Oil Market Ready to Welcome Iran

Kasra nouri
Director General of Public Relations

Iran’s oil market is ready to enter global markets. Maybe for any other oil-rich country like Iran, being under tough economic and industrial sanctions, similar to the unilateralism exercised by White House rulers would mean a halt in output, and therefore any return to pre-sanctions levels would be a far-reached ream.

However, Iran’s petroleum industry has already experienced to pre-sanctions levels when in 2015 it struck a historic deal with nuclear powers. Relying on its well thought-out plans, Iran is now fully ready to regain its lost share as it has no technical problem in reaching full oil production capacity.

Pursuing events in Iran’s petroleum industry during a time the White House has violated every international norms and regulations and flouted basic moral principles to quit the Joint Comprehensive Plan of Action showed that US policymakers were unreliable, but Iran’s oil policy lies beyond sanctions and is rather based on domestic potential for development. For this reason, the US’s non-compliance with its pledges did not ground Iran’s petroleum industry; rather it has relied on Iranian contractors in design, manufacturing, installation and management of projects. It has then become self-reliant and it therefore can overcome challenges.

Iran is one of the energy-richest nations in the world. By relying on its oil experience, Iran carries weight in the oil and energy market. Rather, due to its historically influential position among fellow oil producers, Iran has been instrumental in international interaction between producers and consumers.

Iran’s oil diplomacy may be summarized in one phrase: Pursuing public interests through regional and international partnership and cooperation with a view to guaranteeing energy supply and demand while respecting moral and human principles based on national strength.

This policy is based on political and economic justice, global peace and public welfare. Its main ideals aim to create equal rights for all nations.

Iran Ready to Supply Pakistan Energy Needs

 Iran’s President Hassan Rouhani told Pakistan’s foreign minister in Tehran that Islamic Republic was ready to meet Pakistan’s energy needs.

In a meeting with visiting Pakistani Foreign Minister Shah Mahmood Qureshi, Rouhani stressed the need for the implementation of agreements signed between the two nations.

The Iranian president called for the promotion of Tehran-Islamabad ties in trade, energy and border markets, adding it is necessary for both sides to implement the signed agreements to further cooperation.

For his part, Qureshi expressed hope that the two nations would see broader ties in the trade and economic sectors in the future.

During Qureshi’s three-day visit, the two countries also signed a memorandum of understanding to establish joint border markets in a bid to strengthen cross-border economic exchanges.

The agreement, which was signed by Iranian Foreign Minister Mohammad Javad Zarif and Qureshi, aims to promote economic relations between the two countries and the welfare of border residents.

The border markets will be administrated based on the agreements and protocols between the two sides.

 Baba-Qir, Bankoul Fields Development to Start

 The technical director of Iranian Central Oil Fields Company (ICOFC), Gholam-Reza Nasiraei, has said that the Baba-Qir and Bankoul oil fields were poised to undergo development.

“With the conclusion of 2D seismic testing in the Baba-Qir and Bankoul fields and finalization of seismic data interpretation, development of these fields will top the agenda,” he said.

He added that the 2D seismic testing on both fields would cover about 500 square kilometers in Ilam and Kermanshah provinces.

“Development of these two fields, which are both administered by ICOFC in western Iran, is aimed at assessing production capacity to support the Tang-e Bijar field,” said Nasiraei.

He also said that 3D seismic survey would be carried out in the Tang-e Bijar and Delavaran fields, covering 1,560 square kilometers within the framework of a joint project with the Baba-Qir and Bankoul fields. The 3D survey of the Delavaran field is over and seismic data is being processed and interpreted.

 Foreign Monopoly on Petchem Catalyst Supply Ends

 The secretary-general of Association of Petrochemical Industry Corporation (APIC) has said that Iran’s petrochemical sector, particularly Petrochemical Research and Technology Company (PRTC), was determined to bring an end to foreign companies’ monopoly over domestic development of catalysts.

Ahmad Mahdavi Abhari said that petrochemical companies were ready to cooperate with PRTC to that end.

“We are seeking to produce all necessary catalysts in the petrochemical industry and even envision exporting catalysts. I hope that in partnership with PRTC and its researchers and experts we will no longer have to import catalysts,” he said.

“Catalysts are instrumental in the petrochemical industry and without them the petrochemical industry cannot move ahead,” he said.

Noting that PRTC and R&D sections of all petrochemical companies are trying to domestically manufacture catalysts, Abhari said: “Fortunately, we have reached some extent of success in this field, and every year we are producing various catalysts of high quality.”

 Isfahan Refinery to Switch to Petro-Refining

 The deputy CEO for economic and commercial affairs of Isfahan Oil Refining Company and Isfahan Petrochemical Company has said the former had purchased 42% of shares of the latter.

“In doing so”, Mehdi Saremi said, the refiner “took a major step towards becoming a petro-refiner.”

He said that Isfahan refinery was fully feeding the petrochemical plant, adding: “With transformation of Isfahan oil refining company to a petro-refinery and investment in downstream industries affiliated with the refinery, which receive feedstock from this industrial complex, other industries will be also fed.”

Noting that developed nations were moving towards setting up petro-refining units, he said petro-refineries had such advantages of enhanced margins, reduced pollution, lower feedstock costs and integrated management.

Mostafa Elahi, CEO of Isfahan Petrochemical Company, said under the Isfahan refinery and petrochemical plant would strengthen their bonds, adding: “By sharing experience and benefiting from reciprocal cooperation, the two companies can create new value-added for Isfahan petrochemical company.”

96% of Iran Supplied with Natural Gas

 CEO of National Iranian Gas Company (NIGC) Hassan Montazer Torbati said 96% of Iran’s population has access to natural gas.

“Access of 96% of Iran’s population to natural gas is unique in the world,” Montazer Torbati said.

“Now that everyone recognizes NIGC as a leading organization, our task is much heavier, because now with 96 percent of the country's population benefiting from gas, which is a unique statistics in the world, we should think more about network stability and processes and creation so that we will have a better and more dynamic organization,” he said.

Montazer Torbati said an important fact in Iranian organizations is that they favor “construction” over “mechanism”.

“Our managers like production much more than mechanism,” he said.

“Maybe in some organizations, mechanism managers are ignored, while it is mechanism which counts and can help manage time,” he added.

Iran, Turkmenistan Discuss Oil Cooperation

 CEO of Iran’s Khazar Exploration and Production Company (KEPCO) Ali Osouli met with Turkmenistan’s Ambassador to Tehran Ahmad Ghorbanov to discuss expansion of cooperation in the oil industry.

Speaking in the meeting, Osouli underlined the long history of Iran-Turkmenistan relations as two neighboring countries with deep cultural ties, and introduced some of the activities and experiences of KEPCO in the Caspian Sea region.

Touching on the capabilities and achievements of his company in deep-water operations,

Osouli talked about the formation of the South Caspian Oil Research Consortium, blocking and prioritization of exploration operations as well as signing an agreement with Azerbaijan for cooperation in Caspian Sea’s Alborz block as some of the important measures taken by KEPCO over the past few years.

Osouli also referred to the establishment of shipbuilding facilities in northern Iran and the construction of Caspian and Amir-Kabir platforms, as well as the construction of multi-purpose vessels by Iran and noted that the Islamic Republic has the potential to provide services and cooperate with Turkmenistan in the mentioned fields.

Ghorbanov, for his part, welcomed the expansion of cooperation between the two countries, especially in technical and engineering sectors, and underlined the important role of Turkmenistan embassy as a bridge of communication through which logical and executive proposals will be provided to Iranian companies operating in Turkmenistan.

Referring to the cooperation between Iran and Azerbaijan, the Turkmen ambassador expressed hope that Turkmenistan would also be able to use Iran's services and technical knowledge in deep-water operations and that a meeting of the two countries’ economic committee would be held as soon as possible.

“There is great potential for expanding Turkmen-Iranian energy cooperation in the Caspian Sea, which could contribute to the two countries' economic development,” he said.

KEPCO is a subsidiary of the National Iranian Oil Company (NIOC) founded in January 1998. The company is active in a variety of oil and gas-related areas including exploration, development, and production in the South Caspian Sea and three littoral provinces of Mazandaran, Golestan, and Gilan in Iran.

ICOFC Awarded Energy Management Certificate

The Iranian Central Oil Fields Company (ICOFC), which is Iran’s largest onshore gas producer, has been awarded the standard certification of energy management system (ISO50001: 2018) for respecting international standards while boosting its productivity.

Ahmad Rajabi, the company's production manager, said: “Establishment of energy management system was carried out in line with the implementation of general policies of resilient economy and reform of consumption pattern instructed by the Supreme Leader.”

He added: “Accordingly, over the past two years, by conducting studies and preparing standard instructions, the necessary infrastructure to comply with the requirements of the system were put forth in three stages of audit, including transit, internal and external audits by the certification company and finally ICOFC succeeded in receiving the certificate of Energy Management System (ISO50001: 2018).”

He said establishment of energy management system in ICOFC subsidiaries South Zagros Oil and Gas Production Company, East Oil and Gas Production Company and West Oil and Gas Production Company was being followed up on.

South Pars Sustainable Supply Requires Obstacle Removal

CEO of Pars Oil and Gas Company (POGC) Mohammad Meshkinfam has said sustainable supply from the giant South Pars gas field would require removal of obstacles.

“Sustainable and safe supply from South Pars requires removal of obstacles and supporting production, which is being followed up on seriously this year,” he said.

Meshkinfam said POGC was supplying more than 70% of Iran’s rich gas production and providing feedstock for 40% of gasoline production in the country.

Meshkinfam stated that important measures have been taken to remove obstacles and support safe and maximum gas production in South Pars, adding, “Since the beginning of this year, the necessary plans and proposals in this regard have been announced to the Petroleum Ministry, and these cases are being considered.”

He referred to the continuous meetings held with the production and operation directors of the company and said in the weekly meetings, the bottlenecks and problems facing the production operations are announced; and in accordance with these problems, planning and action are taken to solve them.

Petchem Mix to Be Diversified

The director of downstream industries development at National Petrochemical Company (NPC), Mohammad Mottaqi, said the mix of petrochemical products would be diversified further.

“With a view to completing the value chain, a group of accelerative projects are envisaged with a focus on developing downstream industries,” he said.

Mottaqi laid emphasis on the role of downstream petrochemical industries in supplying the needs of some large industrial units, saying: “Completing the value chain and generating value-added would be among the ramifications of supplying feedstock and developing new products in the downstream sector.”

“Growth and development of downstream industries will bring about economic prosperity, job creation, industrial and regional development,” he said, adding that NPC would be envisioning reduction in imports, and instead supporting increasing diversity after the second and third jump projects become operational.

He said that NPC, in cooperation with the Ministry of Industry, Mine and Trade and the private sector, can overcome obstacles and support production.

“Supplying domestic needs with the products of petrochemical plants would be a priority,” he said.

Rouhani Boasts Post-JCPOA Oil Sales

President Hassan Rouhani has said that Iran saw its oil sales increase from 900,000 b/d to 2.8 mb/d immediately after it struck the 2015 nuclear deal with six world powers.

He added that transfer of seawater to Iran’s central plateau had been financed by revenues gained following oil sales thanks to the implementation of the Joint Comprehensive Plan of Action (JCPOA).

“Iran’s oil sales increased from 900,000 b/d to 2.8 mb/d post-JCPOA and more than IRR 12,000 billion allocated to projects last calendar year had been provided thanks to the JCPOA,” he said.

Rouhani said the nuclear deal was fully beneficial to the country, adding: “Of course, we may have not achieved everything we wanted, but undoubtedly more than 80% of our expectations were met. Following the implementation of JCPOA, we had the highest economic growth in the world in 2016. Our inflation rate dropped to below 10% in some cases. That is a historic achievement.” 

The president said some media in the country and abroad had prevented people from learning about the achievements of the JCPOA, including the closure of the possible military dimension (PMD) case.

Rouhani said former US president Donald Trump dishonored the agreement, adding: “It is unfortunate that some people accuse this administration of inefficacy rather than saying that the US and Trump committed crimes.”

Iran Ranked OPEC 4th Producer

Iran produced 2.393 mb/d of crude oil in April, becoming the 4th largest producer of the Organization of the Petroleum Exporting Countries (OPEC), an OPEC monthly report said.

The report said that all 13 OPEC member states produced 25.083 million barrels totally in April, up 26,000 barrels month-on-month.

Saudi Arabia produced 8.132 mb/d, Iraq 3.92 mb/d, and the United Arab Emirates (UAE) 2.614 mb/d in that month. Venezuela and Libya cut their output respectively 81,000 b/d and 67,000 b/d.

Iran Heavy Oil Price Down

Iran’s heavy crude oil traded 2% lower in April compared with that of March. It was registered at $63 in April, down from $64.3 the previous month.

The OPEC oil basket price was also down over 1% to $64.09 in April.

In its report, OPEC put global oil demand for 2021 at 96.46 mb/d up 6.58% year-on-year.

OPEC forecast global oil demand for Q1 2021 would stand at 93.29 mb/d, for Q2 at 94.79 mb/d, for Q3 at 97.09 mb/d and for Q4 at 99.74 mb/d.

OPEC and its partners agreed in April to increase production in May, June and July 350,000 b/d, 350,000 b/d and 450,000 b/d, respectively. Saudi Arabia will continue to voluntarily cut 1 mb/d from its output until July.

One Year On, Kazempour Ardebili Loss Still Felt

 Last year on April 17, Iran’s long-serving governor for OPEC Hossein Kazempour Ardebili passed away. A figure of international renown, he was a key official in Iran’s petroleum industry, not to mention his long background in political and economic sectors.

Owing to his long years of serving as Iran’s governor for OPEC, Kazempour Ardebili was instrumental in preserving Iran’s oil production quota within the Organization of the Petroleum Exporting Countries. Many experts believe that without his consultations, Iran could not reach such a position.

Ever since serving at the Ministry of Commerce until long years of service at the Petroleum Ministry; Kazempour Ardebili was dedicated to serving the nation. Thanks to his experience in the ministries of foreign affairs and petroleum, he had grown into a seasoned negotiator who won praise from peers. The architect of Iran's oil diplomacy, internationally renowned petroleum industry figure, lobbying diplomat and anti-sanctions combatant were just some of titles given to him in national and international media.

To honor Kazempour Ardebili, "Iran Petroleum" has conducted interviews with Foreign Minister Mohammad Javad Zarif and Deputy Minister of Petroleum for International Affairs and Trade Amir-Hossein Zamani-Nia.

Qualified Diplomat

Minister Zarif is among Iranian officials well familiar with Kazempour Ardebili. Zarif said Kazempour Ardebili was a fully qualified diplomat, noting that the resistance exercised by Petroleum Minister Bijan Zangeneh and Kazempour in favor of Iran’s OPEC quota was highly commendable.

“Kazempour was not only an oil diplomat. He was also a competent economic diplomat. He was also a security and political diplomat. As far as security and political relations are concerned, Kazempour Ardebili had his ideas in wartime,’ he said.

“He served as deputy foreign minister for international affairs. He revived Iran’s economic ties with Japan. He attracted unique facilities from Japan. His political contacts with various people were very important. When he was in Japan, he had established communications with then director general of Japan’s foreign ministry. He was successful in tough political issues. He generously shared his ideas with us and he was helpful. He was well informed of restrictions to negotiators. Some are accustomed to sitting outside and just giving orders. But Kazempour was first and foremost a negotiator and therefore he offered very reasonable proposals. He knew what is possible and what is not in talks.”

Respecting Frameworks

Regarding implementation of instructions by Kazempour, Zarif said: “As Iran’s ambassador to Japan, deputy foreign minister for economic and international affairs, Iran's governor for OPEC and deputy minister of petroleum, Kazempour acted within frameworks set for him. But when he returned to Tehran and wanted to write reports, he spoke openly about problems even though it would have not favored him in person. He was outspoken in expressing his own weaknesses. I believe that rather than being in need of specialized manpower in our country, we need courageous ones. An outstanding feature of Hossein Kazempour Ardebili was that he did not seek his own serenity. All those who liked him was because of his free-spirited nature.”

JCPOA, OPEC

Zarif also turned to Kazempour Ardebili’s role in the talks leading to the 2015 nuclear deal, officially termed the Joint Comprehensive Plan of Action (JCPOA).

“The Petroleum Ministry made maximum use of the JCPOA and that is commendable. That was thanks to the management of Mr. Zangeneh in person and such qualified figures as Hossein Kazempour. Iran’s oil production level was raised to more than pre-sanctions levels,” he said.

Zarif said that after the JCPOA was implemented, National Iranian Oil Company (NIOC) and such persons as Zangeneh and Kazempour did their best without offering any pretexts. In some cases, they hit obstacles. For instance, numerous agreements could be signed, but they faced domestic opposition. “However, we did our best to make maximum benefit from that opportunity. Of course, we could have benefited further,” he said.

