Secure Route for Energy Transition

Ali Forouzandeh

Director General of Public Relations

Politicians and experts unanimously agree that the world is headed towards transition from fossil fuels to new and renewable energy sources. Although this will happen gradually, in the current situation, the global economy has properly realized that gas is the best and safest route for the relevant transition. Therefore, given the significance of the issue, the largest gas reserves holders, including Iran, may make suitable decisions to become major players in the global gas trading.

A priority in the Petroleum Ministry in the 13th administration has been to put into practice the energy diplomacy against the backdrop of sanctions. Due to enhanced domestic consumption and growing exports, gas has been highlighted more than any other sources of energy. A tripartite gas swap deal between Iran, Turkmenistan and Azerbaijan, which came into effect in November 2021, puts a seal of approval on this issue.

Another important event was the holding of the sixth summit of the Gas Exporting Countries Forum (GECF) in Qatar. GECF members account for 45 percent of world trade and 65 percent of the world's proven gas reserves. The meeting was even more important than the ones held in previous periods, given the tensions between Russia and the West and the rise in energy demand, as the coronavirus is on the decline.

Another importance of gathering of the leaders of the world’s gas giants is that during the energy transition period, the share of natural gas in the energy mix of all countries is increasing, and due to the energy crisis, all countries are seeking to enhance natural gas production capacity and LNG export.

Finally, in addition to these achievements, the meeting could provide leverage for the lifting of unilateral US sanctions against Iran, expand cooperation with regional countries and GECF members, and help Iran fare better in the global gas trading.

One key issue here is that Iran should invest in developing LNG plants with a view to diversifying its export mix by benefiting from all local and external potential.

GECF Synergy in Sustainable Gas Supply

The sixth summit of the Gas Exporting Countries Forum (GECF) was held on February 22, 2021, in the Qatari capital of Doha. GECF members account for 44% of world gas production, 67% of world gas reserves, 64% of pipeline gas transmission and 66% of liquefied natural gas (LNG) trade. Iran, one of the world’s largest gas producers and a founding member of GECF, held the position of the Secretary General of the Forum for two terms and participated in this meeting at the highest level. Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russi6a, Trinidad and Tobago, Venezuela are the 11 GECF members, with Malaysia, Norway, Iraq, Peru, Azerbaijan and the UAE as observer members.

Iran’s President Ebrahim Raeesi, while addressing the summit, said:  “The holding of six summits of GEFC since the establishment of this fledgling intergovernmental organization is, more than anything else, a strong sign of convergence, solidarity and determination of its members to pursue the goals of the body whose foundations were laid at Tehran’s initiative in 2001.”

“The purpose of GECF and its founders and members is to protect the sovereignty of countries over their natural resources, especially gas, to cooperate in finding solutions to protect the collective interests of member countries, to develop cooperation between countries in various fields such as exploration, production and trade of natural gas, strengthening the role of natural gas in combining world energy consumption and consensus and cooperation in strengthening security of supply and security of natural gas demand,” he added.

Noting that GECF summits would provide a chance for synergy in objectives, he said: “As gas-rich countries and gas exporters, in line with improving the security of natural gas demand, by pursuing the goals and mission of GEFC, we may send a clear message to the world to ensure sustainable energy supply in the short and long term.”

“More than a decade after the first GECF summit in 2011, which was held in Doha under the motto ‘Natural Gas, Response to Challenges of Sustainable Development in 21st Century’, the world now more than ever needs the collective efforts of its members to fulfill the slogan,” he said. “The Sixth Summit is the first summit since the outbreak of the COVID-19 pandemic, and its motto ‘Natural Gas: Shaping the Future of Energy’ sends a constructive and positive message to society that in the current context of energy markets and the difficult path of the world in post-COVID economic recovery, natural gas will be a contributing factor.”

Natural Gas Share

Raeesi said: “Natural gas, as a clean, safe, and richly extractable fuel, will make significant contribution to the world's energy mix for decades to come, and will retain its economic, technical, and environmental advantages over other fuels.”

“The growing trend of electrification in the coming decades and the role of natural gas as the most important input of electricity generation, reinforces this perspective. From this perspective, our approach as members of GECF is to supply more natural gas to the world market based on a humanitarian approach,” he added.

Raeesi said: “That increases the status and importance of collective decisions of GECF members, which altogether account for more than 70% of proven natural gas reserves and 44% of the market output. Joint ventures and exchange of experiences may help improve solidarity between communities and increase stability, security and convergence in international relations, while increasing natural gas trade.”

He described as humanitarian, the approach of GECF member states for further gas supply to global markets, saying: “The international community should stop and not recognize any unilateral and coercive measure like the US’s unjust sanctions against the GECF members’ oil and gas industry.”

Natural Gas in Post-COVID Era

Raeesi said: “In the current context of the global economy and the prospect of rising energy prices, I propose that GECF implement an initiative entitled “Natural Gas to Serve the Global Economy in Post-COVID Era” aimed at helping the global economy recover from the COVID-19 outbreak. At a time when the repercussions of the virus are declining, the pivotal role of GECF will be very promising in ensuring the security of energy supply in the world.”

“This may be achieved through joint ventures in the upstream sectors of the gas industry, reforming consumption patterns, increasing energy efficiency in member countries with dual environmental and economic goals, and ultimately building more export capacity and controlling the rising trend in natural gas prices. In this way, the position of GECF in the natural gas market will be strengthened and will lead to the stabilization of the market and the maintenance of the growing share of natural gas in the world energy basket. Islamic Republic of Iran is ready to look positively at the creation of a mutual investment fund among GEFC members,” he added.

Raeesi said: “Natural gas produced by GEFC members may be used as a tool to reduce the environmental impact of greenhouse gas emissions and control global warming. Natural gas may be the best alternative to polluting fuels. I would like to emphasize, therefore, that setting climate goals, without taking into account the realities of the

world’s current energy in terms of sufficient financial resources and public access to advanced technologies, will not help solve the world's complicated problems of climate change.”

“The international community must support multilateral initiatives aimed at enhancing the security of energy supply while protecting the environment, as the Forum seeks. The international community, for example, must prevent and recognize any unilateral and coercive measures, such as the United States' unjust sanctions imposed on the oil and gas industry, although in today's world, with fully aware and free nations, the use of sanctions to impose sanctions. The domineering will and demands of a country have no effect on independent countries, but at the same time jeopardizes the economic interests of the member states of GEFC,” the president said. “In an interactive environment between gas-exporting countries, the individual interests of each member state could be secured in the form of a collective strategy based on collective cooperation. The main asset of this forum is the experience and technical knowledge available in the member countries, which with the help and cooperation of members could serve the interests of natural gas suppliers and consumers and the global economy.”

Iran Capacity

Raeesi said: “In this context, Iran, as one of the world’s largest holders of natural gas reserves, has a very high capacity for production, transmission and export of natural gas and greater participation in ensuring the security of global energy supply. Despite unjust, unilateral and unlawful US sanctions, Islamic Republic of Iran has been able to increase  its natural gas production rate and rely on large and valuable projects in the upstream and downstream sectors, relying on the capabilities of specialized and committed manpower and using local companies and local technical knowhow to run oil and gas projects.”

“Iran is one of the leading countries in the world in the development of domestic gas consumption, so that now 95% of Iran’s population is covered by national natural gas network and replacement of liquid fuels with natural gas in industry, transportation and power plants has been successfully implemented. Currently, the share of natural gas in Iran's energy consumption basket has increased to more than 70%. We have put the policy of improving energy efficiency and reducing the energy intensity on our agenda, and with the increasing benefit of the global market from Iranian oil and improving the production capacity of natural gas, we will see Iran's export capacity increase,” he said.

Raeesi said: “Relying on its huge natural gas reserves and strategic geographical location, Islamic Republic of Iran intends to play a role commensurate with this volume of reserves in the global gas market by developing bilateral and multilateral cooperation with neighboring countries and other countries. The initial steps of this strategy were taken with the tripartite gas swap agreement between Iran, Turkmenistan and Azerbaijan in November 2021. We are ready to develop such paradigms of cooperation and participation to the maximum.”

“The capacities created in the Iranian gas industry have created suitable grounds for the cooperation of the private sector of the member countries of GEFC in the field of upstream and downstream of natural gas and its trade, especially the knowledge-based companies. Accordingly, Islamic Republic of Iran invites the GECF member states to exchange information and experience in the field of extraction, processing and transmission of gas and related technologies, to start systematic cooperation for joint ventures in the gas industry,” he said.

He added: “The regional strategy of the Islamic Republic of Iran is based on increasing the production and export of natural gas and the access of as many nations in the region to this clean fuel of choice. Islamic Republic of Iran announces its readiness to become a safe route for gas swap between producers and consumer markets.”

Sanctions Cause Uncertainty

Iran’s Minister of Petroleum Javad Owji addressing a GECF ministerial meeting, said: “I hope that this meeting will be able to take another step towards achieving the goals set out in the Statute of GEFC by exchanging views on key issues of interest, especially the vision and global development of the gas industry, by taking effective decisions and measures.”

He supported the basic strategy of GECF to move to a safer and more stable world in the field of energy, and said that imposition of unilateral and unlawful sanctions against GEFC member states violates international law and causes uncertainty in the world energy market.

“In the last two years, we have witnessed the outbreak of the COVID-19 virus and its new strain, omicron, and its adverse impacts on the social and economic life of major countries in the world. But is no exception to this rule and has experienced ups and downs,” he said.

Owji said: “Nevertheless, GEFC, accounting for about half of the world's natural gas exports, has been able to maintain its strategic role in the sustainable supply of natural gas in the world, despite the outbreak of the COVID-19 virus.”

“One of the most important lessons learned from the COVID-19 virus by all stakeholders in international, regional and global gas markets is to increase paying attention to the role and importance of bilateral and multilateral international cooperation and strategic cooperation with key energy organizations and associations such as OPEC, International Energy Forum and International Gas Union for the transition from unstable conditions.”

Owji said: “GEFC, in light of the transition period of energy and paying attention to the requirements of climate change and sustainable development, focuses on improving the security of natural gas supply in regional and global markets and maximum efforts made to pave the way for comprehensive development of natural gas and energy as

accessible and environmentally friendly fuel biodiversity worldwide, especially in energy-poor nations.”

Joint Potential

Owji stated that due to the growing importance of technologies such as technologies of adsorption, production and storage of carbon, blue hydrogen and reduction of methane gas leakage, it seems necessary to develop the technology transfer process as one of the main ways to improve GECF members’ production and export capacity, facilitate the strengthening of GECF gas export mix. He added that transfer of successful knowledge and experience in areas of interest such as gas production, development of export terminals, new methods of managing gas contracts, new investment mechanisms and project financing, management and strategic partnerships will maximize the utilization of shared capacities and capabilities.

GECF Strategy

He pointed out that Iran, with its thousands of kilometers of domestic gas supply network, is one of the leading countries in this field. “We strongly believe that the imposition of unilateral and transnational sanctions by domestic law on any of GECF member states could disrupt the steady flow of natural gas worldwide and jeopardize the security of natural gas supply.”

“In this regard, the support of member states and observers of the Forum for the idea of ‘depoliticization of international and global gas cooperation’ and ‘restoring economic logic and multilateralism’, which is also emphasized in the summit statement, can play an important role in maintaining supply and demand security for gas in the world and achieve fair prices for all stakeholders in the global gas industry,” said Owji.

The minister emphasized that imposition of unilateral and unlawful sanctions against members of GECF is not only a violation of international law, but also a major cause of uncertainty in the global energy market. He said: “Strategic instability is a major factor in recent developments in relation to high natural gas prices in Europe. Energy market balance is in the interest of energy producers and consumers.”

He said that Iran would support GECF’s major strategy of transition to a more secure and more stable world in terms of energy.

“The Petroleum Ministry of Islamic Republic of Iran in the 13th administration is fully prepared to organize all its capacities in the best possible realization of this strategy with the good intentions and strategic approach,” he said.

Gas Swap

On the sidelines of the ministerial meeting, Owji said: “Iran is ready to cooperate with all GECF member countries in a variety of methods available in the natural gas and energy trade, including swap, transit and other common methods.”

“As one of the world’s largest holders of proven natural gas reserves, as well as one of the founders of GECF, Iran's core strategy is to provide maximum support to the spirit of cooperation and GECF collective decisions in accordance with the articles of association and procedures agreed upon by GECF members,” he added.

Owji said: The severe determination of the 13th administration and the Petroleum Ministry is to increase its share in the natural gas trade and help meet the growing demand for gas in the world by developing Iran's relations in the gas trade in the region and then in the world.”

“We are ready to cooperate with all member countries of GEFC in natural gas and LNG trade, including swap, transit and other common methods. It is noteworthy that the geopolitics of our country is such that it can be used as the most desirable corridor for gas transmission to the east and west.”

Owji said: “We have not only the largest gas reserves in the world, but also neighbors to the world’s largest holders from the north and south, Russia, Turkmenistan and Azerbaijan to the north and Qatar to the south. At the same time, we have access to the export corridor with the European continent through Turkey. All these conditions indicate the importance of Iran as one of the main pillars of gas trade in the world. At the same time, due to the large size of the country, it is possible to establish storage facilities with the cooperation of members of GECF to control seasonal conditions. It is worth mentioning that as a leading country in the construction and expansion of the domestic gas supply network, we have the appropriate technical and engineering capacity to partner with the member countries of GEFC.”

Cooperation

The oil/energy ministers of Iran, Russia, and Azerbaijan, as the region's most powerful countries in the electricity industry, stressed the need to develop regional cooperation in the energy sector.

In a historic meeting on the sidelines of the GECF Summit in Qatar, Iran’s Owji, Russia’s Energy Minister Nikolay Shulginov, and Azeri Energy Minister Parviz Shahbazov exchanged views on developing regional cooperation in the field of electricity.

Meantime, Iran and Venezuela signed a memorandum of cooperation aimed at expanding cooperation in various sectors of the oil industry. The Memorandum of Understanding was signed by Minister Owji and Venezuela’s Felix Placencia Gonzalez in the presence of President Raeesi, on exporting technical services, technology transfer, training services, manpower training and cooperation in the refining industry.

It should be noted that on the sidelines GECF summit, Owji met with Mohammad Hamel, Secretary General of GECF as well as the Oil and Energy Ministers of Algeria, Qatar and Nigeria and the Venezuelan Foreign Minister in Doha.

The bilateral or multilateral talks discussed areas such as gas swap, technology transfer, technical knowledge, and investment in oil and gas fields. Furthermore, Iranian and Iraqi ministers exchanged views on cooperation in the energy sector, as well as Iraq’s debt to Iran over gas exports

Gas Exports to Neighbors, Gas Diplomacy Priority

Iran’s deputy petroleum minister for international affairs and trading has said that the Petroleum Ministry in the 13th administration would focus on cooperation with neighboring nations when it comes to gas exports.

