Regional Convergence in Energy

Ali Forouzandeh
Director General of Public Relations

Promoting energy diplomacy has been the motto of Petroleum Ministry in the 13th administration. Many petroleum industry plans, particularly regarding oil, gas and petroleum products export as well as utilizing local and external potential for development projects hinges onimproving energy diplomacy, particularly with neighboring and regional nations.

In light of the 13th administration’s approach of “regional convergence,” development of energy diplomacy and subsequently Iran’s cooperation with neighboring nations, it could be argued that the outcome of the policy has been expansion of cooperation with a variety of nations, ranging from Russia to Qatar, Oman and Turkmenistan as far away as Latin America.  Expanding level of cooperation and ties between Iran and Russia has topped the agenda. Strengthening ties would be a firm prooffor Minister of Petroleum JavadOwji’s statement declaringthe Tehran-Moscow close ties is experiencing an unprecedented golden age which has neverbeen experienced by Iran and Russia. On such basis, anIranian delegation led by Minister Owji participated in the meeting of the 16th Russian-Iranian Business Council convened in Russia. The meeting led to the signing four documents of cooperation with a view to the expansion of Iran-Russia ties.

As far as energy diplomacy is concerned, in addition to utilizing external potential, the key point would be to export technical services as domestic firms involved in the petroleum industry have developed such potential over years, a prime instance of which is the export of technical services to Latin America, and construction of overseas refineries. In line with this, Iran’sPetroleum Ministry has recently planned to implementoverseas exploration projects.Talks have been held with Venezuela and Tajikistan among other countries, to that end.

Golden Age in Iran-Russia Ties

During the 16th Iranian-Russian Business Council, hosted by Moscow, four documents were signed for cooperation between the two nations by Iranian Minister of Petroleum Javad Owji and Russia’s Deputy Prime Minister Alexander Novak. Owji has said that Iran-Russia ties had entered a “golden age”. Novak also said that Iran-Russia trade grew 45% in 2022 year-on-year.

Chaired by Owji and Novak, the Council is tasked with following up on cooperation between Tehran and Moscow.

New Chapter

The economic and political relations between Iran and Russia have had numerous ups and downs in the past years, but the level of these relations in the 13th administration has gone beyond  that of the previous administrations in such a way that the presidents of the two countries met five times in 2022 alone and focused on expansion of cooperation.

More than 50 Iranian experts and deputy ministries and representatives of various organizations traveled to Russia with the delegation of Islamic Republic of Iran to attend the Iranian-Russian Business Council, and the Russians with more than 150 people consisting of public and private sectors in the form of various working groups in this have attended the meeting.

Persons in attendance were representatives from the Ministry of Petroleum, Ministry of Foreign Affairs, Ministry of Economy, Ministry of Roads and Urban Development, Ministry of Energy, Ministry of Science, Research and Technology, Ministry of Agriculture, Ministry of Sports and Youth, Ministry of Communications and Information Technology and representatives from the Presidential Office, Majlis, Armed Forces Staff, High Council of Trade, Industrial and Special Economic Zones, Atomic Energy Organization of Iran, Central Bank of Iran, National Development Fund of Iran, National Standards Organization, Chamber of Commerce and Iran Business Center.

Three working groups discussed and exchanged opinions in the 16th Business Council meeting. The working groups included "Water and Power", "Space", "Oil and Gas", "Atomic Energy", "Agriculture", "Transportation and Customs", "Standard", "Banking, Finance and Investment", "Culture, Labor and Sports", "Free Zones", "Trade", "Communications, Information Technology" and "Science and Technology".

Addressing the meeting, Owji thanked Novak for hosting the event, saying:  “Fortunately, the relations between Islamic Republic of Iran and Russian Federation are expanding and we are in the golden era of the relations between the two nations and the two great countries of Iran and Russia.”

He said that the relations between the two countries have never been so close to each other and this golden opportunity should be used to the fullest.

All-Out Development

Owji enumerated grounds for cooperation between Iran and Russia as follows: Establishing extensive banking cooperation to create a suitable and reliable payment system in order to facilitate trade and investment, swap energy carriers, especially gas, crude oil and petroleum products, and develop Iran's gas export markets with the participation and investment of the Russian side in various sectors of Iran's oil industry, especially development of the value chain of petrochemical products, oil refining and field development, activating the North-South Transport Corridor, especially focusing on the full utilization of existing capacity and infrastructure development.

He also called for the mutual acceptance of the two countries’ standard system with the aim of developing trade, exchange of agricultural products, including the import of grain from Russia and the export of tropical agricultural products to Russia, and the use of Iran's position as a transit hub and swap of Russian agricultural products, creating a joint fund for regional and global investments, bilateral guarantee funds to issue mutual guarantees for the companies of each side with the aim of reducing the risk of trade and investment among other work axes between the two countries.

Among the other domains of negotiations between Iran and Russia in the energy sector, one may refer to technology transfer in the field of IOR and EOR, in which case some oil wells would be used for hydraulic fracturing.

Achieving a favorable level of trade between the two countries is of great importance, especially in infrastructure areas such as the North-South Corridor, oil and energy, transit; monetary, banking and customs cooperation. To that effect, Minister Owji has said it would help the two nations reach a favorable level of trade.

Nasrollah Ebrahimi, acting head of the Secretariat of the High Council of Trade, Industrial and Special Economic Zones, has said major Russian firms from various sectors attended the meetings.

“They have held serious economic negotiations with their Iranian counterparts in the field of joint investment in projects between the two countries and welcomed Russian investors to participate in Iran's petrochemical hubs, oil and gas, airport, etc.” he said.

“In the first step, it is planned to create a connection between Lotus Astrakhan, Anzali and Chabahar Free Zones, and in the

future, they are going to extend the connection to the Mundra Free Zone of Mumbai, India. In this meeting, Russian private and state-owned banks were invited to operate in the common free zones of the two countries within the framework of transparent and unified regulations. In case these banks wish to form offshore banks and international stock markets, the ground will be paved for them. The two countries’ capital markets should be assisted in terms of bank transactions,” he added.

$44bn Investment in Energy

Iran’s Petroleum Ministry in the 13th administration has held intensive negotiations with the managers of the Russian energy industry for the development of relations between the two countries in the energy sector. It has already signed more than $4 billion worth of contracts with large Russian companies for the development of oil and gas fields. Meantime, more than $40 billion worth of memorandums have been signed with large Russian companies in various fields, such as construction of gas pipelines to neighboring countries, swap of oil, gas, petroleum products, and export of petrochemical products. In this regard, petrochemical products and catalysts were exported to Russia last month.

