resulted from attending the exhibition. The machinery manufacturer section of the exhibition usually has the highest number of visitors and the highest sales rate. Holding a well-organized exhibition will help the manufacturers to benefit more from the exhibition. Moreover, it is important to advertise well and attract more people to the exhibition. In this regard we will do our best.”

Disposable Containers on Exhibit

The secretary of Disposable Containers Manufacturers Association, Mohammad-Baqer Emami Al Aqa, said that IRANPLAST exhibition is now making the preliminary arrangements for participation of exhibitors and added: “ The fair is currently in the enrollment stage and for our association members the contract with exhibitors is supposed to be made up to June 21.” “So far, we have been able to allocate 80% of the space given to us to the association members. However, the number of the members that had announced their participation before the beginning of the New Year was more than now. The reason is that at the beginning Hall 7 was supposed to be allocated to our association, but later on it was given to machine manufacturers, since they needed a better showing place. Subsequently, Hall A41 was assigned to our association, but we couldn’t convince many members of the necessity of this change,” he said. “To be fair to everyone, in allocating the stands we gave priority to members who had registered first. The biggest and smallest stands were 78 and 9 square meters in area, respectively. However, we are negotiating with the exhibition organizers because most of the stands, comprising 32 stands, in this hall are 12square meters in area, while majority of our members have requested 30-35 square meter stands. In this regard, we will hold some sessions with the exhibition managers to convince them to change the configuration of the hall. Otherwise, some more members may refuse to take part in the exhibition, since they need bigger stands,” he added. He pointed to the positive and valuable relationship between the association and the exhibition organizers and continued: “the organizers have patiently paid attention to our needs and their performance has been up to our expectations, and thank God there have been no problems. Furthermore, two policy-making sessions were held to which we were also invited, though, if such sessions were held continuously we had gotten better results. Holding the exhibition internationally has a targeted effect and the contribution of all groups in arrangement sessions is needed.” “We hope the exhibition website is a well-designed, strong and user-friendly website, so that the participants can register fully online.” Registration Satisfactory Hamid Piroozfar, the secretary of Iran Masterbatch Producers Association, said the association is responsible for the registration of its members: “according to the agreements with the IRANPLAST exhibition manager, Mr. Zonouzi, the association members are supposed to register through their relevant associations. Based on the negotiations with the exhibition organizers, our association members are placed in the raw materials and semi finished product categories; therefore they will exhibit in halls 8 and 9.” “It is appreciable that all the associations are involved in the decision-making process of this year’s exhibition. Hopefully in future there will be no individual exhibitors, and all companies attend the exhibition as subgroups of their associations. However, there have been some problems which led to some complaints. For instance, the suitable places are allocated to sponsors, while the sponsorship fees are very high.” he added. Piroozfar said that Iran Masterbatch Producer Association was established almost last year, and continued: “the association has 32 members, among which 16 have asked to exhibit in IRANPLAST. Almost all contributing members were complaining of the place allocated to our association, since it was the tail end of the halls 8 and 9. We had 877 square meters in hand and most of this area has been allocated to exhibitors according to their request date and area. I think most of the members are now satisfied with the place given to them.” “We are trying to have a stand along with Polymer Technology Incubator and National Polymer Association. In this stand we will provide the visitors with a list of the association members, and we will try to recruit new members, as well. In addition, our honorary members, the foreign companies that import raw materials and additives, will also be present at the exhibition.”

 

Petrobras has contracted saipem for

 

 construction of subsea facilities for the Lula Norte, Lula Sul, and Lula Extremo Sul project offshore Brazil.

The location is in the Santos basin presalt region, around 300 km (186 mi) from the coasts of Rio de Janeiro and São Paulo states.

Saipem will engineer, procure, fabricate, and install three offshore pipelines, associated pipeline end terminations, and free standing hybrid risers for the gas export systems to be installed in the Lula field in water depths of up to 2,200 m (7,218 ft).

The Saipem FDS2 will perform most of the offshore within the first half of 2016.

Saipem’s yard under development in Guarujá will fabricate the risers and subsea equipment. The Saipem FDS2 vessel will handle most of the offshore installations during the first half of 2016.

 

Pancontinental Oil and Gas NL has

verified that the recently completed Sunbird-1 well off the southern Kenyan coast has intersected an oil column – the first oil ever discovered off the East African coast.

 The gross oil column is assessed to be 14 m (46 ft) thick beneath a gross gas column of 29.6 m (97 ft) in a reefal limestone reservoir in the Sunbird Miocene Pinnacle Reef in area L10A. The Sunbird Reef is an ancient Miocene pinnacle reef buried beneath 900 m (2,953 ft) of younger sediment.

 The corresponding net values are 9.2 m (30 ft) for the oil zone and 28.3 m (93 ft) for the gas zone. The net values are calculated for the reservoir using cut-offs of 10% porosity (Phi) and 50% shale volume (Vsh).

 

Statoil Steps Up Barents Sea Drilling

 

 

Statoil has approval from the Norwegian Petroleum Directorate for a wildcat well in the Barents Sea.

The semisubmersible Transocean Spitsbergen will drill well 7325/1-1, the second in production license 615, which was awarded in 2011 under Norway’s 21st licensing round. It spans blocks 7324/1, 2, 3, and 7325/1.

Co-licensees are ConocoPhillips Scandinavia, OMV (Norge), and Petoro.

Meanwhile, the Norwegian Petroleum Safety Authority has issued consents for three Statoil initiatives offshore Norway.

One is for use of the Navion Europa as a temporary storage vessel for the Heidrun field and the Heidrun Oil Export Solution in the Norwegian Sea.

Heidrun is in 350 m (1,148 ft) of water in the Haltenbanken region. Production started in 1995 using a concrete TLP.  Statoil has commissioned new facilities to extend the field’s life.

Navion Europa, operated by Teekay Shipping, regulates buoy loading operations on the Norwegian continental shelf.

In the North Sea, Statoil has authorization to use the semisubmersible Songa Trym to drill well 35/11-A-31 in the Fram H-Nord field in license 090, in 361 m (1,184 ft) of water

Aramco Confirms Deepwater Red Sea Oil Find

 

Saudi Aramco has discovered three oil and two gas fields over the last year, according to the company’s annual report.

These included the deepwater oil field Al-Haryd in the Red Sea, which followed a significant gas discovery in the Shaur structure in this region the previous year.

Also in 2013, the company executed its first deepwater drillstem test at Duba-1, in the northern Red Sea, in a water depth of 2,127 ft (648 m). Results indicated tight reservoirs for potential future development.

As for offshore development programs, the shallow-water Manifa field off eastern Saudi Arabia entered production in April 2013, three months ahead of schedule, with output reaching 500,000 b/d of oil by July.

SapuraKencana Wins Rig Supply Contracts

 

SapuraKencana Petroleum has won two contracts to supply multiple platforms for projects offshore Southeast Asia. Total value is around $415 million.

Carigali-PTTEPI Operating Co. has commissioned four wellhead platforms and associated subsea pipelines for the block N-17 and B-17-01 field Phase 3 project in the Thailand-Malaysia Joint Development Area (JDA).

Work starts this month and is expected to be completed in September 2017.

Hess Exploration has contracted three wellhead platforms for a project in the North Malay basin, due to be delivered and installed by 3Q 2016.

 

 

World Oil Developments

 

Libya

 

Libyan oil is returning to global markets following the reopening of an Eastern port and an increase in production, an oil official said.

Returning supplies, even limited ones, from the North African country could bring relief to markets rattled by mounting fears of Iraqi disruptions.

Speaking to The Wall Street Journal, Mohammed el-Harari, a spokesman for state-owned National Oil Co. said a tanker with a capacity of 350,000 barrels destined for Europe is currently loading from the Eastern oil port of Hariga and a second will follow soon. He said the facility reopened over the weekend after protests by guards over wages arrears came to an end.

Last month, Libya was forced to divert its crude exports to a local refinery after dwindling oil flows led to a risk of fuel shortages.

Following the resumption of production at two fields, the country's oil production now stands at 208,000 barrels a day, Harari said. That is up from about 150,000 barrels a day previously, though it is still a fraction of normal output of 1.6 million barrels a day.

Libya's production and exports have been frequently shut by strikes and armed occupations since a civil war that toppled strongman Moammar Gadhafi in 2011.

The impact of the disruptions on global markets has been compounded by escalating unrest in Iraq, which normally exports 2.6 million barrels of oil a day.

 

Iraq

 

The safety of Iraq’s oil-producing capacity, and the global energy market as a whole, is under threat from the Islamic State of Iraq and the Levant (ISIL) insurgency.

Over the last fortnight, the ISIL has made jaw-dropping advances across Iraq. ISIL now holds large parts of the country’s central and northern regions, including Mosul, the second-biggest city, and Saddam Hussein’s home town of Tikrit.

Since splitting from al-Qaeda in 2011, ISIL has operated on both sides of the Syrian-Iraqi border. If the World Cup wasn’t on, and it wasn’t the height of summer, this militia group’s activities would be dominating our news agenda to a far greater extent than they are.

Perhaps the oil price will force us to confront what’s really happening in the Middle East. Brent crude hit almost $116 a barrel, its highest level since September 2013. Prices are up 10pc over the last fortnight, since this new insurgency kicked-off, with crude steadily approaching the $120-$125 danger zone.

At that level, oil starts to impose serious economic damage on the major energy importers. Over the last half century, pretty much every oil price spike has been followed, relatively quickly, by a recession in the Western world.

More recently, a related pattern has emerged. In 2011 and again in 2012, it was the rise of oil to around $125 that triggered a return to “risk off” and a significant downward correction of equity market.

The concern then was that a US air strike would cause massive upheaval, with fighting spreading from Syria, which produces a mere 56,000 barrels of oil daily, to Iraq, which back then pumped a very sizeable 3.1m — or 3.7pc of global production.

That’s exactly what has happened — even though the air strike was called off. Last year prices rose from around $108 to $117 and, so far, the current response has been roughly the same. In that sense, the market’s response to these Iraqi fireworks has been relatively subdued. One reason is that the oil exports from the region which has seen most of the fighting, northern Iraq, has anyway been offline since earlier this year, due to a damaged pipeline to Turkey. Those losses to global commodity markets were already priced in.

Earlier this year, Iraqi production hit a 35-year high of 3.6m barrels — up no less than 16pc on the year before. The country’s output is set to grow to no less than 5m barrels by 2019, according to the International Energy Agency, the Western world’s energy think tank.

“Given Iraq’s precarious political and security situation, this forecast is now laden with downside risk,” the IEA warned, in a report. “This [ISIL] offensive is not only raising concerns about future production from operating and new projects, but is casting a pall on the functioning of the country’s government institutions and even on regional stability”.

The exploitation of “tight” oil and gas formations has seen America’s total energy production recover to its seventies peak of 11.3bn barrels a day. Back then, though, the world economy was much smaller, and used a lot less energy. And the reason US energy prices are below those in Europe (particularly gas prices) isn’t because shale energy is cheap.

On the contrary, producing shale requires the drilling of many more wells than conventional production. American energy prices are low due to a combination of massive shale-focused tax breaks and a near blanket energy export ban – which has produced a glut. Again, shale is important, but it won’t redraw the global energy map.

This new threat to Iraqi oil supplies is set against an alarming trend barely mentioned by Western analysts. Last year, the global oil industry discovered just 13,000m barrels of oil, a third less than in 2012 and the lowest discovery rate in 62 years.

Kuwait Eyes More Investment in Europe

 

Kuwaiti Oil Minister Ali Al-Omair visited the Kuwait Petroleum Refinery site at Rotterdam and met the management there and inspected the various departments and installations.

Speaking to the Kuwait news agency, KUNA, he underlined the importance of his first visit to the Netherlands and his delight about visiting the refinery.

"We are following one of the major investments for Kuwait in Europe which is at the Rotterdam refinery and hopefully we can succeed in resolving all the problems facing our investments," he said.

The minister praised the young Kuwaitis in the management of the refinery for their hard work and dedication.

Al Omair said he will be meeting with the Dutch foreign affairs minister and the minister of economy tomorrow.

"We hope to have good talks with them regarding Kuwaiti investments in the Netherlands," he said.

"We are looking forward to increasing our investments in Europe and also to overcome all the obstacles that we face," stated Al Omair.

He described Dutch-Kuwaiti relations as "excellent" and noted that the Kuwaiti foreign minister recently visited the Hague to celebrate the fiftieth anniversary of diplomatic relations between the two countries.

"Our foreign minister had good and fruitful talks with the Dutch side and we hope to strengthen our relations," he added.