“We have so many opportunities among our neighbors that Europe is our next priority, but if the Europeans are interested, we can negotiate to meet their needs. It requires that the Europeans remain independent and not follow in the footsteps of the United States,” he has said.

Whereas gas prices in the world markets have been constantly increasing in recent years, Iran's share of gas exports is only less than 2 percent, and due to the increase in gas supply to Iran's provinces and the decline in natural production in gas reservoirs such as the South Pars gas field within 4 years, it seems that in order to achieve the export goals in the vision plan for development, Iran should think about gas efficiency at the same time as developing new gas fields.

Therefore, in addition to the full development of South Pars and the use of pressure boosting platforms in this field in the long run, Iran also needs to develop other fields such as North Pars, Ferdowsi and Farzad to enhance the country's gas production capacity, while also pursuing efficient use policy to generate wealth. Iran should seriously enter neighboring markets, particularly Persian Gulf littoral states. The reason is clear. Due to lower pollution, most countries are opting for gas. Iran is rich in gas and it can become a reliable supplier to potential buyers.

15 Potential Buyers

Iran’s geographical location is different from other gas producers in the world. Iran has 15 neighbors, all of whom except Russia, Azerbaijan and Turkmenistan depend on gas imports. For instance, Turkey needs Iran’s gas although it has diversified its market and is receiving gas from Russia and even Azerbaijan’s Shah Deniz and transits gas to Europe, too. Iraq also remains a buyer of Iran’s gas although it recently struck a $27 billion deal with France’s Total Energies. Most oil development projects in Iraq require water and gas injection for enhanced recovery.

Southern neighbors need further Iran’s gas. Some experts see them as the best customers of Iran’s gas because their gas consumption peaks in the summer and it would be possible for Iran to manage its gas in a bid to guarantee a sustainable gas supply.

Flexibility and Marketing

Under the present circumstances, Iran’s Petroleum Ministry must have competitive prices in various markets. The fact is that due to the non-development of major gas fields like North Pars and daily-growing gas demand across the country, efficient use would be the solution to increasing the current 2% share of global gas trading.  

Optimization is required to exist in both sides of supply and demand, but at stake here is demand. Gas demand has one solution, known as price modifications. Furthermore, development of renewable energies with diverse strategies to guarantee sustainable supply is another solution for reducing gas consumption in Iran.

Gas exports constitute a multi-dimensional issue not only in Iran, but also across the world. It has political, economic and security aspects. All stakeholders, including states and companies that may be either buyer or seller, would study all aspects of this issue. Significant gas reserves and growing demand for gas would not be merely sufficient for signing gas imports/exports agreements. The issue of gas exports is largely affected by major political, security and economic issues of beneficiaries and definitely foreign relations and international politics are key factors. In line with a macro-policy, Iran is prioritizing gas distribution and domestic consumption and therefore it would export gas only when there would be spare gas.

In light of its huge gas reserves, Iran must at least on paper, be a leading exporter and have a significant share of the market. But in practice, its share stands at 2% only. Three reasons are offered for this meager share: The first factor is the US sanctions that have affected Iran’s gas exports from two aspects: cutting Iran’s access to natural gas markets and banning international companies from investing in and developing Iranian gas fields. A case in point is the planned Iran-Pakistan-India gas pipeline. Despite Iran’s flexibility and more importantly its cost-effectiveness, the project was not implemented.

India opted for LNG and Pakistan refused to participate in financing the construction of the pipeline inside its territory, even though Iran pulled the pipeline to the border and even offered it at some point, but Pakistan refused on various pretexts. The alternative Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline was implemented. Pakistan provided an expensive floating terminal for receiving LNG and started importing gas from Qatar, and Qatar sold gas to Pakistan under good terms.

Today, it is crystal clear that the US has been behind all these stone-walling attempts and all these countries have shunned Iran under US pressure to instead opt for other choices.

The second factor has been domestic consumption. Gas consumption in Iran has often registered a 10% growth on an annualized basis. Gas distribution projects to supply gas to remote areas has increased gas consumption in the country. Any increased gas production is absorbed by domestic networks and therefore no gas is set aside for exports. More than 90% of households being connected to the gas grid is a source of satisfaction, but on the other hand such high gas consumption would not allow any export. Iran is currently the third largest producer of gas in the world with an annual output of 230 bcm a year.

Using gas in the petrochemical sector and downstream industry would generate a significant value-added, but advantages of a good gas market at the global level and using gas reserves also require gas export. Winning share of world markets would create strategic power for the country and largely contributes to security and economic growth and stability of the country.

Global Gas Prices

Over  recent weeks, the price of gas in the world has increased dramatically. The largest price increases were in Europe and Far East Asian nations including Japan and China. Market data show that prices have increased by about 250% since January 2021 alone, 70% of which only in August.

A former secretary-general of Gas Exporting Countries Forum (GECF), has put it as follows: “Declining supply, disruption of pipelines on the one hand, and rising demand are due to cold weather forecasts in Europe and Japan this winter. In this regard, Russia has reduced gas supplies from Yamal, which feeds one of Russia's most important pipelines to Europe, to 77 percent. Russia's Gazprom has cited technical issues as the reason for the decline. Due to rising demand and concerns about winter gas imbalances, gas prices in Europe for November delivery have risen to $50 per BTU. This is the highest gas price figure in history. In Japan, the increase was more than about $42 per BTU.”

With these assumptions, gas appears to be a key fuel worldwide in the coming years. But in this attractive market, what opportunity can Iran, as the second largest holder of gas reserves in the world and the third largest producer, create for itself?

Bargaining Chip

Gas Exports have always been a top priority in Iran’s vision plan. Over the past four years, in parallel with increased capacity, recovery from the South Pars gas field has been followed up faster by National Iranian Gas Company (NIGC).

Energy and gas market processes have changed dramatically, the first change being the price change, which has now normalized prices. In the past, the price of gas in Asia was $20, in Europe it was $12, but now it has reached $6 and $4, respectively. As a result, the price has been normalized. New suppliers like the United States have emerged, a country that was one of the world's largest importers until 2005, and now its gas shipments have even reached the Persian Gulf, as well as other countries.

Maroun Meets Oil/Gas Target at 100%

Maroun Oil and Gas Production Company (MOGPC) recovers crude oil, gas and condensate from the three complex fields of Maroun, Kupal and Shadegan. MOGPC operates on 3,080km of land, stretching to Haftkal and Naft Sefid to the north, Jarrahi River to the east and southeast and an operational zone, located 30 kilometers from the city of Ahvaz to the west and southwest. MOGPC runs 28 production, desalination, compressor stations, gas injection and water supply facilities.

CEO of MOGPC Hamid Kavian tells “Iran Petroleum” the company is realizing 100% of its targets in the current calendar year. He also notes that all associated gas in the fields run by MOGPC would be gathered in three years.

The following is the full text of the interview he gave to “Iran Petroleum”:

To what extent have you met your targets?

Like the past three years, we are meeting our targets at 100%, as required by National Iranian Oil Company (NIOC)’s plan.

How much is your average production?

We supply about 450,000 b/d of crude oil to the Isfahan refinery and export about 150,000 b/d. In terms of production, we are among top ones within southern oil-rich regions.

How much was MOGPC required to reduce output due to sanctions?

Fortunately, as we feed mainly oil refineries, we were required to cut only 60,000-70,000 b/d from our production. Of course, we benefited from the opportunity of sanctions and the subsequent freed-up capacity to go ahead with our overhaul plans.

How much does it take you to reach maximum output?

About 60,000 production cut was caused after capping wells. We hold meetings at MOGPC once a week to review various scenarios for reaching maximum output. Besides, meetings have been held every two weeks at National Iranian South Oil Company (NISOC) to restore maximum production. We need at least two-three months to restore maximum output.

What’s your share of feedstock supply to petrochemical plants now?

We are currently producing 30,000 b/d of gas condensate, which is delivered as feedstock to petrochemical plants after being mixed with products from other NISOC-run companies. In addition to liquids, C2+ along with 570 mcf/d of rich gas is supplied to the Maroun petrochemical plant. The remaining light gas is delivered to National Iranian Gas Company (NIGC) for domestic purposes. We also produce 6,000 b/d of naphtha from the gas extracted from Maroun’s Khami reservoir, which goes straight to export terminals.

How much associated gas does MOGPC gather?

We are currently gathering 88% of extra associated gas, 4% of which is used domestically. The remaining 8% is planned to be gathered within three years. I can say that we are one of the leading companies in associated petroleum gas gathering.

You have recently implemented two gas gathering projects, haven’t you?

Yes. Currently we have two five-year agreements with a $17 million investment to build gas compressor stations and sweeten sour gas at the rate of 15 mcf/d and then to sell low-pressure gas sent to the flare No. 6 at the rate of 14 mcf/d. Thanks to these projects, flare gas was down 40%.

To what extent has MOGPC met its gas injection targets?

75%.

How many gas injection stations do you have?

We have two statins. The first one is the Maroun gas injection station whose task is to inject gas into the Asmari reservoir of Maroun with capacity of 150 mcf/d. The second one is the Kupal gas injection system whose task is to feed gas into the Asmari reservoir of Kupal with capacity of 150 mcf/d. 

Isn’t there any gas injection now?

We’re injecting no gas now due to the cold season. Of course, what is important for our reservoirs is the accumulated gas injection in order to stabilize the reservoir pressure. We run at full capacity at the beginning of the year when it is warm and inject 150 mcf/d to the Kupal station. 

Could you tell us about the latest status of enhanced oil recovery projects?

The four packages of Maroun 1&4, Maroun 3, Maroun 6 and Maroun 2&5 are being handled by MOGPC. In these projects, development and workover wells are drilled, some of which have been delivered. But our main projects like injection, optimization of desalters and other units pertain to output preservation, which are under way despite some delay.

Will they become operational within the two-year schedule?

No, their operation would need more than two years.

What’s the reason for this delay?

There are different reasons, each project must be analyzed separately and based on the project itself, we cannot write a general version for 28 reservoirs, for example, when we talk about the surface facilities, it must be determined, for example, whether the goods we buy are specific and there is need to be imported or not. Some of the problems also arise from implementation issues, each of which must be addressed on its own.

How much has COVID-19 been involved?

COVID-19 was a national problem, but because production should not be stopped at all, so it created difficult conditions for employees, so we tried since the beginning of the outbreak of the virus, in addition to distributing masks and other health items, work shifts from the three eight-hour shifts to two 12-hour shifts to reduce the movement of troops, although there was a lot of pressure on our forces, but we were able to prevent the spread of the disease significantly, so that in the last two years, we unfortunately had two feet. But under no circumstances did we allow the slightest interruption in production. However, the COVID-19 pandemic is still going on and we know we have to be ready again.

How much commodity has been manufactured domestically?

Due to the good support from domestic manufacturers, we have been able to domestically manufacture 3,809 items at the company level and prevent production interruptions. Of course, in the sectors where technical knowhow was not available in the country and we needed to import, due to the increase in the costs caused by sanctions, we had to procure the goods we wanted at a higher cost. Since 2018, of 1,238 requests, we have domestically manufactured about 20,000 required items of process equipment and machinery.

In addition to gathering associated gas, what measures have you taken on the wells to eliminate environmental pollution?

You know, many of our activities are operations on wells, part of which was environmental pollution, which we managed to use by MOS and MOT methods to collect nearly 90,000 barrels of oil that was burning and had environmental pollution. Add to the production cycle.

What steps have you taken to eliminate oil pollution?

In addition to the main production, due to the reservoir conditions, the oil we produce has some brine as an unwanted fluid, which is close to 50,000 barrels. Fortunately, despite the problems we had due to sanctions, we were able to upgrade the pumps in this section with the help of knowledge-based companies. As a result, more than 99% of the waste was treated and processed to be injected into waste disposal wells. From this perspective we can say that MOGPC produces no waste.

Why did you decide to apply the skid-mounted technology at MOGPC?

Due to the processing of salt oil, it was decided to use quick-yielding projects in this sector, which is why we went to use the skid-mounted in Maroun 5 with a capacity of 20,000 barrels. Our initial tests proved to be successful. This project would be a major development in the salt oil processing knowhow, thereby dispensing with the need to use costly de-emulsifiers.

WOGPC to Boost Oil/Gas Output

CEO of Iranian Central Oil Fields Company (ICOFC) Ramin Hatami has said that plans were under way to increase oil and gas production from wells run by West Oil and Gas Production Company (WOGPC).

He said that WOGPC would see its oil production jump 22% and its gas production 10% in the next Iranian calendar year which starts March 21.

Referring to the main projects WOGPC has under way, he said: “These projects include the Dehloran gas gathering and compressor station with an investment of € 125 million under a 23-month contract, NGL 3100 feed pipeline and a power transmission post with an investment of € 85 million, the second development phase of the Tang-e Bijar field and construction of a compressor station to up to 11 mcm/d, the second phase development of the Dehloran field and a compressor station to up to 40,000 b/d, as well as development of the Sumar, Saman and Delavaran oil field to 10,000 b/d production capacity.”

He also touched on the planned development of Danan and Naftshahr oil fields, saying: “In the Danan project, drilling 11 wells, seismic testing, building pipelines, and building a desalination unit with capacity of 10,000 b/d, as well as an output hike of 9,300 b/d are planned. Three rigs are already operating here.”

“In the development of the Naftshahr oil field, drilling a well, workover of four wells and an output hike of 2,500 b/d are planned. But after studies, two workover projects were set aside,” he added.  

Hatami said that WOGPC had met 99% of its oil production target and 96% of gas production target in the current calendar year.

26th OPEC+ Ministerial Meeting Concludes

The 26th OPEC and non-OPEC Ministerial Meeting was held via video conference on Wednesday, March 2, 2022, under the chairmanship of Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman, and Co-Chair Deputy Prime Minister of the Russian Federation, Alexander Novak.

Following the conclusion of the 26th OPEC and non-OPEC Ministerial Meeting, held via videoconference on  March 2, 2022, and based on internal consultation held exclusively by the OPEC and participating non-OPEC oil-producing countries in the Declaration of Cooperation of (DoC), it was noted that current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market, and that current volatility is not caused by changes in market fundamentals but by current geopolitical developments.

The OPEC and participating non-OPEC oil-producing countries decided to:

Reaffirm the decision of the 10th Ministerial Meeting on 12 April 2020 and further endorsed in subsequent meetings including the 19th Ministerial Meeting on 18 July 2021.

Gas Transmission Up 2.8%

CEO of the Iran Gas Transmission Company (IGTC) Mehdi Jamshidi-Dana has said that gas transmission across the country increased 2.8 percent during the first 10 months of the current Iranian calendar year (March 21, 2021-January 20, 2022) compared to the same period last year.