According to Owji, Russian firms and investors have so far finalized $4.5 billion worth of agreements for the development of seven oil and gas fields in Iran.

Mohsen Khojasteh-Mehr, CEO of National Iranian Oil Company (NIOC), has referred to the $40 billon memorandums, saying: “This memorandum is related to development of three gas fields in the Persian Gulf and 6 oil fields in Iran, which are approaching the end of the studies and whose MDP is available. Therefore, in late November, a high-level delegation of Russian companies will travel to Tehran to present a report on this memorandum and finalize it.”

Neutralizing Sanctions

Touching on possible sanctions that the US and the European Union plan to apply to Russia in January, Owji said: “Iran has been facing such sanctions for years, so it is a good opportunity to neutralize the sanctions with the help of two countries.”

Referring to the implementation of agreements and joint plans between Iran and Russia in the near future, he said: “Right now, there is a strong will in the public and private sectors of both countries to neutralize the sanctions.”

He added: “Iran and Russia have good capacities, especially in the field of hydrocarbon resources in the region. The oil and gas resources of the two countries are very influential in the world today, and fortunately, the two countries have made good and aligned decisions within the framework of OPEC+ alliance.”

He said that Iran’s Petroleum Ministry would work in favor of broader strategic cooperation in various domains of the energy sector.

Noting that a historical opportunity had been created for the two countries to broaden their ties, Owji said: “Iran-Russia cooperation will not only result in growth in both countries, but also it will prepare the ground for other countries in the region to grow.”

He said Iran and Russia were both under unjust sanctions, saying: “By relying on our own potential, we are sure we can neutralize these sanctions.”

Russia Investment

Novak has laid emphasis on better ties between Iran and Russia in the energy sector, saying: “Russian companies are currently investing in the oil fields of Islamic Republic of Iran, and the volume of such investments will increase next year.”

He referred to a very large package of agreements in the field of energy and added: “For example, this year Gazprom signed a memorandum of understanding with NIOC. Agreements have been made regarding recovery from the gas fields of Islamic Republic of Iran, as well as the export of gas to third countries.”

“We have also agreed on the swap of oil products and this cooperation is promising,” he added.

Novak said Iran-Russia relations had strategic commercial and foreign policy ties, noting that they were determined to expand their ties.

“I express my gratitude to Iran’s petroleum minister due to his constructive approach and his review of all aspects of cooperation,” he said.

Novak said the Russian-Iranian Business Council meeting could give a fresh impetus to Tehran-Moscow ties. He added that Iranian and Russian presidents had developed reliable ties.

“Trade exchanges between the two countries are developing and expanding. During the first eight months of 2022, they grew 45% year-on-year,” he said.

“Iran and Russia are among the main exporters of hydrocarbon. For this reason, we try to focus on other commercial areas such as construction materials, petrochemical trade, as well as agricultural products,” he added.

Novak said that agreement had been made for Iran and Russia to remove obstacles to commercial and economic cooperation. “We will also help Islamic Republic of Iran reach agreement with the Eurasia Union for free trade.”

“It was also agreed to have joint projects in the field of shipbuilding, automobile manufacturing, and airplane manufacturing, and joint Iranian-Russian companies would be formed to cooperate in supplying necessary parts,” he said.

Deepened Ties

The relations between Iran and Russia have become more intimate over recent years, and the two countries, as Caspian Sea littoral states, have realized in these years that in order to strengthen their forces in the region they must act in accordance with collective and neighborly behavior in order to confront the Western bloc.

This issue has been highlighted in the 13th administration more than in the past, and with the unfolding crisis of Russia-Ukraine war, the Russian side has focused more on strengthening this relationship.

In the economic sector, cooperation between Iran and Russia has been increasing in the last few years, and according to statistics, despite COVID-19 restrictions in the last two years, the volume of trades shows a good increase.

The total value of the goods exchanged between Iran and Russia in 2021 was $4.035 billion, which is the highest figure in the history of relations between the two countries. Of this amount, $3.068 billion was worth of Iran's imports from Russia and $967 million worth of Iran's exports to Russia. The figures for 2020 were respectively as follows: $2.22 billion, $1.425 billion and $795 million. A two-fold increase is visible.

At the same time, the volume of trade between the two countries has seen a significant jump in the past two years, especially in the export of Iranian goods to Russia, and as the numbers show, commercial cooperation between the two countries in 2022 is on a sharp rise.

As far as oil and gas is concerned, it could be argued that Iran and Russia have seen a big jump ever since the 13th administration took office in Iran. Minister Owji visited Moscow twice in the first half of the current calendar year and met with senior officials there.

The Russian-Iranian Business Council first met in December 1996, which was the first one following the collapse of the Soviet Union in 1991.

The 15th meeting was held in June 2019 in Iran.

Potential for Roaring Trade with Russia

The active energy diplomacy between Iran and Russia and the ensuing opportunities have made it possible for Iran to expand international relations in the field of oil and gas. Accordingly, based on the announcement of Iran’s petroleum minister Javad Owji, in the latest measures takenIran has started talks on bartering  and swapping products from the Caspian Sea with some Russian companies, because according to him, nearly 10 million tonnes of bartering and swapping and export of petroleum products capacity exist for Iran in this area, while Iran also had an active presence in Energy Week in Russia and the international meeting of the oil, gas, petrochemical and renewable energy industries, which indicates the importance of developing relations to the two countries.

The existence of huge oil and gas resources and related infrastructure and easy access to high seas are among the myriad advantages of Iran that have boosted the Iranianpetroleum industry. Although unjust sanctions and their consequences have stripped Iran of some of the opportunities available in the oil and gas market, the country has never lost its share in the global markets.

Development of active energy diplomacy between Iran and Russia and Russian companies is an unlimited capacity that Iran was able to achieve while neutralizing the imposed sanctions throughnegotiations. Accordingly, in July, National Iranian Oil Company (NIOC) and Russia’s Gazprom signed a $40 billion memorandum of understanding to develop Kish and North Pars gas fields, 6 oil fields, as well as to maintain pressure in the South Pars gas field. At the same time, the document covers operations of exchange with natural gas and petroleum products, implementation of liquefied petroleum gas projects and construction of gas pipelines.