The minister is accompanied by Nizar Aladsani, head of the Kuwait Petroleum Corporation, Bakheet Al Rashidi, head of Kuwait Petroleum International (KPI), Khaled Al Mushaileh, acting vice president of KPI Europe, Adnan Al Qallaf Group manager-stakeholder management KPI, Eman Al Sabah, and manager in the oil minister’s  office, Khaled Al-Saee.

Kuwait’s ambassador to the Netherlands, Hafeez Al-Ajmi, and advisor at the embassy Ali Althaidi also attended the meetings at the Rotterdam refinery.

The Kuwaiti delegation was welcomed by the managing director at the Kuwait refinery at Rotterdam, Wael Salmeen.

 

LG, Hyundai Clinch $4b Deals with Turkmenistan

 

South Korean industrial conglomerates LG International and Hyundai Engineering will build gas processing plants in Turkmenistan worth a combined $4 billion, Turkmen President Kurbanguly Berdymukhamedov said.

"Turkmenistan sees a long-term partner in South Korea. And today we concluded two large-scale agreements worth a total of $4 billion," Berdymukhamedov told journalists after holding talks with his visiting South Korean counterpart Park Geun-hye.

The contract to build two processing plants was signed by Turkmen state gas company Turkmengas, LG International Corp 001120.KS and Hyundai Engineering Co. HYENG.UL following the talks.

"For the first time in the history of our diplomatic relations, the president of South Korea has visited Turkmenistan. We share the opinion with the president of Turkmenistan that we should increase the volume of our mutual trade and investments," Park said through an interpreter.

Berdymukhamedov, who has sweeping powers in his Central Asian nation of 5.5 million, has in recent years overseen rapid economic growth exceeding 10 percent annually, largely on the back of rising natural gas exports to China via a pipeline launched in late 2009.

 

Shell Offers to Settle Nigeria Oil Spills

 

Royal Dutch Shell is ready to pay up to 30 million pounds in compensation for two oil spills in Nigeria in 2008 after a London court rejected a larger claim, sources involved in the case said.

Around 11,000 residents of the Bodo community in the Niger Delta represented by law firm Leigh Day appealed in 2011 to a London court for more than 300 million pounds in compensation for the spilling of 500,000 barrels of oil.

The London High Court rejected the claimants' attempts to expand the scope of the compensation, ruling that the pipeline operator could not be held responsible for damage caused by oil theft.

Shell's offer from September 2013 to settle the case for 30 million pounds remained on the table, sources involved in the case said.

A trial is planned to start in May 2015, but Shell urged the claimants to reach a settlement beforehand.

"From the outset, we've accepted responsibility for the two deeply regrettable operational spills in Bodo," Mutiu Sunmonu, Managing Director of the Shell Petroleum Development Company of Nigeria Ltd (SPDC), said in a statement.

"We hope the community will now direct their UK legal representatives to stop wasting even more time pursuing enormously exaggerated claims and consider sensible and fair compensation offers," Sunmonu said.

 

Gazprom to Start China Pipeline in Aug

 

Russia’s energy giant Gazprom plans to launch the construction of the Power of Siberia pipeline in August for gas deliveries to China, the company said in a statement.

"We have a precise plan of action. All of the responsibilities have been distributed and strict timeframes have been set. Our goal is to make the first weld of the Power of Siberia [pipeline] in August," the statement quoted Gazprom CEO Alexei Miller as saying.

The Power of Siberia is a gas transmission system aimed at delivering gas from the Irkutsk and Yakutia gas production centers to Russia’s Far East and China.

Gazprom and China National Petroleum Corporation (CNPC) signed a 30-year contract in late May for the sale of Russian gas to China at a volume of 38 billion cubic meters per year with delivery along the eastern route.

The deal is estimated to be worth $400 billion. Russia is planning to invest $55 billion and China around $22 billion in the gas deal.

The gas deal requires the two partners to run additional investment projects to develop the Chayandinskoye and Kovyktinskoye gas fields, build the Power of Siberia gas pipeline in eastern Siberia and an LNG plant in Amur Region.

 

WB to Ask Oil Companies to Stop Flaring Gas

 

The World Bank will urge producers of oil to stop flaring natural gas by 2030, saying the amount of fuel wasted in the practice would generate enough power to meet all of Africa’s demand for electricity.

“It will be voluntary but we hope that both companies and countries will see the sense in what we are proposing,” Anita George in the bank’s extractive industry unit said in a Moscow interview. “We are planning to propose it in September.”

The World Bank is leading 33 companies and nations in the Global Gas Flaring Reduction partnership that seeks to shrink the industry custom by 30 percent in the five years to 2017. The gas is pumped from fields when companies drill for oil.

Halting the burning of about 140 billion cubic meters of gas globally every year would reduce carbon-dioxide emissions equivalent to taking about 70 million cars off the roads.

Mexico and Azerbaijan have reduced flaring about 66 percent and 50 percent, respectively, in the past two years, George said. In Nigeria, Royal Dutch Shell Plc is investing about $4 billion to reduce flaring from local oil fields.

BP Plc’s biggest flaring occurs at its crude production in the Rumaila oilfield in Iraq, said Bob Dudley, chief executive officer at the London-based company

 

Canada Sets Conditions on Pipeline to Pacific Ocean

 

Canada has approved construction of a pipeline to the Pacific Ocean, opening up one of the world's largest oil fields as Washington dithers over another link southward from Alberta's oil sands.

The Northern Gateway project gained momentum after US President Barack Obama delayed a decision on another pipeline -- Keystone XL -- first proposed in 2008 to move Alberta bitumen to refineries along the US Gulf Coast.

The oil conduit from landlocked Alberta to the sea would propel further development of the province's oil sands, unleashing tremendous economic kickbacks for Canadians, Natural Resources Minister Greg Rickford has said.

In a statement, the minister said the government accepted an independent review panel's recommendation to approve the project, with 209 conditions to mitigate environmental impacts.

"Moving forward, the proponent (Enbridge) must demonstrate... how it will meet the 209 conditions," Rickford added.

The government's nod is the last major administrative hurdle for the Can$7.9 billion (US$7.3 billion) Northern Gateway project.

The pipeline project itself is the first to be approved to enable Canada to diversify markets for its crude oil.

However, opponents refused to lie down, vowing civil disobedience and court challenges to try to stop it, while opposition New Democratic Party leader Tom Mulcair vowed to kill the project if his party wins elections scheduled for 2015.

Approval is politically risky for Prime Minister Stephen Harper's ruling Conservatives, with 21 Tory MPs seeking re-election in westernmost British Columbia, where most voters oppose the pipeline.

Gas, Key to Iran-Iraq Alliance

 

Iran will start exporting natural gas to its western neighbor Iraq next year as the two Middle Eastern countries seek to strengthen ties. Iran’s gas will first go to Iraq and later on it will go to Syria, Lebanon and the Mediterranean in the coming years.

Iran has sought, in recent years, to play an active role in the regional energy exchanges as well as global gas trade.

Sitting atop the world’s largest gas reserves in the world, Iran has been pursuing long-term strategies like purchase, imports, transit and swap of gas in order to strike a balance into its energy mix and boost its presence in the gas market.

Iran’s unique geographical position and its third largest producer slot with a daily capacity of 700 mcm/d as well as infrastructure and pipelines carrying 750 mcm/d enable the country to provide numerous opportunities to its neighbors.

With the development of the remaining phases of the giant offshore South Pars gas field – the largest in the world – Iran’s gas production capacity will dramatically rise. Iran will be able to export 250 mcm/d of gas in four years; therefore the country will be a top supplier of gas.

Iran is currently producing around 650 mcm/d of gas, which will soar to 1.4 bcm/d by March 2015. Phases 12, 15 and 16 of South Pars are to fully come on-stream by March 2014.

Iran widely counts on South Pars gas field, shared with neighboring Qatar, for its gas exports.  The volume of recoverable gas along with gas condensate in South Pars equals 230 billion barrels of crude oil. The Iranian section of the gas field holds 14 tcm of gas in place, 10 tcm of which recoverable, and 17 billion barrels of gas condensate, 9 billion barrels recoverable.  South Pars makes up 50 percent of Iran’s gas reserves and eight percent of the world’s gas reserves.

In summer 2011, Syria, Iraq and Iran signed a breakthrough energy deal which required Iran to deliver gas from South Pars to Iraq, Syria and Lebanon before being supplied to the European Union. The total project is estimated to cost 10 to 15 billion dollars.

Iran’s planned gas pipeline to Europe would be 5,600 kilometers long and would cut through Iraq, Syria and Lebanon. The project will be financed in the form of build-operate-transfer (BOT) or build-own-operate (BOO). So far, 15 European companies have volunteered to market South Pars gas.

Countries located on Iran’s gas supply route to Europe will get gas to meet their demands so that the rest would reach Europe. In 2020, Iraq is estimated to need 10 to 15 mcm/d, Syria would need 15 to 20 mcm/d and Lebanon would need 5 to 7 mcm/d of gas.

But Iraq cannot wait until Iran-Europe pipeline has been constructed. Iran agreed to supply 25 mcm/d of gas to its western neighbor through a branch off national gas pipeline.

The Iraqi section of the pipeline is being built by Iranian companies. Experts say providing technical and engineering services to other countries would create jobs and improve economic, political and cultural relations.

Senior Iranian officials are reiterating the need for industrial plants to supply products for exports. For that purpose, the quality of products must be seriously taken into account so that they would be able to compete with products supplied by other countries.

 

Exporting Technical Services to Iraq

 

Iranian contractors are currently building a pipeline in Iraq for the delivery of gas to that country in the near future. After the construction of this pipeline, cities and villages located on the route of the pipeline will also receive gas.

The agreement signed between Iran and Iraq requires Iranian engineers to build the 270-kilometer pipeline.

Iraqi energy expert Hossein al-Javaheri says Iranian companies involved in oil and gas projects are faring as well as international companies operating projects in Iraq.

“Numerous international private companies have offered to invest in Iraq’s oil sector, but Iraqi Oil Ministry prefers Iranian contractors due to the quality of their work,” he said.

Another sector Iran’s private sector is expected to invest in Iraq is compressed natural gas (CNG) production and distribution.

Javaheri said: “During my visit to Iran, I saw that Iranian contractors and petroleum engineers are as experienced as European experts. The Iraqi Oil Ministry officials are expected to finalize their agreement with Iranian officials about joint cooperation.”

Based on preliminary agreements, Iran is expected to start delivering 7 mcm/d of gas to Iraq in the first phase. Iran has accepted the price proposed by the Iraqi side.  

Managing director of Iran Gas Engineering and Development Company Alireza Gharibi has said that the construction of a pipeline that will carry natural gas from Iran to Iraq will be completed by the end of the current Iranian calendar year in March 2015.

He said that based on an agreement between the two countries, the pipeline will finally carry 40 mcm/d of Iran's natural gas to Iraq.

The Iranian official stated that the 100-kilometer pipeline will stretch from the village of Charmaleh, located in Iran’s western province of Kermanshah, into the town of Naft Shahr on the border with Iraq.

The Iran-Iraq gas pipeline project will be finished by the end of the current Iranian calendar year, after which tests will be conducted on the pipeline and necessary infrastructure will be prepared to increase the volume of gas export from the initial 7 mcm/d to 10 mcm/d, he said.

 

Nabucco Founders Eye Iraq Gas

 

Iraq's proven gas reserves are estimated at 3.17 tcm, or two percent of the world’s gas reserves. But the point is that nearly 70 percent of Iraq’s natural gas is associated gas and it is mainly flared due to lack of infrastructure and marketing. Despite these huge reserves, Iraq still needs Iran’s gas to power its factories, petrochemical plants and power plants. Iraq was recently elected an observer at the Gas Exporting Countries Forum (GECF).

Turkmenistan and Azerbaijan are short of gas to feed the Nabucco pipeline; therefore the founders of this pipeline are now looking at Iraq’s gas reserves. Iraq, which cannot even meet its own domestic gas demand, is unlikely to be able to feed gas into Nabucco.

The Nabucco-West pipeline (also referred to as the Turkey–Austria gas pipeline) is a proposed natural gas pipeline from the Turkish-Bulgarian border to Austria. It is a modification of the original Nabucco Pipeline project, which was to run from Erzurum in Turkey to Baumgarten an der March in Austria. The aim of the Nabucco pipeline is to diversify the natural gas suppliers and delivery routes for Europe, thus reducing European dependence on Russian energy. The original project was backed by several European Union member states and by the United States, and was seen as a rival to the South Stream pipeline project. The main supplier was expected to be Iraq, with potential supplies from Azerbaijan, Turkmenistan, and Egypt.