Courage, Frankness and Futurism

                    Zamani-Nia also knows Kazempour as they both served at Iran’s Foreign Ministry. He said that Kazempour was instrumental in creating international consensus, saying he is always remembered as an honorable man at international forums.

“I learned my first lesson in multilateral and international talks from Kazempour. I also learned from him at the Petroleum Ministry. I had no knowledge of oil. He was like my mentor. That is just the appearance. More significant than that, was Kazempour’s mentality of sharing everything with others. Courage, frankness, smartness and futurism were enshrined in Kazempour. He was courageous enough,’ he said.

“Kazempour always expressed his views clearly. He was very courageous and frank. He was better placed than his peers at the Ministry of Foreign Affairs and Ministry of Petroleum. He knew how to strike a balance between his professional and private life,” he said.

Kazempour and JCPOA

Referring to Kazempour’s involvement with JCPOA talks, he said: “Kazempour and Zarif were close friends. Kazempour was not directly involved with the JCPOA talks, but he told Mr. Zarif whatever he had in mind and he exchanged views with him. They listened to each other and made necessary planning. Zarif and Kazempour were in contact in the run-up to the JCPOA.”

“The JCPOA was a turning point in the political history of Iran. Iran’s oil sector was the main beneficiary of the JCPOA. Foreign delegates from Asian and European nations flooded Iran. We drew maximum benefit from the JCPOA in the oil sector. We regained our lost market share twice. We had started development work and attraction of foreign investors but due to the IPC and the hawks in Iran, everything lingered on,” he said.

Talks for Saving Iran Share

Zamani-Nia said: “Kazempour was helpful in various sectors. His contribution to the revival of Iran’s share in OPEC was marked. That was achieved following talks with fellow member states in order to preserve Iran’s share in OPEC. When [US] sanctions were back in place, OPEC was to cut shares in a bid to strike a balance in the oil price, but Kazempour resisted and Iran’s oil production was set at the highest figure we had reached after the [1979 Islamic] Revolution. That was not just Kazempour’s smartness; rather, he was internationally famous among peers.”

Consensus-Maker

Building consensus in international forums was another outstanding feature of Kazempour, said Zamani-Nia.   

He said Kazempour was always quick in establishing contracts with others. “Within five minutes, he broke all ice and entered friendly ties. His ties were always strong.”

He was a famous oil diplomat because working at international energy forums has a diplomatic nature, he said.

“A diplomat has to safeguard national interests, but others should be also convinced about their own interests. Consensus should be built. Who can do so? That is multilateral diplomacy. Therefore, Kazempour is well described as an oil diplomat,” said Zamani-Nia.

“A diplomat should by no means be infuriated. If you get angry during multilateral talks you’ll lose. Kazempour was always smiling and he knew how to develop and implement ideas,” he said.

“He was in close contact with Prince Abdul Aziz, but he knew how to deal with him in favor of national interests,” he said.

Zamani-Nia said Kazempour always kept his friendly ties with others despite conflict of national interests with his peers from fellow OPEC member states.

KEPCO Plans Fleet Renovation

 Ali Osouli, CEO of Khazar Exploration and Production Company (KEPCO), has announced widespread planning for the renovation of the maritime fleet of the company. He said that the plan involves the Iran Amir-Kabir semi-submersible platform and Caspian vessels.

The maritime fleet of KEPCO, which became operational in 2009, includes one semi-submersible platform known as Iran Amir-Kabir and three support vessels known as Caspian vessels. Ever since becoming operational, certified domestic companies have conducted regular annual inspections on the KEPCO fleet.

“As far as Caspian vessels are concerned, necessary certificates have been renewed three times. Following the last round of inspection by Ports and Maritime Organization (PMO) and the (DNV) classification society, KEPCO is required to conduct underwater reparations,” he said.

“Regarding Caspian 1 and Caspian 2 vessels, inspection for issuing certificate was conducted up to March 2018 by applying alternative methods. After that, based on PMO requirements, renewal of certificate for vessels would be possible after reparation of the hull and equipment under water,” he added.

Certificate a Must

Osouli touched on the necessity of conducting such inspections, saying: “Without renewing certificate for vessels, they cannot operate in the Caspian Sea. Nor is it possible to support Platform Iran Amir-Kabir.”

“In fact, Caspian 1 and Caspian 2 vessels are needed for any displacement and support of platforms. Without them, any operation would hit snags,” he said.

Based on regulations set by the International Maritime Organization (IMO) and classification societies, maritime vessels are inspected within specific periods of time. Special inspection is also carried out for renewal of certificates for vessels. That may be done after overhaul at the discretion of the classification society. That is in addition to annual inspection of vessels.

16 Subsystems Overhauled

Regarding the latest situation of Iran Amir-Kabir, Osouli said: “The Iran Amir-Kabir semisubmersible platform has been also inspected by several renowned companies. Some activities like replacement of equipment, upgrading the anti-corrosion system on the platform structure are needed. Such activities have been designed and carried out under water. The machinery and equipment of the platform have been prepared based on the recommendations of the manufacturer and the functionality of equipment in offshore drilling, controls, seawater cooling, safety, environment, painting and so on.”

According to him, planning and overhaul of equipment on each drilling platform – whether onshore or offshore – would require necessary readiness for the future objectives of the functionality of platforms. To that effect, overhaul and commodity supply of 16 subsystems has been envisaged. These foreign-made systems have been overhauled fully by domestic entities. They are dismounted, serviced and assembled based on international standards.

Noting that there are some challenges in the engineering, procurement and implementation sectors and given the uniqueness of some equipment, he said access to services was a major challenge.

Platform Painting

Osouli said: “After nearly 11 years since this unique platform, which symbolizes the firmness and honor of Iran’s petroleum industry in the Caspian Sea, and in light of operations carried out by this structure over recent years, based on expert inspections and visits, it was concluded that in a bid to prevent excessive rusting and corrosion, platforms needed fundamental painting. The contractor was notified of painting in an agreement signed last August.”

Overhaul of Platform Residence

Osouli also touched on changes in the residential atmosphere of the platform, saying: “After KEPCO’s technical experts studied the circumstances, the conditions were assessed as unsuitable for living because of no overhaul during 11 years, installation of the platform at different drilling locations, settlement of various contractors and depreciation of piping systems. Therefore, necessary measures were taken for reparation.”

Overhaul of Generators

Osouli touched on 24,000 hours of overhaul on four generators of Iran Amir-Kabir Platform by relying on domestic experts, saying: “Since all equipment on the platform is directly or indirectly fed by electrical energy supplied by generators, this section has to be monitored regularly. In fact, the unfavorable conditions of the engines prioritized the process of their overhaul by KEPCO. A tender bid was held, and contractor was chosen.”

Upgrading Industrial Automation

He also referred to the overhaul of the industrial automation system of Iran Amir-Kabir, saying: “Since long time has passed since safety and firefighting equipment were installed, in a bid to protect standards and respect safety requirements of the platform and equipment, necessary action must be taken for renovating the equipment. For this purpose, necessary actions have been taken to choose an experienced Iranian contractor.”

Subsea Equipment

Osouli also referred to the latest overhaul measures carried out on subsea equipment of Iran Amir-Kabir, saying: “The last test was conducted in 2014.”

He said that due to no drilling since that date, equipment has been just occasionally overhauled.

“Due to budget limitations, overhaul has been based on verification based on standard tests and minimizing necessary repair and spare parts. KEPCO engineers have handled this task effectively to prevent any imposition of financial burden on the company,” he added.

Osouli expressed hope that after undergoing overhaul and renovation, KEPO would be ready to carry out drilling in the Caspian Sea this year.

NISOC Set to Produce More Than Pre-Sanctions Period

Iran’s petroleum minister, Bijan Zangeneh, said even when the US reimposed oil sanctions on Iran in 2018 Iran would be quickly returning to pre-sanctions levels as soon as they are lifted. Such remarks by Zangeneh might have plunged into doubt were it not for the period following the 2015 Iran nuclear deal with six world powers. But Zangeneh’s long experience in the Petroleum Ministry and his knowledge of the petroleum industry and the international oil market has convinced the oil market and analysts that Iran would be ready to restore its oil production to pre-sanctions levels and lift its exports as soon as ongoing nuclear talks in Vienna come to fruition, so that the Biden Administration would lift sanctions.

Ahmad Mohammadi, CEO of National Iranian South Oil Company (NISOC) said the company was ready to lift its output to figures higher than that of pre-sanctions levels in 2018. It means NISOC is fully ready for comeback to the oil market.

In 2018, Donald Trump, then US president unilaterally quit the Iran nuclear deal and reinstated sanctions on Iran’s petroleum industry in a bid to zero Iran’s oil exports. But Iran turned to petroleum products while selling oil after its traditional buyers stopped buying for fear of US penalties.

JCPOA Experience

US sanctions reduced Iran’s oil production, but National Iranian Oil Company (NIOC) used the experience it had gained prior to the JCPOA to renovate installations with a view to getting ready to return to higher oil output, as soon as sanctions are lifted.

NISOC, whose production capacity stands at more than 3 million barrels, may supply 80% of Iran’s oil output. It would be instrumental in bringing Iran’s output back to the 2018 levels.

Mohammadi said NISOC’s five subsidiaries – Karoun Oil and Gas Production Company, Maroun Oil and Gas Production Company, Aghajari Oil and Gas Production Company, Gachsaran Oil and Gas Production Company and Masjed Soleiman Oil and Gas Production Company have been instructed to make arrangements for raising output. “As soon as sanctions are lifted to allow for increased oil exports, production will increase,” he said.

Mohammadi said during instructed production cut, the condition of wells, reservoirs and installations of NISOC are constantly monitored and necessary arrangements are made for increasing production capacity.

NISOC has already experienced quick return to the oil market after the JCPOA was implemented.

In August 2017, NISOC’s then CEO, Bijan Alipour, said arrangements had been made in 2014 and 2015 for maximum crude oil production in the post-sanctions period. NISOC had officially promoted a plan titled “Maintaining Readiness for Post-Sanctions Maximum Production”, covering about 400,000 square kilometers in five provinces. Under this plan, specialized technical operations including overhaul and renovation of installations and pipes, extensive downhole operations as well as techno-engineering tests were carried out. Therefore, NISOC became ready to resume production as soon as it receives notice of sanctions removal. It maximized its production shortly after the JCPOA deal became operational.

Oil Exports

Iran has not officially announced its oil production and exports rates. All eyes are turned to Iran’s return to the oil market. 

U.S. bank Goldman Sachs said it expected the biggest jump in oil demand in history at 5.2 mb/d over the next six months, as vaccination campaigns accelerate in Europe and travel demand climbs. Goldman Sachs said easing international travel restrictions in May would boost jet fuel demand by 1.5 mb/d.

Naturally, Iran would be prepared to join this market. By reviewing Iran’s crude oil and gas condensate exports before and after the JCPOA, one can be assured that Iran’s maximum oil output would be possible in the shortest possible time.

In 2011, Iran was exporting 2.487 mb/d of crude oil and gas condensate, which dropped to 1.361 mb/d a year later. In 2013, the figure stood at 1.284 mb/d. In 2015 when the JCPOA was signed, Iran was exporting 1.398 mb/d. Iran’s oil and condensate exports fell to below 1mb/d in the months leading to the JCPOA. But as soon as the JCPOA was implemented in 2016, Iran’s oil and condensate exports averaged 2.559 mb/d in 2017.

Iran’s revival of oil market share, which is described as the quickest return, happened at that time. Iran’s oil and condensate exports hit 3.8 mb/d in June 2016. In 2017, Iran’s oil and condensate production increased 77 million barrels. Such quick return to the world oil market and revival of market share could not materialize without Petroleum Ministry’s active diplomacy.

In 2017, Iran was exporting 2.13 mb/d of oil, 62% of which was destined to Asia and 38% to Europe. The country’s condensate exports totaled 180 million barrels in 2017. Oil and condensate earned Iran $41 billion in 2016. Comparing Iran’s 3.72 mb/d production in the final months of 2016 with production levels in early 2016 shows that Iran had increased its crude oil production 20% during the 12-month period.

With 10% of global oil reserves, Iran is the fourth largest holder of crude oil in the world. But due to various reasons including cutting edge technology shortcomings, less than 20% of its reserves has been tapped. Furthermore, production from oil reserves across Iran has been done through their natural pressure over the past four decades, and today, downhole pumps are used for that purpose.

As soon as sanctions are lifted, negotiations will start with potential investors with a view to maximizing output.

Esfand Oil Output Up

 The planned production hike from Persian Gulf offshore oil fields has always been among the priorities of National Iranian Oil Company (NIOC). Production from one well in the Esfand oil field has started at the rate of 2,000 b/d. In this report, the increased oil reserves in the Persian Gulf with the focusing on enhanced output from the Esfand field, has been reviewed.

As per policies adopted by Petroleum Ministry and NIOC on defining fast-track projects for reservoir studies, the Iranian Offshore Oil Company (IOOC) moved to assign studies on the four oil fields of Hendijan, Bahregansar, Abuzar and Norouz in March 2020. That led to a 740-million-barrel increase in the in-place oil reserves of the four Persian Gulf oil fields. Ali Khajavi, IOOC technical director, said the four oil fields were now estimated to hold 9.9 billion barrels of oil in place.

Recoverable Reserves Worth $10bn

Khajavi said reservoir studies were conducted within 9 months with a monthly progress of 11%, adding that they were carried out jointly by IOOC and Iranian companies.

“Based on the production projection scenarios, total recoverable oil in the four fields had increased 217 million barrels. With oil price at $45 a barrel, offshore oil fields are now worth roughly $10 billion more,” he added.

Khajavi said that master development plan (MDP) studies were the most significant instrument for production optimization, choosing the suitable way of developing reservoirs and finally enhancing recovery from hydrocarbon reservoirs. MDP studies normally involve seismic data processing and interpretation, basic geological studies, static modelling, basic reservoirs engineering studies, compliance of history and development of dynamic simulation model, compilation and implementation of production scenarios and finally full economic studies and adoption of optimal and comprehensive plan for reservoir development.

Based on past experience, all activities would need time varying between 2.5 and 4 years. In many cases, particularly developed reservoirs currently in the second half of their production life, due to deep changes in the production conditions of the reservoir and well and surface production conditions, it would take three to four years to conduct studies and therefore they would lose their expected efficiency and effectiveness. It is then essential to define fast-track projects and conduct MDP with a view to reducing the timing of studies and adoption of development plans to below one year at much lower costs.

Esfand Development Accelerates

Along with production hike plans at NIOC, some plans are under way to develop oil fields in the Persian Gulf. The Esfand oil field is a case in point.

Ali-Reza Salmanzadeh, CEO of IOOC, said that the company’s four contract packages on this project had been finalized.

He said that completion of this project would add 16,000 b/d to Siri oil output.

Salmanzadeh highlighted the successful conclusion of fast-track reservoir studies at IOOC, leading to increased proven deposits in the Persian Gulf.

The four IOOC packages – pertaining to Sivand, Esfand, Resalat, Forouzan and Reshadat – are among a total 33 packages envisaged by NIOC.

Output Hike from Esfand

The Esfand oil field is located 18km southeast of Siri Island in the Persian Gulf. Discovered in 1969, the field came online in 1970. It currently incorporates five offshore platforms – three well platforms, one production platform and one flare platform.

The field contains 29 production and injection wells. Platform Ilam is established on this field. The main platform is connected via an 80-meter bridge to Platform Ilam 1 and Platform Ilam 2 are 3km and 3.2km, respectively far from the main platform.

These platforms were built in 1998 by Total. In the Esfand field, four production wells are located in Platform Ilam 1, while six water injection wells are operating. Furthermore, three production wells are operational on Platform Ilam 2 and five production wells along with three injection wells are operational on Platform Ilam 3.

Esfand field also produces gas, which is used to feed Siri Island before being transferred to Kish Island. The power plants in Kish Island are fed with this gas. It is also possible to pump gas to Qeshm Island.

Oil is carried in a 16-inch pipeline, and gas in an 18-inch pipeline to Siri Island. Another 16-inch pipeline is used for supplying water from Siri Island to platforms.

EPDF Project

Hamid-Reza Saqafi, CEO of Drilling Company International (DCI), said DCI was the contractor of the EPDF (engineering, production, development, finance) project for Siri, had installed the offshore DCI-1 drilling rig in Platform Ilam 1. He said that Iranian contractors and engineers had for the first time installed threaded pipes 150 meters deep, facilitating drilling of SIE-E1P6 well in this platform.