Transmission of the mentioned fuel also hit a new record high of over 851 million cubic meters per day (mcm/d) in the Iranian calendar month of Dey (December 22, 2021-January 20, 2022), the official announced.

The above-mentioned volume of natural gas was transmitted through West Asia’s largest natural gas network uninterruptedly to allow all Iranians’ access to this strategic fuel during the cold season.

With a total length of over 37,855 kilometers, Iran’s gas network is also among the world’s most modern networks and it enjoys the world’s latest up-to-date measurement, transmission, and pressure boosting instruments and equipment.

There are 88 gas pressure boosting units, 326 compressor units including turbochargers, electric compressors, and compressor motors as well as 61 pipeline operation centers (yards) operating along the country’s gas network to ensure a stable supply at all times.

Iran, Most Favored Option for Gas Supply

CEO of National Iranian Gas Company (NIGC) Majid Chegeni has said that Iran is the most favored option for gas supply to both East and West.

“In fact, due to its geographical position and infrastructure, Iran can be the most favored option for gas trade,” he said.

Chegeni said the Gas Exporting Countries Forum (GECF), which accounted for about half of natural gas and LNG exports in the world, played a strategic role in sustainable and secure natural gas supply via swap or exports.

He said: “Iran has repeatedly stated that due to the expansion of thousands of kilometers of gas transmission network in the country, in addition to gas exports, it is ready to conduct gas swaps, especially from north to south and vice versa to neighboring countries through pipelines and LNG facilities.”

Chegeni stated that the definite policy of Islamic Republic of Iran is to expand ties and cooperation with neighboring countries, and the central strategy of the Petroleum Ministry is cooperation with other countries in the field of energy.

 Bidboland Persian Gulf Gas Storage Facility, Wharf Launched

The facilities and storage tanks for export products and the independent wharf of Bidboland Persian Gulf Gas Refining Company were officially commissioned in the southwestern city of Mahshahr.

A ceremony was held on Thursday to launch the facilities and storage tanks for export products and independent wharf of Bidboland Persian Gulf Gas Refining Company in the presence of Iranian Minister of Petroleum Javad Owji, Morteza Shahmirzaei, the CEO of the National Petrochemical Company, Mohsen Khojastehmehr, the CEO of the National Iranian Oil Company, and Abdolali Ali Asgari, the CEO of the Persian Gulf Petrochemical Industries Company (PGPIC).

Bidboland Persian Gulf independent storage facilities and reservoirs were constructed on a land area of 64 hectares with an investment of €270 million with an annual export capacity of 2 million tons of valuable products including propane, butane, pentane plus.

$500mn Contracts for East Karoun Gas Gathering

Minister of Petroleum Javad Owji has said that agreements worth more than $500 million had been signed for flare gas gathering in East Karoun.

He told reporters on the sidelines of “Iran Plast” that $1.35 billion of agreements had been signed, $500 million of which pertained associated petroleum gas gathering in the fields located in the east of the River Karoun.

He said that the Persian Gulf Holding would soon strike a deal for gas gathering in West Karoun.

Owji also touched on the $800 million agreement signed for the development of the jointly-owned Sohrab oil field, saying: “We will also sign agreements on flare gas gathering, as well as development of oil and gas fields.”

The minister said that Iran’s petrochemical output capacity stood at 90 million tonnes, adding that actors of the petrochemical sector had managed, over recent years, to supply manufacturers’ needs across the country.

He said that the petrochemical industry had earned Iran $10 billion in revenue during the first ten months of the current calendar year.

“Fortunately, the petrochemical industry is a leading sector in terms of knowledge-based technologies and we are currently seeing that the bulk of catalysts needed in the country have been domestically manufactured,” he said, adding that Iran would become self-sufficient in catalyst production by the end of the current administration.

“Now, unlike in the past, petrochemical holdings have entered the field of investment collectively, and we will soon see a great change in projects located in underdeveloped regions of the country,” he said.

Asked about feedstock to petrochemical plants, the minister said: “The 13th administration is serious about providing sustainable feedstock for petrochemicals. Currently, due to lack of investment and shortage of feedstock, a significant part of the country's petrochemical capacity is untapped.”

Owji also said that due to insufficient investment in the upstream sector, Iran had failed to reach the planned 1.25 bcm gas output.

Energy Ties Discussed with Uzbekistan, Brazil

Iran’s Deputy Minister of Petroleum for International Affairs and Trading Ahmad Assadzadeh held separate meetings with Uzbekistan’s deputy minister of energy and Brazil’s ambassador to Tehran to explore avenues of cooperation in the energy sector.

During the meeting between Assadzadeh and Uzbekistan’s Azim Akhmedkhadjaev, it was agreed that an energy committee be set up between the two countries to follow up on agreements made between the two parties.

The 14th meeting of the Joint Commission for Economic, Trade, Scientific and Technical Cooperation of Iran and Uzbekistan was held with the participation of the Ministry of Industry, Mine and Trade of Iran Reza Fatemi Amin, and Deputy Prime Minister and Minister of Investment and Foreign Trade of Uzbekistan Sardor Umurzakov.

During the meeting, Fatemi Amin said that Iran and Uzbekistan enjoy a long-term social, cultural, and civilizational history.

He expressed Iran's readiness to improve economic and trade relations between the two countries based on the cultural affinity and long-standing relations.

The Minister of Industry, Mines, and Trade called the 14th Iran-Uzbekistan Joint Commission Meeting as a turning point for developing economic ties.

Sardor Umurzakov also said that the roadmaps for economic and trade cooperation between Iran and Uzbekistan are being prepared.

Assadzadeh also exchanged views with Brazil’s ambassador to Tehran on manner of improving ties in the energy sector.

Brazil’s expected oil output surge this decade will make it the world’s fifth-largest crude exporter in 2030, Brazilian Mines and Energy Minister Bento Albuquerque said recently.

Iran Petchem Ready for Int’l Cooperation

 CEO of National Petrochemical Company (NPC) Morteza Shah-Mirzaei has expressed the company’s full readiness for international cooperation.

In a meeting with Tengiz Bolturuk, CEO of Kyrgyzstan’s national holding company, and Kyrgyzstan’s ambassador to Tehran; Shah-Mirzaei said: “Due to the diversity of production of chemical and polymer products in Iran's petrochemical industry, we have the opportunity to meet the needs of countries around the world, including Central Asia.”

“NPC faces no restrictions on foreign cooperation and partnerships with countries and international companies, and is ready for any cooperation,” he added.

“Following talks on the sidelines of “Iran Plast” with the Kyrgyz ambassador on the country's interest in purchasing petrochemical products from Iran, the necessary arrangements are being made to obtain licenses to sign a trade agreement in the near future,” said Shah-Mirzaei.

Noting that a new era had begun for commercial ties between Iran and Kyrgyzstan in the petrochemical sector, he demanded that Kyrgyzstan list its petrochemical needs for Iran to go ahead with supply.

“NPC, while welcoming and inviting cooperation with well-known and allied countries, also provides the ground for this type of foreign cooperation and participation in the Iranian petrochemical industry,” he said.

Shah-Mirzaei said: “Iran's petrochemical industry is about 60 years old and with its technical and engineering knowhow, it has very valuable technical and scientific experiences, and using this experience, it is ready to export technical and engineering services to Kyrgyzstan.”

Technology Instrumental in Iran Polymer Industry

The vice-chair of Iran National Plastic and Polymer Industries Association (INPIA), Saeed Zokaei, has stressed the need for development of innovation to help upgrade the polymer industry in the world.

“Development of innovation in this industry, in addition to creating added value, creates sustainable employment for the country,” he said.

“All aspects of innovation must be considered, including patterns of business development, marketing and sales, product and process development, and cost reduction for sustainable business and country growth. The highest efficiency is in the business model,” he added.

Zokaei said Iranian polymer products were worth $1,500-1,600 per tonne, while the average global value was $5,600 per tonne.

“A country like Japan exports the same products with an average value of more than $10,000, so the more innovative the product is in line with completing the chain, the higher the added value for the country,” he said.

“If the entire current export products of the petrochemical industry are transformed into innovative products, it could create a higher added value of about $50 billion, provided that we take this sector seriously in the national and corporate dimension and bring more innovative products to the market in line with the more innovative organization,” he added.

Zokaei said: “The pace of change in the world is increasing rapidly, there are both technological changes and environmental concerns in the world that have led to the adoption of laws, requirements and incentives for the plastics industry in the world, which may affect the plastics industry in the world.”

 Agreement Signed for Sohrab Oil Field Development

National Iranian Oil Company (NIOC) has awarded an $800mn contract to local upstream contractor Dana Energy to develop the 2bn bl Sohrab oil field in the country's western Khuzestan oil and gas heartland.

Sohrab is one of several fields that straddle Iran's border with Iraq.

The agreement was signed during a ceremony overseen by President Ebrahim Raeesi and Minister of Petroleum Javad Owji. CEO of NIOC Mohsen Khojasteh-Mehr and CEO of Dana Energy Mohammad Iravani signed the agreement.

Over the contract's 20-year duration, Dana Energy has committed to produce 160mn bl from the field and to raise production to a plateau of 30,000 b/d, NIOC said. Iran's Petroleum Ministry said the field holds 16°API crude in the Ilam layer, 17.5°API crude in the Sarvak layer, 31°API crude in the Kajdomi layer and 35°API in the Gadvan layer.

Sohrab is located northwest of Ahvaz in Khuzestan. NIOC says the field shares a reservoir with the 1bn bl Huwaiza field in Iraq, which Iraqi state-owned Misan Oil (MOC) began to develop in 2017.

Given the price of each barrel of crude at $50 on average over the period, the value of extracted crude from the hydrocarbon reserve is estimated to be around $8 billion.

The project envisages the drilling of 20 new wells, the construction of a pipeline and a separation plant.

The project will be developed under the terms of the Iran Petroleum Contract (IPC), the upstream investment contract that Tehran rolled out in late 2016 in anticipation of renewed foreign investment following the lifting of nuclear-related sanctions that came with the signing of the 2015 Iran nuclear deal.

Iran, Tajikistan to Expand Oil, Gas Ties

The Iranian Minister of Petroleum said that the Iran-Tajikistan Energy Working Group has been formed, adding that the level of trade between the two countries would pass 500 million Euros.

Javad Owji told reporters after a Wednesday meeting with Tajik Minister of the Energy and Water Resources Daler Juma: "This is the first visit of the Tajik Minister of Energy to Iran and good talks took place."

He added: "Iran's Ministry of Petroleum is ready to discuss export of technical and engineering services with regard to its capacity and capabilities in the field of recovery, exploration and operation of oil and gas fields and refineries and at the same time production of petrochemical products; we had good agreements in these areas.”

The Minister of Petroleum stated: "Export of oil, gas and liquefied petroleum gas (LPG) through pipelines were also negotiated, and an energy working group was formed between the two countries, which I think will soon lead to agreements in these fields."

"God willing, Iran will participate in the development of Tajikistan's oil and gas fields," Owji said. “Following the request for reconstruction and modernization of oil refineries in this country, Iran, relying on the capabilities of the National Iranian Oil Refining and Distribution Company (NIORDC) in the refining industry, will soon send its technical teams to the friendly and brotherly Tajikistan to reach agreements on energy, oil, gas and petrochemicals to be implemented.”

Referring to the improvement and development of energy diplomacy under the 13th administration, he said: "The view of the people and the administration, especially to friendly and brotherly countries, including Tajikistan, is very significant and the first state visit of the President was to this country, where about eight documents were signed, and the plan is to increase the level of trade with Tajikistan to more than 500 million euros.”

The Minister of Petroleum noted: "The highlight of today’s talks with the Minister of Energy of Tajikistan concerned export of petroleum products, technical and engineering services, which I promise the Ministry of Petroleum will soon complete this capacity. Besides, good discussions were raised regarding training in the energy sector of Tajikistan and the National Iranian Oil Company (NIOC) aired its readiness in this regard.”

Domestic Manufacturers in Iran Oil Hub

A specialized oil show was held in the oil-rich city of Ahwaz with focus on supporting domestic manufacturing. The four-day event was sponsored by National Iranian Oil Company (NIOC), National Iranian South Oil Company (NISOC), National Iranian Drilling Company (NIDC), Arvandan Oil and Gas Production Company (AOGPC) and Petroleum Engineering and Development Company (PEDEC). Totally, 210 domestic manufactures and companies including manufacturers of petroleum industry equipment, oil project contractors, knowledge-based companies involved with science parks and incubators were in attendance. Two categories of homegrown drilling bits were unveiled, breaking the US, German and Chinese monopoly on toothed bits.

Ali-Reza Daneshi, CEO of NISOC, said oil production would increase immediately as soon as grounds are paved.  

“We must seek to implement a new plan in this industry and we must change the roadmaps in this regard,” he said.

“The current administration believes in cross-border communications, which fortunately have been well established during the president's recent visits, and the agreements with Russia on the transfer of some technologies have been within this framework,” he added.

Daneshi said the petroleum industry manufacturers should enter the field of product advantage, adding: “We should try to amend some laws in accordance with the current circumstances is to support the manufacturers of oil industry equipment.”

He said: “Domestic production takes the country out of many problems and can bring sustainable production of oil to the whole country.”

Daneshi touched on the capabilities of petroleum industry equipment manufacturing companies, saying: “Some of these companies have grown exponentially and are internationally recognized, and companies that can work alongside the oil industry will be welcomed.”

Resilience to Sanctions

Sadeq Khalilian, Khuzestan provincial governor, addressing the inauguration ceremony of the event said that unjust sanctions imposed by Western governments failed to prevent Iran from moving towards scientific and industrial progress. “The resilience of the petroleum industry to sanctions symbolizes our country’s independence and resilient economy.”

“In this exhibition, the latest achievements of manufacturers and producers of industrial equipment are displayed, and these achievements show the peak of independence and reaching the high capabilities of the country in the field of oil industry,” he said.

The governor of Khuzestan, emphasizing that the completion of the production value chain will be determined by these manufacturers, said: “Supporting the efforts of these production units, which are present in the field with all their potential and capacity, is essential.”

Khalilian said that the knowledge of establishing a large number of industrial and production units in the field of oil is a valuable achievement for the country, adding: “Continuation of this path with cooperation and support of products should be on the agenda of the oil industry.”

He also mentioned the presence of some foreign countries in this round of the Ahwaz Oil and Drilling Industry Exhibition and said: "Khuzestan province's industrial capacities have crossed the internal borders today, which promises a bright future for the oil industry, as well as steel-related industries."

He also stressed the need for more domestic companies to interact with each other and strengthen ties with foreign companies for technology development.