Official figures released by international agencies indicate that the gas market is expanding in the current century and some energy experts refer to the 21^st century as the Century of Gas. Less pollution, diversity in energy mix, relatively low price, disablement of nuclear reactors generating electricity, the failure of oil fields to meet world’s energy needs and the extent of gas reserves in the world have concentrated attention on gas.

Adoption of proper gas trading strategies by Iran, a major gas holder, would be an important step for an effective presence in the regional markets.

Iran is determined to raise its share of the world gas trade to 10 percent. Iran’s gas production will double from the current 700 mcm/d once all phases of South Pars gas field have come on-stream.

Besides revenues, Iran’s gas exports to Iraq will also contribute to stronger ties between the two Muslim neighboring states. Following the removal of Saddam Hussein in 2003, the Iranian government has taken steps for promoting diplomatic ties with Iraq. Iran’s exports to Iraq have jumped from 300 million dollars in 2004 to six billion dollars.

Ukraine Crisis and Iran’s Position in Europe Gas Supply

 

By Shuaib Bahman, Eurasia Energy Researcher

 

The crisis in Ukraine and the concomitant escalation of tensions between Russia and the West has once more pushed to bold relief Moscow’s resort to energy as a pressure lever against European governments. Most European countries worry that Russia would execute its threat of gas cut in retaliation for United States and the European Union economic sanctions imposed on Moscow. Therefore, the European countries further focused on diversifying their sources of energy. To that effect, gas-rich Iran is a major option for the European bloc.

 

Russia Energy Supply to Europe

 

Over the past 40 years, Russia has been a major supplier of gas to Europe. Since 2006, Russia’s gas monopoly Gazprom has struck long-term (25-year) gas supply contracts with European countries. Due to its neighborhood with Russia, Europe is obliged to view Moscow as an energy supplier. Therefore, Gazprom is in a position to bring about challenges for many European governments.

In 2008, Gazprom sold 65.5 percent of its total natural gas exports to European countries. Russia’s gas sales to Europe fell in 2010 compared with 2009, but in 2011 and 2012, it sold 156.6 and 151 bcm of gas to Europe. Moscow remains the leading supplier of natural gas to Europe. After Russia, Norway, Algeria and Qatar enjoy a 19, 10 and 6 percent share, respectively in the European gas market.

Based on a long-term agreement signed in early 2009, Russia agreed to supply 120.08 bcm of gas to Europe and Moldavia via Ukraine. Moreover, Russia pumps 50 bcm a year of gas to Europe through Slovakia. With the implementation of Nord Stream gas pipeline in 2012, this pipeline will be able to supply 55 bcm a year of gas, which equals one-third of Russia’s total gas exports to Europe.

Besides revenues from direct gas sales to Europe, Gazprom gets money from European countries in other ways, too. According to a Wall Street Journal report in 2009, European customers owe Gazprom 2.5 billion dollars due to Europeans’ under-consumption because the Europeans customers are required under their contract with Russia to purchase a specific amount of gas.

 

Russia-Europe Mutual Needs

 

Preserving and expanding the European market is one of Russia’s main energy strategies. To that effect, Russia is pursuing the following two approaches at the same time in order to maintain its monopoly on gas exports to Europe.

 

1. Energy Security and Diversity: Although Europe favors extension of Nabucco pipeline to use gas produced in Turkmenistan, Iran and Azerbaijan, Russia claims to be able to diversify Europe’s energy sources by exporting gas through other routes. North Stream and South Stream are among projects suggested by Gazprom for diversifying Russia’s gas exports to Europe in order to avoid the impacts of possible gas cut. Moreover, Gazprom has sought to present itself as a reliable partner for the Europeans and has blamed Ukraine for last winter’s gas supply.

 

2. Blocking All Other Gas Export Routes to Europe: Russia is making efforts to block other routes of gas delivery to Europe. To that end, it is trying to transfer Turkmenistan’s gas to its own territory from north. The prices offered by Gazprom for purchasing gas from Turkmenistan are higher than the price at which Iran buys Turkmen gas. In the meantime, Russia is helping China win a share in Turkmenistan’s gas reserves so that part of Turkmenistan’s gas would flow into East Asia before going to Europe. Russia is resorting to all political and commercial tactics in an attempt to have Turkmenistan’s gas exports to Iran cut. The Russians believe that Iran will have to meet its growing domestic demand if Turkmenistan stops supplying gas to Iran and then the Islamic Republic will lose its exports capacity. If possible, Russia and Gazprom would prefer that Iran’s gas totally go to Pakistan. That is why Gazprom has even offered to contribute to Iran-Pakistan gas pipeline project which is currently on hold.

 

The two aforementioned points make it clear that Russia is ready to strengthen its dominance on Europe’s energy market even at the cost of losing dominance on other markets. The significance of Europe in Russia’s national security and foreign policy doctrine has caused Moscow to view energy as an important tool in its foreign politics.

Meanwhile, the European Union has two reasons to view Russia as a source of energy. The first is that Russia is geographically close to Europe and it is considered the most cost-effective option for energy imports. The second is that Russia is more stable than most energy-rich Persian Gulf and Middle East countries. Unlike Middle East countries, Russia is not prone to crises; therefore it can guarantee energy supply.

 

Ukraine Crisis and Energy Lever

 

Ukraine is the most important buyer of Russia’s gas among Commonwealth of Independent States (CIS) countries. In 2007, it purchased 59.2 bcm of gas from Gazprom. Ukraine’s 2008 gas purchase from the Russian company fell to 56.2 bcm. Ukraine’s gas purchase from Russia dropped to 37.8 bcm and 36.5 bcm in 2009 and 2010, respectively. However, Russia sold 44.8 bcm of gas to Ukraine in 2011 and 32.9 bcm in 2012. These volumes of gas sales indicate Ukraine’s dependence on Russia’s gas.

At present, some 80 percent of Russia’s gas exports to Europe are done through Ukraine. This volume is set to decline as Nord Stream and South Stream are close to becoming operational; however, Ukraine’s gas transit network is the second largest in Europe and remains the main route for Russia’s gas transmission to Europe.

Russia’s gas exports to Europe via Ukraine amounted to 116.9 bcm in 2008, 4.3 percent higher than the year before. Russia’s trans-Ukraine gas exports to Europe soared from 8.4 bcm in February 2010 to 9.278 bcm in February 2011. During the first two months of 2011, trans-Ukraine gas exports reached 19.328 bcm. At a time Ukraine is the most important route for Russia’s gas transfer to Europe, the eruption of crisis in this country affected relations between Russia and European countries. The Europeans slapped economic sanctions and Russia held out the possibility of using the energy lever. In a letter addressed to leaders of 18 main gas importing European countries including France, Germany, Italy, Greece, Bulgaria, Turkey, Moldavia, Poland and Romania, Russian President Vladimir Putin warned that Ukraine’s gas debt to Russia threatens gas supply to Europe. The Russian president said Russia would demand advance payment for gas supply to Europe. German Chancellor Angela Merkel also said that the EU has taken Putin’s warning seriously. That indicated that the Ukrainian crisis had largely worried European leaders about Russia’s energy supply.

 

Iran Gas

 

Given the European leaders’ concerns about Russia’s possible gas supply cut to Europe and Moscow’s use of energy as a political instrument, the EU seems to be looking for new sources of energy. Among countries with reliable energy reserves, Iran could be a favorable option. Establishing relations for energy cooperation could be a significant step for diversifying Europe’s energy sources. Here are the advantages of the Islamic Republic with regards to gas supply:

First, Iran holds the largest gas reserves in the world. According to the 2012 estimates by the British Petroleum (BP), the world is awash with 187.3 tcm of gas, which would be enough for 56 years only. Russia used to be the top gas holder, but the latest BP estimate said Russia’s gas reserves have declined from 44.6 to 32.9 tcm while Iran’s gas reserves are estimated at 33.6 tcm. Therefore, the European governments can count on Iran’s gas on the long-term.

Second, Iran is a safe and stable country. Security and stability are definitely two important elements in investment and trade. While most Iran’s energy-rich neighbors in the Middle East are grappling with numerous security challenges, the Islamic Republic enjoys stability. Therefore, investment in Iran and construction of pipeline is secure and the European counties can invest in Iran safely.

Third, is Iran's geographical position. Iran is closer to European countries than other energy-rich countries in the Middle East. Therefore, laying out a pipeline from Iran to Europe could be done at low costs.

Despite all these advantages, Iran’s gas exports to Europe face two major hurdles:

First is the shortage of proper infrastructure for the development of Iran’s gas fields at a higher pace. Second is lack of a gas pipeline connecting Iran and Europe.

The main reason behind these two obstacles is Europe’s erroneous policy of obedience to the United States. Over recent years, the European countries have been barred from operating oil and gas projects in Iran due to US embargoes on the Islamic Republic. The Europeans have deprived themselves of access to Iran’s rich energy resources.

The European countries obeyed the US policies, while the Americans are neither dependent on Russia’s gas, nor can they get gas from Iran due to their geographical distance. Due to their submission to US pressure over Iran, the Europeans have had no option but to remain dependent on Russia’s gas. The Europeans could not take any step towards diversification of their energy sources.

Now, if the European countries learn a lesson from the Ukrainian crisis and realize their mistakes, they should move to wean themselves off Russia’s gas monopoly and reconsider their policy vis-à-vis the Islamic Republic so that they would be able to find new sources of energy.

Ukraine Crisis and Iran’s Position in Europe Gas Supply

 

By Shuaib Bahman, Eurasia Energy Researcher

 

The crisis in Ukraine and the concomitant escalation of tensions between Russia and the West has once more pushed to bold relief Moscow’s resort to energy as a pressure lever against European governments. Most European countries worry that Russia would execute its threat of gas cut in retaliation for United States and the European Union economic sanctions imposed on Moscow. Therefore, the European countries further focused on diversifying their sources of energy. To that effect, gas-rich Iran is a major option for the European bloc.

 

Russia Energy Supply to Europe

 

Over the past 40 years, Russia has been a major supplier of gas to Europe. Since 2006, Russia’s gas monopoly Gazprom has struck long-term (25-year) gas supply contracts with European countries. Due to its neighborhood with Russia, Europe is obliged to view Moscow as an energy supplier. Therefore, Gazprom is in a position to bring about challenges for many European governments.

In 2008, Gazprom sold 65.5 percent of its total natural gas exports to European countries. Russia’s gas sales to Europe fell in 2010 compared with 2009, but in 2011 and 2012, it sold 156.6 and 151 bcm of gas to Europe. Moscow remains the leading supplier of natural gas to Europe. After Russia, Norway, Algeria and Qatar enjoy a 19, 10 and 6 percent share, respectively in the European gas market.

Based on a long-term agreement signed in early 2009, Russia agreed to supply 120.08 bcm of gas to Europe and Moldavia via Ukraine. Moreover, Russia pumps 50 bcm a year of gas to Europe through Slovakia. With the implementation of Nord Stream gas pipeline in 2012, this pipeline will be able to supply 55 bcm a year of gas, which equals one-third of Russia’s total gas exports to Europe.

Besides revenues from direct gas sales to Europe, Gazprom gets money from European countries in other ways, too. According to a Wall Street Journal report in 2009, European customers owe Gazprom 2.5 billion dollars due to Europeans’ under-consumption because the Europeans customers are required under their contract with Russia to purchase a specific amount of gas.

 

Russia-Europe Mutual Needs

 

Preserving and expanding the European market is one of Russia’s main energy strategies. To that effect, Russia is pursuing the following two approaches at the same time in order to maintain its monopoly on gas exports to Europe.

 

1. Energy Security and Diversity: Although Europe favors extension of Nabucco pipeline to use gas produced in Turkmenistan, Iran and Azerbaijan, Russia claims to be able to diversify Europe’s energy sources by exporting gas through other routes. North Stream and South Stream are among projects suggested by Gazprom for diversifying Russia’s gas exports to Europe in order to avoid the impacts of possible gas cut. Moreover, Gazprom has sought to present itself as a reliable partner for the Europeans and has blamed Ukraine for last winter’s gas supply.

 

2. Blocking All Other Gas Export Routes to Europe: Russia is making efforts to block other routes of gas delivery to Europe. To that end, it is trying to transfer Turkmenistan’s gas to its own territory from north. The prices offered by Gazprom for purchasing gas from Turkmenistan are higher than the price at which Iran buys Turkmen gas. In the meantime, Russia is helping China win a share in Turkmenistan’s gas reserves so that part of Turkmenistan’s gas would flow into East Asia before going to Europe. Russia is resorting to all political and commercial tactics in an attempt to have Turkmenistan’s gas exports to Iran cut. The Russians believe that Iran will have to meet its growing domestic demand if Turkmenistan stops supplying gas to Iran and then the Islamic Republic will lose its exports capacity. If possible, Russia and Gazprom would prefer that Iran’s gas totally go to Pakistan. That is why Gazprom has even offered to contribute to Iran-Pakistan gas pipeline project which is currently on hold.