Despite some restrictions like supplying foreign-made products like coiled tubing and chromed liners and restrictions in benefiting from the drilling services of foreign contractors, by relying on management knowhow and capacity, engineering staff, DCI’s drilling manpower, knowledge and experience of local contractors for supplying commodities and technical services, necessary measures for continuation of work like designing and building agitator for the drilling rig’s fluid system were undertaken for the completion of SIE-E1P6 well.

“SIE-E1P6 is producing 2,000 b/d of oil,” he said.

“Given the use of optimal design and best equipment and services currently available at this well and the production depth of 942 meters, this well can provide the highest production for IOOC, when compared to 467-meter E1P5,” he said.

Golden Year for ICOFC in Oil/Gas Output Hike

 Iranian Central Oil Fields Company (ICOFC), a subsidiary of National Iranian Oil Company (NIOC), fulfilled entirely its obligations in maximum efficient recovery and maximum oil and gas production last calendar year to 21 March 2021. ICOFC had prioritized oil and gas fields shared with neighbors and supplying domestic needs in the household and industrial sectors. ICOFC’s activities indicate the company’s full readiness to increase output to pre-sanctions levels.

The following is a review of the most important achievements of ICOFC and introduces its development plans for the current calendar year.

Oil Fields Development

Khesht oil field development plan for enhancing oil output for delivery to Genaveh for exports was among the ICOFC’s plans last calendar year. To that effect, building a gas compressor station in Cheshmeh Khosh for gathering associated gas released from the West Paydar oil field (Asmari) for injection into the Cheshmeh Khosh field for enhanced recovery or delivery to the NGL 3100 plant to produce high-value condensate, building gas compressor station to gather associated gas in West Paydar (Bangestan), East Paydar, Dalpari and Aban to be injected into Cheshmeh Khosh with a view to enhancing recovery or delivering to the NGL 3100 plant for high-value condensate recovery are among other development projects currently under way to enhance production from the said oil fields.

From Storage to Compressor Station

Along with enhanced oil recovery projects, ICOFC carried out some gas projects. All these activities show ICOFC’s firm determination to raise gas output sustainably. Gas storage in Shourijeh D, development of the second phase of the Dalan refinery (Farashband) with a view to developing the facility to process the gas supplied by the Aghar field, second phase development of the Tang Bijar gas field, building a gas compressor station in Kangan, construction of compressor station at the Naar field for gathering gas, and establishment of the Dehloran gas compressor station for maximum recovery from this field and preventing the flaring of 82 mcf/d of associated gas are among these projects. Currently, development of 13 new gas fields and construction of two gas compressor stations with an investment of about $3.5 billion top the company's agenda.

3 New Wells Drilled

In a bid to sustain and enhance production, 16,468 meters of oil and gas well drilling was carried out last calendar year. Implemented using 6 rigs, the drillings included three new wells and one workover oil well. Furthermore, eight workover gas wells are among other activities in the drilling sector.

Sustainable Gas Supply

By the end of last calendar year ( 20March 2021), in order to guarantee winter fuel supply in cold seasons in six northern and northeastern provinces and feed the national gas trunkline, 1,856 mcm of gas was injected and stored in the Shourijeh storage site and 1,014 mcm in the Sarajeh storage site. Furthermore, gas supply by these two storage sites included 930 mcm from Sarajeh and 2,005 mcm from Shourijeh D.

Seismic Testing

The largest and the most sophisticated 2D and 3D seismic survey operations were conducted in the petroleum industry in the final months of last calendar year. Currently, 3D seismic testing is under way in the Tang Bijar and Delavaran fields, covering 560 square kilometers. Moreover, 2D seismic testing in the Baba Qir and Bankol fields in Ilam Province has been conducted on an area of over 800 kilometers. Seismic testing has created more than 550 jobs. The seismic testing operations have cost IRR 1,059 billion plus €39 million.

EPCF/EPDF Field Development

Three agreements struck between ICOFC and three Iranian companies, worth IRR 16,000 billion for adding 17,000 b/d to oil output in ICOFC-run areas has become operational. The agreements are aimed at enhancing oil production in the provinces of Ilam, Kermanshah and Fars, which would create jobs for 2,630 persons, enhance oil production and make business prosperous for Iranian manufacturers and suppliers. These projects will be implemented over a two-year period. They involve the Danan, Saadatabad and Naftshahr fields. Geophysical activities are being monitored in coincidence with drilling operation.

Dehloran Gas Compressor

In light of the imminent launch of the NGL 3100 plant in the Cheshmeh Khosh area, feeding associated

gas from the Dehloran and Danan fields into the NGL 3100 plant would become possible. Then, after going through processing, gas liquids would be separated to be partly injected into oil wells for enhanced recovery and into the national gas network for sweetening. For this reason and for the purposes of gathering associated gas from Dehloran and Danan fields, construction of the Dehloran gas compressor station was envisaged. The contractor is currently making arrangements for the project, carrying out engineering and development activities and making preparations for commodity purchase.

Gas Compressors in Fars Province

Homa, Varavi and Tabnak fields in Fars Province sustainably feed the Parsian 1 and Parsian 2 refineries – both key gas refineries in terms of the refining capacity and gas supply. A review of history of pressure fall-off in Homa and Varavi fields signals significant pressure fall-off over coming five years.

Negotiations started with an Iranian company as investor in ethane recovery (Parsian Sepehr refinery) in the downstream sectors of the Parsian 1 and 2 refineries. Agreement was signed to that effect, and the contractor is currently preparing the location of the project and making arrangements for engineering and development.

Gas Compressor Station Rearrangement

The Naar field gas production capacity stands at about 18 mcm/d with an about 3,000 b/d gas condensate production capacity. The gas produced by this field is dispatched to the Fajr Jam refinery through 24 and 30-inch-diameter pipes, while gas condensate would be delivered in 6-inch pipes.

Production hike is envisaged from Naar field. That would be realized through rearranging gas compressors. Studies are under way to see if Iranian companies would be able to handle this project.

Kangan Gas Compressor

According to surface and subsurface studies, the only effective factor in enhanced gas recovery from Kangan field is to establish gas compressor stations, which would enhance the recovery rate to 82%. Meanwhile, production would go on with a flow rate of 30 mcm/d in warm months and 40 mcm/d in cold months. That would go on for 10 years. For this purpose, using 25MW turbocompressors was envisaged for the Kangan gas compressor station.

Gas Gathering Auctioned Off

In a bid to prevent flaring associated gas, and to reduce harmful environmental impacts and generate value-added from these resources and also create investment and business opportunities, ICOFC has undertaken necessary measures to sell flare gas from Sarvestan and Saadatabad, Naftshahr/ Sumar and Cheshmeh Khosh fields through holding auction bids. Arrangements are also under way for the sales of gas from Khesht field. The gas envisaged to be sold from these fields roughly totals 93 mcf/d.

Research Projects

ICOFC lays emphasis on the necessity of optimal use of existing potential at universities and cooperation with scientific and academic centers in the country, particularly knowledge-based companies, to push ahead with research objectives and implement two field-oriented researches including Tang Bijar and Baba Qir and Saman and Bankol as its satellite fields and Khesht field. Meanwhile, carrying out research and technological studies to develop technical knowhow for the optimization of production processes and enhancement of the recovery rate in the Khesht field are under way.

So far, ICOFC has endorsed 77 research projects, 72 of which are finished and 5 research projects are under way in partnership with universities and research centers. Last calendar year, the company also put out to tender comprehensive studies on the Tabnak, Shanol, Varavi, Aghar and Dalan gas fields; as well as the Naftshahr, Sarvestan and Saadatabad oil fields within the framework of five packages with a view to determining reservoir specifications, constructing surface and subsurface models, forecasting the performance of the field, making economic calculations and presenting a plan for development and enhancement of recovery.

Crash Plan for Development

In execution of sustainable feedstock supply to gas refineries and in a bid to safeguard gas production and consumption balance, a crash plan has been approved by the NIOC Board of Directors for the development of ICOFC-run fields in the provinces of Fars, Bushehr, Hormuzgan, Kermanshah and Khorasan Razavi.

The projects include development and preservation of gas production from the Dey, Sefid Zakhour, Halegan, Sefid Baghoun, Khar Tang, Gerdan, Madar, Eram, Pazan, Toos, Baba Qir, Bistoun fields, the second phase of the Aghar field and development of the Farashband gas refinery and construction of gas compressor station for the Sarkhoun and Shanol fields. Throughout this project, 121 wells would be drilled or worked over, 2D and 3D seismic testing would be carried out, line pipes and processing installations would be installed. That would allow for the maximum recovery of 142 mcm/d of gas and 100,000 b/d of condensate.

Kharg Oil Storage Capacity Grows

 Over the past decades, Iran has been a leading supplier of oil in the world. It has maintained its presence in international markets and has met its obligations based on quotas set by the Organization of the Petroleum Exporting Countries (OPEC). Although international sanctions have brought about obstacles ahead of achieving its goals, nothing has halted Iran’s crude oil exports to global markets. A review of existing infrastructure in Iran’s petroleum industry, specifically in oil exports, indicates that Iran’s oil exports has regularly and constantly got under way, from production to logistics.

The present report focuses on the activities Iranian Oil Terminals Company (IOTC), highlighting its main activities pertaining to exports and production.

Despite widespread challenges and bottlenecks caused partly by the coronavirus pandemic and international developments pertaining to the petroleum industry and IOTC’s domain of activity, IOTC has benefited from effective and continuous support of Petroleum Ministry and National Iranian Oil Company (NIOC) to accomplish the mission assigned to it in the sectors of crude oil and gas condensate storage and exports in full safety, on time and in compliance with Quality, Health, Safety, Environment (QHSE) obligations and standards.

Nonstop Exports

IOTC is mainly tasked with crude oil storage and exports, and highly contributes to raising foreign currency for the country. Carrying out this task safely, sustainably and with minimum cost has been a major objective sought by this company. Significant activities have taken place to that end, including laying infrastructure at the Kharg oil terminal to receive and store condensate in support of sustainable gas production, exporting crude oil and gas condense based on NIOC policy and figures set by relevant organs without any disruption, and increasing the crude oil storage capacity in the Kharg area by 3 million barrels. This issue has been always taken into consideration for vacating the need for renting any tanker to store oil, which would save on costs.

Meanwhile, offloading gas condensate by using single-point mooring (SPM) in Assaluyeh for the first time in the country and repairing crude oil pipelines using domestic facilities and saving significantly on costs, are among other measures taken to that effect.

Although over the past three years Iran’s petroleum industry has experienced unprecedented sanctions, driving oil exports down, the necessary infrastructure for boosting oil storage has not come to any halt. Therefore, necessary measures were undertaken to increase crude oil storage in the country.

Abbas Assadrouz, CEO of IOTC, has said that following the operation of 45 storage tanks and risk management in Kharg, the crude oil storage capacity has increased by 1 million barrels.

He said this goal was achieved while Iran was under sanctions and the petroleum industry has to respect covid-19 restrictions. “That had doubled our difficulties, but we desperately needed to increase our oil storage capacity. That saved us hard currency as hiring oil tankers would cost too much,” he added.

Continued Oil Flow

Assadrouz touched on the mission assigned to IOTC, saying: “The mission assigned to IOTC has been to assist in continued oil and gas production and constant flow of oil exports. IOTC’s output would be to generate hard currency to finance other activities in the country.”

He said IOTC accomplished its mission of safe storage of crude oil and condensate last calendar year, adding: “In fact, the flow of oil exports continued and never stopped.”  

Assadrouz said the success achieved over the past one year was the result of capability, endeavor and commitment of IOTC staff and NIOC’s effective support.

“Last [calendar] year we achieved significant success, some of which are increasing crude oil and gas condensate storage capacity, continued crude oil and condensate exports under difficult conditions, management, storage and export of condensate and products from the Kharg terminal and Assaluyeh for the purpose of supporting sustainable gas production,” he added.

Assadrouz also laid emphasis on preparing infrastructure and making necessary plans in order to urgently increase crude oil exports capacity based on NIOC plans in the current calendar year. “In light of the general policies of the [Islamic] establishment and the petroleum industry in completing the oil pipeline stretching from Goreh to Jask, operations for measuring and exporting crude oil from the Jask oil terminal would be another priority of the company,” he said.

He said that overhaul of the western jetty of Kharg would be another important project envisaged for the current calendar year. “The western jetty of the Kharg oil terminal, which is the largest crude oil export jetty in Iran, can accommodate the largest oil tankers in the world. In this project, in addition to structural renovation, decrepit equipment in the safety sector will be replaced.”

Domestic Manufacturing

The task assigned to IOTC at the national level is unique and no other country is as much active. In light of technological needs and against the backdrop of sanctions on the country, IOTC is required to focus on the supply of commodities and meeting needs in this sector. With such a vision, IOTC has always been a top research entity at the NIOC level and it has managed to conduct key logistics work by relying on domestic knowhow and potential.

One of these projects is the design and manufacturing of the loading arm and operation of a berth in the eastern jetty, which is unique in the country. This loading arm has already been installed and helped carry out more than ten operations. Construction of this arm has cut dependence on foreign companies, saved Iran hard currency and created jobs for educated persons. Its design and manufacturing has been a novelty, and technology transfer has been done in the real sense of the world. Its features include easy maintenance and dual-purpose functionality (loading and, if need be, unloading).

Assadrouz touched on the domestic manufacturing of 309 items, saying: “These items used to be supplied only from abroad by spending hard currency. Now their domestic manufacturing has removed many obstacles and problems.”

He said that most of these commodities were used for technical purposes. “In some cases, due to their monopolized manufacturing and sanctions imposed on them, we hit serious problems.”

“Furthermore, domestic manufacturing of these commodities saved the country about IRR 100 billion. Designing and building electric actuators of industrial valves and snap ring for the crude oil

loading arms are some examples.”

He also announced designing and manufacturing of electronic cards for metering system in Kharg and Assaluyeh, saying: “These cards were in fact the heart of the metering system. It was impossible to buy them from abroad and in case of no domestic manufacturing serious problems would be created in this key sector.”

Physical Assets Management

Each industry is required to handle timely maintenance. Speaking about just maintenance belongs to the past. Over recent years, in light of the inclusiveness of the issue and involvement of financial issues, technical inspection, commodity supply and human resources, the issue is discussed under the title of management of physical assets. A variety of activities has been carried out in this sector. Some of them are designing a code for management of physical assets for the first time at NIOC and following up on its implementation, proposing combination of several key projects including emptying pipelines leading to SPM, inspection of pipelines, pigging of subsea pipes, determining outputs for the physical assets management code, conducting corrosion management project for the first time as the Petroleum Ministry pilot in partnership with the Office of Deputy Minister for Corporate Planning, activating numerous projects for physical assets management including purchase, installation and operation of diesel generator, electronic protection in Kharg Island, supply of hoses for SPMs, supply of necessary valves, overhaul of 160 key equipment in jetties, pipelines, reservoirs and power plants, identifying, assessing and risk management of physical assets for continued operation are among the most important plans which Assadrouz highlighted with regard to management of physical assets.

Quality and Productivity

Assadrouz said all activities of IOTC had been designed based on the vision plan sketched out for the company. He said they were being followed up on with regard to the general and specific objectives. The general objectives include enhanced quality and sustainable productivity, increased creativity and sustainable innovation, and enhanced quality of life for the staff. Special objectives include enhanced sustainability, agility and resilience in the IOTC operation, increasing the level of satisfaction of key stakeholders, upgrading the system of physical assets, regular improvement of performance and excellence of IOTC’s operation.

Therefore, by focusing on these objectives and relying on committed and specialized human capital, as well as scientific and sympathetic management, acceptable performance has been experienced in the oil terminals sector in the past one year.

Golden Chapter

Assadrouz said one equipment largely needed in vessels had been manufactured by IOTC and knowledge-based companies.

“Relying on the capability of staff at IOTC and knowledge-based companies, and overcoming obstacles and preparing the ground for the blossoming of knowhow and specialty opened a new golden chapter to further show that unjust sanctions have been overcome and that the petroleum industry needs have been met by domestic specialists,” he said.

“The specialized operation of berthing and separation at the company are being done based on the latest international standards as a mission assigned by Petroleum Ministry and NIOC,” said Assadrouz. He added that an IOTC-owned vessel used in berthing oil tankers and fighting fire and providing other marine services, has been phased out due to problems in the speed control system.

“This ASD vessel had a Z/P propulsion system, which is the latest system in tugboats in the world. It has been developed by Japanese companies,” he said.

Assadrouz said supplying such equipment would be impossible due to unjust international sanctions, adding that no positive response had been received from foreign companies due to unjust sanctions. He noted that since the vessel was out of service, it imposed heavy renting costs.