Big Potential for Cooperation

Touching on some advantages of the Iran-Russia MOU, Minister Owji said: “Both Iran and Russia have high potentials in the oil, gas and petrochemicalsfields. Fortunately, we have signed a memorandum of understanding worth nearly $4 billion for field development and $40 billion for construction of gas pipelines and LNG plants.”

“Regarding exporting products and bartering and swapping from the Caspian Sea basin, we have also started working with some Russian companies and we have capacity for nearly 10 million tonnes of bartering, swapping and exporting oil products. Last [calendar] year which ended on 20thMarch2022, we exported nearly $12.5 billion of petrochemicals and catalysts to various countries, including Europe,” he added.

Owji said: “This time, we unveiled field development contracts for the Russians in the form of off-take, in which the investor is fully insured and supported by the PetroleumMinistry of the Islamic Republic of Iran. This type of contracts is very sweet and attractive for Russian investors, and considering the importance of energy, which we all know in the world today, it has created a golden opportunity to sign other contracts with the Russians in the field of energy.”

He said the Iranian government welcomed investment by Russian economic actors in the oil and gas sector, field development, swapping petroleum products and exporting petrochemicals.

150 mcm/d Gas Output Hike

The $40 billion MOU signed between Iran and Russia covers various aspects.

Hormoz Qalavand, manager of “Supervisionon Oil and Gas Production Dept.” at NIOC, said: “Expansion of oil cooperation between Iran and Russia will increase Iran’s oil and gas production. At the same time, it will help advance some of the oil industry’s plans, including boosting pressure in the South Pars gas field, which is one of the major concerns of Iran-Russia oil cooperation.”

Experts believe that Gazprom's presence in southern Iran, in addition to helpingenhanceIran’s oil and gas production, is a strategic response from Russia to Europe, which is implementing strategic contracts with Qatar. Therefore, although Iran benefits from this cooperation, it is also important for Russia to convert this memorandum signed with Gazprom into a contract.

Qalavand said all points mentioned in the MOU were important, adding that it would result in a 150 mcm/d gas output hike with the planned development of Kish and North Pars fields by Russian firms.

Details

Under the MOU, Russia will allocate nearly $25 billion to development of gas fields and completion of LNG projects and flare gas gathering in Iran. Furthermore, it will spend $15 billion on developing six oil fields including Karanj, Azar, Changouleh, Ab Teimour and Mansouri.

Earlier, agreements were reached with the Russians to develop West Paydar and Aban fields among others for $4 billion which includes a total of seven oil fields.

Roadmap for Cooperation

Ahmad Assadzadeh, deputy minister of petroleum for international affairs and trading, hasrecently travelled to Moscow to attend Russia’s Energy Week meeting.

Referring to Iran-Russia cooperation, he said: “Our cooperation with Gazprom is set in a long-term roadmap and 6 sub-working groups with Gazprom have been formed to follow up on the roadmap. The exchange of information on 6 oil fields and 2 gas fields with Gazprom has started and we hope to be able to formulate a comprehensive plan for the development of these fields soon and enter the contractual phase. We hope that the contracts will be concluded by the end of thecurrent calendar year, which certainly requires firm will of both parties. Various issues are being followed up on with Gazprom, including in the field of LNG, research and development of oil and gas fields.”

According to him, there are two large LNG projects in Iran, which is actually a large plant with two operating rows of 5 million tonnes called “Iran LNG”, which, due to the US sanctions, the equipment and facilities needed for these two plants remain blocked by the Europeans although Iran has paid for them. If this equipment isdelivered, Iranmay start these plants and export LNG.

Touching on Iran-Russia LNG cooperation, he said: “Russia has technology in this sector and negotiations have also been held with some Russian private companies in the LNG sector, and they have expressed their desire for low-volume production, and we are also very interested in working in the LNG sector.”

Assadzadeh said Iran was ready to offer facilities to Russian investors for investment in LNG, adding: “We provide facilities, land and low-cost feed to the investors of the LNG sector so that they can produce this product in the conditions

of the global market, which is now like gold.”

150 mcm/d Gas Output Hike

Implementation of Iran-Russia agreement would help maintain the current level of gas production in Iran while it would help increase its gas output.

Qalavand said the planned supply of 150 mcm/d of gas from Kish and North Pars would be a key step in Iran’s gas production.

“One of the very important measures that has made the issue of maintaining and increasing production a vital issue is the discussion of enhancing pressure in the South Pars field, which is carried out in the form of an investment worth approximately $20 billion,” he said.

Referring to the significance of gas production to supply winter fuel and boosting Iran’s presence in international markets, Qalavand said: “In the winter of last calendar year, for the first time, maximum production from the South Pars field reached 705 mcm/d, and now with the cooperation of Russian companies, especially Gazprom, and the use of their latest technologies in this field, maximum recovery is possible.”

He said that CEO of NIOC Mohsen Khojasteh-Mehr had insisted on following up on the MOU contents so that an agreement would be signed after NIOC’s greenlight to Gazprom’s technical and economic proposal.

Russia, Gas Friend and Oil Rival

It seems that the cooperation between Iran and Russia based on this memorandum will come to fruition sooner in the gas sector. Khojasteh-Mehr had recently said: “There is great potential for swapping and transiting Russian gas through Iran, which can be defined as a win-win game for the parties.”

Development of Iran’s gas fields by Russia will be implemented based on the principle of “constructive interaction instead of inhibiting competition”, while it should be noted that there is no competition between the two countries in Iran’s regional markets. Once strategic relations are established between two countries, constructive cooperation will be applied rather than inhibiting competition even in joint markets.

Economic Cooperation

In any case, it is crystal clear that expansion of cooperation between Iran and Russia in the energy sector is one of the issues strongly stressed by the officials of the two countries.Based on this recently, First Vice President Mohammad Mokhber, on the sidelines of the 2ndCaspian Economic Conference held in Moscow, in a meeting with the governors and heads of regions of the Russian Federation, assessed the existing capacities in these regions as useful and constructive in order to improve the level of cooperation.

According to him, the presidents of Iran and Russia intend to maximize the level of economic ties between the two countries.