 

The two aforementioned points make it clear that Russia is ready to strengthen its dominance on Europe’s energy market even at the cost of losing dominance on other markets. The significance of Europe in Russia’s national security and foreign policy doctrine has caused Moscow to view energy as an important tool in its foreign politics.

Meanwhile, the European Union has two reasons to view Russia as a source of energy. The first is that Russia is geographically close to Europe and it is considered the most cost-effective option for energy imports. The second is that Russia is more stable than most energy-rich Persian Gulf and Middle East countries. Unlike Middle East countries, Russia is not prone to crises; therefore it can guarantee energy supply.

 

Ukraine Crisis and Energy Lever

 

Ukraine is the most important buyer of Russia’s gas among Commonwealth of Independent States (CIS) countries. In 2007, it purchased 59.2 bcm of gas from Gazprom. Ukraine’s 2008 gas purchase from the Russian company fell to 56.2 bcm. Ukraine’s gas purchase from Russia dropped to 37.8 bcm and 36.5 bcm in 2009 and 2010, respectively. However, Russia sold 44.8 bcm of gas to Ukraine in 2011 and 32.9 bcm in 2012. These volumes of gas sales indicate Ukraine’s dependence on Russia’s gas.

At present, some 80 percent of Russia’s gas exports to Europe are done through Ukraine. This volume is set to decline as Nord Stream and South Stream are close to becoming operational; however, Ukraine’s gas transit network is the second largest in Europe and remains the main route for Russia’s gas transmission to Europe.

Russia’s gas exports to Europe via Ukraine amounted to 116.9 bcm in 2008, 4.3 percent higher than the year before. Russia’s trans-Ukraine gas exports to Europe soared from 8.4 bcm in February 2010 to 9.278 bcm in February 2011. During the first two months of 2011, trans-Ukraine gas exports reached 19.328 bcm. At a time Ukraine is the most important route for Russia’s gas transfer to Europe, the eruption of crisis in this country affected relations between Russia and European countries. The Europeans slapped economic sanctions and Russia held out the possibility of using the energy lever. In a letter addressed to leaders of 18 main gas importing European countries including France, Germany, Italy, Greece, Bulgaria, Turkey, Moldavia, Poland and Romania, Russian President Vladimir Putin warned that Ukraine’s gas debt to Russia threatens gas supply to Europe. The Russian president said Russia would demand advance payment for gas supply to Europe. German Chancellor Angela Merkel also said that the EU has taken Putin’s warning seriously. That indicated that the Ukrainian crisis had largely worried European leaders about Russia’s energy supply.

 

Iran Gas

 

Given the European leaders’ concerns about Russia’s possible gas supply cut to Europe and Moscow’s use of energy as a political instrument, the EU seems to be looking for new sources of energy. Among countries with reliable energy reserves, Iran could be a favorable option. Establishing relations for energy cooperation could be a significant step for diversifying Europe’s energy sources. Here are the advantages of the Islamic Republic with regards to gas supply:

First, Iran holds the largest gas reserves in the world. According to the 2012 estimates by the British Petroleum (BP), the world is awash with 187.3 tcm of gas, which would be enough for 56 years only. Russia used to be the top gas holder, but the latest BP estimate said Russia’s gas reserves have declined from 44.6 to 32.9 tcm while Iran’s gas reserves are estimated at 33.6 tcm. Therefore, the European governments can count on Iran’s gas on the long-term.

Second, Iran is a safe and stable country. Security and stability are definitely two important elements in investment and trade. While most Iran’s energy-rich neighbors in the Middle East are grappling with numerous security challenges, the Islamic Republic enjoys stability. Therefore, investment in Iran and construction of pipeline is secure and the European counties can invest in Iran safely.

Third, is Iran's geographical position. Iran is closer to European countries than other energy-rich countries in the Middle East. Therefore, laying out a pipeline from Iran to Europe could be done at low costs.

Despite all these advantages, Iran’s gas exports to Europe face two major hurdles:

First is the shortage of proper infrastructure for the development of Iran’s gas fields at a higher pace. Second is lack of a gas pipeline connecting Iran and Europe.

The main reason behind these two obstacles is Europe’s erroneous policy of obedience to the United States. Over recent years, the European countries have been barred from operating oil and gas projects in Iran due to US embargoes on the Islamic Republic. The Europeans have deprived themselves of access to Iran’s rich energy resources.

The European countries obeyed the US policies, while the Americans are neither dependent on Russia’s gas, nor can they get gas from Iran due to their geographical distance. Due to their submission to US pressure over Iran, the Europeans have had no option but to remain dependent on Russia’s gas. The Europeans could not take any step towards diversification of their energy sources.

Now, if the European countries learn a lesson from the Ukrainian crisis and realize their mistakes, they should move to wean themselves off Russia’s gas monopoly and reconsider their policy vis-à-vis the Islamic Republic so that they would be able to find new sources of energy.

 

IEA Sees Spread of Shale Revolution

 

The shale boom that has transformed the oil industry in the US will spread beyond North America before the end of the decade, sooner than previously expected, the International Energy Agency said, while at the same time warning of significant aboveground risks to conventional supply over the next five years.

The use of techniques such as "fracking" to unlock previously inaccessible oil reserves in the US have transformed the country's oil industry, putting it on track to become the world's largest oil producer by 2020, according to the IEA. However, a mixture of legal, political and investment constraints have meant shale production has been slow to spread to other countries.

According to the IEA, that is changing faster than expected, with policy developments in Russia and Latin America set to encourage the application of unconventional extraction technologies on a larger scale than ever before.

In its most recent analysis, which takes a five-year view of the oil market, the IEA predicted that tight oil production from outside the US could account for 650,000 barrels a day of global oil supply by 2019.

Although that is just a fraction of the 5 million barrels a day the US is expected to produce from its shale oil fields by 2019, it highlights the continuing impact techniques like fracking are likely to have in helping increase global oil supply even toward the end of the decade when the IEA expects US oil production growth to plateau.

Indeed, by some estimates, the US contains no more than 15% of the world's total shale and light tight oil resources, but the impact of their development on the oil market is already profound. By the end of the decade the IEA expects North America to produce 20% of the world's oil supply and to have become a "titan of unprecedented proportions" in oil product markets as its exports of refined products soar.

Meanwhile, the producers that have historically dominated the oil market could prove a weak link as underinvestment and political turmoil in many countries pose a threat to supply growth.

"While OPEC remains a vital supplier to the market, it faces significant headwinds in expanding capacity," said Maria van der Hoeven, executive director at the IEA.

A particular concern is the continuing insurgency in Iraq which sent oil prices soaring to nine-month highs last week.

According to the IEA, rising oil production in Iraq will account for 60% of the Organization of the Petroleum Exporting Countries' growth in production capacity over the next five years, but even without the unrest currently sweeping the country, Iraq's oil industry faces significant challenges from chronic infrastructure bottlenecks.

While Baghdad is targeting output of 8.5-9 million barrels a day by 2020, the IEA cut its forecast for Iraqi production capacity by nearly half a million barrels a day, projecting the country will produce just 4.5 million barrels a day by 2019.

"Given Iraq's precarious political and security situation, the forecast is laden with downside risk," the IEA said.

NOC – IOC Collaboration

 

Having a glance at the history of International Oil Companies (IOCs), one can notice that long time ago when international oil companies started their activities in oil-rich countries, they dominated the whole chain of oil business. In those days, oil-rich countries did not enjoy the required oil and gas infrastructure, capital and technology and know-how to extract oil and monetize it, therefore the IOCs which possessed the relevant means and tools ran oil operations and activities in oil-rich countries. Gradually, in the second half of the 20^th century some oil experts and politicians from major producing countries thought of nationalization of oil industry and they set up pure National Oil Companies(NOCs) to secure the national interests of their nations through minimizing dependence on foreign countries and companies. Nationalization process along with major geopolitical events and price shocks which disrupted the flow of oil in 1970s and 1980s, all reduced the traditional dominance of IOCs.

 Nevertheless, the newly-established NOCs were still in need of IOCs expertise, technology and investment to develop their oil and gas fields. However, in some countries the NOC officials tried to reduce their dependence on IOCs, but due to some political considerations their governments opted to commission their oil projects whether upstream or downstream to IOCs without taking into consideration their national interests. At present, circumstances have changed and majority of producers control their own oil and gas reserves, and IOCs do not dominate oil trade as they did long time ago. Today NOCs account for almost 45% of oil production in the world, while the six major international integrated oil companies produce around 13% of oil in the world.

Due to oil price plunge in 1986, investment level in the oil industry reduced drastically. Therefore, NOCs had to seek ways of financing their projects and developing their own capabilities to survive. But this was not the end of the story; there were some developments in the market and prices recovered. The higher the oil price, the richer became NOCs, and as a result of having access to financial resources  they thought of indigenizing oil industry technologies and financing their own projects to minimize their dependence on IOCs.

As mentioned before, reliance of producing countries on IOCs emanated                                                        mainly from their firm need to technology and investment. Therefore, IOCs took benefit from their financial and technological advantages to control oil production chain across the world.

Thanks to current oil prices, NOCs in  producing countries do not  highly rely on IOCs in terms of investment anymore, however there are still giant oil and gas development projects in some parts of the world, especially in the Middle East which require joint investment  and advanced expertise of IOCs and NOCs to accelerate the pacing of the projects’ progress.

As service companies perform the tasks previously conducted by IOCs, today NOCs are not obliged to rely on IOC capabilities in their upstream projects any more. So service companies with advanced potentials and skills benefit from the existing situation. However, when it comes to implementation of long-term projects which are more challenging NOCs prefer partnership with IOCs rather than service companies.

Although NOCs and IOCs have distinct objectives and despite the traditional image that IOCs may cooperate with NOCs just in resource development, there are variety of fields that NOCs and IOCs can cooperate with each other: training, technology transfer, development of infrastructure and HSE issues.

NOCs and IOCs can mutually be beneficial to each other e.g. IOCs offer capital and technology, while NOCs provide the resources. In this regard, mutual trust and respect may serve as one of the major drivers of relationships between NOCs and IOCs. As far as some producers do not have good memories of IOCs which dominated their oil industry operation and trade, it is so crucial for NOCs to act in such a way to recede them and convince host countries that their relationship will be based on mutual understanding and respect. Turning to impediments ahead of NOCs-IOCs partnership, one may refer to market volatility which can lead to uncertainty and reluctance on the part of investors to invest in the oil industry projects. It should be kept in mind that timely and sufficient investment along the supply chain, within the framework of NOCs-IOCs cooperation, recently hindered by political tools and politicization of oil industry will definitely jeopardize global energy security. In other words lack of sufficient investment raise the prospect of shortfall in incremental capacity and may lead to oil price hikes. Lack of data transparency will also discourage investment and constrain capacity development. It can also affect security of supply. One of the other potential impediments ahead of NOC-IOC proper relationship, which should be removed, is improper taxation systems and contractual frameworks which can dissuade IOCs and/or investors from any type of collaboration with NOCs.

In conclusion, oil companies and producing countries are expected to go beyond mere industrial issues. They are expected to sponsor scientific researches, raise education standards and train skilled workforce for the oil industry. This can be realized through technology transfer and close collaboration of NOCs and IOCs.

 Meanwhile, in order to benefit from a stable energy market NOCs, IOCs and governments should collectively cope with the energy sector challenges. That is why in IEF Ministerial Meetings, ministers of oil and energy of producing and consuming countries as well as CEOs have frequently called on all the players in the energy scene, especially the IEF Secretariat to tackle energy challenges and find solutions for them.

Therefore, “win-win” collaborations of NOCs and IOCs based on mutual respect may significantly without taking into consideration political issues, contribute to producers and consumers’ prosperity, as well as security of supply and demand.

 

 

NDCO Develops Drill Watch

 

Iranian researchers at North Drilling Company (NDCO) have managed to design and develop drill watch system which provides accurate information on critical drilling and fluid parameters during drilling, tripping, and other sensitive rig activities.

Iran is now among several Western countries possessing the technology for drill watch systems.