10 Agreements with Domestic Manufacturers

On the sidelines of the exhibition, an agreement was signed between Petroiran Development Company (PEDCO) and NIDC for the supply of a drilling rig to the Binak oil field. Enhanced recovery from Binak, administered by NISOC, has been assigned to PEDCO. 

Daneshi reaffirmed NISOC’s full support for domestic manufacturers, saying: “We are distancing ourselves from hardware and shifting to software and instruments.”

“Fortunately, about 10 contracts have been signed between oil companies and domestic manufacturers at the exhibition, while commitments have been made to manufacture and produce some of the most important goods in the industry,” he said.

Domestic Manufacturing Support

Abdollah Ozari Ahwazi, CEO of AOGPC, referred to the significance of the private sector’s role in the realization of outlooks envisaged for the petroleum industry.

“Iran's oil industry is moving towards technology-orientation, and under the thirteenth administration, this initiative will gain more momentum and its

achievements will undoubtedly be more tangible for the great nation of Iran,” he said.

“Economic, social, environmental and energy diplomacy factors are the characteristics of Iran's oil industry that meet its needs while observing the principles of productivity, depends on cooperation with scientific centers, universities, knowledge-based companies, manufacturers of Iranian equipment and goods,” he added.

7,100 Items

Hamid-Reza Golpayegani, CEO of NIDC, said: “The production of 7,100 items of widely-used parts in the drilling industry in the last two decades is the result of effective and constant cooperation between this company, scientific research centers, and domestic manufacturers and industrialists.” 

“The number of these parts, including the increase and proliferation of domestically produced resources, reaches about 23,000 items, which while being self-sufficient in this field in the face of restrictions and unjust sanctions in practice prevented the slightest interruption in drilling operations and integrated technical services to oil and gas wells,” he said.

Golpayegani said: “Acquiring technical knowledge and manufacturing goods and equipment by local artisans was one of the seemingly unattainable aspirations of the past years of the country's oil industry, which fortunately in the last four decades with the efforts of specialists and experts and interaction with manufacturers, producers and knowledge centers, valuable steps have been taken, and indeed deserve appreciation.”

Noting that mastering technical knowhow for manufacturing petroleum industry and drilling items would continue until self-sufficiency would be achieved, he said: “Efforts are being made to produce domestically made parts and equipment based on accepted and complete and more comprehensive terms and standards than foreign counterparts, and to be competitive and exportable.”

Golpayegani pointed to the order placed for buying 231 items needed for domestic production worth more than IRR 571 billion from March to December last year, saying: “So far 170 items of goods worth about IRR 434 billion have been delivered to the warehouse and the rest are in progress.”

7 Manufacturing Agreements

In this exhibition, seven contracts for manufacturing parts, equipment and consumer items required by NISOC were signed with domestic manufacturers. These contracts include the manufacture of spare parts for turbines, spare parts for compressors, oil, anti-corrosion drilling mud and pilot, which are used in the process of oil extraction and recovery.

Other worth- noting issues in holding this exhibition include the signing of a memorandum of cooperation between NISOC and the Islamic Azad University of Khuzestan with the aim of developing the level of scientific and technological cooperation.

This is a five-year memorandum and conducts research and technology studies in the field of technical knowledge and transfer of experience and technologies desired by both parties, conducting scientific and applied studies and researches, implementing national projects and documenting research and technology needs.

Monopoly Broken

At the Ahwaz oil show, the monopoly of the United States, Germany and China in the production of toothed drills by Iranian engineers was broken by unveiling two types of domestically-made drills.

Hassan Mohammadi-Majd, head of drill mass production committee in Khuzestan Province, said: “The drills that were unveiled are of the tooth type and are produced in the sizes of eighty-two and thirty-eight inches and are considered as the latest products of the country in the field of oil industry.”

He added: "The technical knowledge of making these drills has been localized for the first time in the country and is the result of years of efforts made by researchers and elites of Khuzestan University."

“These drills have many technical and engineering complexities and, in their production, special superalloys have been used. And specialized knowledge in this field was previously at the disposal of developed countries,” he said.

Mohammadi-Majd said these drills used to be purchased from the US, Germany and China, adding: “At this time, however, the quality of production of domestically -manufactured drills is equal the successful examples in the world, so we are looking for plans to export this product.”

NIDC Unveils MOT

On the first day of the exhibition, the first mobile oil treater (MOT) of NIDC was unveiled.

This unit, which is considered as an equipped oil production plant, can be installed on four trailers and moved to oil wells in the shortest possible time.

Afshin Abolhassani, head of NIDC instrument and well test division, said: “As this facility joins NIDC’s technical services fleet, it would enable us to provide integrated specialized services at oil wells, particularly at work- over wells.”

He said: "The construction of this unit was considered upon NISOC request and instructions of Petroleum Ministry on banning oil burning in fuel pits, in order to comply with environmental standards and control pollutants and to prevent energy loss and financial damage caused by waste of national capital.”

Drilling Equipment

At the exhibition, the main shaft of Varco top drive, which has been manufactured for the first time by a local company and had been ordered by NIDC, was unveiled.

CEO of Taksaz Industrial Innovators Engineering Company (TIECO) Abbas-Ali Gorji said: “TIECO is tasked with optimizing foreign-made top drive parts, an example of which was the main shaft of Varco top drive, which is technologically advanced.”

Gas Supply Continues in Iran 2nd Hub

Every year, with the beginning of the cold season of the year, the amount of gas consumption in Iran reaches a significant figure. According to OPEC, Iran accounts for 6.7 percent of world gas demand, with only 1.1 percent of the world's population. These numbers show that per capita gas consumption in Iran is 6 times that of the world. At present, due to the trend of gas consumption in Iran, one of the programs of the Petroleum Ministry is focused on maximum gas supply.

This report focuses on the Petroleum’s Ministry’s plans for maximum gas supply in light of plans adopted by the Iranian Central Oil Fields Company (ICOFC) that is Iran’s first onshore producer and second overall gas supplier.

Iran has significant gas reserves, which are located essentially in the South Pars gas field, the South Zagros region and eastern Iran. Gas recovery from the South Pars field began with the production of 12 bcm of gas in 2002, and now the figure has reached 220 bcm a year. The amount of cumulative recovery from this joint field reached 1,861 bcm last calendar year, whose value is estimated at $335 billion.

South Pars had a 10% share of the country's total gas production in 2002, at the same time as the start of gas recovery, while with the development of the phases of this field, about 70% of the country's gas production is now supplied from South Pars. But besides the huge South Pars field, 25% of Iran's gas needs are supplied by gas fields located in South Zagros and east of Iran. Some of them are Naar & Kangan, Aghar & Dalan, Sarkhoon & Parsian in South Zagros and Khangiran and Gonbadli in eastern Iran.

Ramin Hatami, CEO of ICOFC, describes the company as the largest onshore producer in Iran. He said that in September 1998, ICOFC was assigned to make maximum efficient recovery from onshore oil and gas fields.

The number of oil and gas fields affiliated with ICOFC has increased from 14 to 30 now. ICOFC’s average oil production initially stood at 52,000 b/d, which has now reached 76,000 b/d without considering output from the Aban, Azar and West Paydar fields and production cut imposed by sanctions. Average rich gas production from ICOFC-run fields has increased from 146 mcm/d to 174 mcm/d. Furthermore, gas condensate production at ICOFC-run fields has increased from 38,000 b/d to 41,000 b/d. It noteworthy that maximum oil and gas production capacity of ICOFC-run fields currently stands at 250 mcm/d of gas and 250,000 b/d of oil.

Hatami has said that the most important oil projects implemented by ICOFC included development of the Saadatabad, Danan and Naftshahr oil fields under EPCF/EPDF projects with a view to increasing the output by 15,000 b/d, development of the Dehloran field in two phases under EPCF/EPDF projects, establishment of compressor stations with an output ceiling of 40,000 b/d and development of the Sumar, Saman and Delavaran oil fields to 10,000 b/d.

Referring to ICOFC’s plan to increase gas production, he said: “An output of 140 mcm/d will materialize by development of the Dey, Sefid Zakhour, Halegan, Sefid Baghoun, Khar Tang, Gardan, Eram, Pazanan, Madar, Tous, Baba Qir, Bisotoun and Aghar II along with development of Farashband refineries and establishment of gas pressure stations at Sarkhoun and Shanol fields.”

Furthermore, ICOFC’s main gas projects include second-phase development of Tang-e Bijar and establishment of a compressor station to bring output to 11 mcm/d, establishment of Homa, Varavi, Tabnak and Kangan gas compressor stations for a total output of 100 mcm/d and maintenance of the Nar gas compressor station to preserve the output of 18 mcm/d.

Gas Fields

Hatami said ICOFC is fully ready to handle the winter gas supply. ICOFC affiliate East Oil and Gas Production Company (EOGPC) is supplying 65 mcm/d of gas during winter, which is in line with its obligations.

EOGPC covers the provinces of Khorasan Razavi, North Khorasan and South Khorasan, specifically dealing with the Khangiran and Gonbadli gas fields. The gas and condensate produced from these fields is delivered to the Khangiran gas refinery.

Given EOGPC’s strategic role in gas supply to northern and northeastern provinces, this company is going ahead with its development activities. To that effect, development of new gas fields is on the agenda. One case in point is Toos gas field whose development is prioritized by ICOFC. For this purpose, necessary documents are being arranged for tender bid. The next phase would be pursued through investment or NIOC resources.

South Zagros Ready for Winter

As the overhaul work is over at the South Zagros Oil and Gas Production Company (SZOGPC), the company is ready to supply maximum fuel during winter.

Hatami said that 4,000 meters of the company’s pipeline has been overhauled, putting the company in a stable gas production state.

SZOGPC supplied 40.86 bcm of gas, 12.8 million barrels of gas condensate and 1.55 million barrels of oil during the first 11 months of the current calendar year. Average production from the nine fields run by SZOGPC stood at 129 mcm/d, which reached 158 mcm/d last December.

Hatami also said that 90 new development wells, as well as 17 workover

fields had been drilled in the SZOGPC-run area during a five-year period under a gas production plan.

SZOGPC is the largest ICOFC offshoot and the second largest gas production hub in the country. It runs five gas zones in the three provinces of Fars, Bushehr and Hormuzgan.

Other gas fields administered by ICOFC include the Tang-e Bijar field in western Iran. It produces 7-10 mcm/d of gas. With its second phase development, it would see its output reach 20 mcm/d.

Future Projects

Hatami also referred to the plans for the West Oil and Gas Production Company (WOGPC) during next calendar year, saying the main projects included construction of an associated gas gathering station and a gas compressor station in Dehloran with an investment of € 125 million, construction of NGL 3100 feed pipelines and power substation with an investment volume of € 85 million, development of the second phase of the Tang-e Bijar field and construction of a compressor station to increase production to 11 mcm/d, second-phase development of the Dehloran field and development of Sumar, Saman and Delavaran oil fields up to a capacity of 10,000 b/d of oil. Furthermore, Petroleum Engineering and Development Company (PEDEC) would deliver the Azar oil field to ICOFC next calendar year.

Iranians Consume 6 Times As Much Gas

At present, the average gas consumption of the domestic, commercial and non-major sectors has reached 490 mcm/d, which is up 140 mcm/d year-on-year. The amount of domestic gas consumption in the same period last year was 350 mcm/d. On the other hand, there are now 25 million gas subscribers in the country, of which 76% are in the first three steps of consumption and consume 50% of the country's gas. The amount of gas consumption in the power plant sector is 135 mcm/d and in the industrial sector is about 120 mcm/d, and the highest amount of gas consumption in the country is related to the domestic sector. According to experts, the average per capita gas consumption in Iran is 6.7 times the world per capita consumption, i.e., Iranian consumers consume more than 6 times the world average gas, which means that energy consumption in Iran mainly relies on gas. As far As the European Union is concerned, this number is three times higher, i.e. the per capita consumption in Iran is three times the per capita consumption in the whole European Union. In Iran, gas is consumed three times the population of the European Union.

Iran is the second largest holder of gas reserves and has huge potential for gas production, but the main challenge is the wasteful consumption that occurs in various sectors, making Iran the fourth largest consumer of gas in the world after the United States, China and Russia. The index of energy consumption in Iran per square meter is on average three to four times the world, and energy losses in the domestic sector and heating in the cold seasons are very high.

Last calendar year, the maximum production of Iran's rich gas was 1bcm/d, which was sent to gas transmission lines by deducting losses and injecting 860 mcm/d, and the amount of gas consumption in the domestic sector was 630 mcm/d. This year, according to the dispatching forecast of National Iranian Gas Company (NIGC), 850 to 860 mcm/d will be sent to the transmission lines.

Two Petro-Refineries Planned in Iran

Petro-refineries are new units established by integrating refineries and petrochemical plants. These units are new in the petroleum industry. But they are advantageous as they would help reduce operation costs levied on a refinery and a petrochemical plant.

On the other hand, the benefits of petro-refineries include reduced running costs due to mergers and exchanges of energy and material flows, enhanced profit margins per barrel from $7 to more than $15, and the possibility of forming chemical units within petro-refineries in completing the value chain. .

The legal capacity required for building petro-refineries, as well as ministerial support for such facilities in Iran provide Iran’s petroleum industry with a remarkable opportunity. With the formation of such facilities, Iran would see its crude oil sales decline and value-added increase in the petroleum industry.

Considering forecasts by leading institutes to increase the per capita consumption of petrochemical products instead of fuel and countries’ needs for refining and petrochemical products, as well as Iran’s access to infinite hydrocarbon resources and world corridors, the domestic market and regional markets provide this possibility for this country. In line with the pre-determined goals in the development of the petroleum industry, construction of oil refineries has been put on its agenda, an issue that few countries have the advantage of.

According to Minister of Petroleum Javad Owji, construction of petro-refinery units, along with enhancing the production capacity of petrochemical plants, will undoubtedly reduce and even stop the sales of crude oil. Based on this, it can be noted that implementation of quantitative and qualitative improvement plans for the country's refineries with the aim of increasing the supply of feedstock to upstream and downstream industries, especially petrochemical plants, will be one of the most important plans envisaged by the Petroleum Ministry.

According to experts, construction of a petro-refinery instead of a petrochemical plant and a refinery separately, will optimize and reduce the required capital and current costs. Development of productive super-projects such as petroleum refineries also has important long-term and short-term effects, and shows positive and tangible economic, social and political effects in the country.

What is certain is that stopping the sales of crude oil never means giving up oil, because reducing and stopping the sales of crude oil means increasing products, building petroleum refineries, enhancing the production capacity of petrochemicals, and so on.

Future-Oriented Approach

A glance at changes in the per capita consumption of chemical products in the world, as well as changes in the fuel consumption of vehicles, shows that the approach to switch from refinery to petro-refinery is quite strategic and forward-looking. With the population growth in the world and concomitant changes in the lifestyle of people, especially in developed countries, the consumption of petroleum chemicals is quite growing. On the other hand, with the advancement of vehicle technology and environmental considerations, car fuels are becoming clean fuels.