Knowledge-Based Companies

Promoting cooperation in the field of oil and gas by utilizing the capacity of knowledge-based companies is another important issue that the two countries always emphasize in their relations. Accordingly, on the sidelines of the Caspian Economic Conference in Moscow, Iranian oil industry officials held useful meetings in this regard with top Russian companies, including Gazpromneft and Zarubzhneft. According to Assadzadeh, two Russian technology parks were visited. He continued as saying that these technology parks consist of knowledge-based companies with advanced technology in the field of Russian oil and gas industries, in this visit, a corner of the capabilities of these companies was observed. The issue of technology is one of the axes that, if seriously addressed, will deepen the strategic ties of the two countries.

He said: “In the panel discussion held on energy projects of Caspian Sea littoral states on the sidelines of the Caspian Economic Conference, on behalf of Islamic Republic of Iran, we proposed two categories of infrastructure and case issues to be included in the agenda of the meeting and should be continuously followed up. The attendees welcomed our proposals.”

Development of oil and gas fields in the Caspian Sea, establishment of transportation corridors and energy connections between the countries bordering the Caspian Sea, and establishment of Caspian Joint Investment Fund in order to develop energy projects were among the proposals presented in the meeting.

Assadzadeh also referred to Minister Owji’s presence in Mokhber’s meetings with Russian, Kazakh and Azeri prime ministers, saying: “The statements by Russian companies’ directors indicate very high potential for cooperation between the two nations in various sectors of the petroleum industry. Benefiting from these opportunities require seriousness on the part of both parties.”

Multilateralism, Iran’s Winning Card

Iran’s geopolitical position in the world and specifically its convenient geographical location in the Persian Gulf and the Caspian Sea on the one hand, and its long experience in the field of energy on the other, have made it one of the important and decisive countries in the field of energy supply in the world. The position of Iran in terms of energy transmission routes and the country's vital role in global energy security is very important because Iran, with its special geographical and geopolitical position for the landlocked region of Central Asia, is a desirable transit country and can bring the oil and gas of these countries to high seas in the best way and even to Europe through Turkey.

The existence of huge oil and gas reserves in Iran and the capabilities of Iran's oil industry have made the country one of the main players in the field of world energy supply, which cannot be easily removed from the world markets. According to Mohsen Khojasteh-Mehr, CEO of National Iranian Oil Company (NIOC), Iran has about 157 billion barrels of recoverable oil and 33 tcm of recoverable gas reserves, totaling 1,200 billion barrels of oil equivalent (boe).

Therefore, Iran is always considered one of the important players in the field of energy supply of the world, and its active energy diplomacy in recent months confirms it.

Currently, Iran’s plan in the field of energy diplomacy pertains to significant and active presence in the region, Central Asian and Latin American countries, which has been welcomed by these countries.

Gas Swap

The conclusion of a gas swap agreement between Iran, Turkmenistan and Azerbaijan with an annual figure of 1.5 to 2 bcm of gas on the sidelines of the 15th Economic Cooperation Organization (ECO) summit and its implementation from the beginning of 2022, Iran's relationship with Turkmenistan and Azerbaijan into a new phase and caused a thaw in ties between Iran and Turkmenistan. But Iran-Turkmenistan ties were not limited to this agreement as the two countries also signed a memorandum of understanding on the export of technical and engineering services and petroleum products. Furthermore, during Javad Owji’s visit to Azerbaijan, a memorandum was signed for doubling the volume of gas swap via Iran.

Ties with LatAm Nations

The climax of Iran's energy diplomacy could be considered in establishing relations with Latin American countries. Venezuela, Cuba and Nicaragua are the countries where Minister Owji discussed with their highest executive and senior officials,ways to expand the borders of energy diplomacy.

Signing four memorandums and two contracts with Latin American countries in the field of development and production of oil and gas fields, upgrade and modernization of refineries, issuing technical and engineering services and technology transfer and development of export markets for crude oil, gas condensates and petroleum products are among the most important programs of the Petroleum Ministry. Oil is considered in the establishment of this diplomacy, which has provided Iran with new export markets in that region of the world.

Hengam Development

Minister Owji visited Oman in May. He met with Omani ministers of foreign affairs and oil to discuss export of technical and engineering services in the oil and gas industry, marketing petroleum and petrochemical products, as well as setting up a joint committee to develop the Hengam field which they share.

Iraq Gas Debt Collected

However, the most important event in the activation of Iran's energy diplomacy could be considered the collection of $1.6 billion in arrears owed by Iraqto Iran for gas delivery to its western neighbor. In the last quarter, compared to the same period last year, Iran's gas exports to neighboring countries grew by 43% in volume, while during the same period, collection of liabilities from this export has increased by more than 90% compared to the same period last year. According to Owji, the sustainability of gas exports to Iraq has always been emphasized by the authorities of the Islamic Republic of Iran, therefore the increase in gas exports to this country will be assessed in the future plans of the PetroleumMinistry.

Ties with Russia

Among Iran's plans to expand its energy diplomacy, we may mention the strategic relationship with Russia, which is very important for both countries. According to experts, the relationship between Iran and Russia is deep and strategic, which could be greatly developed, while the top officials of the two countries have repeatedly expressed their interest in developing relations, which can emerge and develop especially in the field of energy, according to such an approach. In early June this year, the Petroleum Ministry hosted a high-ranking Russian delegation headed by Alexander Novak, Russia’s deputy prime minister.

The two countries emphasized expansion of oil cooperation and Minister Owji said: “We intend to raise the level of trade relations with Russia in various economic sectors to $40 billion per year in the 13thadministration. The achievement of the meeting between the high-ranking delegation of Iran and Russia was the signing of three cooperation documents including a joint statement, a memorandum of understanding between the National Petrochemical Company (NPC) of Iran and Russia’s Union of Chemical Industries, and the 12th protocol of the meeting of the working group on transportation cooperation between Islamic Republic of Iran and Russian Federation.

International Fora

The presence and active participation of the PetroleumMinistry  in international fora, organizations and conferences in the field of energy, especially OPEC and the Gas Exporting Countries Forum (GECF), and consultation and interaction with high-ranking officials of OPEC member countries and gas exporting countries, as well as Armenian government officials, managers of Chinese companies and some ambassadors are considered to advance the goals of the oil industry, including the plans of the Petroleum Ministry to expand energy diplomacy in the recent period.

Iran shares land and maritime borders with a total of 15 countries, which has sought opportunities and valuable fields for this country that can be developed day by day, and hence the policy of deepening relations with neighbors and countries in the region in opening new fields and new export markets for this country is very effective.