Utilizing large- scale, easily readable liquid crystal displays, the Drill Watch system supplies rig personnel with important drilling and circulation system values and relative alarm point settings in a rugged, compact, stainless steel display unit designed for use on the rig floor. Backlighted LCDs allow easy viewing of information in all light conditions. Using the integral keypad, alarm points, alarm acknowledgment, and display operation parameters such as active tanks, lines strung, gain/loss, top drive/ rotary table gear select, trip mode, and ROP status can easily be set or modified when drilling conditions or rig operations change.

The Drill Watch system monitors hook load and bit weight, standpipe pressure, RPM and torque, depth of hole, total active mud volume, gain/loss, individual and totalized SPM from three pumps, and return flow from a variety of sensor input types, including voltage, current, and pulse. Signals are processed by a TOTAL DAQ data acquisition unit and transmitted on the communication network to the display. If desired, information can be interfaced to a personal computer for remote display, archiving, and printing.

The significance of drill watch system comes further to the limelight in wildcat drilling which is the process of drilling for oil or natural gas in an unproven area, that has no concrete historic production records and has been unexplored as a site for potential oil and gas output. The most successful energy companies are the ones with a very high rate of drilling success, irrespective of whether the wells are drilled in known areas of production.

In every drilling operation, the director of operations, geologist, driller and other staff need to know of parameters related to their field of activity. They need to have regular access to the necessary parameters in order to make decisions or introduce changes.

For example, the driller should closely monitor the weight of drilling pipes to avoid any probable problem. The geologist should be well aware of the depth of the well and take samples regularly to study drilling cuttings.

First, from the starter hole, the team drills a surface hole down to a pre-set depth, which is somewhere above where they think the oil trap is located. There are five basic steps to drilling the surface hole:

Place the drill bit, collar and drill pipe in the hole.

Attach the kelly and turntable, and begin drilling.

As drilling progresses, circulate mud through the pipe and out of the bit to float the rock cuttings out of the hole.

Add new sections (joints) of drill pipes as the hole gets deeper.

Remove (trip out) the drill pipe, collar and bit when the pre-set depth (anywhere from a few hundred to a couple-thousand feet) is reached.

Once they reach the pre-set depth, they must run and cement the casing.

 Place casing-pipe sections into the hole to prevent it from collapsing in on it. The casing pipe has spacers around the outer side to keep it centered in the hole.

The casing crew puts the casing pipe in the hole. The cement crew pumps cement down the casing pipe using a bottom plug, a cement slurry, a top plug and drill mud. The pressure from the drill mud causes the cement slurry to move through the casing and fill the space between the outer side of the casing and the hole. Finally, the cement is allowed to harden and then tested for such properties as hardness, alignment and a proper seal.

Mostafa Karaei, director of repair planning at NDCO says drill watch system does not need separate staff for steering and it provides the necessary data through its sensors. The parameters shown by drill watch vary, depending on the manufacturer of the system, he said, adding that the main parameters are shown by all drill watch systems.

Given the significance of this system and its important role in drilling operations, NDCO focused on manufacturing drill watch. NDCO researchers finally managed to design this system for the first time in Iran in West Asia. Drill watch is also being manufactured by Western and Chinese companies. It took Iranian researchers 1.5 years to design and build drill watch, using the state-of-the-art technology.

The drill watch systems purchased from other countries had technical problems and they did not calculate the depth and penetration rate accurately. Moreover, they did not match climatic conditions in southern Iran where the country’s main oil and gas reservoirs are located. The foreign drill watch systems were not calibrated appropriately in southern Iran. But the drill watch system designed by NDCO even boosts the quality of drilling monitoring.

NDCO’s drill watch system is wireless and needs no cables. Therefore, it could be installed everywhere to monitor drilling parameters. In the meantime, operators of drilling equipment can assess the parameters by connecting to the Internet.

NDCO has spent around 50,000 dollars on making the drill watch system, while it had to pay some 350,000 dollars for purchasing foreign ones.

The drill watch designed by NDCO is comprised of the following sections: A control part which reads data on the sensors before processing and storing them, a log view to log the data, a gauge view for digital display of the parameters, calibrate for calibrating sensors and playback for reviewing the data.

The drill has sensors for measuring weight, pressure, depth, torque, mud pumps impinge and other parameters. It can display the main drilling parameters like hook load, WOB, SPP, torque, RPM, depth, bit depth, SPM, GPM and ROP.

The drill watch designed by NDCO has been installed on seven drilling rigs NDC110, NDC112, NDC113, NDC115, NDC116, NDC117 and NDC119.

Membrane Module Knowhow Mastered in Iran

 

Experts at the Membrane Technology Research Group of Petrochemical Research and Technology Company (NPCRT) have managed to design and fabricate the first 2521spiral-wound membrane module in Iran with the objective of separating carbon dioxide from the synthesis gas stream and the first spiral-wound reverse osmosis (RO) membrane module which operates similarly to commercial RO modules.

The technical knowhow used for designing and fabricating 2521spiral-wound membrane modules of gas separation applications was mostly monopolized by an American company. Now, Iran is able to supply this product across the Middle East and the world.

Yousef Mohammadi, head of NPRT s HiTech Research Group, said the 2521spiral-wound membrane modules were developed following widespread studies on commercial membrane modules.

“After studies were conducted on the membranes and required data were acquired, these membranes were initially produced on the lab scale and then on the semi-industrial and industrial scale,” he said.

“Although this module is used in separating carbon dioxide from synthesis gas, development of this technology will allow using it in all membrane-based gas separation processes,” said Mohammadi. “Also, the model developed for gas separation spiral- wound modules can be used for fabricating, microfiltration, ultra-filtration and reverse osmosis modules.”

Mohammadi said efforts are under way for increasing the scale of the designed modules.

“Acquiring the technical knowhow for fabricating 4040 modules is on the agenda of Membrance-based Gas Separation Research Team at the NPCRT HiTech Research Group. This achievement which has for the first time changed lab-scale research on membrane-based gas separation into practical research in this sector indicates a bright horizon in membrane technology in Iran,” he said.

Membrane and membrane processes are widely used in different industries as a tool for separation, concentration, purification or final processing. Membrane systems enjoy such features as high selectivity, low energy consumption and low operational costs. Gas separation, microfiltration, ultra-filtration, reserve osmosis (RO) and pervaporation (PV) are among the most famous fields of activities of membranes.

Mohammadi said valuable infrastructures have been established in this sector, facilitating the fabrication of vast variety of membranes and membrane modules.

“To that effect, a commercial-scale membrane production line has been launched with a capital equaling only 10 percent of the price of foreign ones,” he said, adding that the module produced in Iran costs around 80 percent lower than foreign ones.

This group of membranes is used in all petrochemical plants, as well as oil and gas refineries.

Design and fabrication of the first RO membrane module measuring 2.5 inches in diameter and 21 inches in length has been another achievement by the NPCRT’ s researchers. This module is used in water desalination. 

Mohammadi said the indigenization has been done in conformity with international standards.

“The membrane fabricated in this way is made up of three different layers,” he said.

Mohammadi said membranes are required to be converted into spiral-wound modules or elements in order to be able to withstand high pressures and result in high surface areas.

He said the necessary infrastructure has been prepared for the fabrication of membranes, adding that a production line has been launched.

Mohammadi said RO module production in Iran costs at least 50 percent lower than foreign modules.

He said these membranes could be used in petrochemical plants, as well as oil and gas refineries. They could be used in producing water, treatment of wastewater, as well as in membrane filtration processes.

Mohammadi said all devices including casting, coating, cutting, injection, wrapping, and filament winding, have been designed and manufactured in Iran.

With the help of technologies developed at NPCRT, different spiral-wound membrane modules could be configured for microfiltration, ultra-filtration, nano-filtration, reverse osmosis, pervaporation as well as gas Separation that could turn Iran into a major international player in the membrane technologies.

That could turn Iran into a major international player in the membrane technologies.

 

Gasoline Vapor Recovery

 

Gasoline always evaporates into the air throughout storage and transportation. Emission of gasoline vapor leaves harmful environmental, physiological and economic impacts. 

The issue of gasoline evaporation and its impacts on the environment have long been discussed in the world, but gasoline vapor recovery has just recently been taken into account.

In Iran, Petroleum Ministry has defined a project to mitigate and recover gasoline vapor.  The project requires gasoline vapors to be gathered at gas stations, fuel storage facilities and transportation tankers. This project will protect the environment and people’s health, not to mention its economic benefits. The project will bring 300,000 liters a day of gasoline to fuel consumption cycle.

Abdollah Molla-Baqer, director for engineering and projects of National Iranian Oil Products Distribution Company (NIOPDC), says the project was launched in 2008 and is expected to be completed by March 2017.

He said the project will be first executed in big cities where fuel consumption causes heavy pollution. He added that gasoline vapor gathering can prevent the emission of 3,000 liters of gasoline vapor per distribution of 1,000 liters of gasoline.

“The first phase of this project starts in gas stations. Gasoline vapor containment system has been installed in 3,400 gas stations. This system includes sealing storage tanks in gas stations and installing equipment to avoid emission of gasoline vapor,” he said.

Molla-Baqer said pressure / vacuum relief valves, dry couplings, steam hose, manometer, steam header and piping are used in this system.

“In the second phase of gasoline vapor gathering, 2,700 tankers are equipped with the gasoline vapor transfer system in Tehran and in Karaj,” he said.

The official said this system needs pipes, suction pump, coaxial hose and a nozzle.

He said vapor recovery unit has been established at Tehran, Karaj and Bandar Abbas oil storage facilities in preparation for the project.

Molla-Baqer said steam valve, pneumatic system and piping are needed for equipping oil tankers with gasoline vapor gathering.

“The necessary changes were made in equipping oil storage facilities with top loading facility to match vapor recovery unit (VRU),” he said.

According to the official, the VRUs have been installed in three different refrigeration, membrane and carbon methods.

He said environmental concerns are more important than economic aspects for Iran’s Petroleum Ministry.

“The unfavorable impacts of emission of gasoline vapor on the environment may cause photochemical smog which would reduce visibility, produce particles, cause acid rains, erode soil and old equipment, destroy rivers and jungles, change climatic conditions, damage the ozone layer and cause global warming,” he said.

Molla-Baqer said the total project would cost around 9.8 trillion rials.

 

Return of Investment

 

Molla-Baqer said the project is highly profitable for Iran, adding: “If the average daily gasoline consumption is assumed at 65 million liters, the annual consumption will reach 22 billion liters a year. With the implementation of the vapor recovery project, 300,000 liters a day and 100 million liters a year of gasoline will be recovered and returned to the consumption cycle. Based on the Persian Gulf FOB prices, i.e. 25,000 rials per liter, we can prevent the loss of 2.5 trillion rials a year.”

 

Domestic Manufacturing

 

Molla-Baqer said the equipment needed for the gasoline recovery project is now being manufactured in Iran. He said Iran used to buy pressure/vacuum relief valves from the United States, Germany, Australia and China at high price.

He said that Iranian companies are currently manufacturing these valves which cost 1/20 of foreign ones. He added that Iranian companies are also working to manufacture dry couplings, too. 

Pressure and/or vacuum relief valves are used on liquid storage tanks and other process vessels or systems to prevent structural damage due to excess internal pressure or vacuum.

 

Storage tanks are pressurized when liquid is pumped in, compressing the existing vapor or when rising temperatures cause increased evaporation or expansion of existing vapor. Conversely, a vacuum condition may be created when pumping out or due to falling temperature. To prevent tank damage, vapor must be allowed into or out of the tank at specified pressure/vacuum conditions. The volume rate of venting depends upon the tank size, volatility of the tank contents, the pumping rates and the temperature.

A dry disconnect coupling (also called dry break coupling) is a hose connection device which provides an automatic mechanism to seal off both the hose and the fixed pipe end when the hose is disconnected.

Dry disconnect couplings are used in any fluid transfer application where loss of fluid upon disconnection cannot be tolerated because of environmental regulations, worker safety considerations, the high value of the fluid, or where cleanliness is a concern.

Petroleum Industry in the 3^rd Millennium

 

The world oil industry experienced ups and downs at the outset of the third millennium. The first drastic change was a sharp slump in the crude oil prices. Due to the decline in the prices, the world countries shifted focus from the oil market to the petroleum industry. Up to 2000, the oil market was exclusively controlled by main oil producers and it followed the general economic rules. But some developments in the 2000s destabilized this sovereignty.

 

Technology Role

 

In the early 1997, the oil prices hit their 16-year low. Some experts attributed the sharp decline to the return of Iraq to the oil market following the removal of Saddam Hussein, warm winter in the northern hemisphere and a decision by the Organization of the Petroleum Exporting Countries (OPEC) to lift output.