Meanwhile, according to studies presented at the World Congress of Refineries and Petrochemicals, demand for gasoline and fuel oil in the coming years will face a significant decline in Europe and North America, but in West Asia and Africa continue to face increased demand.

According to experts, from 2030, the growth of demand for refined products will be stable and from 2040 onwards, it will face a decreasing trend, while the growth of demand for petrochemical products is always on the rise. On the other hand, according to the Energy Information Administration (EIA), the demand for petrochemical downstream materials will grow by more than 50% by 2050, so that the gap between demand and production is always increasing, and by 2050, production will be more than 25%.

Studying the future market of refined and petrochemical markets, as well as advantages of petro-refineries over refineries have encouraged investors to finance petro-refinery construction.

Two Petro-Refineries in Iran

Construction of petro-refineries to provide fuel and feedstock to the petrochemical industry is one of the priorities and programs of the Petroleum Ministry to prevent crude sales. According to Owji, two petro-refineries will be built in the country in the coming years. Although in terms of the number of petro-refining units, this figure depends on the investors entering the field, the law provides good incentives, such as a one- to two-year feedstock permit.

The minister said financing of the planned petro-refining projects would be through National Development Fund of Iran (NDFI), banking facilities, bonds, public participation, oil barter trade as well as foreign investment from aligned nations.

Legal Capacities

According to Majlis Research Center (MRC), the government is required to build refineries and petro-refineries whose mix of products has lower than 10% of fuel oil content. Article 44 of the 6th Five-Year Development Plan stresses the creation of the refining capacity of 2.7 million barrels of oil and condensate up to the end of the plan which also requires the government to provide necessary facilities to build such capacity in order to supply mainly lighter and middle distillate products. 

Owing to the fact that the Petroleum Ministry is legally barred from possessing more than 20% share in a refining or petrochemical company, development of downstream oil industry is left to the private sector. And due to the fact that the Petroleum Ministry is tasked with constructing these units, the private sector would offer necessary support.

Meantime, adoption and promulgation of a law on supporting development of downstream crude oil and gas condensate industry using public investment has marked a turning point in the development of the petro-refining capacity in the country, which can be instrumental in ending stagnation in the construction of petro-refineries. This law incorporates incentives like feedstock supply, liberalized economy for petro-refineries, location in southern coasts, flexibility in financing instruments as well as allocation of at least 30% of shares to the public. That would help overcome obstacles to development of the petro-refining capacity.

Gas Condensate 

Providing the required feedstock to these units is one of the important issues that should be considered in the formation of these units. According to the Center for Study of Value Chain in Oil and Gas Industry, petro-refining capacity is in fact a completely economical approach to oil and gas recovery, in addition to being profit-oriented.

According to this center, Iran enjoys a unique opportunity to design and build petro-refineries thanks to access to gas condensate, because this feedstock (gas condensate) is known as a super light oil in terms of quality.

Famous Licensors

Rather than producing fuels such as gasoline and liquefied petroleum gas, petro-refineries produce olefins and aromatics, which are upstream petrochemicals. Establishment of chemical parks in the downstream section of petro-refining projects to convert olefins and aromatics into valuable chemical and polymer finished products, in addition to having the advantage of sustainable feed available, creates the highest added value from the refining process and produces various products. But the issue that needs to be addressed is the use of technologies that are used in the process of these units.

Petro-refining complexes also produce hydrocarbon (fuel), chemical and polymer products, and this variety of products requires the use of more sophisticated and, of course, more diverse technologies.

Therefore, designing and building a petro-refinery goes beyond equipment supply, which is often emphasized in some analyses. Technology has a top role in petro-refineries and hiring foreign licensors with good background may prove effective.

In terms of technology, all the units that exist in a petro-refinery, such as oil refining processes, steam cracker units, aromatic units and similar catalytic fracture units, exist in the petrochemicals or refineries of the country, but are not petro-refineries. In addition, technical knowhow or licenses of many of these projects have been purchased by some domestic refineries, including Arak, Isfahan, etc., even during the sanctions period.

Value Chain Completion

Completion of the value chain in Iran is stated in the governing documents. At present, a large part of the raw materials required by downstream industries such as packaging, plastics, automobile, textile, construction, artificial leather and shoemaking are imported from abroad, while these materials could be supplied by launching a chain of olefins and aromatics at petro-refineries. It seems that if petro-refineries are developed in the country and the next production chains of these units are completed, it will be possible to help develop downstream industries in the country, which would create value-added and job opportunities. In fact, in this puzzle, petro-refineries are the starting point for completing the value chain in the petroleum industry

Iran Plast, a Springboard to Regional Markets

Iran Plast kicked off in the presence of minister of petroleum, minister of industry, mine and trade and a group of MPs. It indicated the significance of the annual show for the government and parliament.

Petrochemicals make up only 5% of Iran’s crude oil and natural gas produced in Iran. But the petrochemical industry is now accounting for over 40$ in Iran’s non-oil exports with an output of over 65 million tonnes. That is the highest value-added and largest contributor to gross domestic product (GDP) in Iran.

Given that the highest added value of the petrochemical industry is achieved in the complementary industry, it is possible to earn more than $48 billion a year, which is equivalent to about half of the revenue, just by developing the sector and the current level of raw materials produced in the country.

Preparation and conversion of raw materials such as methane, ethane and oil into consumer products such as bags, shoes, clothes and clothing, all electric and non-electric kitchen appliances, auto parts and related equipment and most of the things we see around us and use them. From tables and chairs and luxury decorative accessories inside and outside the house and equipment needed for manufacturing medical equipment and computers and millions of other items … products related to the petrochemical industry and downstream industries Chains are interconnected.

Downstream Sector 70% Share

However, despite Iran's relative advantage in petrochemicals and its downstream industries, we are witnessing discrete chains in this sector, and therefore most of materials in various sectors of the petrochemical industry, after being exported to industrial countries such as China, Japan and the European Union and becoming final products, are re-imported and consumed at exorbitant prices. Of course, with the development of upstream and midstream petrochemical industries over recent years, important steps have been taken to complete the value chain of this industry, but the sales of raw materials is still the most important advantage of this industry in Iran, while the available data show that about 70% of the value-added of the petrochemical industry is realized in the downstream industries, and this sector has not been developed in line with the upstream industries.

At present, the above process has been formed while the competitive advantage of petrochemical products, especially in the downstream sector against the sales of oil and gas, has caused this group of industries to be in the center of attention of the government today, and considering the important role of these industries in economic and social development as well as the existence of potential capacities in the country, the petrochemical industry with significant capabilities and capacities for domestic and foreign industries should be considered more than ever.

Iran’s petroleum industry, especially the petrochemical industry, has been always looking to interact with the world and compete with foreign companies. Therefore, trying to modernize this industry is one of the most important things to consider.

One of the good opportunities to interact with domestic and foreign companies in any industry are international exhibitions. Currently, in Iran’s petrochemical industry, Iran Plast can be considered the most important event in this industry. This exhibition hosts hundreds of domestic and foreign companies every year.

Five Continents Represented

During the 15th edition of Iran Plast, 430 domestic and foreign companies from 15 countries, including Italy, China, Brazil, Hungary, Portugal, Kazakhstan, Azerbaijan, Pakistan, Afghanistan, Turkey, Syria, Taiwan, Tajikistan, Armenia and Iraq were present.

Such events as well as holding more seminars, lectures and workshops will turn the exhibition into a venue for trade exchange, further enhancement of the affinity between domestic and foreign activists, introducing products and raw materials of domestic and foreign machinery production, as well as introducing investment potentialities. Such high-capacity exhibitions should become a platform to attract foreign investment and not just a place to introduce foreign companies to sell their goods, parts and machinery. This exhibition and similar events could be considered a center for aggregation of domestic and global capabilities for the further development of the petrochemical industry, which may provide a wide range of services.

The presence of foreign participants in this exhibition could be examined from two different perspectives: first, presence in the Iranian market for a long time, participation in projects and investment in various sectors and upstream and downstream industries, and second, the sales of required machinery. In downstream industries, raw materials such as more advanced polymers and blends, as well as various industrial parts in these industries.

Sanctions Blunt Interest

The fact is that the most important part of the presence of foreign companies in the oil, gas and petrochemical industries pertains to upstream units and industries, oil and gas extraction and production of petrochemical, petrochemical and polymer products, which requires technical and technological capabilities and even very high financial capacity. So far, the sector has not been directly attractive to international companies, and some domestic and global restrictions could be attributed to this. International sanctions by Western countries have so far acted as a major weakness for investment in our country's upstream industries, which has completely limited Iran's potential for competition with other countries in the region.

Currently, the vast market of goods and downstream industries is the most important and attractive place for foreign companies to enter. Interviews with foreign participants point to issues that show the strengths and weaknesses of Iran's petrochemical industry and market from the perspective of non-Iranians. Most foreign participants stated that they had visited Iran for the first time, and that this new approach could be attributed to the removal of some global restrictions and the open space created.

Positive economic outlook of Iran, new investments in upstream industries, strong position of our country in production and export of petrochemical products with a focus on polymers, strong regional relations of Iran, export markets for downstream products, expectation of economic stability and the prospect of overcoming the recession and many other cases have created conditions that make the presence of foreign companies attractive and pay more attention to the market.

Almost all foreign participants considered the Iranian market an attractive market that made the participants happy when describing the Iranian market. On the other hand, the vast majority of them positively assessed the outlook for the Iranian market and better predicted the coming days. This mindset seemed to be influential in the business strategy of these companies, as most of them were thinking of having a permanent presence, opening a representative office or having a sales representative in Iran, which could definitely lead to stronger business ties.

$4bn Investment for North Pars Development

Warning bells are set to toll within four years in the supergiant South Pars gas field, which is currently supplying more than 75% of Iran’s gas consumption. The North Pars gas field would be an ideal option to make up the South Pars output shortfall. Mohsen Khojasteh-Mehr, CEO of National Iranian Oil Company (NIOC), recently said that development of the North Pars gas field was on the agenda to help enhance Iran’s gas supply, a project which is estimated to cost $4 billion.

As South Pars is forecast to see its production decline in coming years, North Pars would be a favorable option due to its huge volume of gas and condensate reserves, as well as its geographical position.

The head of NIOC has also touched on other scenarios for offsetting the South Pars shortfall, including enhanced recovery from 10 gas fields run by the Iranian Central Oil Fields Company (ICOFC), development of the Kish gas field and the gas transmission pipeline, development of the North Pars gas field, development of South Pars Phase 11, and development of Farzad A and Farzad B gas fields. These projects, which would totally add 366 mcm/d to Iran’s gas output, would require $54 billion in investment.

60 tfc of Gas in North Pars

Being one of the largest independent fields in Iran, North Pars is located 120 km southeast of Bushehr Port. Discovered in 1967, it is estimated to hold 60 tcf of gas in place. According to the latest studies on the North Pars reservoir, the estimated daily gas production from this field would be 4 bcf/d (115 mcm/d) along with 11,000 barrels of gas condensate.

After its discovery up to 1976, a total of seven exploration, appraisal and development wells had been drilled at North Pars. The wells totaled 17 in 1979. Two incomplete platforms had been also installed there. Two foreign companies were developing North Pars up to 1979, which left Iran following the victory of Islamic Revolution. After the revolution, due to the eight-year imposed war, work halted at this field. 

China, Russia Engaged

As the war ended, the Petroleum Ministry decided to develop this field in light of Iran’s growing need for gas. The North Pars development was defined in four phases. Foreign companies showed interest in developing this field. In 1993, Shell, BHP as well as Indian and Chinese companies expressed their readiness for investment in North Pars. Finally in October 2008, a buyback deal was signed with China’s CNOOC. However, the deal did not go ahead due to imposition of international sanctions on Iran’s petroleum industry.

In December 2017, a memorandum of understanding was signed with Russia’s Gazprom. The Russian company had offered to build four offshore platforms, lay four offshore pipes, drill 55 development wells and construct onshore facilities. The proposals were approved by NIOC Directorate of Reservoirs, but the MOU never became an agreement due to the US withdrawal from the 2015 Iran nuclear deal and the ensuing imposition of tough sanctions on Iran.

Early Production in 2025

NIOC Board of Directors adopted a decision in November on planning the chain of activities for developing North Pars with a view to early production in 2025. These activities include establishment of offshore platforms to extract reservoir fluid from the field, lay a 100-km subsea pipeline and erecting necessary installations in Pars 2 for gas separation. It has to be noted that 17 wells had been drilled and 26 metal structures, including jackets, had been installed prior to the Islamic Revolution, but they were damaged due to airstrikes in the imposed war.

Now NIOC hopes to develop this field with foreign investment. But development of this field would not wait for foreign investors and necessary measures have already started as follows:

Securing 7 wells and deconstructing an offshore structure: According to the NIOC Board of Directors’ decision, Pars Oil and Gas Company (POGC) is to start work in early 2022.
Conceptual design to identify the optimal development process pattern is expected to be assigned to advisor.
Basic and advanced design based on NIOC Board of Directors’ decision for engineering studies, for which $ 4 million has been earmarked.
Start of Development Activities: This phase is planned to start with the priority given to Phase 1 after licensing round.

Sitting atop over 33 tcm of gas, Iran currently holds the world’s second largest gas reserves. More than 93% of Iran’s urban and rural population are connected to the gas network. Meantime, industries and power plants use this clean fuel of choice due to its low pollution rate.

Khojasteh-Mehr has said that South Pars would be accounting for 700 mcm/d of a total 940 mcm/d of gas consumption expected this winter.

Asia and Global Economy

Fereydoun Barkeshli

President, Vienna Energy Research Group

If we name the 19th century the century of Britain and the 20th century the century of the United States, we may say for sure that the 21st century is the century of Asia. Asia has waited 500 years for this time to arrive, enduring 500 years of humiliation, colonization and exploitation.

Today, Asia has a population of nearly 5 billion with an average life expectancy of below 45 years. Of course, 1.5 billion of these people live in China, but Asia is not all China. Almost the same number live in India, but Asia is not all India, either. If Asia could keep its 2019 5% GDP growth, over next 10 years, the rest of Asia would have as much GDP as China.

In fact, Asia is even larger than what is geographically called Asia. Important parts of Europe, now called Eurasia, are located on the vast of Asia. Asia is not just a continent. Asia is a megacity or metropolis housing the world's largest oil and gas producers and energy consumers. The world’s largest underground resources are also located in Asia.

Of the world’s nearly 8 billion people, only less than 750 million live in Europe, with an average life expectancy of over 45 years and rapidly aging population. The entire Europe constitutes only 22 percent of the world. The United States, of course, still has the capacity to grow and will keep pace with Asia. Of course, Africa has also shown good and positive signs of growth and development, and the 22nd century should probably be called the century of Africa, too.