Russian Firm to Develop Shadegan Field

The deputy CEO of Khatam Oil, Gas and Petrochemical Holding affiliated with Khatam al-Anbia Construction Headquarters has announced that a Russian company has agreed to develop the Shadegan oil field based on a new model of oil contracts. In an interview with “Iran Petroleum”, Omid Asakereh also said that talks were under way with Russian companies for other oil projects in Iran, including talks with Gazprom to develop the Kish gas field.

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

Which projects is Khatam Oil, Gas and Petrochemical Holding currently focused upon?

Khatam al-Anbia HQ has, over recent years, operated numerous projects in the petroleum industry. It has currently many more under way. It has finished studying development of Mansouri, Ab Teimour, Farzad A and Farzad B. Their MDP is also over and we are ready to develop them. We are focused upon developing Azadegan, Yadavaran and Shadegan oil and Kish gas fields. We signed an MOU with National Iranian South Oil Company (NISOC) in February 2017 to develop Shadegan. Along with a foreign partner, we were supposed to prepare the financing model and MDP of the field during a six-month period, but the contract talks came to a halt due to the US’s unilateral pullout from the Joint Comprehensive Plan of Action (JCPOA).

Are you partnering the Russians in the Shadegan field development?

Yes, to develop the Shadegan field, a trilateral agreement has been signed between two Iranian parties and a Russian party under the IPC model during President Ebrahim Raeesi’s visit to Russia. We are currently deciding about the share of each party in the project which would run during 20 years. Shadegan is to be developed by new drilling in the Asmari and Bangestan reservoirs for a 70,000 b/d output hike.

What is the most important challenge you are faced with in the Shadegan development?

Each field has its own specific features. However, Shadegan is a young one with a minimum of challenges. Therefore, we won’t need sophisticated technologies to raise its output. A major challenge in developing this field is the asphaltene production in the Bangestan reservoir, which necessitates foreign technology. We also need foreign investment to develop the field.

Is the Shadegan project the first cooperation between Khatam al-Anbia HQ and Russian firms?

Yes. We also held fruitful talks with Russia’s Tatneft in 2016 and 2017, but they were suspended following the US’s withdrawal from the JCPOA. During a recent visit to Russia by Iranian officials, a communications channel was set up between the two nations, which in turn prepared the ground for broader cooperation between Iranian and Russian companies. The agreement marks Russia’s first official engagement with Khuzestan.

Have you had any talks with regard to absorbing our own investment?

Yes, we have presented $1.5 billion worth of foreign investment documents for developing the field.

Have you held separate talks with the Russians for other oil and gas projects?

We are thinking of expanding our cooperation with the Russians. Therefore, we have proposed to negotiate development of the Ahvaz field with Russian companies. We are waiting for the agreement on the part of the CEO of National Iranian Oil Company (NIOC). Should he agree, we will sign our MOU with the Russians to begin our studies. Ahvaz is one of the largest oil fields in Iran, maximum efficient recovery from which would require specific technologies. The Russians can help us reach this objective.

NIOC has signed a $40bn MOU with Gazprom to implement oil and gas project. Have you held any talks with this company?

Following the Petroleum Ministry’s instruction, we are in talks with Gazprom for developing the Kish gas field under the new model of oil contracts. We are still in the preliminary phases. The Russians are expected to bring in investment and technology. We have also effective logistical facilities in the Persian Gulf to serve the project.

What do you plan to do for the Azadegan field?

The MOU for the development of the Azadegan field was signed in June between NIOC and six Iranian banks and six E&P Iranian companies. We are one of them. We are currently examining frameworks of cooperation. But our priority in West Karoun is the Yadavaran field, which we are interested in the second phase of.

What projects do you have under EOR/IOR agreements?

Ahvaz 2, 4 and 5 to prevent a 30,000 b/d output fall and instead increase the field output by 42,000 b/d; Maroun 2, 5 and 6 to prevent a 20,000 b/d output falloff and instead increase the output by 30,000 b/d; and the offshore development of the Rashadat field were drilling 20 wells would allow a 70,000 b/d increase in output.

Could you tell us about the latest status of seismic testing in Paniz and Darreh Gaz, as well as exploration studies in Toudaj?

The Paniz seismic project is one of the largest offshore and onshore projects in the Middle East. We are currently in the final phases of seismic survey. The basic studies of the project were initially onshore-based, but following the 2019 flooding, the geopolitics of the region changed and the project’s design changed from onshore to offshore. We’re currently in the second half of the project. The seismic studies of Darreh Gaz along the border with Turkmenistan are over and we have informed the client of the results. As far as the Toudaj exploration block is concerned, we have to say that it is the first time an Iranian company is performing exploration studies. We have been tasked with evaluating geopolitical, geophysical and drilling data within the Toudaj area, as well as providing financial and technical proposals for the exploration operations.

In May, you signed an MOU with the Gas Engineering and Development Company (GEDC) to develop the Nasrabad salt dome in Kashan for natural gas storage. What phase is the project in now?

The MOU is worth $400 million. Over an 8-year period, we would build 9 storage tanks in this area, set up dehydration installations and install gas injection compressors with a view to bringing the storage capacity to 500 mcm of natural gas, which would be injected during 8 hot months to be used during 4 cold months of year. I have also to add that given the specific conditions of the reservoir, the project would allow for a 24 mcm/d production capacity. We are currently preparing the proposal to change the MOU into an agreement.

ICOFC Testing Waters for Enhanced Crude Output

The projectto maintain and enhance the oil outputratein the Iranian Central Oil Fields Company (ICOFC) in the Danan, Saadat Abad and NaftShahr oil fields is in the final stages of implementation.

According to ParvizSalehvand, the director of the oil field maintenance and enhanced production projectsat ICOFC, implementation of these projects will come to fruition by the end of the current calendar year, which began on March 21. Therefore, it can be noted that with the completion of these projects in the mentioned fields, oil production in the fields will be raised by at least 13,000 barrels per day.

Here is an overview of the plans aimed at maintaining and enhancing crude oil production in the 3 oil fields:Danan, Saadat Abad and NaftShahr.