Many historians believe that the oil price has always been tied to technology. Over the past ten years, technological advancements have caused changes in the oil prices. In the meantime, state-of-the-art technologies for recovery from offshore reservoirs have significantly cut production costs. The role of technology in the oil prices could not be ignored.

 

Horizontal Drilling

 

Another turning point which reduced oil prices was the development of horizontal drilling technology. Directional drilling (or slant drilling) is the practice for drilling non-vertical wells. It can be broken down into three main groups: oilfield directional drilling, utility installation directional drilling (horizontal directional drilling), directional boring, and surface in seam (SIS), which horizontally intersects a vertical well target to extract coal bed methane.

Directional drilling helped more oil recovery at lower costs.

Some advantages of horizontal drilling included increasing the exposed section length through the reservoir by drilling through the reservoir at an angle, drilling into the reservoir where vertical access is difficult or not possible, and allowing more wellheads to be grouped together on one surface location can allow fewer rig moves, less surface area disturbance, and make it easier and cheaper to complete and produce from the wells.

However, until the arrival of modern downhole motors and better tools to measure inclination and azimuth of the hole, directional drilling and horizontal drilling was much slower than vertical drilling due to the need to stop regularly and take time-consuming surveys, and due to slower progress in drilling itself (lower rate of penetration). These disadvantages have shrunk over time as downhole motors became more efficient and semi-continuous surveying became possible.

What remains is a difference in operating costs: for wells with an inclination of less than 40 degrees, tools to carry out adjustments or repair work can be lowered by gravity on cable into the hole. For higher inclinations, more expensive equipment has to be mobilized to push tools down the hole.

 

Consequences of Oil Price Fall

 

The aforementioned factors which led to higher oil recovery set the stage for important structural changes in the world oil industry. The most important change was the merger of some big oil companies. In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge and form a new company called Exxon Mobil Corp., the largest company on the planet. After shareholder and regulatory approvals, the merger was completed on November 30, 1999. The merger of Exxon and Mobil was unique in American history because it reunited the two largest companies of John D. Rockefeller's Standard Oil trust, Standard Oil Co. of New Jersey/Exxon and Standard Oil Co. of New York/Mobil, which had been forcibly separated by government order nearly a century earlier. This reunion resulted in the largest merger in US corporate history.

ExxonMobil is the largest of the world's super majors with daily production of 3.921 million BOE. In 2008, this was approximately 3 percent of world production, which is less than several of the largest state-owned petroleum companies. When ranked in terms of oil and gas reserves, it is 14th in the world—with less than 1 percent of the total.

These structural changes led to the creation of oil giants in the world, but these companies suffered losses due to oil price fall. Royal Dutch Shell had to close its offices in Britain. Even many non-OPEC countries had to stop production which was no longer cost-effective. 

Pricing Formula

 

Sudden oil price fall left impact on the pricing formula in the world markets. In the years before the outbreak of World War I, crude oil buyers used to purchase oil based on the US crude price and the distance. During that time, all oil-related activities including exploration, extraction, transfer and distribution were controlled by a group of big oil companies. This trend continued until the early 1970s when oil producers realized the necessity of defining a role for themselves in the oil pricing. In 1973, the oil pricing formula was defined by OPEC.  The terminology of oil pricing was developed in those years.

In 1997, the oil pricing went to the stock markets. Oil experts had concluded that the only way to curb oil price fall was that the black gold be traded in the stock markets to prevent future price shocks.

Rudkhan Castle; Beauty and Prowess 

 

I got an email from a friend, containing images of the most beautiful castle in Iran. When I was looking at the photos I could not believe that they were real. I thought they were paintings.

Rudkhan Castle is a brick and stone medieval castle in Iran. Located 25 km southwest of Fouman city north of Iran in Guilan province, it is a military complex which had been constructed during the Seljuk Dynasty by followers of the Ismaeili sect. The castle is built on two tips of a mount, with an area of 2.6 hectares (6.4 acres). Its architects have benefited from natural mountainous features in the construction of the fort.

The Rudkhan Castle River originates in the surrounding heights and flows from south to north.

After crossing a mountainous winding route with dense forests, the first thing that one notices about the castle is its big entrance gate.

Rudkhan Castle sits at the two peaks of a mountain at elevations of 715 and 670 meters and contains strong fortifications and battlements at a length of 1,550 meters. The castle's 42 towers still stand intact.

At the 2006 census, population of Fouman was 27,763, in 7,728 families.

Fouman is famous for its Persian cookies called Koloocheh, which are thinner and larger than its famous brethren, the Lahijan Koloocheh. While not as well publicized and mass produced as the Koloocheh from Lahijan, Fouman's Koloocheh is quite popular and tasty.

Rice has been cultivated in this region for many years, where some indigenous cultivars (landrace) were conventionally bred by farmers.

 

Unique Nature

 

After leaving behind the urban region, we see a unique green landscape which may be seen only in the movies. Water was running on both sides of the road. The water was clean and jungles were full of fresh air. Wooden cottages are built near the river. Among the towering trees, the scenery was reminiscent of postal cards.    

Guilan province has a humid subtropical climate with a large margin of the heaviest rainfall in Iran: reaching as high as 1,900 millimeters (75 in) in the southwestern coast and generally around 1,400 millimeters (55 in). Rasht, the capital of the province, is known internationally as the "City of Silver Rains" and within Iran as the "City of Rain". Rainfall is heaviest between September and December because the onshore winds from the Siberian High are strongest, but it occurs throughout the year though least abundantly from April to July. Humidity is very high because of the marshy character of the coastal plains and can reach 90 percent in summer for wet bulb temperatures of over 26 °C (79 °F). The Alborz range provides further diversity to the land in addition to the Caspian coasts.

The coastline is cooler and attracts large numbers of domestic and international tourists. Large parts of the province are mountainous, green and forested. The coastal plain along the Caspian Sea is similar to that of Mazandaran, mainly used for rice paddies. Supposedly, due to successive cultivation and selection of rice by farmers, several rice cultivars including Gerdeh, Hashemi, Hasansaraei, Domsiyah, Sadri and Tarom have been bred in both Guilan and Mazandaran provinces.

 

Guilan Province

 

Guilan divides into a coastal plain including the large delta of the Sefid Rud and adjacent parts of the Alborz Mountains. The soil is fertile loam, with dunes and marshy stretches along the lower plain. The jungle-like forest contains partly endemic species such as the Caucasian wingnut (a kind of walnut), and silk trees cover part of the plain. Animals include wild boar, lynx, panther, hyena, jackal, and deer, with waterfowl in the coastal stretches. As mentioned before, on most cultivated land in Guilan, rice is grown. Other crops include tobacco, fruits, vegetables, and tea (grown in the foothills above the rice fields). Fishing, developed by the Russians in the 19th century, has been state run since 1953 and is important; most of the catch (sturgeon, salmon, white fish) is either dried or canned and is exported, as is the caviar, which in the early 1970s accounted for about one-fifth of world production. Guilan has some modern factories, mainly for tea and rice processing. Modern developments include a dam at Manjil.

 

History

 

Archaeological excavations reveal the antiquity of the province to date back to prior to the last Ice Age. In the 6th century BCE, the inhabitants of Guilan allied with Cyrus the Great and overthrew the Medes. The province then passed from the control of one dynasty to the next.

After World War I, Guilan came to be ruled independently of the central government of Tehran and concern arose that the province might permanently separate at some point. Prior to the war, Guilanis had played an important role in the Constitutional Revolution of Iran and had sent an armed brigade to Tehran which helped depose the Qajar ruler Mohammad Ali Shah.

The movement of Mirza Kouchak Khan Jangali in late 1910s, known as Jangalis (or the Constitutionalist movement of Guilan) is glorified in Iranian history, which had effectively secured Guilan and Mazandaran against foreign invasions. In 1920 British forces invaded Bandar-e Anzali, while being pursued by the Russian Bolsheviks. In the midst of this conflict between Britain and Russia, the Jangalis movement entered into an alliance with the Bolsheviks against the British. This resulted in the establishment of the Soviet Republic of Guilan, which lasted from June 1920 until September 1921.

In February 1921 the Soviets withdrew their support for the Jangali government of Guilan, and signed the Soviet-Iranian Friendship Treaty with the central government of Tehran. The Jangalis continued to struggle against the central government for the rest of that year until their final defeat in September when control of Guilan returned to Tehran.

Guilan has a humid climate with plenty of annual rainfall. The Alborz range provides further diversity to the land in addition to the Caspian coasts. Large parts of the province are mountainous, green and forested. The coastal plain along the Caspian Sea is similar to that of Mazandaran, mainly used for rice paddies.

The majority of the population speaks Gilaki, a Persian dialect, as their first language while many children, particularly in the cities, tend to use standard Persian amongst themselves.

This province is a popular destination for domestic tourists. The coast of Caspian Sea is one of the major holiday retreats; and of course the small village of Masouleh in the hills south-east of Rasht, where the roof of one house is the courtyard of the next house above, attracts  many domestic and foreign tourists.

 

Villages

The most beautiful vicinities of Iran are found in northern Iran, and especially in Guilan Province. Coverage of green forests, diverse sources of water, local architecture, and cultural specifications are eye-catching; forming a basis for the development of tourism. Some of these rural attractions, known both internally and internationally are as follows:

 

Harzavil Village, Roodbar- Manjil

 

The history of this village dates back to over a thousand years, and is situated near the city of Manjil. Nasser Khosrow, the famous Iranian poet had traveled to this village and had mentioned this vicinity in his travel accounts. There is an ancient cypress tree in the village that attracts crowds of people every year. The tomb of Aqa Seyed Mahmood Marandi and Imamzadeh Ebrahim are other attractions of this area.

 

Kiashahr Village, Rasht

 

This village has made impressive progress during the years and has turned into a city. Kiashahr is located on the banks of a beautiful wetland, and enjoys a wonderful landscape and pleasant weather. Here there are wooden docks and some cottages for temporary use and fishing. Rest houses and restaurants have been constructed in the forest park close to the sea, so as to provide services to visitors. This village is one of the beautiful attractions of Guilan.

 

Masouleh Village, Fouman

 

This village is situated in the south west of Fouman, 63 km. from Rasht. It enjoys a moderate climate. Local architecture, springs, waterfalls, the 'Rood Khan' River and dense forests all make it an attractive tourism spot. Masouleh's integrated architecture and its houses are of two storied. These comprise of an entrance corridor, cellars and other unique architectural features, and are linked to each other by a staircase, such that the terrace of each house is the court-yard of the house above. The presence of the ancient Own Ebne Ali and Own Ebne Mohammad in Masouleh are pilgrimage sites and hold cultural importance.

 

Museums

 

Mian Poshteh Palace Museum (Navy Exhibition), Anzali

 

The historical structure of Mian Poshteh is located in one of the most beautiful localities of Bandar Anzali. In the year 1924, this palace was reclaimed by Reza Shah from its owner who was a Russian merchant. In 1977, this museum was inaugurated as the Navy museum. In this double storied structure, paintings and intricate plaster adornments can be noted. There is also a portrait attributed to Nasseredin Shah Qajar.

Rasht Museum, Rasht

 

The Rasht Museum extends over an area of 560 sq. m. and is a two-storey building. These premises belonged to Mirza Hossein Khan Kasmaie, (an ally of Mirza Kuchak Khan Jangali). The same was purchased by the Cultural and Arts Organization in 1970. After the required renovations, the structure was converted into a museum. The said museum is under control of the Cultural Heritage Organization at present, and was inaugurated in the year 1989. The museum comprises of three sections named as, the archaeological, anthropological and a sector displaying documents. Objects discovered in the excavations of hillocks such as Marlik, Tukam, Daylaman, Cheraq Ali and the Tegran cave are on exhibit there.

 

Guilan’s Rural Heritage Museum

 

About 15 kilometers far away from Rasht, there is a green and calm highway, with its two sides surrounded via rush and pine trees.

Stepping or driving a little forward, you'll reach an open and wide area decorated with wooden tableaus and billboards including the text "Musee patrimoine rural de Guilan" next to "UNESCO" and "Aix Du Province University" logos.

That French title remembers the glorious opening ceremony of "Guilan museum of rural heritage" in March 2007 where Prof. Christian Bromberger gave an interesting lecture about the history of Gilak tribe in front of hundreds of people, those in love with Persian culture.

Guilan museum of rural heritage is a fantastic and unique Eco-Museum that has been constructed in order to show the hidden corners of Guilan people's culture and lifestyle to the tourists from all around the world.

After paying a very skimpy amount of fee to the attendant at the entrance gate, you will find your way into a natural corridor with tall maple trees on the two sides and their foliage acting as roofs, preventing the sun and rain from damaging the traditional cobblestone floor of this narrow rural route.