Asia and Modern Regionalism

The emergence of the phenomenon of Trump and Trumpism in the United States was the result of facts whose signs already existed and had been seen. Henry Kissinger told the World Economic Forum in Davos in 2018 that when Ronald Reagan told Mikhail Gorbachev to topple the wall, and shortly following the Soviet Union collapsed, he could not sleep because he was overjoyed as the nightmare created since 1949 with the rise of the Soviet Union had now ended, and the US was the only superpower in the world.

However, by the late 1990s, it became clear that a bipolar world was safer for the US. What was seen in Trump’s diplomacy in 2016 was an acknowledgment of what American global leadership means. What is NATO for? What is the status of the many international organizations that were formed during the Cold War to protect the world from the Soviet Union? What is the United Nations for?

The progressive evasion of the United States from playing an international role stems from the emergence of scattered regional powers. What should the US support now? How can NATO serve the US now?

America’s concern today is maintaining and consolidating economic and trade power rather than addressing a threat that may one day endanger Europe. Among US presidents, Bill Clinton made the most effort to get China into the World Trade Organization. The process of internationalization of China’s economy has intensified since its accession to the WTO and has gained momentum.

11 December 2001, when China joined the WTO, was a turning point for Beijing. Clinton imagined that by linking Communist China to the world family of world trade, he had engineered a calm China. But China became the world’s factory. Most companies left for China due to cheap labor and huge market. China became the growth engine in Asia and many Asian countries, especially Southeast Asia. ASEAN itself became the growth engine in East Asia, and the cycle of growth and prosperity spread to other countries in Asia.

Now China and Asia have become the main concerns of the United States. Asia is in a position to have all the tools it needs for intercontinental development. Of course, this does not mean that Asia is far from intercontinental conflicts. Asia is not a homogeneous or mono-cultural continent. In fact, there are a lot of racial, ethnic, religious, cultural and other factors on the continent, but at the same time, compared to Europe, which has had more than 170 wars over the past 300 years, the number of wars in Asia is still below 50.

Asia is engaged in various regional agreements. In addition, the Shanghai Charter, the ECO, the [Persian] Gulf Cooperation Council and many other treaties strengthen cooperation between Asian countries. Interestingly, some of these organized links were formed even prior to the formation of the European Common Market and even prior to the Benelux of Belgium, the Netherlands and Luxembourg, or the so-called Coal and Iron Union. The conditions for a common Asian market in those years were not yet ready. The Non-Aligned Movement (NAM) played a role briefly. The same goes for the Arab League. But the world and Asia are completely different now. Today, Asia accounts for two-thirds of the world’s GDP.

Asia has regained its identity for the first time in centuries. Once more, Asia is not China. Neither is India. In fact, China needs Asia more today than ever. China imports 70% of its food. India is a major importer of fertilizers and chemicals. China deals with drought for six months of the year and with flood for the other six months. China has to use chemical fertilizers for agriculture, which is 2.5 times the world average. Today, the world knows Asia mainly with China. Asia is far beyond China or India.

Geopoliticization of Asia

Asia and the Asians have longed for Westernization for years and even centuries. The Asians were competing to overtake the West sooner than others. Learning European languages, adopting European apparel or Western lifestyle was largely valuable to the Asians, and perhaps still more or less important. In the third decade of the 21st century, it is now important for Westerners to know and speak the languages of Asian nations.

With this introduction, I intend to say that Asia has made significant efforts to achieve its current position. The Asians have learned Western culture and have mastered what they saw as necessary and experienced its application. The Westerns have followed the same path in the earlier periods of its history. In fact, Iran has been one of the important pioneers of this path and has been ahead of many other Asian countries. Iran learned modern European-style banking from the Dutch during the Safavid period and spread it across the region.

The 19th century was the coal century. The 20th century is the century of oil and the 21st century is the century of gas. Iran has the second largest natural gas reserves in the world. Therefore, Iran’s role, as much as it started with oil in the 20th century, may now continue with gas, of course, with intelligence and completely different conditions from the time of the emergence of oil in the Iranian economy.

Thirty years after World War II, Japan became the world’s second largest economy. Then, 30 years later, China became the world’s second largest economy. As the world’s second-largest economy behind the United States, Japan had some conflicts with the United States, but eventually submitted to the US. China, however, officially told the Americans that they were late. They are late in realizing the geopolitical realities of the global economy, and therefore have to know their limits. At the end of World War II, the United States accounted for about 50 percent of the world’s GDP. Even in 2000, the United States still controlled a quarter of the world’s GDP. Today, the United States accounts for 17 percent of the world’s GDP, not far behind China, but less than the rest of Asia.

The term geopolitics entered public diplomacy from oil. In World War I, Churchill, then a British naval admiral, changed the fuel of the British navy from coal to a more efficient liquid fuel, which was a key factor in Britain’s victory in the war.

As long as the fuel and energy of ships and other vehicles were solid, that is, coal, consumers dealt with the miners of Glasgow and Manchester. The fuel shift to oil fundamentally changed things, and the axis of relations shifted from within Britain to Iran and the Middle East. Geopolitics first entered the literature of diplomacy. Hitler attacked Russia for Baku’s oil. Mussolini sent troops to Libya for oil, and the United States came to the Middle East.

Since then, global communications have been a source of power and authority for nations. Over the past 50 years, 64 million kilometers of roads have been built, as well as 4 million kilometers of railways and 2 million kilometers of oil and gas pipelines. Of course, 1 million kilometers of telephone and internet cables have been built during this period. This amount of communication lines was not built during 4,000 years ago. Communication is now the foundation of the geopolitical supremacy of nations. Powerful countries have more and wider connections.

Communication is the foundation of strategic power. Asia ranks first in the world in terms of communications today. The fact that China is now so focused on the One Belt, One Road project stems from the need and importance of communication in this century. I would like to point out that Iran has recognized the strategic importance of communications for many years, and in the 1990s, it proposed the Silk Road plan and made it operational.

Asia accounts for 45% of the world’s road connections, 65% of railways and nearly 50% of oil and gas pipelines. Of course, Asia is vast and populous and still needs more infrastructure.

Connectography

I want to say that geopolitics in the future Asian-oriented world is a world that no longer defines geography, the fate of countries and societies. Countries are not defined in their traditional physical and geographical boundaries. Countries become city-centric and communication-oriented. Today, a citizen of Kabul feels closer to Mashhad in Iran than to Kandahar. Bombay is closer to London than Bengal. These differences are mainly due to the communication geography of the regions and the degree of urbanization. 50% of Iran’s GDP, without oil, is concentrated in Tehran province. The same rule applies to other parts of the world. Connectography or communication geopolitics has changed the connections within countries.

In this new form of geopolitics, the relations between the countries of the twentieth century are different, and the Asia of this century will be formed in a new structural integration in which national ties are defined in a new and different sense from the past.

Over centuries, geography has determined the fate of nations, and it still does. In the combination of the future Asianized and regionalism, globalization, and globalism are still in place, but the globalism that communicates and explains its highways. Asia does not follow the trend of 19th century Europe or 20th century America.

We must now acknowledge that the United States has ended its global leadership. Democrats or Republicans have no role to play in the path that the United States, the world, and Asia have taken. None of the 7 industrialized nations or the top 20 countries in the world will have a place in world leadership and management. It will not be long before the United States separates from most international organizations. With the separation of the United States from the international organizations and its affiliated institutions, Europe will gradually invent new paths.

I don’t think the UN would live long. I would like to call the UN the Un-united Nations (UUN). The NATO treaty also lost its applicability. But in any case, the dispute over the economy, trade and tariffs will not end. There would be crushing economic wars but without bloodshed. Perhaps OPEC, and now OPEC+, is likely to be the last bastion of a stable international organization. America has not lost the ground, but has lost time, and the rules of the game have changed.

The shale revolution is an important and serious phenomenon. With the advent of shale, the United States finds itself without the need for Middle East oil, which it had pledged to protect Saudi Arabia for more than 70 years. Today, the United States wants Saudi Arabia and the Middle East only to control and manage oil supplies to Asia. In the 2000s, there were 11 left-leaning, pro-Russian and pro-Chinese countries in South America with direct popular vote. Currently, only three left-wing countries in all of South America are in office and do not have good conditions. America’s concern today is to protect its borders.

Last Word

Asia is back after 5 centuries and wants to take its future into its own hands. The Asians have never been more proud of being Asian than they are today. But only countries who understand the situation would be making progress. These countries adopt active, effective, realistic and development-oriented diplomacy. They have good GDP, while their citizens are happy with the governing system. Without sustainable economic support, other achievements will not survive long.  

Today, 200 independent countries in the world share half a million kilometers. The source of power is not the hardware military power of the twentieth century. In the age of strategic communication geography, the volume and capacity of Internet has become a source of power. The challenges ahead are many, but the opportunities and capacities that lie ahead are endless. In 2018, the world spent $2 trillion on military and $9 trillion on communications. By 2030, more than two-thirds of Asia’s population will be urban. International communications will be more city-centric than ever. To act and play a role in a world where Islamic Iran is the highway of communication between East and West, it is necessary to prepare and understand the conditions.

Asia can draw up its own climate agreements. Asia does not need to have climate rules in Paris or Glasgow. Asia can set up its own trade organization and set its own legal, financial and monetary rules. This does not mean blocking communication with other countries, regions and continents of the world, but on the contrary, it needs to be strengthened, but rewritten

 Lukoil Completes Oil Project Purchase in Mexico

Russia’s second-largest oil producer Lukoil says that it has completed its acquisition of a 50% operator interest in an offshore oil project in Mexico, part of its drive to expand its global reach.

As reported by Reuters, Lukoil said that it finalized the deal to buy the stake in the Area 4 project by acquiring the operator’s holding company following approval by local authorities.

Lukoil put the transaction value at $435 million plus expenditures of $250 million.

The project includes two blocks, which are located 42 kilometers offshore in the Gulf of Mexico.

TotalEnergies Hails Light Oil Venus Find Offshore Namibia

TotalEnergies has described its deepwater Venus discovery offshore Namibia as “significant.”

The Venus 1-X well, drilled by the Maersk Voyager drillship, encountered approximately 84 m (275 ft) of net oil pay with associated gas in a good-quality lower Cretaceous reservoir.

Kevin McLachlan, senior vice president at TotalEnergies, said “the very promising initial results prove the potential of this play in the Orange basin.”

Results from the coring and logging program should assist preparations for appraisal operations to assess the commerciality, he added.

Fraser to Manage North Sea DHH Appraisal Drilling

North Sea Natural Resources Ltd (NSNRL) has contracted Fraser Well Management to provide operator services for the Devil’s Hole Horst (DHH) appraisal well in the UK central North Sea.

The prospect extends across seven blocks in license P2321, awarded under the UK’s 29th offshore licensing round, and is located around 100 mi (161 km) east of Aberdeen.

Recent re-interpretation of two test wells drilled on the prospect in the 1970s suggests that hydrocarbons could be found within the Permian Zechstein formation.

Further analysis by NSNRL indicates substantial volumes of oil may be present in the Jurassic Fulmar Sands, which was overlooked in the original test wells.

ExxonMobil Contracts Workover Package for Malaysia Wells

ExxonMobil Exploration and Production Malaysia has issued a letter of award to Velesto Workover for a program offshore Malaysia.

Velesto will provide a hydraulic workover unit and associated services for the one-year contract, due to start this summer on selected wells.

The company will deploy the VELESTO GAIT 6, which provides pulling and snubbing capacities of 460,000 lb and 225,000 lb respectively, and can be assembled on offshore platforms to perform workover and P&A operations.

DOF Vessel for Gippsland Basin Decommissioning

Esso Australia, as operator of the Gippsland basin joint venture, has entered an agreement with DOF Subsea to charter a multi-purpose supply vessel to support decommissioning work in Bass Strait offshore southeast Australia.

ExxonMobil Australia chair Dylan Pugh, said:  “Over the last few years, we have completed around $600 million of early decommissioning works in Bass Strait, including successfully removing the Seahorse and Tarwhine facilities, completing plug and abandonment activities on our Blackback and Whiting wells, and significantly progressing well decommissioning activities on Kingfish B and Mackerel.”

Russia-Ukraine War and Europe Energy Market

Shuaib Bahman

The conflict over Ukraine, which was triggered by the US-caused crises and tensions, eventually led to a war between Russia and Ukraine. Ever since Joe Biden took office, the United States has made extensive efforts to escalate the crisis in Eastern Europe, which, along with Russophobia, has sought to insinuate the idea that Europe would not be able to counter Moscow’s security threats without US support.

Currently, the situation in Ukraine is extremely sensitive, and the current limited war may be either extended to a wider scale or stopped with the restraint of the warring parties and mediation of actors and international institutions. In the meantime, what matters is the energy-related equations in this war. The outbreak of this war pushed up energy prices in world markets. Of course, in the deeper layers, energy both played a significant role in the eruption of this war and will have a huge impact on European countries.

Energy Role

In order to better understand the impact of energy on the start of the Russia-Ukraine war, it is important to consider a few points:

Russia has lost about 10 percent of its gas exports share to Europe over the past decade. While Moscow supplied about 42 percent of Europe's gas over the past decade, it has now fallen to about 32 percent. Over the past decade, the focus of Russia's energy exports has shifted from West to East in a way that East Asian markets, especially energy exports to China, have become more important European markets for Russia. The reason for this is quite clear and of course logical. Because the center of gravity of the world economy is shifting from West to East and China will soon become the world's largest economy. At the same time, China is a great power in the vicinity of Russia, and Moscow needs strong pressure levers, of which energy can be one, to interact on an equal footing with its neighboring power. However, over the past decade, the importance of the European energy market for Russia has diminished.
The US energy macro-policies and strategies changed dramatically during the Trump era. In 2017 and 2018, the United States not only expanded its investment in shale oil and gas, but also it authorized an active role in energy exports. Yet another major challenge for the US administration was the lack of a viable market for export development. Because traditional producers were more or less active in the field of energy exports, and importers were reluctant to change their import sources. This prompted the United States to pursue a policy of sanctions against some of the world's largest energy producers. Sanctions against Iran, Libya, Venezuela and Russia can be assessed in this regard. In fact, the Americans tried to find a new void in the world markets by imposing sanctions on oil and gas exporting countries so that they could fill these gaps themselves. What is specifically related to Russia and Europe is the Nord Stream 2 pipeline, which was supposed to significantly enhance the capacity to export energy from Moscow to European countries. However, neither Germany nor other European countries backed away in the face of US sanctions and continued pin hope on a new pipeline project. In such context, what could change the current situation? The answer is quite clear. The Americans had to destroy Russia-Europe relations in such a way that the Europeans themselves would boycott the Nord Stream 2 pipeline and reduce energy imports from Russia. In the meantime, Ukraine was the most prepared to escalate tensions between Moscow and Europe.
Over recent years, European countries have pursued two policies simultaneously in the field of energy. The first policy was based on the diversification of energy supply sources and the second policy was aimed at diversifying energy transmission lines. However, the Europeans failed to properly pursue these policies due to their alliance with the United States in regional and international policies. One of the reliable sources for the Europeans in supplying the required gas was Iran, which due to sanctions, the Europeans were never able to act effectively in this regard. In fact, the Europeans, by supporting US hostile policies and sanctions against Iran, practically imposed sanctions on themselves and deprived themselves of one of the world's most important energy sources.