$7b Earmarked for Output Enhancement, Maintenance of ICOFC Fields

In December of the year 2017, the approval of plans to maintain and enhance oil production of the National Iranian Oil Company (NIOC) under EPC-EPD contract terms was issued along with its financing, and it was put on the agenda with a credit of $7.246 billion. Based on the initial plan, the philosophy behind implementing of these plans was to maintain and raise the average production capacity of crude oil by 281,000 barrels per day during the three years of 2018-2021 compared to the average production in the first half of the calendar year of 1396 (March-September 2017). The projects entail 34 investment packages in 29 fields or reservoirs with another package focused on corporate social responsibilities.

In the subsurface section of these projects, drilling of 280 new wells and ERD (Extended Reach Drilling) and workover, completion, repair and re-drilling of 1,730 wells are envisaged. Activities regarding the surface sectionincludebuilding a desalination unit, an exploitation and processing unit, a collection plant, pressure boosting and gas injection facilities, flow and transmission pipelines, pump stations, turbo pumps, manifolds, construction and completion of offshore platforms and other procedural arrangements. Among the mentioned 29 fields and reservoirs, Danan, Saadat Abad, NaftshahrandDehloran Fields are operated by ICOFC.

ParvizSalehvand, the operator of production maintenance and enhancement projects at ICOFC, said: “The production maintenance and enhancement scheme of these three fields has been put on the company’s agenda with a credit of nearly $202 million:$142 million allocated for Danan, $30 million for Saadat Abad and $30m for NaftShahrfields.”

General Field Characteristics

In Danan field, by drilling 11 new wells, daily production increased by 9,000 barrels; in Saadat Abad field, by drilling 2 new wells and repairing and completing one workover, and in NaftShahr field, by drilling 1 new well and repairing and completing 4 workovers, daily production increase of 2,000 barrels is forecasted for each of these two projects. Also, for the plan to maintain and increase the production of Dehloran field, by drilling 8 new wells and 2 effluent wells along with completion of 5 workovers, an increase in the daily production by 8,000 barrels of oil is planned for.

Starting Operations ASAP

One of the features of these projects is the presence of Iranian E&P companies in their implementation, says Salehvand. The licensing rounds for the projects were held in less than 4 months and the National Iranian Drilling Company (NIDC), MAPNA Group and Global Petrotech Kish were selected as developers in these projects. Another important feature of these 3 projects was obtaining the necessary environmental permits in less than 3 months, because at the time when the plans were announced to start working, having environmental permits was a prerequisite. Accordingly, in the shortest possible time after receiving the necessary environmental permits and carrying out clean-up operations in the border areas of Danan and Naftshahr, activities of these 3 projects began.

New Oil Horizons in Danan Field

In the Danan project, based on the arrangements that were made, some obstacles to financial payments for all projects were removed, and some financial problems ahead of itsimplementation were solved and the process of implementing activities was expedited. In this field at the end of the Iranian calendar year 1400 (20 March 2022), four wells with a capacity of about 4,500 b/d came on stream.

It is worth mentioning that with the completion and drilling of the last well in Danan field in August, the drilling operations of wells for maintenance and enhanced oil production in Saadat Abad, Danan and Naftshahr fields have come to an end. With the completion of the drilling and workover operations of 17 wells in these fields, and with the implementation and completion of surface operations including well facilities, construction of desalination units and flow pipelines and transfer to exploitation units, it is expected that the oil production capacity

of ICOFC will increase about 11,000 b/d, and the executive operations of the surface sector of the project to maintain and enhance oil production in the fields should be completed by the end of the current  Iranian calendar year ( 20 March 2023).

Regarding oil production from Danan field, Salehvand said: “The production of Danan oil field from the total number of mentioned wells was estimated to be about 9,000 b/d which is expected to increase by 11,000 to 14,000 b/d. Also, one of the highlights of the Danan field production maintenance and enhancement plan is the simultaneous 3D seismic operation of an area of ​​approximately 500 square kilometers with the drilling of wells in this field, which is remarkable in its own kind, as the simultaneous implementation of these operations has been done in order to save time and money.”

Another important feature is clean-up operation of the land from mines and war tools,whilecollecting seismic data without a single day of downtime.

According to him, seismography includes 4 stages of planning and engineering, data collection, data processing and interpretation, which is expected to open a new horizon with the interpretation of seismic data and drilling information obtained from new wells for the development of the oil field and production in this region.

The Danan field production maintenance and enhancement plan includes 12 work packages, 11 of which related to well drilling operations and surface operations and one package concerning 3D seismic operations. In the work packages of this field, electrification of all wells was also envisaged, and this operation is now in the final stages. The main contractor of Dananfieldproject is Mapna Group.

Salehvandnoted: “One of the work packages in this field includes construction and installation of a skid mounted desalination unit with a daily capacity of 10,000 barrels, which is being done for the first time by a capable domestic construction company and is now in the beginning stages of installation

NaftShahrOilProduction

NaftShahr joint oil field was discovered 60 km away from QasreShirinCounty, Kermanshah Province, western Iran,backin 1923. The first barrel of oil was pumped from the field in 1947. So far, large amounts of oil have been pumped out of the field, but activities have been implemented under EPC-EPD contractsfor more production and optimal use of the available facilities.

According to Salehvand, the project is defined in the form of drilling one new well and four well workovers with a capital of $30 million, and entails engineering, implementation and goods procurementin the surface and subsurface sections and its implementation began in March 2019. Currently, the entire subsurface stage of the project has been completed with more than 2,000 meters of drilling.

It is noteworthythatNaftShahroilfield is a specific field in terms of geological features and reservoir, which has made it one of the most complex oil fields in Iran. Despite the particularity and complexities of the NaftShahr oil field, drilling of a new well was successfully completed and reached the production stage, and it came online in August 2021 with the oil production of approximately 500 b/d.

The operator of the production maintenance and enhancement of ICOFC said about the importance of implementing the NaftShahr field development plan: “Despite the complexity of this field in terms of drilling, geology, reservoir engineering, the high risk and risks of drilling operations, and its being shared with Iraq, and the need to clean up the place of implementation of the project from the remaining ammunition from the imposed war, and despite the sanctions and constraints caused by the spread of the coronavirus, implementation of the project has been carried out by reducing and compensating the stoppages that did occur. Therefore, one of the strong points of this project has been the timely supply of subsurface equipment and the use of the existing goods of the main contractor (NIDC).”

According to the approval of NIOC, the plan was aimed at maintaining and enhancing production fromNaftShahr oil field to reach2,000b/d. At the moment, 500 barrels of the predicted amount of output from this field have been realized, which has been added to the daily production of the field. According to Salehvand, NaftShahroilfield with an API of 40 is one of the lightestcrudes produced in the country.