“Technicians from the directorates of operations, logistics and commodity affairs, in cooperation with a knowledge-based company, found faults and conducted reverse engineering on the control system and electronic circuits and developed the idea for designing the soft drive to control the engine fluctuations,” he said.

Assadrouz: “That saved us heavy costs spent on reparation. Furthermore, daily renting costs were added to the saved costs, which totally saved more than IRR 20 billion.”

IOOC Oil Output Capacity Doubles yr/yr

 Iranian Offshore Oil Company (IOOC) accounts for a major share of oil recovery from Iranian oil fields in the Persian Gulf. Last calendar year, despite all hardships and restrictions, valuable measures were taken to preserve production level from joint fields, to overhaul installations and to save costs.

The entities in charge of offshore oil industry in Iran are making their best to prevent a fall-off in oil production through maximum efficient recovery from oil and gas fields, particularly joint fields, despite tough US sanctions. Over the past two years, IOOC has preserved production levels against the backdrop of the US sanctions following its 2018 withdrawal from the Joint Comprehensive Plan of Action (JCPOA). The US sanctions are still effective; however, oil production companies in Iran have effectively managed such conditions.

IOOC holds nearly 100 billion barrels of oil and 180 tcf of gas in place. With a crude oil storage capacity of more than 27 million barrels, IOOC is the leading company in offshore oil production in the Persian Gulf.

Last calendar year, IOOC saw its production capacity double. The company was 117% ahead of plans. During the first half of the calendar year, more than 32 drilling operations were concluded.

IOOC owns a full crude oil exploration, production and export chain. It may be the only oil production company in the country to handle crude oil exploration for export by relying on its own capabilities which include 202 offshore platforms and structures (29 big production platforms), 13 onshore plants, two single-point moorings, three oil export jetties, one jetty for exporting gas products, a modern and giant floating terminal in the Persian Gulf with a storage capacity of over 2.2 mb/d of crude oil, and several thousand kilometers of crude oil pipeline.

IOOC supplies oil with various quality levels, ranging from the API gravity of 19 in the Soroush/Norouz fields to 45 in the Hengam field. The result of this wide range of oil production is the supply of six various classes of oil for export, out of a total eight. IOOC has attracted a board spectrum of buyers.

Last calendar year, new agreements were finalized for studying reservoirs. Significant steps were taken for first-time recovery and hiring knowledge-based companies.

Renovation

Installation of Platform S1 in Salman field, renovation and temporary delivery of Platform Nasr 2, continued renovation of Platforms Nasr 1 and Nasr 3 simultaneously, renovation of four K-class platforms in the Doroud field in the structure, pipe-laying and painting sectors have been under way. Meanwhile, with efforts made by Iranian experts and specialists, Platforms 07 and 08 of the Hendijan field have been installed over recent months in their locations in the Persian Gulf. These platforms would enhance the production capacity of the Bahregan center administered by IOOC.

Installation of a new 680-tonne residential platform in the Forouzan field is another IOOC measure. This residential platform, measuring 20 meters long and 14 meters wide, is a four-storey platform. That would furnish appropriate facilities for the staff on the production platform of the Forouzan field. By next March, platforms A20 and A21 of the Abuzar field would have been installed.

Environmental Activities

IOOC feels compelled to complying oil production activities with international conventions and protocols on the environment, maximum efficient recovery of oil and gas, enhanced recovery, improving production methods and preventing associated gas flaring. It has made valuable efforts during years of activity. It has reduced waste release in compliance with the Kuwait protocol, launched a giant gas gathering facility in the fields located in the Kharg, Bahregan and Siri areas.

With the commissioning of the 140 mcf/d Siri NGL project, as a major environmental project in the petroleum industry, gas flaring at IOOC-run fields would be reduced to zero, several thousand tonnes of pollutants would no longer be realized into the Persian Gulf, a variety of gas products including propane, butane, pentane and gas condensate valued at millions of dollars would be produced.

Since 2006, the Kish Power Plant has been fed with 25 mcf/d of gas supplied by the Kish operation zone and associated gas supplied from the fields located in the Siri zone. These measures have prevented the flaring of billions of cubic feet of gas and environmental pollution in addition to saving more than 266 million liters a year of gasoil in the island, thereby playing an instrumental role in the prosperity and blossoming of this coral island of the Persian Gulf. Meanwhile, IOOC’s gas delivery to the Kharg Petrochemical Plant stands at 140 mcf/d, which is converted into valuable products.

Regarding activities carried out in the HSE sector, Lavan F&G, Siri F&G and Salman Platform H2S system are cases in point.

Two Catalyst Production Projects Operational

 Two knowledge-based catalyst production projects – polypropylene and high-density polyethylene catalysts – have become operational using homegrown knowhow. The projects came online in a remotely participated-in ceremony by President Hassan Rouhani. These production units have been built by researchers at the Shazand branch of Petrochemical Research and Technology Company (PRTC) in Markazi Province. The equipment is totally domestically-manufactured. Iran’s petrochemical industry would no longer have to import these categories of catalysts. The $7 million PP catalyst production unit has an annual capacity of 12 tonnes a year, meeting 30% of the petrochemical industry’s needs. The HDPE catalyst has been launched with the CX technology and an investment of $3 million. With an annual production capacity of 20 tonnes, it would supply 25% of Iran’s petrochemical needs.

Catalysts are used as the heart of chemical processing units. The catalysts used in the petrochemical sector are valued at $270 million a year. Of a total 40 major catalysts used in the petrochemical industry, 19 have hitherto been manufactured domestically while 9 more would be manufactured by next March.

Lucrative Petchem

Addressing the ceremony President Rouhani said “During the economic war of the past three years, Iran’s petrochemical industry has managed to provide 90% of national currency needs.”

He said the petrochemical industry was a profitable sector in Iran, adding: “To implement one of the projects that was inaugurated today, $1 billion has been invested over four years, while revenue from this project stands $1 billion a year.”

Touching on the 25-million-tonne increase in the petrochemical production capacity over one year, he said: “The petroleum industry has been always brilliant in Iran’s history. Particularly the 2010s was the decade of progress, victory and jump in production and development.”

“Major work has been done in the petroleum industry over this decade, ranging from oil and gas exploration to finishing big projects in Assaluyeh, from the Goreh-Jask oil pipeline project to completing petrochemical plants like Persian Gulf Bid Boland and other projects from R&D to oil compressor manufacturing, from ending gas flares to gas supply to villages including gas supply to Sistan & Baluchestan Province,” he said.

Technology Growth in Petchem

Ali Pajoohan, CEO of PRTC, said: “As a subsidiary of National Petrochemical Company (NPC), PRTC is mainly tasked with developing technical knowhow to build petrochemical plants, produce catalysts and strategic materials for petrochemical plants. Thanks to prominent scientists and researchers working at the international level, this company has over recent years made significant achievements.”

He said PRTC in 2020 developed technical knowhow for HDPE for the Tabriz Petrochemical Plant with a capacity of 300,000 tonnes, technical knowhow for HDPE at the Bushehr Petrochemical Plant with a capacity of 400,000 tonnes, the Fateh propylene production unit with a capacity of 120,000 tonnes and above call, a 900,000-tonne plant for converting natural gas to PP, including a methanol, a propylene and a polypropylene plant, in the Eslamabad Gharb Petrochemical plant. He added that a PP output enhancement plant in southern Iran would be built with PRTC-developed technology.

Pajoohan said that some specific equipment used in the petrochemical plants would be built only if its technical knowhow becomes available in the country. He added that supply of some equipment should be decided only by licensors.

“By domestic manufacturing of these technologies, we will see a significant movement in the manufacturing of parts and equipment for the petrochemical industry,” he said.

He also said the two catalyst projects were inaugurated with a total investment of about IRR 2,700 billion.

“The HDPE catalyst project was built in one year and the PP catalyst one in two years,” said Pajoohan.

Refinery Project Operational

President Rouhani also inaugurated the Parsian Sepehr refinery project. This facility has capacity to produce 3.3 million tonnes a year of ethane, propane, butane and condensate with an investment of $1 billion. It would yield $1 billion in annual revenue.

The ethane recovery unit of Parsian Sepehr Refining Company is located in the city of Mehr in southern Fars Province. The ethane separation unit of the refinery is located in Assaluyeh in Bushehr Province.

Parviz Rahat, CEO of Tadbir Economic Development Group (TEDG), said: “The project started with government permission and upon proposal by Minister of Petroleum and endorsement of Executive Committee of Imam Khomeini’s instruction with the investment of Tadbir Energy Development Group. The first line of credit was opened in 2016.”

He said that construction of the Parsian Sepehr refinery began under tough sanctions in the country, adding that its tentative startup coincided with the maximum pressure campaign.

Petchem Feedstock at 1.3mt

Mahmoud Zirakchianzadeh, CEO of Parsian Sepehr Refining Company, said: “By inaugurating the Parsian Sepehr refining project, 1.3 million tonnes a year of ethane is annually supplied to olefin units at petrochemical plants.”

“Every day, 74 mcm of rich gas from Tabnak, Shanol, Varavi and Homa is treated at the Parsian refinery to be supplied to the Parsian Sepehr ethane recovery unit in Mehr (near Phase 3 of South Pars). With a 95% ethane recovery capacity, the plant has the highest purity,” he said.

Zirakchianzadeh said 16 million tonnes of methane produced annually at the Mehr site would be fed into the urban gas distribution network. “The ethane produced at the site would be transmitted through a 63km pipeline to the Assaluyeh site for final separation and the annual production of 3.3 million tonnes of ethane, propane, butane and gas condensate,” he added.

He said that 1.3 million tonnes a year of ethane would be delivered to the ethane pipeline to feed the olefin units of the petrochemical industry, one million tonnes of propane and butane would be exported and 1 million tonnes of condensate would be produced.

“A 450,000-tonne PDH development project is envisaged for converting the propane refined at the Parsian Sepehr refinery to polypropylene and complete the chain of products. We hope that following the issuance of permission by Petroleum Ministry for allotment of land and allocation of facilities from the National Development Fund of Iran, we would see the start of construction,” he said.

250 Domestic Manufacturers

Gholam-Hossein Nozari, chairman of Parsian Oil Refining Company, said that $660 million of the $1 billion spent on the Parsian Sepehr refinery had been provided by NDFI.

He touched on hardships in the project, saying 64 kilometers of drilling had to be carried out, 34km of which had to go through mountain ranges.

“The equipment for this refinery has been built in 18 provinces and 250 domestic manufacturers have been involved in the manufacturing of equipment,” he said.

Nozari said that the main idea in this project was to complete the value chain, adding: “With the inauguration of a midstream and a downstream unit, environmental considerations would be followed as 500,000 cubic meters of carbon dioxide would be separated.”

Petchem Development Follows Global Model

The petrochemical industry is a major pillar of the petroleum industry in the production chain, as well as the driving engine of economic, political and social development in the country. This sector largely contributes to the gross national product (GNP). The wave of developments in the petrochemical industry came to fruition last calendar year (to 20 March) with the emergence of the “second jump” in the petrochemical sector and inauguration of 17 petrochemical projects, leading to lower sales of raw materials, creating value-added, generating wealth and job. The projects defined for the second jump (projects scheduled to come online this calendar year and those for the third jump (scheduled to come online up to 2025) are under way, highlighting the necessity of diversifying the market for petrochemical exports in Iran.

The petrochemical sector has experienced significant growth over recent years. In just one year, big strides have been taken in the petrochemical industry. A review of projects that have come online over the past one year, shows the satisfactory performance of this industry. The second jump projects, in which $12 billion has been invested, would bring the petrochemical production capacity to 90 million tonnes a year. They were Parsian Mehr Refining, Arta Petrochemical, Dey Arya Polymer Petrochemical, Lordegan Petrochemical, Hegmataneh Petrochemical, Masjed Soleiman Petrochemical, Kangan Petro-Refinery, Abu Sina Petrochemical, Exir Solution Petrochemical, Sabalan Petrochemical, Miandoab Petrochemical, Kaveh Petrochemical, Kimia Pars Petrochemical, Bushehr Petrochemical, Phase 2 of Ilam Petrochemical, Bid Boland II Gas Refinery and Lorestan Catalyst Production.

Behzad Mohammadi, CEO of National Petrochemical Company (NPC), said: “In the second petrochemical jump, 27 projects were envisaged to come online by March 2022.”

He added: “Of them, 17 became operational last calendar year, bringing the petrochemical production capacity from 66 million tonnes to 90 million tonnes. This figure will reach 100 million tonnes by next March, earning the country $25 billion in revenue.”

With the inauguration of these diverse projects, Iran’s petrochemical industry is currently producing a variety of products like methanol, petrochemical feedstock, polypropylene, urea, ammonia, maleic anhydride, pentane, hexane, polymer catalyst and olefin, ending Iran’s dependence on imports and saving the country hard currency. Before the second jump in the petrochemical industry, Iran had a 2% share in the world petrochemical production, but now it eyes a 6.3% share, an objective which would be reached.

Strategic Projects

NPC is tasked with developing the petrochemical industry. In addition to the second and third jump projects, strategic projects are also envisaged. A key point would be to take into consideration feedstock supply to these plants.

Hassan Abbaszadeh, director of planning and development at NPC, said: “All feedstock available in the upstream petroleum industry for the development of the petrochemical industry has been analyzed over the past one year. The most significant feedstock available to the petrochemical industry is natural gas. Whereas development of South Pars phases has been under way since years ago and in light of the joint nature of this gas field, it is necessary to accelerate recovery of these deposits. Meantime, infrastructure and circumstances have not been prepared for gas exports. Therefore, in the 2000s, converting natural gas to petrochemical products was adopted as a smart approach, and gas-based petrochemical development was adopted as a strategy. Many projects have been defined, most of which are methanol, urea or ammonia-based. Due to various reasons some of them have not been finalized and are still under way.”

Gas Share in Petchem Sector

Currently, 8% of Iran’s natural gas production is consumed in the petrochemical sector. Half of this amount is used for power and steam generation in utility units, and less than 4% of natural gas is used as feedstock for the petrochemical sector. Furthermore, the projects defined under the 5th and 6th development plans are fed with gas. The petrochemical industry would be consuming about 154 mcm/d of gas by 2025.

Abbaszadeh said it was import to consider feedstock supply to all gas-powered petrochemical projects. “If in the future, such issues as energy saving or development of upstream petroleum industry are not considered, this industry will be faced with challenges, particularly in winter when due to low temperatures and pressure fall-off in pipes and high consumption, natural gas supply would be the main challenge.” He expressed hope that necessary arrangements would be made for supplying sufficient gas to petrochemical plants.

As far as petrochemical industry development is concerned, other usable feedstocks including NGL and ethane have also been discussed.

During meetings attended by Minister of Petroleum Bijan Zangeneh last calendar year, three combined feedstock projects are available with potential to use 4 million tonnes of ethane. Emphasis was laid on using combined feedstock for more economical projects. 

The Persian Gulf Hormuz Petrochemical Company with annual capacity of 5.8 million tonnes and investment volume of $4.5 billion was envisaged with ethane and butane as feedstock to produce polyethylene and polypropylene. Another combined olefin-fed project is Arghavan Vista Energy in Assaluyeh. Fed with ethane and butane, it will have capacity to produce 1.8 million tonnes a year. The investment made in this project amounts to $1.6 billion. The third combined feedstock project is the aromatic olefin project run by Arya Oil and Gas Company, an affiliate of Parsian Oil and Gas Company. Fed with naphtha and ethane, it has capacity to produce 4.8 million tonnes a year of products. The investment made in this project amounts to $4.8 billion.

Under the present circumstances, in light of availability of feedstock in the upstream sector for developing this industry, one has to follow the route towards developing the chain of mid-stream and downstream petrochemical products. Chain completion means such products as methanol and ethanol, supplied massively, would be produced to serve as feedstock in downstream projects.

Value Chain Development

In a bid to develop the value chain and diversify products, four chains were selected and a strategy was worked out for developing the petrochemical industry based on the value chain development: the chain of propylene, methanol, ethylene and benzene. Developing these four chains would result in products of higher value. Iran is selling these products currently at $500 per tonne, which they are traded at $1,500 per tonne in global markets. In order to supply propylene needs in the country, propylene production projects were envisaged. Iran is currently producing about 1 million tonnes of propylene, which would reach 4 million tonnes, once new projects become operational. In this regard, Eslamabad GTPP, Dayer Port MTP, Amir Abad Port GTP, Anzali Port GTPP, three MTP projects in Assaluyeh Propylene Park and Pars

PDH project in Assaluyeh have been defined. In the project envisaged in Eslamabad Gharb, natural gas would be converted to methanol, propylene and finally propylene. With an investment of $500 million, this project will have capacity to produce 960,000 tonnes. NPC, using technical knowhow developed by the Petrochemical Research and Technology Company (PRTC), would be running it.