Energy Outlook

Russia, Europe and the United States are now embroiled in the Ukraine crisis. Most likely, European countries will insist on boycotting the Nord Stream 2 pipeline. This is despite the fact that in previous years, huge investments were made to launch it. Transferring energy through the pipeline could also reduce the energy costs of German households and some other European countries by about a quarter a year.

Although with sanctions imposed on the Nord Stream 2 pipeline, Russia will see its role decline in Europe’s energy market and the US would have a chance to replace it, Moscow is not the only loser. Russia may further focus on Eastern nations and strengthen its alliance with China against Western governments. That would increase Europe’s energy costs because gas imports from the US would cost much more. Let’s keep in mind that energy imported from Russia was transported by pipeline at a relatively low cost. However, gas imported from the United States must be done on special ships, which will be expensive to transport. At the same time, many European countries do not yet have the proper infrastructure to import gas through special docks and platforms so that they can unload LNG and LPG from the ship and connect it to their transmission circuit. However, in the current situation, the Europeans seem to be the biggest losers in the Ukrainian war in terms of energy.

Nord Stream 2 Gas Pipeline and Ukraine Crisis

Fereydoun Barkeshli

President, Vienna Energy Research Group

Amid rapidly rising tensions and full-fledged military escalation between the United States, NATO and Russia over Ukraine, gas has come to play the focal role and the prospective Nord Stream 2 is going to be detrimental. Nord Stream2 was built to take Russian gas under the Baltic Sea directly to Germany. This is how the gas pipeline is an integral part of the story. The current operating gas pipeline, known as Nord Stream 1, transmits the Russian gas to Germany and other Western European countries via Ukraine and couple of other borders.

Europe currently receives 40 percent of its gas requirements from Russia via Existing NORD Stream 1 pipeline. Once NORD Stream 2 goes operational, Europe’s reliance on Russian gas and oil combined will reach to as much as 80 percent. Such reliance on Russian energy by Europe is considered United States’ redline and beyond tolerance.
In this article I am trying to highlight the central role that energy plays in the entire recent US/NATO/Russia/Ukraine upheavals.

On January 27, the United States announced that in case of any Russian soldiers crossing into Ukraine, one way or another, Washington would work with Germany and other allies in Europe and elsewhere to ensure that the pipeline wouldn’t move forward. However, new German Chancellor, Mr. Schultz decided to distance himself by not responding to remarks made by the White House. A gesture that offended the US and possibly emboldened Kremlin.

Since the 1960s when Europe first began importing gas from Russia, Washington perceived Russian energy in general, and gas in particular as a threat to US leadership together with European energy security.

Over recent years, with the emergence of fracking and shale gas, the United States has become the world’s largest gas producer and a major exporter of LNG. The United States henceforth has the ambition to muscle in on Europe’s huge gas market, displacing Russian gas. With Nord Stream 2 completed and already filled with gas ready to move on while still awaiting German regulatory approval, the stakes were high.
Soon after pipeline construction began in 2018, the US passed a law threatening sanctions on the Swiss barge laying the pipeline for Nord Stream 2. The Swiss government advised its company to pull out of the contract. Instead two Russian ships completed the line despite threats of sanctions by The United States. Washington also threatened German contractors, but Ms. Angela Merkel stood firm.
In 2021, with construction almost complete, German Chancellor visited the White House, met with President Biden in person and insisted on approval of Nord Steam 2 approval. United States gave way and agreed. Biden wanted to mend relations with Germany that was gone soured during the Republican President in office.
Nord Stream 2, like its predecessor Nord Stream 1, began as a joint venture (that is 51 percent Russian Gazprom and 41 percent Royal Dutch Shell as well as Austrian, French and German companies). Later on, the government of Poland came in and nearly forced European partners to relinquish their shares, leading to creation of another European venture. Most European partners weren’t happy and decided to give up their partnership in the Nord Stream 2 venture.

Gazprom believed that Russia was bullied by Germany and its European partners including Poland towards which Russia was particularly sensitive. Nevertheless, Germany wasn’t quite happy about the involvement of Poland in the project on the ground that the Germans considered Poland as a possible or potential rival in capturing positive view of the United States and rest of the Europe as a substitute or alternative for the time when Germans got too sluggish, old and lost relevance. Of course, this is an idea that is mostly emancipated from Asia and China. General perception is that Europe is gradually but consistently losing relevance as population is aging and new avenues of innovation and creativity is drying up.
It is important and needs analyzing that Nord Stream 2 is the only gas pipeline in the world, affected by the US sanctions. All those pipelines completed prior to 2019 were exempt. Gazprom claimed discrimination and appealed. In August 2021, a German court rejected Gazprom appeal and ruled that Gazprom was linked to unfair trade practices and unlawful practices based on the European Union laws.
German industrialists said: “we’re desperate for Russian gas”. Germany has only 17 days of gas supply in storage facilities, though there are other limited storage facilities elsewhere in Europe.

Volatile short term sport prices have compounded their woes. EU gas imports have increasingly shifted from long-term contracts with crude oil indexed prices, towards short-term deals by multiple traders in spot markets, a visible and important indication that gas is gaining ground as a major substitute for oil.
In 2020, spot prices were roughly half those of Gazprom’s long-term contracts. Prices surged as much as seven times in 2021, reflecting a combination of factors at play. On the demand side, economic revival from COVID-19 boosted demand for gas in most of Asia and Europe. On the supply side, renewables and green sources of energy declined in most of Europe. With the decommissioning of nuclear power plants in Germany and falsely huge green energy surge, natural gas turned to be of utmost necessity that encouraged Russia to take bold steps in its regional ambitions including Ukraine.
Europe blamed Russia for high gas prices, though Gazprom affirmed that it was supplying the volume of gas that was contractually obliged to supply. In fact, gas came up in full force to play a major role in the global energy scene. Gas prices had no reference for pricing in major energy stocks prior to the formation of Gas Exporting Countries Forum (GECF). It was after 2000 that gas prices were brought up in international stock exchanges in London, Tokyo and New York. Prior to the year 2000, gas prices were oil-indexed.

Russia is a petro-state. It’s the world’s largest natural gas exporter, and the second largest oil exporter just behind Saudi Arabia. Pipelines and sea routes are vital to its economy. Russia wants to sell oil and gas in Asia and Europe. As such Nord Stream 2 makes huge commercial sense, as well as geopolitical objectives. With Nord Stream 2, no transit fee is paid, and that makes the Russian gas even cheaper. It is also shorter and more efficient. Nord Stream 1 that crosses Ukraine is already sixty years old and requires constant repair and maintenance. Ukraine also keeps raising its transit fee since 2014. In the meantime, Nord Stream 2 remain controversial, seriously opposed by Ukraine and Poland who know that   as a result of transiting reduced volume of gas through their territories, less fee is received and geopolitical importance of their countries will be diminished. There is no doubt that Germany, Austria, the Czech Republic and others in Europe need it. The Russian gas is vital for Germany. Ex- Chancellor of Germany opted to close nuclear power plants for political reasons. She wanted Green Party support in election. Germany is the first entry point for Russian gas through Nord Stream 2 that adds to Germany’s influence over Europe, a situation that envies France and some other European governments.

The current crisis between US/ NATO and Russia that ultimately led to a major military operation by Russia into Ukraine has been brewing for some years. With the dissolution of the Soviet Union, NATO and the United States decided to push closer to Russia and Moscow has been nervous. As such, one of the major concerns of Russia in building the Nord Stream 2 gas pipeline was to overcome a potential risk to its gas exports to Europe and Germany in particular.

In December 2021, Moscow presented a draft treaty to the US and NATO asking for a complete overhaul of the European security architecture. Among different phases, Russia demanded that the United States and NATO must recognize Moscow’s rights to perform its plans and obligations for supply of oil and gas to Europe. As such, US must seize to sanction or impose restrictions on Russia’s gas supply in Europe.
It is interesting to note that in August 2020, Russia concluded a new major strategic alliance with China. Based on the information that leaked to the media, China agreed to buy gas from Russia on a twenty-year long contract. This grand strategic energy alliance provided Russia with the assurance and confidence that there’s always a buyer for its gas, no matter what way Europe would go on Russian energy supply.
The theme of Russian security proposal to the West demonstrated total confidence on the side of Russia that, governments must nock to request energy from Russia. Moscow was also confident that Turkey as the second most powerful member of NATO, after the US was in no position to go against Russia. Needless to mention that Ankara opted to stand by the NATO side after Russia entered Ukraine. However, European capitals are extremely disturbed by the events in Ukraine and find themselves in the middle of nowhere.

As mentioned earlier, Europe seems to be out of touch with the fast evolving international security environment. Europe relies on the US for security and military protection, relies on China for business and trade and relies on Russia for energy. A reliance that has stayed in place for many years. Population is aging and is in no mood for a major change. European reliance on Russian gas and oil will not vanish overnight. Europe will have to seek alternatives, no matter what will come next in Russia/ Ukraine situation. Alternatives are limited. United States has sanctioned major gas player, Iran. Iranian gas was sanctioned by the US. Iran had to shift gas output towards domestic consumption and is in short supply for Germany. Huge investment and hefty transfer of technology is of dire need. Though there are still windows of opportunity for both sides. United States cannot sanction a country’s energy sector and they blame the producing country to produce even more oil and gas.
My view is not related to any hurried or incalculable support or condemnation of US/NATO/Russia/Ukraine conflict.

GECF Impact on Europe Gas Market

Shuaib Bahman

The sixth summit of Gas Exporting Countries Forum (GECF) held in Qatar, particularly its coincidence with ongoing Russia-Ukraine conflict was a key event in the energy sector. The summit was attended by Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago and Venezuela. The Netherlands, Norway, Iraq, Oman, Peru, Republic of Azerbaijan and the UAE were also in attendance as observer members.

GECF accounts for 44% of total world gas production, 67% of world gas reserves, 64% of piped gas exports and 66% of liquefied natural gas (LNG) trading.

GECF Standing

The importance of gas as a good source of energy will grow in the coming years. Hence, producing and consuming countries, which were looking for strategies to control and manage it, created an organization comprised of gas producers and exporters. GECF, whose sixth summit was held on “Natural Gas: Shaping the Future of Energy: with the aim of coordinating gas-exporting countries”, has been able to play an important role in the field of gas in recent years. During its years of activity, the Forum has succeeded in coordinating the countries active in the field of gas production and preventing losses caused by inconsistency between these countries, which will ultimately be to the detriment of their national interests.

In the meantime, what has added to the importance of this forum in recent years is the growing global trend of demand for energy along with low natural gas prices in the market. GECF was basically created due to the losses caused by the lack of coordination and interaction between the world's gas producers and exporters. In fact, gas-producing and exporting countries have come to the conclusion that by being part of an organization, they protect their market interests in a better way. As a result, the main goals of GECF include increasing cooperation between gas exporting countries, adjusting gas prices, examining market conditions and cooperation for the development of gas fields in gas-rich countries.

More specifically, the GECF summit held in Qatar was instrumental for energy security from two aspects:

1. The prevalence and persistence of COVID-19, which continues to plague many parts of the world.

2. Creation of tension between Russia and the West that could challenge the security of gas exports to European countries.

Therefore, on the one hand, the security of rising energy demand after the end of the COVID-19 pandemic, as well as the possibility of reducing or even cutting off Russian gas exports to Europe, were two important issues that overshadowed the GECF summit in Qatar.

Europe US Challenge

GECF’s support of the idea of ​​depoliticizing international and global gas cooperation and returning to the economic logic and multilateralism that was emphasized in the summit’s closing statement may play an important role in sustaining global gas supply and demand and achieving fair prices for all stakeholders of the global gas industry. However, the imposition of unilateral and extra-legal sanctions against GEFC members, as well as the tense policies of great powers, are seen as deterrents to ensuring sustainable energy security. Over recent years, the United States has imposed various sanctions on the gas industry of the GECF member countries such as Iran, Russia, Libya and Venezuela. On the other hand, the tension-causing US policies in Eastern Europe, which led to tensions and war in Ukraine, have affected the security of energy exports to European countries.

At a time when GECF member states seek to balance global markets and see energy market balance in favor of producers and consumers, the US unilateralist policies along with imposing economic sanctions on gas-exporting countries, as well as crisis creation in important parts of the world have challenged the security of energy transmission. Natural gas prices nearly doubled by the end of 2020, and US tensions in Ukraine have prompted European countries to look for alternative sources of Russian gas. However, finding suitable alternatives for European countries is not easy. Because most producing countries have a small excess capacity to fill this potential gap.

On the other hand, European countries that used to try to ignore the role and position of GECF in global markets will now have to comply with some of the terms of the Forum. In fact, European countries have no choice but to accept the signing of long-term contracts to ensure the supply of gas they need. The European Union has so far resisted long-term contracts for 10, 15 and 20 years. Of course, even accepting such conditions will not solve the problem of the Europeans in the short term. Because increasing the production of countries with gas resources requires huge investments, and Europe's access to the gas of these countries will take several years.

GECF-Europe Future Cooperation

The idea of ​​forming organizations and associations is usually proposed and pursued by producers, and the purpose of establishing such organizations is to create security of supply, market stability and to create a stable income. For this reason, mainly consumers do not consider the creation of such organizations in their favor because it increases prices and reduces their power over sellers. Therefore, since the idea of ​​forming GECF was brought about, consumers have always been opposed to it. Meanwhile, European countries, which are among the most important importers of gas, have always expressed concern about the coordinated policies of GECF.

However, the Europeans seem to be forced to change their course and compensate for some of the weaknesses of GECF due to the US policies. Many critics believe that the Forum, sometimes referred to as “Gas OPEC”, has never had a significant impact on global fuel supply, demand and prices, despite its high share in the world production and reserves. In fact, the role of GECF in the global gas market is not comparable to the role of OPEC in the oil market. What has largely fueled the GECF weakness is the type of short-term contracts that exporting countries have signed. However, the current situation in Europe and the policies of the United States of America will make up for this weakness of GECF by the importing countries themselves. In fact, if importing countries, including European countries, want to achieve sustainable and secure gas resources, they have to enter into long-term contracts with GECF members.