700-barrel Growth in Saadat Abad Oil Output

The implementation of the plan to maintain and increase oil production in Saadat Abad field with the aim of increasing the daily production capacity of this field by 2,000 barrels and also increasing the feedstock of the Shiraz refinery began in June 2019. This project has been defined in two sections, subsurface and surface, and is being developed by a domestic private company. Drilling of two new wells, completion of a workover, installation of wellhead facilities, and construction of a total of 14 km of a 6-inch oil pipeline, installation of power supply equipment and manifold development of Saadat Abad unit for connection to two new wells are foreseen in the project. Drilling of 2 new wells have been successfully completed in this field, and since early 2021, production has increased in the field by 700 b/d from one well having come online.

Physical Progress

According to Salehvand, the physical progress of Danan field is 85%, Saadat Abad field 82% and NaftShahr field 72%. The production maintenance and increase of these fields should be completed by the end of the current calendar year. With the aim of compensating for the delays, up to 8 drilling rigs were operating simultaneously in these 3 oil fields, which led to a reduction in the drilling time of the wells. For example, having a glance at the records of previous drilling operations in Danan field, one may notice that the time and cost of drillings have been reduced by about 25%.

On the other hand, one of the important issues was the clean-up of Danan and NaftShahr areas from war mines belonging to the imposed war on Iran. The clean-up operation of the region was carried out in several phases besides the fact that some border skirmishes were also reported in Iraq and near the NaftShahr oilfield during the operations.

8,000 b/d production growth in Dehloran Oilfield

Dehloran field is one of the other fields on the agenda of production maintenance and enhancement projects at ICOFC. This field is located 20 kilometers southwest of Dehloran city in the western province of Ilam and is considered a joint field. The credit earmarked for the project is $210 million.

This project is currently in the tender stage. An increase in the production of 8,000 barrels per day from this field is expected by drilling 8 new wells, drilling 2 effluent wells and completion of 5 workovers will be realized. Construction of a 15,000-barrel separation center and construction of a 12-inch pipeline with a length of 32 kilometers are also among other measures to be implemented in this plan.

Consortiums for Downstream Petchem Sector

The head of downstream petrochemical development at National Petrochemical Company (NPC), Abbas Gholami, has announced the planned establishment of consortiums and specialized parks for petrochemical exports. 

“The downstream petrochemical plants in stagnation now, or those producing below rated capacity will be revived,” he said.

“By upgrading the downstream petrochemical sector we would witness a change in this industry and job creation in the country.Then practical steps would be taken to support and improve domestic production,” he added.

Noting that selling raw petroleum products and fossil fuels had slowed down the growth of downstream industries, he said: “The 13th administration intends to bring an end to raw material sales in the petrochemical sector.”

Gholami said that NPC had signed an MOU with “Iran Small Industries and Industrial Parks Organization” (ISIPO), adding: “Within the framework of this MOU, downstream petrochemical plants that are stagnating or producing below their rated capacity will be identified so that obstacles to their production would be removed to enable them to revive their production capacity.”

According to estimates by downstream industry experts, given the geographical position and natural assets of Iran in the energy sector, Iran’s petrochemical industry could cover a 600-million-odd market in the region. Therefore, it is necessary to have a proper assessment of challenges and opportunities.

Gas Exports to Armenia to Double

Following signingan MOUon economic cooperation in the energy field betweenIran and Armenia, an Iranian deputy petroleum minister said the gas exports to Armenia will double in the future.

Majid Chegeni, who is also CEO of National Iranian Gas Company (NIGC), said, “In coincidence with Armenian Prime Minister NikolPashinyan's visit to Iran, he signed a memorandum of understanding on cooperation with Iran besides an agreement to extend a gas for power barter agreement 2030.”

He added: “Based on this, according to the increase in the volume of exported gas, the electricity bartering rate will also be modified.”

The CEO of NIGC stated: “Now we export one million cubic meters of gas to Armenia on a daily basis, which will be doubled based on the new memorandum.”

Armenian Prime Minister NikolPashinyanvisited Tehran at the official invitation of President EbrahimRaeesi.

Iran Gas Export Up 20%

The head of corporate planning at National Iranian Gas Company (NIGC) has said that Iran’s gas exports had grown 20% during the first five months of the current calendar year year-on-year.

“If the 20th century was the century of oil, the 21st century is the century of gas,” Hossein-Ali Mohammad-Hosseini said.

Referring to the period of transition from fossil energies to renewables, he said: “Iran stands in the second place in terms of gas resources, but it stands fourth in terms of consumption due to inefficient energy use. Therefore, we need to review our performance in a bid to upgrade key energy consumption indicators to an efficient level.”

Mohammad-Hosseini said Iran had a meagre 2% share of global gas trade despite sitting atop huge gas reserves, adding thatRussia’s share was more than 19%.

He also said that there were more than 26 million gas subscribers in Iran, noting that the country’s gas refining capacity had reached 1 bcm.

Last calendar year, Iran produced more than 287 bcm of rich gas to be delivered to refineries. Of more than 267 bcm of sweet gas produced last year, more than 75 bcm was delivered to refineries, while the household sector consumed 60 bcm, the industry 47 bcm and the petrochemical sector 24 bcm..”

South Pars Refineries Supply 570 mcm/d Gas

The CEO of South Pars Gas Complex (SPGC) announced the production of 570 mcm/d of gas in the thirteen refineries of the country's largest gas compound.

“The complex supplies 75% of the country's gas needs with the savvy and expertise of local specialists and hardworking employees,” Ahmad Bahoush said.

Bahoush said the thirteen-strong refinery fleet of the South Pars Gas Complex is ready to supply gas to all sectors of the country with accurate planning in the cold season.

He added: “Currently, the share of gas in the country's fossil energy mix is 73.7%, and the share of South Pars in meeting this country's needs is more than 50% of this amount.”

“Today, gas is the main energy supplier of the country and is closely related to the products of various commercial, industrial, and tourism industries and is very important for all seasons of the year. With this position and importance of gas supply in the country's security, production, industry and trade, it is no longer possible to consider the peak consumption index and its special importance only for the cold season of the year, and it should be given special attention and a deep look in all months of the year,” he said

Oil Industry Standards to Be Nationalized

The director-general of the technical assessment of projects at the Office of Deputy Minister of Petroleum for Engineering, Research and Technology has said that 95 petroleum industry standards would be nationalized in the current calendar year.