The Amir Abad Port project converts natural gas to propylene. With an investment of $1 billion, it will have a rated capacity of 2.3 million tonnes. With the implementation of three MTP projects in Assaluyeh, about 5 million tonnes of methanol would be converted to propylene. Each will have a rated capacity of 700,000 tonnes.

Accelerative projects will also feed downstream industries. These projects would cut from a $2 billion sum spent on imports. Furthermore, domestic industries will be developed. A total of 21 accelerative projects have been defined with an investment of $2.3 billion and production capacity of 2.7 million tonnes in the four chains of propylene, methanol, ethylene and benzene.

Propylene Projects Feeding

Abbaszadeh touched on feeding propylene projects, saying: “Feedstock for propylene production projects in Amir Abad, Anzali and Eslamabad Gharb is natural gas. The feedstock for the three MTP projects in Assaluyeh would be methanol which is available there and methanol producers have already signed agreements for feedstock supply. For example, Zagros Petrochemical plans to convert part of its methanol to propylene or Petro Farhang has directed its methanol at propylene projects.”

Most accelerative projects are fed on propylene. If 5 million tonnes of methanol is converted at three MTP plants in Assaluyeh, 1.4 million tonnes of propylene would be obtained.

Abbaszadeh said part of propylene produced in Assaluyeh would be carried to Marvdasht by pipeline. Numerous studies have been conducted in this regard. The most important objective behind increasing propylene production would be to convert methanol to propylene in order to remove shortage of this product in the country, supply domestic needs for developing downstream plants and preventing imports. The main objective is not exporting products. Juxtaposing these objectives along with the necessity of supplying domestic needs, the decision was made to transfer propylene to various areas in the country. It was agreed that with the government’s investment, these products would be partly transferred to inside the country so that smaller enterprises with less economic ability would have easier access to feedstock. With studies conducted so far, Marvdasht was chosen due to accessibility and existence of distribution infrastructure in neighboring provinces. A gas pipeline stretches from Assaluyeh to Shiraz, whose infrastructure may be used for pipeline. It is possible to use railway on this route.

Water constitutes another reason for carrying propylene with pipeline because the projects at the beginning of the MTP chain need so much water and they need to be implemented on the beaches. But propylene consuming projects depend on less water and they may be implemented in industrial parks. In addition to the main objective that is propylene production, regional development, prosperity and employment in other cities than those in southern areas would come true.

Petchem Mix

About 95 petrochemical products were being produced up to March 2020, each in a variety of grades. With the materialization of the second jump in the petrochemical sector, 10 new products would be added to the petrochemical mix by next March. Three more would be added to the mix under the third jump. But the objective behind accelerative projects would be to diversify the mix of products, particularly imported products. These projects would add 20 new products to the petrochemical mix. In total, with the implementation of strategic projects, 60% of imported products would be sourced domestically.

Petchem Projects Financing

In 2003 and 2004, $ 4-4.5 billion was invested in the petrochemical industry. In 2019, when the country was under the worst sanctions, $3.8 billion was invested. Most projects were financed and implemented by Iranian petrochemical holdings. In addition to accelerative projects, there are 21 small-sized projects for which $3 billion is needed.

Catalyst Production

The most important issue in implementing these projects is development of technology. These projects are technologically sophisticated and advanced ones owned mainly by European companies. The private sector has also explored its own options to attract technology. NPC and PRTC have offered to provide necessary help and support in this regard. PRTC is working on the technology of all downstream projects and has so far made valuable achievements. It has so far developed 17 groups of catalysts, while 16 others are to be manufactured this calendar year. PRTC has won trust among petrochemical companies and various projects are now willing to use such knowhow. Furthermore, removing challenges to the petrochemical industry is a cause of concern for PRTC. PRTC has also inked protocols with universities for cooperation.

A major achievement of PRTC is the domestic manufacturing of the highly strategic technology for MTP. In a bid to build confidence, PRTC provides investors with this technology. Investors would have to pay for it three years later. All necessary knowhow is not available in the country and some options are envisaged to import technology or purchase second-hand units once PRTC would acquire necessary technology.

Global Model

Abbaszadeh touched on the development of Iran’s petrochemical industry based on the global model, saying: “Development is based on market needs. It produces products for which feedstock is available; otherwise, it would feed them with imports. NPC is following a method based on market pull. Another approach is resource push based on which petrochemical products are exported using available feedstock. For instance, natural gas has been abundant and one option has been to convert natural gas to methanol for exports. Currently methanol exports have replaced gas exports. For our country, both approaches have to be taken into consideration as we have good hydrocarbon resources and a good market inside the country and in the region.”

He said: “We’ve seen on many occasions that some products become rare because super-absorbent polymers (SAP) are not produced in the country and every time imports decline production hits snags. Therefore, NPC moves based on market needs.”

Abbaszadeh said: “NPC orientates development of the petrochemical industry in the future. The petrochemical industry’s perspective has been sketched out to develop the value chain. All aspects of development of this industry and diverse projects aimed at completing the value chain, supplying downstream needs, and boosting hard currency revenue are being studied. This is now the way NPC sets its orientation.”

Sumar, Mansouri Output Up

 The Sumar and Mansouri oil fields are located in western and southwestern Iran, respectively. They enjoy great potential for enhanced recovery. Iran plans to use cutting edge technology and attract investment to enhance Sumar and Mansouri outputs by 38,000 b/d and 100,000 b/d, respectively.

The Sumar oil field, which was discovered in 2009 in the western province of Kermanshah, is jointly owned by Iran and Iraq. Sumar holds 475 million barrels of crude oil in place, 70 million barrels of which is recoverable.

According to initial estimates, IRR 519 billion plus $25 million in investment is needed for the development of this field.

When Iran decided to develop it, its petroleum industry was under international sanctions and it had to award the contract under an EPCF agreement to Iranian companies. The contract envisaged drilling two wells, building stations for transmission and separation of oil and gas, pumping and gathering systems. Production from Sumar was initially expected to start two years after the start of operations with Phase 1 output at 5,000 b/d and Phase II output at 10,000 b/d, but this objective was not achieved.

However, the Iranian Central Oil Fields Company (IOFC), which administers Sumar, drilled one well which produced 3,000 b/d. The oil produced from this field is being carried via a 23-kilometer pipeline to Naftshahr production/desalination unit.

In preliminary assessment report on the Sumar oil field in 2009 and 2010, development of the field in Asmari Formation with an initial output of 5,000 b/d from four wells was envisaged.

In the study conducted for the transfer of oil from the Sumar oil field to the Naftshahr production and desalination unit, installation of multiphase pumps, and a single-phase transmission system including a separator, pump and compressor fitted with OLGA and PIPESIM were envisaged.

The preliminary studies indicated that at most 5,000 b/d of pre-salt oil could be processed at the Naftshahr production and desalination unit. But as long as non-salt oil is being produced the processing of the whole oil is possible in the old unit.

Drilling of three new vertical fields in Asmari Formation, workover of an oil production well, installing a 25-kilometer offshore streamline stretching from wells to manifold, acquisition of land and drilling of well, setting up manifold and two-phase separation system, purchase and installation of single-phase pumping system with a capacity of 10,000 b/d, 123 horsepower and 550 pam external pressure, laying out 23-kilometer pipeline to carry 10,000 b/d of oil to Naftshahr production and desalting unit, installing 48 kilometers of power supply lines and a 1.5MW electricity station stretching from Naftshahr to satellite manifold and Sumar wells, are among the most important equipment and facilities needed for Phase 1.

Bangestan Layer of Mansouri

One of reservoirs that Iran has specifically counted on is Bangestan in the Mansouri oil field. The high recovery rate from Mansouri has added to the significance of this field. The latest studies indicate that the average recovery rate from oil fields in Iran is about 28%, while the Asmari reservoir of Mansouri has a recovery rate of 47%, which is indicative of the high potential of this oil field.

Over recent years, production from the Bangestan reservoir of Mansouri has been studied by Committee of consultants at the Directorate of Reservoirs of National Iranian Oil Company (NIOC).

According to NIOC Directorate of Corporate Planning, various scenarios envisaged for enhanced recovery from this field include natural depletion, gas injection and water injection with a view to studying various parameters including output flow and downhole pressure.

The field enjoys very good potential for production and development. More studies are needed in the future to study the Bangestan reservoir of Mansouri field. These studies focus on artificial lifting, hydraulic fracturing and enhanced oil recovery (EOR) methods.

Iran’s petroleum industry and particularly National Iranian South Oil Company (NISOC), over recent years, has focused on the development of Mansouri in order to enhance its crude oil output and its processing capacity. The project is 97.5% complete now. The only remaining section from phase 1 of Mansouri field development is the completion of production and desalination plant.

Mansouri field is located 60 kilometers south of Ahvaz (the provincial capital of Khuzestan); 50 kilometers west of Mahshahr Port and 40 kilometers east of Ab Teimour field. Discovered in 1963, Mansouri field started production in 1973.

The first well in Mansouri field was drilled in 1963 to allow for oil recovery from the Asmari reservoir. Oil production from the Bangestan reservoir began in 1974 after drilling Well No. 2.

After the establishment of the Mansouri production unit in 1979, the processing of the Bangestan oil was transferred from the Ahvaz production unit to the Mansouri production unit.

Mansouri field is administered by Karoun Oil and Gas Production Company, the largest NISOC subsidiary with an output of over 1 mb/d.

The Bangestan reservoir has a production unit with a rated capacity of 75,000 b/d, a desalination unit with a rated capacity of 35,000 b/d and a gas compressor unit with a rated capacity of 30,000 b/d.

Bangestan is estimated to hold 15 billion barrels of oil in place with an output of 60,000 b/d that may be increased to 79,000 b/d. So far, 347 million barrels of oil has been extracted from the Bangestan reservoir.

The average production from each onshore oil well has fallen to 2,000 b/d, down from 26,000 b/d recorded between 1970 and 1972. There were a total of 270 wells when Iran was supplying its maximum oil output. There are currently over 1,500 oil wells.

According to official data, the average oil production rate in Iran stands at 24%, while in many countries it varies between 45% and 65%.

Iranian Petroleum Ministry officials say the average recovery rate from oil fields in Iran stands at around 24%, ranging from 7% in Soroosh oil field to 35% in Ahvaz oil field.

Iran targets Maximum Efficient Rate (MER). MER means the maximum sustainable daily oil or gas recovery rate from a reservoir which will allow economic development and depletion of that reservoir without detriment to ultimate recovery.

If oil is extracted from a reservoir at a rate greater than the maximum efficient recovery rate, then the natural pressure of the reservoir will decline resulting in a decrease in the amount of oil ultimately recoverable.

MER is also commonly used to denote the rate of field production that can achieve the maximum financial return from the reservoir operation. However, the figures of two rates hardly coincide.

In the 1940s, the average production from Iranian oil wells was said to stand at 18,000 b/d. After so many years, the figure is down to 2,000 b/d.

As Iran's oil wells enter their second half of life, between 330,000 and 350,000 barrels per year of oil is missed in onshore wells.

Therefore, enhanced recovery from mature reservoirs like Bangestan is essential for Iran’s petroleum industry.

Cutting Edge Technology Needed in Dey & Sefid Zakhour

The Dey and Sefid Zakhour fields in Iran need investment and state-of-the-art technology. The idea behind development of the two fields is to transfer 1.5 mcm/d and 10 mcm/d of gas processed at the Farashband refinery to Iran Gas Trunkline 2 (IGAT2) and IGAT3.   

The Sefid Zakhour anticline is located north of the Dey anticline, 150 kilometers southwest of the southern city of Shiraz.

Dey and Sefid Zakhour are estimated to hold 6.2 tcf and 6.5 tcf of gas in place, respectively. The two fields were discovered in 2005 and were said to contain 11.4 tcf of gas. With a recovery rate of 75%, the volume of gas extracted from them may stand at 8.5 tcf.

In order to complete exploration data in this field, 2D seismic testing was conducted in 2003, and the results were analyzed and interpreted. The Sefid Zakhour anticline was said to have potential for production. Drilling operations started and the first exploration well was spudded at a depth of 5,271 meters.

The Exploration directorate of the National Iranian Oil Company (NIOC) explored sweet gas in different layers of Kangan Dalan.

Sefid Zakhour is estimated to hold 205 million barrels of condensate in place, with a recovery rate of 35%.

According to the NIOC Exploration Directorate forecasts, if 17 wells are drilled 30 mcm/d of gas may be recovered.

Sefid Zakhour anticline is located around 30 kilometers south of the city of Qir.

The planned development of Dey and Sefid Zakhour fields in Fars Province is expected to provide 15.1 mcm of gas and 10,000 barrels of condensate.

Wellhead equipment, stream pipelines, green space and processing unit are envisaged in the development projects.

A refinery is envisaged to be built for the two fields in two phases within engineering, procurement, construction (EPC) framework. Phase 1 is already complete and Phase 2 is under way.

In order to develop Dey and Sefid Zakhour in the upstream sector  it was essential to take some measures : land acquisition for laying out pipelines and drilling wells, completing the two existing wells, drilling and completion of 11 new fields, purchasing commodities and activating wellhead installations, laying out wellhead pipelines, setting up a gas and condensate separation center, installation of two pumps to transfer condensate from Sefid Zakhour, purchase and installation of pigging system, and installation of line break valves.

According to the estimates made by the Department of Reservoir Engineering Studies of the Iranian Central Oil Fields Company (ICOFC), drilling new wells at the Dey and Sefid Zakhour fields would facilitate realizing 1.15 mcm/d production capacity.

Besides being the second largest gas producer in the country, ICOFC is one of the five NIOC subsidiaries. Established in 1998, ICOFC is tasked with developing 80 oil and gas fields. It would totally need $7.5 billion in investment for its national projects, including $1.8 billion for developing its oil fields – Aban, Paydar, West Paydar, Danan, Cheshmeh Khosh, Dalpari, Naftshahr, Sumar, Dehloran and Khayyam.

To develop the Halegan, Sefid Zakhour, Sefid Baghoun, Dey, Aghar, Madar, Paznan, Khar Tang and Tabnak, $4.4 billion would be invested. Furthermore, $1.3 billion would be invested in compressor stations in the Kangan, Homa and Varavi fields.  

Darquain Phase III

Darquain oil field, which was discovered in 1964 following drilling one exploration well, holds over 5 billion barrels of oil in place, 1.3 billion barrels of which is recoverable. Darquain’s oil is light with an API gravity of 39. The oil produced at this field is delivered to the Ahvaz-Abadan oil pipeline.

According to the estimates made, the investment required for the development of Darquain-3 amounts to $1.5 billion. Darquain-3 envisages operating the Ilam and Sarvak reservoirs, as well as the untapped part of Fahlyan. To that end, water and gas would be injected into the Sarvak reservoir, and gas would be injected into the Fahlyan reservoir.

Furthermore, 31 oil wells, 6 gas injection wells, crude oil processing facilities including pipelines, processing installations, gas compressors, infrastructure including crude oil storage tanks and roads are among other activities under way at Darquain-3.

Darquain-1 and Darquain-2 were developed by Italy’s Eni under buyback deals. A state-of-the-art technology – in coincidence with oil and associated gas injection – is being used there.

In August 2011, an agreement was signed with an Iranian consortium for the Darquain-3 development after Eni quit cooperating with Iran due to international sanctions. But the Iranian consortium failed to handle the project and the project remains open to international investment.

In phases 1 and 2, oil was recovered from Fahlyan formation. In phase 3, oil recovery from the Ilam and Sarvak layers will be done, as well.

Darquain-1 came online in 2005. Darquain-2 required $1.3 billion in investment and demining 7.5 million square meters. Darquain-2 came online in February 2011.

Darquain-3 was expected to become operational within five years. Three years have since passed and the field is still far from commissioning phase. According to plans, in the first stage, 14,000 b/d of light crude and in the second stage, 46,000 b/d of heavy crude will be extracted from the Ilam and Sarvak layers.

Darquain-3 targets the heavy crude layers of Ilam and Sarvak and the undeveloped part of Fahlyan. Eni completed feasibility studies on this project and submitted its results.

The findings of Eni studies indicate that the heavy crude in the Ilam and Sarvak layers were recoverable. Due to the heavy crude oil content, the third phase is totally different from the first and second phases.

Development of joint oil and gas fields in Iran has slowed down in recent years due to financial and technical shortages. That had earned Iran’s neighbors big margins. Due to the financial and technical restrictions, Iran has concentrated on the development of the South Pars gas field, shared with Qatar, and West Karoun oil fields, shared mainly with Iraq.