Tehran Refinery to Cut Sulfur

Upgrading the quality of refined products across the world is an international obligation for promoting petroleum refined products and preserving markets. Today, most major investments in the refining and distribution sector are aimed at supplying products which would conform to environmental standards and regulations.

On the other hand, the existence of strict standards that are set in countries every year makes it impossible to export highly polluting fuel products. Due to the importance of this issue, Tehran Oil Refining Company, as one of the largest "refineries" in Iran, has a written program called the plan to convert vacuum tower residues into valuable products. Due to the amount of metals and very high impurities in the vacuum tower residue, the feed requires very sophisticated technologies for refining. The project is one of the major projects of this refinery and is classified as a megaproject.

Hamed Armanfar, CEO of Tehran Oil Refining Company, said: “In addition to increasing the margins of the Tehran refinery, the project has a significant impact on reducing the pollution of fossil fuels with high-sulfur, so that the project is one of the refinery projects with an environmental approach, while on the other hand it supplies products with higher quality and value.”

He said that the initial studies of the project began with a Japanese company in 2015 (with a mixed feed of 40% atmospheric residue and 60% vacuum residue), adding: “The International Maritime Organization (IMO) banned the sales of fuel oil with more than 0.5% sulfur content to ships for consumption while on the other hand, in light of the decline in the global price of high-sulfur content fuel oil, one of the main priorities of the refinery has been emphasized more than ever.”

“Therefore, after shifting to vacuum residue for fuel, studies have got under way by local and foreign firms to get necessary permits. The project is forecast to come online by March 2028,” said Armanfar.

He added: “Building a new CCR unit, as well as units for reducing the benzene content of gasoline supplied by the refinery and removing ethane from LPG, shifting from STG to GTG+HRSC, building a hexane normal solvent production unit and water treatment project constitute the most significant projects at the Tehran Oil Refining Company in the current calendar year, which are aimed at upgrading the quality of products at this refinery and save on energy consumption.”

Chemicals and Catalysts

Supplying vital equipment and their spare parts under the present conditions of sanctions is a key issue in terms of financing and industry with a view to sustaining production and boosting the quality of refined products at the Tehran Oil Refining Company.

With a view to reaching its self-sufficiency goals and resisting shocks caused by sanctions and accelerating domestic manufacturing of refinery equipment, the Tehran refinery has been focusing on domestic manufacturing. Some achievements are domestic supply of chemicals and catalysts, fixed and rotary equipment including turbine rotors, high-speed pumps, air coolers, meters, compressors and mixers.

Armanfar said over the past three years, 1,220 items of spare parts, 157 items of chemicals and catalysts and 926 items of refinery equipment had been supplied by domestic manufacturing companies.

Other measures taken in Tehran Oil Refining Company to support internal construction, creation and operation of the organizational structure of engineering and internal construction affairs have been the preparation of engineering scopes and inspection, review of technical proposals and material certificates, preparation of construction plans and three-dimensional models of complicated parts to present to manufacturers for future production.

Armanfar said setting up a permanent fairground to display domestically-manufactured spare parts and products for the first time, and assessing and rating more than 260 domestic manufacturers in various sectors were among valuable services rendered by the Tehran Oil Refining Company.

He added that the refinery planned to manufacture high-tech items and hot sections of gas turbines, chemical products, instruments as well as electrical equipment in the future.

Armanfar said in order to reach ideal conditions, the refining company was seeking perfection and agility so that a roadmap would be drawn up for manufacturing.

Analyzers Installed on Chimneys

Paying attention to the environment and its protection requires implementation of programs that are carried out in the refinery. For this purpose, pollution parameters are assessed regularly in the environment. On the other hand, control and cleaning of groundwater pollution in the area of ​​industrial facilities is done in this refinery in order to protect the environment. Therefore, in order to clean the groundwater and use the services of a university advisor to monitor its pollution, groundwater pollution has been monitored by drilling 60 exploratory boreholes in the area, which covers  an area of about 36 km.

Meantime, installing meteorological installations in Baqer Shahr, preparing statistical environmental reports on a quarterly and annual basis in line with instructions to be presented to the HSE Directorate of Refining and Distribution Committee, Ministry of Petroleum and the Department of Environment, updating the environmental aspects of operational units based on ISO 14001:2015, assessing the lifecycle of product and updating waste management by connecting to IRANEMP, providing environmental obligations for projects, identifying environmental risks with PHA PRO and making necessary purchases were among other environmental projects of the Tehran Oil Refining Company during the first half of last calendar year to 21 March 2021.

Gas Replaces Liquid Fuel

Armanfar went on to highlight the most significant measures the Tehran Oil Refining Company had done regarding enhanced efficiency and reduced consumption of energy commodities.

“With measures undertaken to reduce energy commodity consumption over recent years, light and heavy liquid fuel was totally eliminated and natural gas replaced it. Meantime, CO2 emissions fell 50,000 tonnes a year and SO2 pollution 2,500 tonnes a year,” he said.

Armanfar said that the oil refining company’s energy performance improved 1.1% while IRR 3,714 billion was saved in a year and social costs were reduced by IRR 1,020 billion a year.

History of Mideast Oil Contracts

From Beginning to Iraq

Part I

Some 115 years have passed since oil was discovered in the Middle East. These years have not been without ups and downs though. In this tense region, oil has gone through a variety of legal, political, economic, social and cultural challenges, whose examination would be hundreds of volumes. In this piece of writing, the legal and economic aspects of oil contracts in the Middle East have been summarized.

In late eighteenth century, Napoleon occupied Egypt. The Muslim world was stunned. The Westerners had a clear strategy by occupying Muslim countries, using the resources of Islamic lands to advance their own interests. It did not take long for Western colonialism to disclose its nature. Everything became clear when oil came to the fore. It was basically the colonizers who extracted the oil from the lands of the Middle East to lighten their houses and warm themselves up.

Tough Competition

At the same time as D’Arcy’s team was searching for Iranian oil in 1901, more or less simultaneously, oil was being explored in other Middle Eastern countries. Countries that were still generally considered part of the great Ottoman Empire and emerged only a few years later, with its collapse at the end of World War I. Colonial concessions began one by one. Bernard Mommer, in Global Oil and the Nation State, puts it as follows: “The Middle East oil concession system was a legacy of colonialism and imperialism. At the same time as Iran, competition for oil concessions began in Iraq during Turkish rule, and in that British-administered country, the most important oil concession was given to the Turkish Oil Company in 1925. The Bahraini sheikhdoms ceded concessions in 1930 to Kuwait in 1934 and Qatar in 1935, while they were under British mandate. In 1933, Saudi Arabia awarded its most famous oil concession. Each oil concession covered almost a large part of the national territory of these countries. The duration of the concession agreement was between 55 (Bahrain) and 75 (Iraq, Kuwait and Qatar), and the terms of the concession were very vague.”

 Concessions in Iraq

Iraq is one of the countries formed as a result of the collapse of the Ottoman Empire after World War II; an ancient land that was also interpreted as Mesopotamia. Several pre-Islamic civilizations flourished in present-day Iraq, including the Babylonian civilizations in central and southern Iraq, the Assyrian civilization in the north and east, and the Sumerians in the north and west. During the Islamic era, Iraq was the cradle of Islamic civilization for many years, and many Abbasid caliphs chose Baghdad as their capital. With the invasion of the Mongols, Iraq entered a new phase to be only revived after the collapse of the Ottoman Empire. Western colonialists competed fiercely for Iraqi oil. Mommer puts it as follows: “Germany, Britain and the Netherlands began a relentless quest for Iraq's oil concessions while the country was under Ottoman rule. In early 1914, they put aside their discrepancies and cooperated with each other in the form of the Turkish Oil Company. In the middle of the same year, with the help of an Armenian intermediary named Golbenkian, the Turkish Oil Company made a not-so-explicit promise to gain oil concessions, and Golbenkian was to be given a stake in the company because of his services. World War I began. After the war, the situation changed and Germany was defeated, the Ottoman Empire collapsed, and Iraq was ruled by the British. For the British, the promise made by the Ottomans for oil was also binding on the new post-war government. Thus, in the 1920 agreement called 'San Remo', German shares in the Turkish oil company were given to France, and France guaranteed the free passage of Iraqi oil from the Mediterranean Sea to areas under its control, including Syria and Lebanon.”

Profits

Although countries that awarded oil concessions made their own profits, they were at one-sixth at best. This one-sixth was given in such a vague, opaque and bizarre way that if the accurate information on oil extraction by the West could be obtained, it could reach as low as 10 percent. Mommer writes: “After the Iraqi royalties were converted into barrels of oil, the least possible information was provided to the Iraqi government. Because the country was only allowed to check oil shipments in terms of volume and quantity and could not comment on prices. American companies also wanted more secrecy than anything else. Finally, in 1928, an agreement was reached on the shares of the Turkish Oil Company, and Anglo-Persian Oil Company, Royal Dutch Shell, the French Oil Company and the American company “Near East Development” each acquired 23.75% of the shares. The remaining 5 percent, which did not have the right to vote, went to Golbenkian.”

Although the Iraqis were able to increase their share of the oil profits after a long period of looting, they witnessed the looting of their oil by the colonialists for many years.

Oil Teams Performance in Soccer Pro League

Iranian soccer clubs are competing for half-season in all groups, from the premier league to third league. As in previous years, the teams affiliated with the petroleum industry failed to meet expectations. In fact, they emerged with fluctuations. Their performance was on and off. Finally, they did not have any satisfactory performance. Sanat Naft Abadan and Naft Masjed Soleyman represent Iran’s petroleum industry in the soccer pro league of Iranian clubs. Pars Jonoubi Jam, in first league, is another team playing on behalf of the petroleum industry. Naft va Gaz Gachsaran is in the second league. In the third league is the Omidiyeh soccer team. Omidiyeh had fallen from the second to the third league; therefore, it would appear only in the final match in a bid to give itself a new try to be back to the second league.

Apart from the Naft Masjed Soleyman team, other teams showed weak performance at the start of the season. However, they gradually improved their position and came up to the middle of the table after winning several victories. But the situation was different with Naft Masjed Soleyman because it had a quite good start before gradually falling to the bottom of the table. For fear of further drop, they replaced the club’s manager and the head coach.

The following is a brief review the petroleum industry football teams by the end of half-season in various leagues:

Sanat Naft Abadan

Sanat Naft Abadan team started the season with 3 consecutive defeats to be at the bottom of the table. Of course, the oil teams did not have their famous head coach with them in the first 3 games. Alireza Mansoorian, the head coach of Sanat Naft Abadan, who also has a history in Naft-e Tehran, was not present in the first 3 matches with his team due to COVID-19; but as soon as he resumed his activity in the fourth week of the Premier League, the team achieved its first victory.

Sanat Naft Abadan gradually improved and with remarkable results, was able to separate itself from the bottom of the table and finally at the end of the first half of the Premier League season, right in the middle of the table and in eighth place. Alireza Mansoorian's players in Naft Abadan recorded 6 wins, 4 draws and 6 defeats in their record to get 22 points. The oil industry teams are very hopeful that they will achieve better rankings as they continue their growing trend in the second half of the season.

Naft Masjed Soleyman

Naft Masjed Soleyman soccer team chose its head coach later than other teams and recruited players later than other teams. The team's uncertainty caused the head coach and many influential players of the team to leave prior to the start of the season. This, in turn, made things difficult for the new coach.

A few days prior to the start of the Premier League competitions, the club's managers chose Faraz Kamalvand as their head coach. Kamalvand had a history of working with Sanat Naft Abadan and Pars Jonoubi Jam in his record and was well acquainted with the atmosphere of oil teams and with this knowledge, he went to Naft Masjed Soleyman; but in Naft Masjed Soleyman, he did the same thing he had done in Sanat Naft Abadan and Pars Jonoubi Jam, that is, like those two clubs, he left the work in the middle of the road! Kamalvand started with the half and half team and was in the 15th place during 15 games, with sinusoidal results at the end of the half season. In the first few weeks, he believed that because his team did not have a preparatory game, it would not work well and that the games were a preparatory order. For this reason, he promised good days and said that Naft Masjed Soleyman will have good days, and even seriously announced that you should evaluate my team in the second half of the season!

But with all the promises, he left Naft Masjed Soleyman to evaluate the team with another head coach. Of course, this was not the only problem of Masjed Soleyman oil in not concluding in the half-season because the management of the club was constantly changing. In the first half of the season, Naft Masjed Soleyman Club saw 3 managers on top of themselves. First, he started the season with a theory, then with his departure, Abuzar Shojaei continued his work as the acting CEO, and now Hedayatollah Yazdi, as the third CEO, has started his work in Naft Masjed Soleyman. With the arrival of Yazdi, Mahmoud Fekri has replaced Kamalvand so that he can keep the team in the Premier League like last season. Fekri has a history of ascending from the first division league with Naft Masjed Soleyman to the Premier League. That is why he is a popular coach in Naft Masjed Soleyman and he is expected to save the oil industry teams from falling with his wisdom.

Pars Jonoubi Jam

Pars Jonoubi Jam soccer team, which has been relegated to the first division for two years, hopes to return to the Premier League this year; but it is hard work to compete with other contenders.

The transformed South Pars team did not have a good start at the beginning of the season with a new coach and CEO; but gradually, this oil industry team managed to come to its senses and from the middle of the road, defeated the opponents one after another in successive matches in order to separate itself from the bottom of the table and move up to the seventh place. Although this team, is in the middle of the table, due to its short distance with the leading contenders and also the short distance between the teams, he hopes that by continuing his growing trend, it will be the second team at the end of the second half of the season to return to the Premier League. Iman Razaghi Rad, the young coach of Pars Jonoubi Jam, has a special trust in his students and wants to be a surprise in the first division league.

Naft va Gaz Gachsaran

The Naft va Gaz Gachsaran soccer team, which was relegated to the third division at the end of last season, remained in the second division after buying points from the Haffari Ahwaz team, which no longer intended to have a football team. The Naft va Gaz Gachsaran team also faced many changes. From changing managers to the head coach, made this team experience better days; although they were volatile.

Naft va Gaz Gachsaran started the season with Aziz Frisat, and we must say that the results of this team were not good and it was among the teams at the bottom of the table; but gradually the performance of the team improved until at one point it came in third. But as already mentioned, the sinusoidal results of this team made it impossible for them to maintain their position, and finally, after 13 games in the first half of the season, they were in the eighth place. Naft va Gaz Gachsaran, considering the conditions of the table and the proximity of the teams to each other, has the chance to reach the top very soon with 2 victories and its continuation, and to try its luck to ascend to the first division league. This team hopes to get better results in the second half of the season, so they are very hopeful for the future.