The artificial wooden fence on the two sides of this corridor extends all around the museum that is designed exactly such as a small village and includes all parts of a real hamlet such as teahouse, playground, municipality, stable and lake.

Mainly, this museum is dedicated to anthropology and is considered a good and reliable source for sociological studies especially to researchers who want to gather more valuable information on Gilak's life.

The Eco-museum shows the cultural and ethnic diversity of 27 Gilak subgroups in 27 cottages, in each of them there are girls wearing traditional costumes, some of them cooking cuisines, foods and some others making handicrafts. It is noteworthy that the total surface area of museum is about 260 hectares.

 

Old and Historical Houses

 

Darya Beigi House, Langerood

 

One of the ancient houses of Langerood is the Darya Beigi house, one of the reputed families of Guilan. It is a two-storey building, and the rooms on the upper floor have latticed sash windows. This house has two large wooden doors with spikes and knockers. Flanking the doors are mantles with ancient mirrors. Each floor has three chambers, each accompanied by a beautiful balcony. The hall is adorned with paintings and valuable plaster work of the Qajar period. The interior adornments of this house are the important historical and artistic works of Guilan.

 

Monajem Bashi House, Langerood

 

The house is located in the Feshkalay locality, near the Sabzeh Maidan square in Langerood. It belongs to the Monajem Bashi household, and is composed of the interior and exterior segments, private quarter, a mosque, bath and stables. Between the entrance and hall is a vestibule, which is connected to the upper floor by stairs. The upper floor comprises of a hall and three chambers. The adornments of the former depict the architectural effects of Guilan in the Qajar era. Four exquisite sets of doors displaying shrubs and floral designs adjoin the chambers to the hall. This structure is registered as a national monument by the Cultural Heritage Organization.

Other Old Houses

Other ancient houses of the province which are mostly relevant to the Qajar period are: The houses of Haj Mirza Ahmad Abrishami (Rasht), Ayatollah Aqa Roodbari (Rasht), Dewan Beigi (Rasht), Mohammad Sadeqi (Lahijan), Dawoodzadeh (Rasht), Haj Seyed Hashem Bahrani (Rasht) and Sardar Mowtamed Rashti.

Rudkhan Castle; Beauty and Prowess 

 

I got an email from a friend, containing images of the most beautiful castle in Iran. When I was looking at the photos I could not believe that they were real. I thought they were paintings.

Rudkhan Castle is a brick and stone medieval castle in Iran. Located 25 km southwest of Fouman city north of Iran in Guilan province, it is a military complex which had been constructed during the Seljuk Dynasty by followers of the Ismaeili sect. The castle is built on two tips of a mount, with an area of 2.6 hectares (6.4 acres). Its architects have benefited from natural mountainous features in the construction of the fort.

The Rudkhan Castle River originates in the surrounding heights and flows from south to north.

After crossing a mountainous winding route with dense forests, the first thing that one notices about the castle is its big entrance gate.

Rudkhan Castle sits at the two peaks of a mountain at elevations of 715 and 670 meters and contains strong fortifications and battlements at a length of 1,550 meters. The castle's 42 towers still stand intact.

At the 2006 census, population of Fouman was 27,763, in 7,728 families.

Fouman is famous for its Persian cookies called Koloocheh, which are thinner and larger than its famous brethren, the Lahijan Koloocheh. While not as well publicized and mass produced as the Koloocheh from Lahijan, Fouman's Koloocheh is quite popular and tasty.

Rice has been cultivated in this region for many years, where some indigenous cultivars (landrace) were conventionally bred by farmers.

 

Unique Nature

 

After leaving behind the urban region, we see a unique green landscape which may be seen only in the movies. Water was running on both sides of the road. The water was clean and jungles were full of fresh air. Wooden cottages are built near the river. Among the towering trees, the scenery was reminiscent of postal cards.    

Guilan province has a humid subtropical climate with a large margin of the heaviest rainfall in Iran: reaching as high as 1,900 millimeters (75 in) in the southwestern coast and generally around 1,400 millimeters (55 in). Rasht, the capital of the province, is known internationally as the "City of Silver Rains" and within Iran as the "City of Rain". Rainfall is heaviest between September and December because the onshore winds from the Siberian High are strongest, but it occurs throughout the year though least abundantly from April to July. Humidity is very high because of the marshy character of the coastal plains and can reach 90 percent in summer for wet bulb temperatures of over 26 °C (79 °F). The Alborz range provides further diversity to the land in addition to the Caspian coasts.

The coastline is cooler and attracts large numbers of domestic and international tourists. Large parts of the province are mountainous, green and forested. The coastal plain along the Caspian Sea is similar to that of Mazandaran, mainly used for rice paddies. Supposedly, due to successive cultivation and selection of rice by farmers, several rice cultivars including Gerdeh, Hashemi, Hasansaraei, Domsiyah, Sadri and Tarom have been bred in both Guilan and Mazandaran provinces.

 

Guilan Province

 

Guilan divides into a coastal plain including the large delta of the Sefid Rud and adjacent parts of the Alborz Mountains. The soil is fertile loam, with dunes and marshy stretches along the lower plain. The jungle-like forest contains partly endemic species such as the Caucasian wingnut (a kind of walnut), and silk trees cover part of the plain. Animals include wild boar, lynx, panther, hyena, jackal, and deer, with waterfowl in the coastal stretches. As mentioned before, on most cultivated land in Guilan, rice is grown. Other crops include tobacco, fruits, vegetables, and tea (grown in the foothills above the rice fields). Fishing, developed by the Russians in the 19th century, has been state run since 1953 and is important; most of the catch (sturgeon, salmon, white fish) is either dried or canned and is exported, as is the caviar, which in the early 1970s accounted for about one-fifth of world production. Guilan has some modern factories, mainly for tea and rice processing. Modern developments include a dam at Manjil.

 

History

 

Archaeological excavations reveal the antiquity of the province to date back to prior to the last Ice Age. In the 6th century BCE, the inhabitants of Guilan allied with Cyrus the Great and overthrew the Medes. The province then passed from the control of one dynasty to the next.

After World War I, Guilan came to be ruled independently of the central government of Tehran and concern arose that the province might permanently separate at some point. Prior to the war, Guilanis had played an important role in the Constitutional Revolution of Iran and had sent an armed brigade to Tehran which helped depose the Qajar ruler Mohammad Ali Shah.

The movement of Mirza Kouchak Khan Jangali in late 1910s, known as Jangalis (or the Constitutionalist movement of Guilan) is glorified in Iranian history, which had effectively secured Guilan and Mazandaran against foreign invasions. In 1920 British forces invaded Bandar-e Anzali, while being pursued by the Russian Bolsheviks. In the midst of this conflict between Britain and Russia, the Jangalis movement entered into an alliance with the Bolsheviks against the British. This resulted in the establishment of the Soviet Republic of Guilan, which lasted from June 1920 until September 1921.

In February 1921 the Soviets withdrew their support for the Jangali government of Guilan, and signed the Soviet-Iranian Friendship Treaty with the central government of Tehran. The Jangalis continued to struggle against the central government for the rest of that year until their final defeat in September when control of Guilan returned to Tehran.

Guilan has a humid climate with plenty of annual rainfall. The Alborz range provides further diversity to the land in addition to the Caspian coasts. Large parts of the province are mountainous, green and forested. The coastal plain along the Caspian Sea is similar to that of Mazandaran, mainly used for rice paddies.

The majority of the population speaks Gilaki, a Persian dialect, as their first language while many children, particularly in the cities, tend to use standard Persian amongst themselves.

This province is a popular destination for domestic tourists. The coast of Caspian Sea is one of the major holiday retreats; and of course the small village of Masouleh in the hills south-east of Rasht, where the roof of one house is the courtyard of the next house above, attracts  many domestic and foreign tourists.

 

Villages

The most beautiful vicinities of Iran are found in northern Iran, and especially in Guilan Province. Coverage of green forests, diverse sources of water, local architecture, and cultural specifications are eye-catching; forming a basis for the development of tourism. Some of these rural attractions, known both internally and internationally are as follows:

 

Harzavil Village, Roodbar- Manjil

 

The history of this village dates back to over a thousand years, and is situated near the city of Manjil. Nasser Khosrow, the famous Iranian poet had traveled to this village and had mentioned this vicinity in his travel accounts. There is an ancient cypress tree in the village that attracts crowds of people every year. The tomb of Aqa Seyed Mahmood Marandi and Imamzadeh Ebrahim are other attractions of this area.

 

Kiashahr Village, Rasht

 

This village has made impressive progress during the years and has turned into a city. Kiashahr is located on the banks of a beautiful wetland, and enjoys a wonderful landscape and pleasant weather. Here there are wooden docks and some cottages for temporary use and fishing. Rest houses and restaurants have been constructed in the forest park close to the sea, so as to provide services to visitors. This village is one of the beautiful attractions of Guilan.

 

Masouleh Village, Fouman

 

This village is situated in the south west of Fouman, 63 km. from Rasht. It enjoys a moderate climate. Local architecture, springs, waterfalls, the 'Rood Khan' River and dense forests all make it an attractive tourism spot. Masouleh's integrated architecture and its houses are of two storied. These comprise of an entrance corridor, cellars and other unique architectural features, and are linked to each other by a staircase, such that the terrace of each house is the court-yard of the house above. The presence of the ancient Own Ebne Ali and Own Ebne Mohammad in Masouleh are pilgrimage sites and hold cultural importance.

 

Museums

 

Mian Poshteh Palace Museum (Navy Exhibition), Anzali

 

The historical structure of Mian Poshteh is located in one of the most beautiful localities of Bandar Anzali. In the year 1924, this palace was reclaimed by Reza Shah from its owner who was a Russian merchant. In 1977, this museum was inaugurated as the Navy museum. In this double storied structure, paintings and intricate plaster adornments can be noted. There is also a portrait attributed to Nasseredin Shah Qajar.

Rasht Museum, Rasht

 

The Rasht Museum extends over an area of 560 sq. m. and is a two-storey building. These premises belonged to Mirza Hossein Khan Kasmaie, (an ally of Mirza Kuchak Khan Jangali). The same was purchased by the Cultural and Arts Organization in 1970. After the required renovations, the structure was converted into a museum. The said museum is under control of the Cultural Heritage Organization at present, and was inaugurated in the year 1989. The museum comprises of three sections named as, the archaeological, anthropological and a sector displaying documents. Objects discovered in the excavations of hillocks such as Marlik, Tukam, Daylaman, Cheraq Ali and the Tegran cave are on exhibit there.

 

Guilan’s Rural Heritage Museum

 

About 15 kilometers far away from Rasht, there is a green and calm highway, with its two sides surrounded via rush and pine trees.

Stepping or driving a little forward, you'll reach an open and wide area decorated with wooden tableaus and billboards including the text "Musee patrimoine rural de Guilan" next to "UNESCO" and "Aix Du Province University" logos.

That French title remembers the glorious opening ceremony of "Guilan museum of rural heritage" in March 2007 where Prof. Christian Bromberger gave an interesting lecture about the history of Gilak tribe in front of hundreds of people, those in love with Persian culture.

Guilan museum of rural heritage is a fantastic and unique Eco-Museum that has been constructed in order to show the hidden corners of Guilan people's culture and lifestyle to the tourists from all around the world.

After paying a very skimpy amount of fee to the attendant at the entrance gate, you will find your way into a natural corridor with tall maple trees on the two sides and their foliage acting as roofs, preventing the sun and rain from damaging the traditional cobblestone floor of this narrow rural route.

The artificial wooden fence on the two sides of this corridor extends all around the museum that is designed exactly such as a small village and includes all parts of a real hamlet such as teahouse, playground, municipality, stable and lake.

Mainly, this museum is dedicated to anthropology and is considered a good and reliable source for sociological studies especially to researchers who want to gather more valuable information on Gilak's life.

The Eco-museum shows the cultural and ethnic diversity of 27 Gilak subgroups in 27 cottages, in each of them there are girls wearing traditional costumes, some of them cooking cuisines, foods and some others making handicrafts. It is noteworthy that the total surface area of museum is about 260 hectares.

 

Old and Historical Houses

 

Darya Beigi House, Langerood

 

One of the ancient houses of Langerood is the Darya Beigi house, one of the reputed families of Guilan. It is a two-storey building, and the rooms on the upper floor have latticed sash windows. This house has two large wooden doors with spikes and knockers. Flanking the doors are mantles with ancient mirrors. Each floor has three chambers, each accompanied by a beautiful balcony. The hall is adorned with paintings and valuable plaster work of the Qajar period. The interior adornments of this house are the important historical and artistic works of Guilan.