PGSOC to Lift Refinery Run

 Bandar Abbas Gas Condensate Refinery, known commonly as the Persian Gulf Star refinery on the coattails of its constructor Persian Gulf Star Oil Company (PGSOC), made Iran independent of gasoline imports exactly when the country was under tough sanctions. Thanks to the high-quality products of this largest condensate-fueled refinery, Iran became a gasoline exporter in the region. Now refinery managers say they plan to increase the refining capacity of the facility to 480,000 b/d of condensate.

Enhanced production capacity in the giant South Pars gas field from 280 mcm/d to 700 mcm/d of gas over eight years, has at times made Iran’s petrochemical industry prosperous and helped the Persian Gulf Star refinery increase its refining capacity. Last calendar year to March was one of the toughest ever for Iran’s petroleum industry because of US sanctions and the covid-19 pandemic. It was a special year for Iran’s refining industry. The Petroleum Ministry made some production plans both quantitatively and qualitatively. It managed to supply domestic needs while helping petroleum product exports set a new record. The Persian Gulf Star refinery was instrumental in this successful achievement. Last calendar year, the refinery saw its rated capacity of condensate production increase from 360,000 b/d to 420,000 b/d. The plan to bring this figure to 480,000 b/d in the current calendar year would mean guaranteed recovery of rich gas from 12 phases of South Pars which Iran shares with Qatar in the Persian Gulf.

Iran Top Regional Petrol Exporter

Mohammad Ali Dadvar, CEO of Persian Gulf Star refinery, has said the refinery was producing 75 ml/d of refined products, including 47 ml/d of Euro-5 grade gasoline.

He said the refinery’s export achievements had blunted the impact of sanctions, noting that Iran had become the top exporter of gasoline across the region. National Iranian Oil Refining and Distribution Company (NIORDC) distributes the gasoline produced at this refinery.

Dadvar said Iran producing the highest amount of high-quality petroleum products among regional nations. “We own the Persian Gulf Star refinery that is supplying as much product as a 1.3-mb/d oil refinery. 

“When we compare these figures with those of refineries in the region we will notice Iran enjoys the highest capacity for producing products of high value-added,” he said.

During the previous round of sanctions, Iran’s refining industry was importing gasoline. Therefore, this industry turned into a target of sanctions. However, by focusing on refinery development projects in recent years, particularly completion and operation of four refining phases in the Persian Gulf Star refinery, the refining industry became self-sufficient in supplying refined petroleum products, thereby serving as a bridge for an increase in exporting petroleum products.

Refinery Capacity Up 16%

The Persian Gulf Star refinery has played a significant role in the materialization of this success.

Ali-Reza Sadeq-Abadi, CEO of NIORDC, said the refinery had largely contributed to enhanced refining and distribution capacity of petroleum products in Iran. He said that Phase 4 of the refinery had added 120,000 b/d to the refining capacity of the facility in the shortest possible time and with minimum cost.

Over recent years, with the completion and operation of three phases of the Persian Gulf Star refinery and implementation of other refining projects, crude oil and condensate refining capacity jumped from 1.8 mb/d to 2.3 mb/d. It shows that Iran’s refining capacity grew 16% in eight years, leading to a four-fold increase in petroleum products exports. Iran now holds the top rank in the Middle East’s petroleum products’ exports.

Iran’s Minister of Petroleum Bijan Zangeneh said the decision for building the Persian Gulf Star refinery was made in 2003 when he himself was serving as the minister of petroleum in the administration of the then president Mohammad Khatami.

About 74% of the Persian Gulf Star refinery’s first phase was handled by Iranian engineers. In fact, 70% of its design was done by Iranians and 300,000 maps had been exchanged for designing the refinery. Meantime, 60% of the refinery’s equipment is fully domestically made. Sophisticated equipment has been installed by Iranian engineers.

With the commissioning of Phase 1 of the refinery, Iran managed to achieve sustainable gasoline production. Before that, Iran depended on imports because of unsustainability in supply.

Three years on, Iran no longer imports gasoline; rather it uses the South Pars condensate to supply high-quality products.

Construction of the Persian Gulf Star refinery began in 2006 with a capacity of treating 360,000 b/d of feedstock from South Pars, three 120,000-barrel phases. The objective was to maintain gas recovery from South Pars, reduce environmental pollution and help self-sufficiency in supplying strategic energy products. Phase 1 of the refinery came online in May 2017 with production of 12 ml/d of Euro-4 gasoline, 4.5 ml/d of gasoil, 1 ml/d of kerosene and 1.3 ml/d of liquefied petroleum gas (LPG). In Phase 2 which came online in March 2018, the Euro-5 gasoline production doubled to 24 ml/d and gasoil output reached 8 ml/d. Phase 3 became operational in February 2019 with an output of 45 ml/d of Euro-5 gasoline, which constitutes 50% of national gasoline consumption.

Covid-19 and India Energy

 Shuaib Bahman

 The outbreak of the coronavirus pandemic has thus far left negative impacts on global oil consumption. The global demand for oil was slashed sharply by the prevalence of covid-19. The reason was that the killer virus forced people to stay home and shun unnecessary travels. In some nations, lockdown lasted for months. Consequently, driving and flight, which require gasoline and gasoil among other fuels, declined sharply. Such trend was such influential in some countries like India that the world markets were affected.

Oil Consumption Falls in India

The growing number of covid-19 positive patients in India and associated restrictions in various states and cities like New Delhi and Mumbai affected transport sector. As a result, refineries had to scale back on crude oil buying. Amid covid-19 spread, demand for oil in India fell in some cases by up to 70%. The main cause was that new regulations took effect with regard to lockdown. India was forced to impose the widest ever lockdown in dealing with the coronavirus. India saw its oil consumption fall by 50% in some months of 2021 year-on-year. A decline of about 3.1 mb/d largely affected oil markets across the globe.

Over recent decades, the fast economic and industrial growth has largely increased India’s dependence on energy. Meantime, increased purchase of vehicles by various social classes increased use of oil in this country. Currently, more than half of India’s oil import is consumed in the public transport sector, mainly private vehicles and trucks. This data shows the very serious impact of any lockdown in India over oil consumption.

In 2020, India’s demand for crude oil averaged 4.5 mb/d. But the covid-19 pandemic slashed the figure significantly. Now, given nationwide lockdown that pertains to restrictions on travel between cities, crude oil and oil products are expected to experience more decline in consumption.

Indian Oil Corporation (IOC) has forwarded the following figures regarding decline in fuel consumption:

Gasoil sales, down more than 20%
Jet fuel sales, down more than 10%
Gasoline sales, down more than 2%

Such decline in consumption has pushed major oil refiners in India to consider reducing crude oil processing, thereby cutting imports. IOC, which is India’s largest refiner, is operating 85-88% of its refining capacity. The downward trend in refining is likely to decline because many installations in this country are dealing with the challenge of petroleum products’ storage.

India and Future Market

The average demand for oil in India in 2019 stood at 5.3 mb/d, making the Asian giant the third largest consumer of oil in the world. Therefore, any decline in India’s oil consumption would affect its energy purchase and all of global markets. Any decline in India’s purchase of oil would give rise to further surplus in world markets, which would mean that supply overtakes demand and prices decline. But global markets cannot tolerate any further decline. Furthermore, the prices are such that any further fall would affect the market balance and harm producers.

India will try its best to benefit from this situation to fill its strategic oil reserves, but this trend cannot go on long. The covid-19 pandemic is so severe in this country that it may not return to normal any time soon in the future.

Last but not least, due to falling oil consumption in India, global prices are expected to drop. Under such circumstances, despite the fact that oil producers show no willingness to cut their output, they will have to take more serious measures in order to prevent any further price slump.

Bright Horizon for Iraq Gas

 Shuaib Bahman

Iraq, despite being rich in natural gas, is a gas importer. In 2019, the country accounted for 40% of Iran’s gas exports. The figure rose to 65% the year after.

Over recent years, the US has stepped up pressure on the Iraqi government to stop buying gas from Iran. Furthermore, various US administrations have acted such that Baghdad has shown willingness to develop its own gas fields. Iraq is set to reach a point to be able to supply its own gas needs and even become an exporter of gas.  

Attracting Capital and Technology

Gas shortage in Iraq is nothing new. It dates from the 1990s. Several wars launched by Saddam Hussein and associated political crises did not let Iraq’s energy sector grow proportionally with its demographic growth. Consequently, Iraq faced gas shortages from that time on. Since most power plants in Iraq run on gas, power generation in this country has been significantly affected. Mainly in hot seasons, gas shortage causes decline in production and power outage.

Currently, Iraq mainly depends on associated gas. Iraq’s oil production has over recent years been limited by OPEC+ agreements. Therefore, Iraqi’s capacity in feeding its power plants has declined. Meantime, gas flaring in Iraq is squandering away big volumes of natural gas in this country. Therefore, the gas produced in Iraq’s oil fields is mainly flared and wasted away. That is why the government of Iraq has accelerated its gas gathering projects at oil fields in a bid to raise its gas production.

The Iraqi Oil Ministry has announced it is seeking investment to enable Iraq to produce a further 1.5 bcf/d of natural gas. Iraq is currently producing 2.7 bcf/d of gas. Baghad is pursuing three investment projects in a bid to bring its gas production to 4 bcf/d by 2025. It is also seeking investment in the Mansuriya gas field in southeast.

Iraq has signed agreements with various companies in recent years in a bid to develop its gas fields. The Iraqi Oil Ministry has signed a heads of agreement with France’s energy giant Total on gas gathering. The associated agreement is worth $7 billion. These gas projects, which include production of 600 mcf/d, are expected to be developed in two stages. Iraq has also signed a $2.1 billion agreement with China’s Sinopec on the development of Mansuriya.

Iraq's state-run Midland Oil Company will partner Sinopec in development of the Mansuriya field, the statement said.

Under the 25-year contract, Sinopec will hold a 49% stake and Midland Oil Company will hold 51%.

Sinopec will help Iraq to capture and process natural gas from the field and boost output to 300 mcf/d as a targeted production level.

Iraq is also in talks with US companies and other investors to develop the Okaz gas field along the border with Syria. Technical talks have hit some snags in this regard, but a $3 billion project is envisaged for the production of 300 mcf/d of gas.

Iraq is also seeking to spend, with certain energy partners, $15 billion to boost its gas production. These projects include a $3 billion development plan for Basrah Gas Co.

Basrah Gas Co., which counts Shell, Mitsubishi Corp. and Iraq's state-owned South Gas Co. as shareholders, will boost its production to 1.4 Bcf/d from the current 1 Bcf/d by 2025 at a cost of $3 billion. The ultimate plan for Basrah Gas is to reach 2.4 Bcf/d of gas production over an unspecified period.

Shell has a 44% stake in Basra Gas, which captures associated gas from the southern Iraqi oil fields to produce electricity. South Gas Co. has a 51% stake and Mitsubishi Corp. 5%.

Outlook

The Iraqi government has over recent years made significant efforts to increase investment in its gas industry. To that end, it has invited major companies to invest in its gas sector and transfer in technology. The Iraqi government hopes to become self-sufficient in gas production to meet its own needs. Whereas power generation in Iraq largely depends on gas, this point of significance. Therefore, sustainable gas supply would guarantee power generation.

Although the Iraqi government expects to put an end to its dependence on gas imports by 2025 with a $15 billion investment, it is faced with some challenges. Structural corruption within the Iraqi government and overwhelming insecurity in various cities of Iraq may expose big projects to threats. However, it seems that advantages overweigh disadvantages when it comes to gas production in Iraq.

Libra Partners Plan to Hand Back Southeast Area

 Petrobras and its partners in the consortium for the deepwater Libra block in the presalt Santos basin have notified Brazil’s ANP that they plan to relinquish the block’s southeast area.

Since evaluation activities started on the block, the southeast area – a distinct compartment from the other ones – was seen as low potential, and new data analysis has confirmed this view, Petrobras said.

The relinquishment is in accordance with the discovery evaluation plan of well 3-BRSA-1267-RJS, covering the central and southeast areas of the block following the declaration of commerciality of the northwest area, containing the Mero field, the third largest presalt producer.

Exploration/evaluation of this area will continue until March 2025.

Farm-ins Confirmed to Offshore South Africa Block

Africa Energy has closed two farm-out transactions concerning block 2B offshore South Africa.

It has transferred operatorship and a 50% interest to Azinam and a 12.5% interest to Panoro Energy, in consideration for a carry through the Gazania-1 exploration well, due to spud by the end of this year.

Africa Energy now has a 27.5% share in the block, which includes Soekor’s 1988 shallow-water A-J1 oil discovery. Gazania-1 will target a low-risk rift basin oil play up-dip from the discovery.

Finder Awarded North Sea License

 Britain’s Oil and Gas Authority has awarded Finder Energy a 100% interest in the P2528 license in the UK central North Sea, under the 32nd UK offshore licensing round. 

The concession covers a 454-sq km (175-sq mi) area on the southern edge of the South Halibut basin, and is a short distance southeast of the CNOOC-operated Buzzard oil field.

According to Finder, the main prospect on the license is Whitsun, targeting the same Upper Jurassic reservoir that hosts Buzzard.

.There are four other prospects and leads and a small oil discovery

Vestigo Awarded PSC Offshore Malaysia

 Petronas has awarded Vestigo Petroleum a production sharing contract (PSC) for the shallow-water South East Collins Cluster, under Malaysia’s new Small Field Asset terms.

The cluster, in water depths of 42-45 m (138-147 ft), 70 km (43 mi) northeast of Labuan Island, comprises the South East Collins and Lokan fields discovered in the 1980s, with combined recoverable reserves estimated at 10 MMstb.

Petronas’ svp of Malaysia Petroleum Management, Mohamed Firouz Asnan, said: “The award of the cluster of fields under the much-anticipated new fiscal terms is expected to spur the development and production of more small fields in the future …

Australia Offshore Drilling Programs Updated

Santos expects to initiate its $235-million Phase 3C infill drilling program at the Bayu-Undan field in the Timor Sea during the current quarter.

The three production wells (two platform-drilled and one subsea) will develop additional natural gas and liquids reserves, and extend the lives of both the offshore facilities and the onshore Darwin LNG plant.

Saudi Arabia Willing to Sell 1% Stake in Aramco

 Saudi Arabia is in discussions to sell 1 percent of state oil firm Saudi Aramco to a leading global energy company, according to Crown Prince Mohammed bin Salman (MBS).

He said in televised remarks that Aramco, the world’s biggest oil company which listed on the Saudi bourse in late 2019, could sell more shares possibly to international investors within the next year or two.

“There are talks now for the acquisition of a 1 percent stake by a leading global energy company in an important deal that would boost Aramco’s sales in … a major country,” he said, without elaborating.

“There are talks with other companies for different stakes, and part of Aramco’s shares could be transferred to the (Saudi) Public Investment Fund (PIF) and a part listed … on the Saudi bourse,” he said in an interview aired by Saudi TV marking the fifth anniversary of Vision 2030, the country’s initiative to diversify its economy away from oil.

The Aramco initial public offering in 2019 was seen as a pillar of the economic diversification program aimed at attracting foreign investment.

Aramco raised $25.6bn in the IPO and later sold more shares under a so-called “greenshoe option” to raise the total to $29.4bn.

The proceeds of that offer were transferred to the PIF, Prince Mohammed’s vehicle of choice to transform the Saudi economy.

The crown prince is increasingly leaning on Aramco, the world’s biggest oil exporter, to help finance his plan to transform the economy.

BP to Resume Share Buybacks

BP's profit more than tripled to $2.6 billion in the first quarter thanks to stronger oil prices and bumper revenue from natural gas trading, paving the way for the energy company to start buying back its shares.

The jump in profits from a year earlier comes as BP says it expects oil demand to recover in 2021 due to strong growth in the United States and China as COVID-19 vaccination programs accelerate.

In a sign of growing confidence in the economic recovery and its operations following a year of cutting costs, headcount and its dividend, BP said it will buy back $500 million of shares in the second quarter to offset dilution from an employee share distribution program.

Helping it deliver on its earlier promise to buy back shares, net debt fell below the company's $35 billion target sooner than expected, dropping $5.6 billion from the end of December to $33.3 billion at the end of March, chiefly due to around $4.8 billion worth of disposals and higher oil prices.

"We estimate a further $1.5-2 billion in buybacks is possible this year," Bernstein analysts, who have an outperform rating on BP stock, said in a note.

The company said it would provide an update on the third quarter buyback program later this year.

On a conference call, Chief Executive Bernard Looney said it was possible that cash distribution, or dividend, levels could return to pre-pandemic levels over the course of next year.

However, the company is the weakest performer among the oil majors, with shares still around a third lower than their pre-pandemic level as investors fret over its energy transition strategy.

Petrobras Q1 Output Hit by Divestments

Brazil’s Petrobras produced 2.196 million barrels of oil a day in the first quarter, the state-run company said, an increase from the fourth quarter, but a decline in yearly terms.

Petroleo Brasileiro SA, as the company is formally known, attributed the quarterly production boost in part to the ramp-up of its P-70 platform in the major, deepwater Atapu field. The company also had fewer scheduled maintenance stoppages than in the fourth quarter, Petrobras said in a securities filing.

Divestments over the course of the year, as well as production declines at mature fields weighed on production figures in yearly terms.

Output at a major field was slowed in March due to a coronavirus outbreak, unions previously told Reuters.

US Offers $8.25bn in Loans for Power Grid

The U.S. Energy Department said it is offering up to $8.25 billion in loans for companies to boost the power grid as part of the Biden administration's goal to set the country on a path to 100% clean energy by 2035.

The department is making financing available for projects that improve resilience and expand transmission capacity across the grid, "so we can reliably move clean energy from places where it is produced to places where it is needed most," Energy Secretary Jennifer Granholm said.

The financing will be available in two pools. The Loans Program office at the Energy Department is seeking applications for up to $5 billion in loan guarantees to support innovative transmission projects, along with transmission projects owned by federally recognized tribal nations or Alaska Native Corporations.

Offshore Wind Project Sanctions Set to Rise

Final investment decisions on offshore wind energy projects, outside mainland China, will grow 57% in the next 18 months, compared to the 2019-20 period, according to Westwood Global Energy Group.

The growth represents an additional 20.4 GW of new power capacity with just under one-third of this activity being driven by emerging offshore wind markets such as the US, Vietnam, and South Korea.

The analysis comes as Westwood launches its WindLogix application. Developed to offer OEMs, vessel owners, engineering houses and developers daily data driven insight, the solution delivers market analytics dashboards alongside offshore wind project, vessel, station, and component data.

Woodside, UWA Assess Pipeline Marine Growth Impact

Woodside Energy is collaborating with OceanWorks at the University of Western Australia (UWA) on offshore R&D.

According to the latest edition of the company’s house magazine Trunkline, one of the programs concerns the impact of marine growth in offshore engineering.

Results suggest marine growth may help stabilize subsea pipelines. The teams were able to demonstrate that marine growth has the potential to disrupt vortex-induced vibrations (VIV) for pipelines, and that this could render span analysis/rectification procedures unnecessary.

VIV, which can occur when a current goes past or around a pipeline, is caused by unsteady flow behind the pipe.

ExxonMobil Oil Discovery Off Guyana Coast

ExxonMobil made an oil discovery at the Uaru-2 well in the Stabroek Block offshore Guyana. Uaru-2 will add to the previously announced gross discovered recoverable resource estimate for the block, which is currently estimated to be approximately 9 billion oil-equivalent barrels. Drilling at Uaru-2 encountered approximately 120 feet (36.7 meters) of high-quality oil-bearing reservoirs including newly identified intervals below the original Uaru-1 discovery. The well was drilled in 5,659 feet (1,725 meters) of water and is located approximately 6.8 miles (11 kilometers) south of the Uaru-1 well.

“The Uaru-2 discovery enhances our work to optimally sequence development opportunities in the Stabroek Block,” said Mike Cousins, senior vice president of exploration and new ventures at ExxonMobil. “Progressing our industry-leading investments and well-executed exploration plans are vital in order to continue to develop Guyana’s offshore resources that unlock additional value for the people of Guyana and all stakeholders.”

In January 2020, ExxonMobil announced that Uaru-1 was the 16th discovery in the Stabroek Block. The well encountered approximately 94 feet (29 meters) of high-quality oil-bearing sandstone reservoir and was drilled in 6,342 feet (1,933 meters) of water.

In March 2021, ExxonMobil secured a sixth drillship, the Noble Sam Croft, for exploration and evaluation drilling activities offshore Guyana. A fourth project, Yellowtail, has been identified within the block with anticipated start up in late 2025 pending government approvals and project sanctioning

Who Will Pay for Energy Transition?

The transition from a fossil-fuel dominated energy system to one with zero emissions would require trillions of dollars of investment in new production, distribution and consumption equipment worldwide.

New investments could support millions of new jobs in construction and manufacturing, but policymakers are struggling to decide whether to recover the costs from consumers or taxpayers.

In most countries, the cost of providing energy commodities and services, including gas, electricity, other heating fuels, and road fuels, is normally recovered from users in the same way as other services and merchandise.

But the proposed energy transition is likely to be expensive, with a high proportion of upfront capital costs for new generating units, transmission and distribution systems, and consumer equipment such as electric vehicles.

Lower-income households already spend a much higher share of their income on energy services and would be especially hard hit if costs are recovered in the normal way.

In the United States, for example, poorer households in the second of the fourth deciles spent an average of 10-14% of their post-tax income on gas, electricity, other heating fuels, and road fuels in 2019.

In contrast, richer households in the seventh through ninth deciles spent just 5-6% of their post-tax income on the same energy items (“Consumer expenditure survey”, U.S. Bureau of Labor Statistics, 2020).

Precise details differ in other countries, but the poorest households almost always spend the highest proportion of their income on basic energy services for heating, cooking, lighting and surface transport.

2nd Russian Vessel Begins Nord Stream 2 Pipe-laying

A second Russian vessel has now begun laying the almost-complete Nord Stream 2 gas pipeline in Danish waters, the pipeline development company said April 27, in a move likely to accelerate the final work on the Russia-Germany link.

The Adakemik Cherskiy, which has dynamic positioning capabilities allowing for speedier pipe-laying, has joined the Fortuna pipe-layer carrying out work south of the Danish island of Bornholm in the country's Exclusive Economic Zone (EEZ).

"After successful sea trials, the pipe-lay vessel Akademik Cherskiy has started pipe-lay works in the Danish EEZ today," the Nord Stream 2 developer said in emailed comments April 27.

"The pipe-lay barge Fortuna is continuing pipe-lay works," it said.

The Fortuna, which uses anchors in pipe-laying meaning a slower rate of work, resumed operations in Danish waters on Feb. 6.

The Akademik Cherskiy departed from the port of Wismar in Germany on March 4 and spent almost four weeks offshore Kaliningrad before carrying out sea trials in Danish waters.

It had long been considered as a likely candidate to lay some of the remaining pipeline and arrived into the German port of Wismar on Jan. 24, according to S&P Global Platts trade flow software cFlow.

Wismar was also the last port of call for the Fortuna before it resumed pipe-laying work in Danish waters in February.

Nord Stream 2 has submitted the relevant notification to the Danish Maritime Authority (DMA) to use the Akademik Cherskiy for pipe-laying offshore Denmark.

Egypt Restarts Major LNG Project

In the late 90s of the previous century and early years of this century, Egypt in collaboration with international partners started the development of its LNG sector. This resulted in the Idku and Damietta plants with a capacity of 7.2 and 5.3 mtpa, respectively. However, the availability of feed gas evaporated overnight when domestic demand rose strongly until 2012 and the two LNG plants came to a standstill.

Egypt’s fortunes have improved markedly the last couple of years resulting in Idku's restart. Now, also, Damietta has started working after almost nine years of inactivity. Despite the positive signs, challenges remain.

The discovery of several major offshore gas resources during the past decade, of which the supergiant Zohr gas field is the biggest, improved Egypt’s energy outlook. The Idku plant has been exporting since 2018 when production at Zohr started.

Furthermore, Egyptian Dolphinus Holding and Israeli Delek Drilling struck a landmark agreement and started importing additional gas from Israel's Leviathan and Tamar offshore fields in 2020. The deal is worth an estimated $19.5 billion for the purchase of 85 bcm over 15 years. The majority of the gas is exported through the Idku plant to international markets.

The restart of the Damietta is another major achievement for Egypt which intends to become an energy hub and exporter.

There are also plans to transport Cypriot feed gas from its offshore fields through subsea pipelines to the two Egyptian liquefaction plants.

Compressors Made in Iran

 Over the past five decades, overhaul of rotary machinery like turbocompressors has been a cause of concern for the petroleum industry and a major determinant for Iran’s gas industry. Whenever rotary machineries stopped working in the oil and gas facilities, it had to be kept idle until foreign engineers travel to Iran for repairing them. Russian engineers who came to Iran for reparation in the 1970s used to keep Iranians out of site or compressor station so that they would not learn reparation of them. However, Iranians are convinced that self-sufficiency in gas transmission equipment is an obligation, not an option.

Iranian companies like MAPNA Turbine Engineering and Manufacturing Company (TUGA) and Oil Turbocompressor Construction Company (OTC), backed by the Petroleum Ministry, have long commercialized turbocompressors which are among the top 10 high-tech petroleum industry products. Therefore, Iran is among seven nations to have mastered the full cycle of design, construction and after-sales services.

Iranian oil and gas reservoirs are more than 1,000 kilometers away from major consumption destinations. To use this clean energy, gas transmission pipelines and compressor stations need to be built to feed power plants, industries, households, cars and wells and also to be exported. At the heart of each gas compressor station, particularly turbocompressors tasked with gas transmission, rotary machinery lies.

In 1969, the first Russian-made turbocompressor was launched in Iran. Following the 1979 Islamic Revolution, as foreigners left Iran, Iranian manufacturers and engineers took their time to go ahead with necessary reparation. The knowhow was mastered, but manufacturing was yet to materialize.

Finally in 2000, as international companies showed up to develop oil and gas fields in Iran, including the South Pars gas field, Minister of Petroleum Bijan Zangeneh instructed domestic manufacturers of manufacture turbo-compressors. At that time, more than 600 turbocompressors, supplied from 21 manufacturers, were operating in the oil and gas industry. Repairing these varieties of turbo-compressors was a major issue. It was then decided to change turbocompressors to 20-25MW based on National Iranian Gas Company (NIGC) needs.

Iran had no technical knowhow in early 2000s to build turbocompressors. Therefore, it moved to transfer in necessary technical savvy through partnership with leading companies for the purposes of domestic manufacturing of turbocompressors needed by NIGC, management of supply chain and domestic manufacturing of turbocompressor parts along with necessary infrastructure and designing, engineering and building gas compressor stations.

In early 2010s, Iranian companies managed to enhance their share of 25MW turbocompressors to 60% and that of compressors to 90%. That was instrumental in reducing the cost price of compressor stations and bringing about relative independence to Iran.

National Turbine Vs Rivals

Few countries in the world are able to build gas turbines, strategic and technologically sophisticated equipment. Minister Zangeneh has said turbines serve as the heart of the oil and gas industry. Most companies with ability to build turbines are American, German, Italian, Japanese and Russian. Over recent years, thanks to efforts made by Iranian engineers, Iran has joined the club of nations endowed with this technology.

NIGC is the largest user of turbo-compressors. By supporting domestic manufacturers of turbine, NIGC has played an effective role in this honorable process. The prosperity of these companies has saved Iran hard currency, created jobs and upgraded national self-confidence.

At the outset of the calendar year starting March 2013, NIGC Directorate of R&D adopted a project for the domestic manufacturing of turbines using the SGT600 technology owned by German Siemens. Designing and manufacturing a 25MW gas turbine, named IGT25, ended successfully and the first domestic turbine was installed on the Iran Gas Trunkline 4 (IGAT4).

National Turbine Redesign

The turbine had been manufactured in 2015 and had to be overhauled regularly to be usable in 2019, too. Otherwise, leading manufacturers would supply new products on the market to make conditions more difficult for Iranian turbine manufacturers.

Iran’s gas mainly runs from south to north and most strategic stations lie in tropical areas or deserts. Studies conducted to that effect showed that turbines lose 10-15% of their power in high temperatures. Therefore, a project was envisaged to upgrade the performance of turbines. The project was named high ambient solution (HAS). In this project, solutions were studied for overcoming hot weather. After developing an upgraded edition and conducting operating tests, the turbine is ready to be moved to the Khourmowj station. These upgraded systems would be used in the new stations in tropical areas.

The main idea is to upgrade the capacity of national turbine from 25MW to at least 28.5MW. The important point is that this upgrade is done without any general change in the size of the turbine, thereby dispensing with the need for infrastructure changes in the installations. Based on the schedule, this turbine would be commercialized next calendar year. That would allow Iran to remain a player in this rivalry and not lag behind in the technological race.

Although various plans had been carried out for upgrading turbines, no compressor had been upgraded. For this reason, redesigning its technology was envisaged in order to raise the engine’s yield from 82% to 90%. Achieving such a figure would be consistent with the latest advancement in the world. That would bring about major changes in the compressor installations. Gas compression could be done by using a fewer number of turbines. When a fewer number of devices operate, they will wear out later, while electricity, fuel, oil and cable extension costs will decline. On a wider scale, upgrading turbines and compressors together could change the array from 1+3 to 1+2, which would save millions of dollars. Building smaller stations would mean less land allotment and much less investment. The engine upgrade is to materialize in July. It can be argued with certainty that the knowhow for designing, redesigning, engineering and repair has been nationalized. Iran, along with a few number of developed nations, owns technology for gas turbine manufacturing.

TUGA and OTC have received orders for building 200 turbocompressors for the Iranian Petroleum Ministry.

24 Centrifugal Compressors

Agreements were recently signed with domestic companies for manufacturing 24 centrifugal compressors and gathering associated gas in the Rag Sefid oil field with a view to ending associated gas flaring. The agreements are worth totally €165 million. The minister said the agreements constituted a major step towards no-flaring policy, adding that no associated petroleum gas would be flared in 2022.

The Persian Gulf Bid Boland Gas Refinery (Bid Boland II Gas Refinery or simply BB2) struck a €75 million deal with Oil Turbo-Compressor Construction Company (OTC) and MAPNA Turbine Engineering and Manufacturing Company (TUGA) for the construction, installation and operation of 24 centrifugal compressors. BB2 also signed a €90 million agreement with Energy Industries Engineering and Design (EIED) for flare gas gathering in Rag Sefid.

OTC has agreed to manufacture 16 centrifugal compressors for the Aghajari 5 and Bibi Hakimieh 1 operation units, as well as the gas pre-compressor station of Pazanan recycling facility. TUGA is assumed to build 8 centrifugal compressors for the Bibi Hakimieh gas gathering station.

So far, 7 subprojects for gathering 130 mcf/d of gas have been awarded to subcontractors under 9 agreements. Before the end of the mandate of the current administration, 11 more subprojects would be awarded under 5 agreements for gathering 400 mcf/d of gas. Totally, 18 subprojects would be finalized under 20 EPC agreements.

Turbocompressor Manufacturing, Outcome of Long-Term Project

Ahmad Mohaimeni, a graduate of chemical engineering from the Sharif University of Technology, is a gas compressor expert at the Iran Gas Engineering and Development Company (IGEDC). He knows the history of gas compressor stations across Iran. He has been involved in the installation and operation of 175 turbocompressors and has been in charge of launching 135 units across the country. Thanks to Mohaimeni and his peers, nobody is worried about pressure fall-off in gas distribution across the country.

The following is the full text of the interview Mohaimeni gave to "Iran Petroleum":

When did you start launching gas compressor installations? What conditions were they in by that time?

I stepped into gas compressor station installations in 1996. That coincided with the emergence of digital systems at stations and the systems were no longer manual and pneumatic. I was personally involved in the Farashband and Petaveh stations on Iran Gas Trunkline -2 (IGAT-2). The turbocompressors at these stations were Nuvo Pigano, made in Italy, which had been manufactured under GE license. Due to sanctions, only this Italian company had accepted to work in Iran, but Italians were not the only foreign experts at the stations. The installations mainly comprise turbocompressor, filtration and cooling. However, there are many other accessory sections like power supply, safety system, control system, air compressor, emergency generator, gas detector, and firefighting system, and so on. They were all under management of foreign experts from Europe and South Korea. Therefore, we had to deal with a large group of foreign experts who did not take seriously the expert advice of Iranians in the installation and launch of projects.

Do you have any memory of technical operations’ dependence on foreign experts?

One of the main challenges was the coincidence of commissioning with January holidays. I remember well that foreign experts left Iran on vacation regardless of consumption peak in the winter. It was exactly when gas supply was likely to face disruption at any time. They were not even ready to stay in Iran in return for higher sums and preferred to leave Iran on vacation. Since commissioning was entirely dependent on foreigners, the absence of experts was visible. Decision-making rested with foreigners. Of course, it has to be noted that the growing trend in the rank of Iranian engineers was laid bare in the following years. The knowledge they had gained through operation of various compressor stations encouraged them to boost their self-confidence in the face of foreigners and have the initiative in their hands in the following years. I remember a meeting in which experienced German experts were in attendance. I was trying to convince them about the technical failure of equipment. Foreigners gradually realized that Iranians had something to say. I have to note that foreign experts were commanding affairs up to early 2000s. But thanks to knowledge acquired and efforts undertaken by colleagues pushed Iranians towards progress gradually.