 

Monajem Bashi House, Langerood

 

The house is located in the Feshkalay locality, near the Sabzeh Maidan square in Langerood. It belongs to the Monajem Bashi household, and is composed of the interior and exterior segments, private quarter, a mosque, bath and stables. Between the entrance and hall is a vestibule, which is connected to the upper floor by stairs. The upper floor comprises of a hall and three chambers. The adornments of the former depict the architectural effects of Guilan in the Qajar era. Four exquisite sets of doors displaying shrubs and floral designs adjoin the chambers to the hall. This structure is registered as a national monument by the Cultural Heritage Organization.

Other Old Houses

Other ancient houses of the province which are mostly relevant to the Qajar period are: The houses of Haj Mirza Ahmad Abrishami (Rasht), Ayatollah Aqa Roodbari (Rasht), Dewan Beigi (Rasht), Mohammad Sadeqi (Lahijan), Dawoodzadeh (Rasht), Haj Seyed Hashem Bahrani (Rasht) and Sardar Mowtamed Rashti.

Rudkhan Castle; Beauty and Prowess 

 

I got an email from a friend, containing images of the most beautiful castle in Iran. When I was looking at the photos I could not believe that they were real. I thought they were paintings.

Rudkhan Castle is a brick and stone medieval castle in Iran. Located 25 km southwest of Fouman city north of Iran in Guilan province, it is a military complex which had been constructed during the Seljuk Dynasty by followers of the Ismaeili sect. The castle is built on two tips of a mount, with an area of 2.6 hectares (6.4 acres). Its architects have benefited from natural mountainous features in the construction of the fort.

The Rudkhan Castle River originates in the surrounding heights and flows from south to north.

After crossing a mountainous winding route with dense forests, the first thing that one notices about the castle is its big entrance gate.

Rudkhan Castle sits at the two peaks of a mountain at elevations of 715 and 670 meters and contains strong fortifications and battlements at a length of 1,550 meters. The castle's 42 towers still stand intact.

At the 2006 census, population of Fouman was 27,763, in 7,728 families.

Fouman is famous for its Persian cookies called Koloocheh, which are thinner and larger than its famous brethren, the Lahijan Koloocheh. While not as well publicized and mass produced as the Koloocheh from Lahijan, Fouman's Koloocheh is quite popular and tasty.

Rice has been cultivated in this region for many years, where some indigenous cultivars (landrace) were conventionally bred by farmers.

 

Unique Nature

 

After leaving behind the urban region, we see a unique green landscape which may be seen only in the movies. Water was running on both sides of the road. The water was clean and jungles were full of fresh air. Wooden cottages are built near the river. Among the towering trees, the scenery was reminiscent of postal cards.    

Guilan province has a humid subtropical climate with a large margin of the heaviest rainfall in Iran: reaching as high as 1,900 millimeters (75 in) in the southwestern coast and generally around 1,400 millimeters (55 in). Rasht, the capital of the province, is known internationally as the "City of Silver Rains" and within Iran as the "City of Rain". Rainfall is heaviest between September and December because the onshore winds from the Siberian High are strongest, but it occurs throughout the year though least abundantly from April to July. Humidity is very high because of the marshy character of the coastal plains and can reach 90 percent in summer for wet bulb temperatures of over 26 °C (79 °F). The Alborz range provides further diversity to the land in addition to the Caspian coasts.

The coastline is cooler and attracts large numbers of domestic and international tourists. Large parts of the province are mountainous, green and forested. The coastal plain along the Caspian Sea is similar to that of Mazandaran, mainly used for rice paddies. Supposedly, due to successive cultivation and selection of rice by farmers, several rice cultivars including Gerdeh, Hashemi, Hasansaraei, Domsiyah, Sadri and Tarom have been bred in both Guilan and Mazandaran provinces.

 

Guilan Province

 

Guilan divides into a coastal plain including the large delta of the Sefid Rud and adjacent parts of the Alborz Mountains. The soil is fertile loam, with dunes and marshy stretches along the lower plain. The jungle-like forest contains partly endemic species such as the Caucasian wingnut (a kind of walnut), and silk trees cover part of the plain. Animals include wild boar, lynx, panther, hyena, jackal, and deer, with waterfowl in the coastal stretches. As mentioned before, on most cultivated land in Guilan, rice is grown. Other crops include tobacco, fruits, vegetables, and tea (grown in the foothills above the rice fields). Fishing, developed by the Russians in the 19th century, has been state run since 1953 and is important; most of the catch (sturgeon, salmon, white fish) is either dried or canned and is exported, as is the caviar, which in the early 1970s accounted for about one-fifth of world production. Guilan has some modern factories, mainly for tea and rice processing. Modern developments include a dam at Manjil.

 

History

 

Archaeological excavations reveal the antiquity of the province to date back to prior to the last Ice Age. In the 6th century BCE, the inhabitants of Guilan allied with Cyrus the Great and overthrew the Medes. The province then passed from the control of one dynasty to the next.

After World War I, Guilan came to be ruled independently of the central government of Tehran and concern arose that the province might permanently separate at some point. Prior to the war, Guilanis had played an important role in the Constitutional Revolution of Iran and had sent an armed brigade to Tehran which helped depose the Qajar ruler Mohammad Ali Shah.

The movement of Mirza Kouchak Khan Jangali in late 1910s, known as Jangalis (or the Constitutionalist movement of Guilan) is glorified in Iranian history, which had effectively secured Guilan and Mazandaran against foreign invasions. In 1920 British forces invaded Bandar-e Anzali, while being pursued by the Russian Bolsheviks. In the midst of this conflict between Britain and Russia, the Jangalis movement entered into an alliance with the Bolsheviks against the British. This resulted in the establishment of the Soviet Republic of Guilan, which lasted from June 1920 until September 1921.

In February 1921 the Soviets withdrew their support for the Jangali government of Guilan, and signed the Soviet-Iranian Friendship Treaty with the central government of Tehran. The Jangalis continued to struggle against the central government for the rest of that year until their final defeat in September when control of Guilan returned to Tehran.

Guilan has a humid climate with plenty of annual rainfall. The Alborz range provides further diversity to the land in addition to the Caspian coasts. Large parts of the province are mountainous, green and forested. The coastal plain along the Caspian Sea is similar to that of Mazandaran, mainly used for rice paddies.

The majority of the population speaks Gilaki, a Persian dialect, as their first language while many children, particularly in the cities, tend to use standard Persian amongst themselves.

This province is a popular destination for domestic tourists. The coast of Caspian Sea is one of the major holiday retreats; and of course the small village of Masouleh in the hills south-east of Rasht, where the roof of one house is the courtyard of the next house above, attracts  many domestic and foreign tourists.

 

Villages

The most beautiful vicinities of Iran are found in northern Iran, and especially in Guilan Province. Coverage of green forests, diverse sources of water, local architecture, and cultural specifications are eye-catching; forming a basis for the development of tourism. Some of these rural attractions, known both internally and internationally are as follows:

 

Harzavil Village, Roodbar- Manjil

 

The history of this village dates back to over a thousand years, and is situated near the city of Manjil. Nasser Khosrow, the famous Iranian poet had traveled to this village and had mentioned this vicinity in his travel accounts. There is an ancient cypress tree in the village that attracts crowds of people every year. The tomb of Aqa Seyed Mahmood Marandi and Imamzadeh Ebrahim are other attractions of this area.

 

Kiashahr Village, Rasht

 

This village has made impressive progress during the years and has turned into a city. Kiashahr is located on the banks of a beautiful wetland, and enjoys a wonderful landscape and pleasant weather. Here there are wooden docks and some cottages for temporary use and fishing. Rest houses and restaurants have been constructed in the forest park close to the sea, so as to provide services to visitors. This village is one of the beautiful attractions of Guilan.

 

Masouleh Village, Fouman

 

This village is situated in the south west of Fouman, 63 km. from Rasht. It enjoys a moderate climate. Local architecture, springs, waterfalls, the 'Rood Khan' River and dense forests all make it an attractive tourism spot. Masouleh's integrated architecture and its houses are of two storied. These comprise of an entrance corridor, cellars and other unique architectural features, and are linked to each other by a staircase, such that the terrace of each house is the court-yard of the house above. The presence of the ancient Own Ebne Ali and Own Ebne Mohammad in Masouleh are pilgrimage sites and hold cultural importance.

 

Museums

 

Mian Poshteh Palace Museum (Navy Exhibition), Anzali

 

The historical structure of Mian Poshteh is located in one of the most beautiful localities of Bandar Anzali. In the year 1924, this palace was reclaimed by Reza Shah from its owner who was a Russian merchant. In 1977, this museum was inaugurated as the Navy museum. In this double storied structure, paintings and intricate plaster adornments can be noted. There is also a portrait attributed to Nasseredin Shah Qajar.

Rasht Museum, Rasht

 

The Rasht Museum extends over an area of 560 sq. m. and is a two-storey building. These premises belonged to Mirza Hossein Khan Kasmaie, (an ally of Mirza Kuchak Khan Jangali). The same was purchased by the Cultural and Arts Organization in 1970. After the required renovations, the structure was converted into a museum. The said museum is under control of the Cultural Heritage Organization at present, and was inaugurated in the year 1989. The museum comprises of three sections named as, the archaeological, anthropological and a sector displaying documents. Objects discovered in the excavations of hillocks such as Marlik, Tukam, Daylaman, Cheraq Ali and the Tegran cave are on exhibit there.

 

Guilan’s Rural Heritage Museum

 

About 15 kilometers far away from Rasht, there is a green and calm highway, with its two sides surrounded via rush and pine trees.

Stepping or driving a little forward, you'll reach an open and wide area decorated with wooden tableaus and billboards including the text "Musee patrimoine rural de Guilan" next to "UNESCO" and "Aix Du Province University" logos.

That French title remembers the glorious opening ceremony of "Guilan museum of rural heritage" in March 2007 where Prof. Christian Bromberger gave an interesting lecture about the history of Gilak tribe in front of hundreds of people, those in love with Persian culture.

Guilan museum of rural heritage is a fantastic and unique Eco-Museum that has been constructed in order to show the hidden corners of Guilan people's culture and lifestyle to the tourists from all around the world.

After paying a very skimpy amount of fee to the attendant at the entrance gate, you will find your way into a natural corridor with tall maple trees on the two sides and their foliage acting as roofs, preventing the sun and rain from damaging the traditional cobblestone floor of this narrow rural route.

The artificial wooden fence on the two sides of this corridor extends all around the museum that is designed exactly such as a small village and includes all parts of a real hamlet such as teahouse, playground, municipality, stable and lake.

Mainly, this museum is dedicated to anthropology and is considered a good and reliable source for sociological studies especially to researchers who want to gather more valuable information on Gilak's life.

The Eco-museum shows the cultural and ethnic diversity of 27 Gilak subgroups in 27 cottages, in each of them there are girls wearing traditional costumes, some of them cooking cuisines, foods and some others making handicrafts. It is noteworthy that the total surface area of museum is about 260 hectares.

 

Old and Historical Houses

 

Darya Beigi House, Langerood

 

One of the ancient houses of Langerood is the Darya Beigi house, one of the reputed families of Guilan. It is a two-storey building, and the rooms on the upper floor have latticed sash windows. This house has two large wooden doors with spikes and knockers. Flanking the doors are mantles with ancient mirrors. Each floor has three chambers, each accompanied by a beautiful balcony. The hall is adorned with paintings and valuable plaster work of the Qajar period. The interior adornments of this house are the important historical and artistic works of Guilan.

 

Monajem Bashi House, Langerood

 

The house is located in the Feshkalay locality, near the Sabzeh Maidan square in Langerood. It belongs to the Monajem Bashi household, and is composed of the interior and exterior segments, private quarter, a mosque, bath and stables. Between the entrance and hall is a vestibule, which is connected to the upper floor by stairs. The upper floor comprises of a hall and three chambers. The adornments of the former depict the architectural effects of Guilan in the Qajar era. Four exquisite sets of doors displaying shrubs and floral designs adjoin the chambers to the hall. This structure is registered as a national monument by the Cultural Heritage Organization.

Other Old Houses

Other ancient houses of the province which are mostly relevant to the Qajar period are: The houses of Haj Mirza Ahmad Abrishami (Rasht), Ayatollah Aqa Roodbari (Rasht), Dewan Beigi (Rasht), Mohammad Sadeqi (Lahijan), Dawoodzadeh (Rasht), Haj Seyed Hashem Bahrani (Rasht) and Sardar Mowtamed Rashti.