In 2001, Siemens and Iran’s Oil Turbocompressors Company (OTC) signed a deal for the German firm to share technology with the Iranian side. What happened to that historic deal?

The project was a big step that helped Iran start manufacturing turbocompressors. Before that, we had only imported Russian, Italian and German devices and our colleagues in the gas industry had gained good level of knowledge in this regard. Gradually, the difference between Iranians and foreigners declined in terms of knowledge and Iranians got to know technical details more effectively. As efforts got under way for the domestic manufacturing of this strategic equipment, we brought together a group of experienced electrical, control, mechanical and piping engineers to establish a group for operating installations. I was in charge of the group. Under the deal with Siemens, 50 turbocompressors were envisaged to be manufactured. The first one was installed in 2003 in the Petaveh station and the last one in the Kheirgoo station in 2011. This future-oriented contract was full of goodness and benediction for the gas industry. Over ten years, various components of turbocompressors like fuel and command systems of turbines were manufactured domestically. Gradually, Iranians saw their share increase in the design and manufacturing of the strategic equipment.

You were involved in the installation of 50 turbocompressors, which is a unique experience. How do you think this transfer of technology help the growth of the gas industry?

Most of our current success has been achieved thanks to the contract with Siemens for the manufacturing of 50 turbocompressors. The younger generation should know that such achievements have not been made easily. Before this agreement, delivery of turbines was delayed and we were always worried. But now turbine is the first commodity that is delivered to the site and that is too much. Currently at the Khourmowj and Ab Pakhsh stations which I manage, domestically manufactured turbines are delivered ahead of other items. I’m talking about technologically sophisticated equipment whose purchase would have cost big sums, and we always depended on foreign companies to install them for us. Many Iranian engineers have become experienced enough in these years, and that guarantees the future of gas industry. Meantime, signing bigger contracts for the manufacturing of 200 devices in the following years enhanced the Iranian share. After Siemens quit working in Iran in 2010, turbines were manufactured domestically and some prototypes were installed in the Dehaq stations, which functioned much better than the German ones. Since 2015 onwards, all turbines installed at different stations are homegrown. They are now seen in IGAT-6, Jahrom, Khourmowj, Parchin and Semnan.

Naft Masjed Soleyman to Gain Rightful Standing

The Naft Masjed Soleyman football squad is a representative of Iran’s petroleum industry in Iran’s pro league matches. In a bid to boost its players' quality and achieve better results, it chose Mahmoud Fekri, former national footballer, as head coach. During three seasons, Fekri promoted Naft Masjed Soleyman from the first league to pro league. At the beginning the season, he was in charge of Esteghlal, but in the second half-season he was dismissed. Owning to good results he had gained in the first league, he replaced Dariush Izadi to head the Naft Masjed Soleyman squad.

Several weeks after taking over, he has fared well. "Iran Petroleum" has exclusively interviewed Fekri about his decision to lead Naft Masjed Soleyman.

Let’s start by asking you why you chose to lead Naft Masjed Soleyman?

I had previously worked with Naft Masjed Soleyman and I have got to say we left a good year behind at that time because I took Naft Masjed Soleyman to pro league. Now due to my strong knowledge of this team, as well as the city of Masjed Soleyman, I chose this team. Of course, I have to say that club managers were also kind to me. We held good talks and finally reached agreement and I decided to head Naft Masjed Soleyman. We have now started out and I hope that we would reach good results.

Who are your assistants in Naft Masjed Soleyman? Will you continue with your team in Esteghlal or you hire new ones?

The same colleagues are with me, except for Samad Marfavi who personally chose not to cooperate with me in Naft Masjed Soleyman. One or two local coaches have also joined us in order to establish a strong technical division to go ahead with competitions.

How do you assess the standing of Naft Masjed Soleyman?

Its standing is not very good in the table of rankings. However, I’ll try my best to promote Naft Masjed Soleyman to its real standing. Of course, I have to note that I need to be supported by the Board of Directors, CEO, veteran footballers and fans of Naft Masjed Soleyman so that we would have a good team. The Naft Masjed Soleyman squad deserves a higher standing. Therefore, we need to cooperate to push Naft Masjed Soleyman to its real position.

Don’t you think that you run a big risk by accepting to head Naft Masjed Soleyman?

Naft Masjed Soleyman has competent players. Young and experienced players are alongside each other. Therefore, we will try for the team to succeed. I personally believe that Naft Masjed Soleyman has a reliable lineup as there are highly motivated players in the squad. The technical core will also try to add to this motivation. I have to note that I would like to risk. This risk will pay off.

When will your contract expire? Will you renew it?

I’ve signed a contract for 11 games until the end of the season. Then I should see what would happen. If conditions are ripe and I am invited to continue with them, I will negotiate it. If everything turns out to be good, I will stay and continue working.

Do you think that you may be helpful to Naft Masjed Soleyman?

Why not! I’ve come to help Naft Masjed Soleyman. I would not come if I knew I would be of no help. When you love your job you can work anywhere and you will reach your goals. I’ll try my best here so that I can achieve good results along with others in the club in order to push this team to a safe and secure position.

What challenges do you see in the way of Naft Masjed Soleyman?

There is no team to be without problem, particularly under the present circumstances. Only two teams may have fewer structural problems. As an Iranian coach, I am well familiar with the circumstances and I have chosen here based on my personal knowledge. As I said, I have come here for 11 games and I hope to score enough points to take the team out of the red zone.

You said you’ve had good memories of Naft Masjed Soleyman and you’ve already fared well with this team. Do you think you can make history again?

I have kind of zeal for the Naft Masjed Soleyman squad and that is why I liked to work with them. Technically speaking, I know the players. My family and I love the Naft Masjed Soleyman squad. I’ve asked my players to play with motivation in order to take the team out of its current standing. I’ll try to revive the team by scoring good results and leave a good memory in Masjed Soleyman.

Will you hire any new players?

We have good players now and I trust all of them. It is not allowed to hire foreign players; otherwise I would have brought in good foreign players.

So you firmly intend to keep the Naft Masjed Soleyman squad in the pro league, don’t you?

This team has good potential. I’m sure that we will be promoted to the top half of the table after showing several good performances and then we will get out of the present condition. Therefore, I will try my best for the Naft Masjed Soleyman team to stay in pro league.

Iran Oil Documents Declassified

 Documents and artefacts are the main items in the Petroleum Industry Directorate of Museums and Documents. They are instrumental in preserving the history of Iran’s petroleum industry. The Directorate started work effectively in 2014 and has since gathered documents, audiovisual and written references as well as artefacts and old items and tools. In this newly-established center, regulations and protocols including identification, gathering, restoration, preservation and documentation for prospective use by researchers, students and professors have been highly respected.

The following is a brief review of the activities of the Directorate.

Background of Historical Documents

Akbar Nematollahi, director of Petroleum Industry Museums and Documents, touched on the background of historical documents in Iran, saying: “Considering documents in Iran dates from long time ago. In addition to public attention and sensitivity, legislation for state-run organizations and ministries dates back to 50 years ago.”

In 1969, the National Consultative Assembly and the Senate adopted legislation that required all ministries and state organs to preserve important and valuable documents. National Iranian Oil Company (NIOC) also issued a directive in early 1970, requiring that all original documents be preserved. It announced that any elimination of NIOC documents just on the grounds of statute of limitation was illegal.

Nematollahi said in 1972, the then Board of Directors of NIOC established a committee for “regulating bylaws on identifying redundant papers and their elimination”. Members of this committee were from various sections of the company. They had to study the subject and adopt regulations. The committee was later renamed “Evaluation and Identification of Redundant and Crushable Documents and Papers”.

Later that year, the committee was instructed to win approval from competent authorities prior to deciding to eliminate any documents pertaining to litigation in favor or against NIOC and its subsidiaries. Elimination of archived documents and papers was subject to the committee making sure that the documents had no administrative, financial, economic, political, cultural or historic value.

Post-Revolution Documentation

The instructions issued by National Iranian Oil Company (NIOC) on documents following the 1979 Islamic Revolution and establishment of Petroleum Ministry were effective until in 1996, previous regulations were updated and a new directive was issued under the title of “Evaluation of Documents”.

Throughout the implementation of this new directive, an important issue that had been forgotten was the absence of a ministerial body to consider the historical, cultural, social and political value of documents. That might have led to the destruction of many important documents.

Following Minister of Petroleum Bijan Zangeneh’s 2013 directive on the inauguration of petroleum museums, petroleum industry documents were also taken into consideration. Now, by benefiting from the experience of managers, experts and pundits in the documentation sector, gathering, recovering and revival of documents at the level of Petroleum Ministry its subsidiaries are on the agenda. In light of planning and cooperation among various sectors of the Petroleum Ministry, valuable documents have been gathered.

The documents held at the documents’ center of petroleum industry are all original, and contain valuable points. Such documents as agreements, memorandums and protocols, documents related to the first and second generations of the petroleum industry, senior petroleum industry officials (appointments and dismissals, promotions, special orders), documents and correspondence on important decisions, mutual correspondence with other ministries as well as national and international bodies, letterheads from various periods, maps, seals, technical charts, financial documents, confirmed oil project documents, books on oil and gas studies, old oil magazines, photos, films, news reports on the petroleum industry as well as petroleum industry artworks all lie under the category of documents at the “Petroleum Industry Documents Center”.

Nematollahi said the center was tasked with recovering, extracting and deciding on preservation or elimination of petroleum industry documents, gathering, classifying, reviving and repairing oil documents and then preparing them for historical, social, political and economic research by writers, researchers and anyone else interested in this sector, cooperation with oil document evaluation committees at the level of Petroleum Ministry and the four main subsidiaries with a view to identifying documents that would be preserved or eliminated, and finally adopting complementary regulations to create files for the documents.

Documents Center, New Family Member

Farshid Khodadadian, director of “Petroleum Industry Documents Center”, said: “The Petroleum Industry Documents Center” is a key member of the large family of the petroleum industry. It is tasked with safeguarding the identity, experience and more precisely the history of Iran’s petroleum industry. Some petroleum industry veterans or administrative centers have handed over valuable documents and items to the petroleum museums.

Documents have to go through a special procedure after arrival at the Center. They are divided based on affiliation with one of the following: Petroleum Ministry, (NIOC), National Iranian Gas Company (NIGC), National Iranian Oil Refining and Distribution Company (NIORDC) and National Petrochemical Company (NPC).

Dusting and disinfecting constitute the next stage of work on the documents. The documents that may need repair would be identified to be recreated. They are then moved to separate centers to be scanned and loaded in software. This center comprises six major sections – disinfection, restoration, listing, scanning, photography and film, library, press archives and research section.

Industrial Heritage

In addition to documents and photos, devices, tools and artefacts occupy an important place in the petroleum industry heritage.

The objects section of the “Petroleum Industry Documents Center” plans to archive the industrial heritage of the country in the oil and gas sector by arranging these items.

Throughout the century-old history of the petroleum industry in Iran, equipment and devices related to the petroleum industry including pumps, energy generators and engines, separators, distillers, pipes and joints as well as machinery and equipment for the oil, gas, petrochemical, refining and distribution sectors have been used. At this museum items are exhibited from the time steam was used for automation until electricity replaced it. Mechanical and manual controllers used prior to being supplanted by digital ones and artificial intelligence are on display. Identifying, gathering, restoring and preserving this equipment based on their timeline constitute the industrial heritage treasury at the “Petroleum Industry Documents Center”.

Most equipment and machinery at this center are unique. It is noteworthy that some of them even no longer exist in the warehouses of manufacturing plants.

Haftkel, Zagros Oil Gem

Everyone knows the story of the first oil field in Iran and the Middle East. The team led by William Knox D’Arcy explored oil in Naftoun, near what is today known as Masjed Soleiman (MIS) in May 1908. But rarely may someone know when and where the second oil field in Iran was discovered. The second oil field in Iran is located in Khuzestan Province, like the first one, in an area known as Haftkel. In the present article, the history of Haftkel and establishment of a city with the same name in the heart of zigzagging routes in the Zagros mountainside is reviewed.

Leaving Ahvaz to go northeast, one will visit the beautiful and calm city of Haftkel, which may be erroneously known as Haftkel, too. Haftkel is located in a desert where the Bakhtiari tribe lived for hundreds of years.

Prior to the discovery of oil in Haftkel and in coincidence with the operation of Well No. 1, some changes had been made by the British in this area. As a report from the governor’s office puts it, “Since the first well struck oil, construction of luxury houses began in Haftkel for workers, employees and managers who were of Iranian and British nationality. Simple workers were given 10-feet sheds, special workers and technicians were given double or triple-room houses while senior employees and managers were given bungalows. Two movie theaters for the blue-collar and white-collar groups, sport club, recreational facilities, parks and greenspace had been erected in Hafkel, a city suitable for living. According to a weekly report in July 1961, Haftkel and Naft Sefid produced and exported 168,000 b/d of crude oil. In 1969, National Iranian Oil Company (NIOC) pulled out of Haftkel, leaving this beautiful city to the Army.”

According to an Interior Ministry report on administrative division, Haftkel was a district in the Ramhormoz jurisdiction until 2008. Then, it lied within the MIS jurisdiction for several years. That had caused frustration among officials and people, making service-providing to this oil-rich city difficult. In May 2008, on the 82nd anniversary of Haftekl, it was recognized as county. Geographically speaking, Haftkel is almost located in the center of Khuzestan Province. It lies 90km from Ahvaz, 35km from Ramhormoz, 39km from Bagh-malek, 80km from MIS, 85km from Izeh and 100km from Shoushtar.”

MIS, 20 Years Later

The interesting point is that Haftkel struck oil some 20 years after MIS, but it continues to hold the second ranking of the Middle East. In addition to oil, Haftkel has abundant natural resources, including river Zard, nomad settlers and paddy fields.

In the book Khuzestan, Civilization and Oil, we read: “To the southeast of MIS, the cradle of Middle East petroleum industry, lies another oil field known as Haftkel. Although it was discovered 20 years after MIS, it shortly became the largest oil producing field in Iran. It was then named the second oil-rich city in Iran and the Middle East, just behind MIS. Haftkel and its surroundings had won fame prior to oil discovery there. An attractive countryside with Qashqaei and Bakhtiari nomads lies there. Wild flowers grow all across plains both in spring and winter. The river Zard runs nearby and surrounding land under paddy cultivation. Seasonal rivers keep watermills running in most seasons of the year. The remnants of rock dams with lime concrete prove that watershed management knowledge had existed there long time ago. Although this area shot to prominence following the discovery of oil, it was early known for its countryside.”

Chapter 3 of The Detailed Geography of Iran describes Haftkel as follows: “The Anglo-Persian Oil Company did not limit its attention to MIS mines; rather it proceeded with exploration in Qeshm Island, Dehloran and several other spots including Haftkel which lies 35 miles southeast of MIS. It reached a huge oil field in 1927, which had significant natural reservoirs.”

Nature alongside Industry

The beautiful Amsari Mountain, enjoying an untapped and pleasant nature, has its name tied with the Iranian petroleum industry in Haftkel.

As Khuzestan, Civilization and Oil puts it, “The significant point with Haftkel is that in terms of technical coordinates of Haftekl oil reservoir and formation correspond with those of Asmari Formation which lies on the way from MIS to Haftkel. Amsari formation is a big oil hump in Iran. The name was chosen for it because of the reservoir rock found in the Asmari Mountain. After installation of industrial and operational equipment, Haftkel remained a large oil producer in Iran for years. Its 25 wells produced millions of tonnes of oil a year.”

Statistical Data

Historical data available on the discovery and exploration of oil from Haftkel, as well as historical and industrial developments are also interesting. Khuzestan, Civilization and Oil puts it as follows: “Since the discovery of oil in this field in 1928 to 1951, more than 130 million tonnes of oil was extracted from this area. From October 1954 when the Oil Consortium was established, Haftkel came third in terms of production, behind the newly discovered Aghajari oil field and MIS. This ranking was indicative of pressure fall-off in the reservoir. Production in Haftkel dropped after oil reservoirs were discovered in Aghajari and Gachsaran. In 1967, it was ranked the 6th. Aghajari, Gachsaran, Maroun, Ahvaz and Karanj occupying the first six positions. As much as oil production decline in Haftkel, the city lost its liveliness. Migration from the city increased and Haftkel turned into an abandoned city shortly. However, gas injection into the Haftkel field started in July 1976 to allow for oil production. But in 1979, it could not gain a better position than 20th among 23 active oil areas. Oil production is continuing in the Haftkel oil field, run by the MIS Oil and Gas Production Company, by gas injection and its name has still survived in Iran’s petroleum industry.”