Omid Shakeri said that 163 standards had been examined jointly by the Petroleum Ministry and Iranian National Standards Organization.

“There are currently 408 IPS standards available in the petroleum industry. Over the past two years, good activities have been done in the upstream sector,” he said.

He added that 184 more petroleum industry standards would be examined next calendar year.

Shakeri said IPS standard obligation in the petroleum industry projects was a major factor in standard development in recent years.

“Cooperation with INSO will continue until we reach upgraded global standards,” he added.

Energy Infrastructure Needed in Eurasia

Iran’s deputy minister of petroleum for international affairs and trade, Ahmad Assadzadeh, has said that energy projects would be developed in Eurasia by upgrading required infrastructure.

“We have very good capacities in the Eurasian region, but due to the fact that the relevant infrastructure is not available, we could not achieve good success,” he said. “For example, if nowwe want to settle the issue of oil trade between Iran and Russia, our ports are in trouble and our infrastructure is weak both on the Russian side and on the Iranian side. The issue of dredging of the Volga River, dredging of Russian ports are issues that should be pursued by both sides so that we can develop trade in Eurasia between Iran and Russia.”

“We have weak rail connections in the North-South Corridor that needs to be strengthened,” he said, adding: “Right now, more than 100 kilometers between Rasht and Astara in Iran needs to be completed;once it is fulfilled, nearly 50% of the costs and duration of transportation between Eurasian and Southeast countries will be reduced.”

“If we want to export products or petrochemical products from Iran to Russia, the transit tariffs are not the same on the route and this creates a problem,” said Assadzadeh.

Reminding that the swap volume between Iran and Turkmenistan and Iran and Azerbaijan could be increased, he said: “Iran, having a privileged geopolitical position, could be a very favorable passage for transferring energy from the marginal areas of the Caspian Sea and Eurasian countries to Southeast Asia.”

He emphasized the necessity of creating a strong secretariat to strengthen the energy projects of the Eurasian region and suggested: “The countries of the region mayestablish a joint investment fund, have a joint energy consortium, and bring knowledge-based companies closer together by holding a conference and establish a refinery in the Eurasian region in which the member states have shares, and pursue investment in optimizing fuel consumption.”

“The North-South Corridor currently has a capacity of 10 million tonnes on the Iranian side, and these 10 million tonnes are not used sufficiently. It has the potential to triple this amount, and if that happens, mobility is created. For example, according to our statistics, Russia exports 25 million tonnes of coal to India, which has to travel a long distance. According to our estimates, if it is done through rail in Iran, more than 40% of the costs will be reduced and 60% of the transfer time will be reduced.” said Assadzadeh.

“In case we manage to strengthen the necessary infrastructure in the Eurasian region, we may also develop projects in the energy sector relying on these infrastructures,” he added.

Iraq, Oman, Venezuela Seeking Iranian Equipment

The CEO of Iran Gas Engineering and Development Company (IGEDC) said Iraq, Oman and Venezuela were among main buyers of Iranian-made sophisticated equipment.

Reza Noshadi said: “Currently, Pars Oil and Gas Company (POGC) and South Pars Gas Complex (SPGC) are using homegrown turbocompressors and core engines. Furthermore, Iraq, Oman and Venezuela are willing to use this sophisticated Iranian equipment. Thanks to such valuable experience, in the Shourijeh undergroundgas storage site in the Khangiran field, the new generation of 330 psiturbocompressors is being produced for the first time in the country.”

He said internationalization was the most important way for the gas industry to play its role in national prosperity, adding: “We need to be able to commercialize our industrial achievements and export them to other countries, which will in turn create more value-added, bring in more hard currency and create more jobs.”

Noshadi said IGEDC was banking in on national research and technology centers in achieving its long-term objectives.

Northeast Refinery Gas Storage up 165mcm

CEO of the Hasheminejad gas refinery YahyaFeyzi has said that gas storage at the treatment facility had increased 165 mcm year-on-year.

“The refinery has been overhauled and we have made necessary projections for spare parts and chemicals, and we are approaching the season of maximum output in full readiness,” he said.

Referring to the acid gas concentration project launch, he said: “With the operation of this project, 11,000 tonnes a year was added to the refinery’s sulfur output. Furthermore, the commissioning of this project would end necessityof replacing catalysts every year.”

Feyzi said: “The gas concentration tower emits CO2 with 95% concentration and the daily output of 500 tonnes. National Iranian Gas Company (NIGC) has given authorization for its outsourcing to the private sector.”

He said that various grades of sulfur supplied by the refinery would help business, economic and environmental sustainability.

“All economic activities at the refinery are done with high efficiency. In sulfur production, there is a move towards products of high value added,” said Feyzi.

He said the refinery was pursuing a green process with a view to saving the environment for future generations.

Feyzi said due to the water recycling project, the refinery’s water consumption has fallen from 4,000 to 2,000 cubic meters.

Iran Owns Mideast Largest Onshore Drilling Rig Fleet

The CEO of National Iranian Drilling Company (NIDC) has said that Iran owns the largest fleet of onshore drilling rigs in the Middle East.

“Of the total onshore and offshore drilling rigs in the country, 72 light, heavy and ultra-heavy rigs are owned by NIDC,” said Hamid Reza Golpayegani.

“In addition to having the largest drilling fleet in the region with experienced experts, and experienced human resources, NIDC has the most equipped technical and engineering facilities to simultaneously provide technical and engineering services in the drilling industry, which is one of the unique advantages of this company in comparison with big drilling companies in the world,” he said.

Golpayegani said: “Before the establishment of NIDC, the drilling industry in Iran was fullyrun by western companies and managed by them, and Iranian employees were responsible for most of the manual work, and this industry was 100% dependent on foreign countries.”

He added: “Today, the drilling industry in Iran is 100% local, and Iranian experts have the ability to drill oil and gas wells in different corners of the world and in any climate and formation.”

Iran Starts Crude Oil Refining at El Palito Refinery

Iran has started a crude oil refining process at a rate of 100,000 barrels per day (bpd) at the El Palito refinery in Venezuela.

Iranian Petroleum Minister JavadOwjisaid the El Palito refinery was the first facility that Iran had built overseas.

Owji said: “This was a long-standing and 43-year-old dream that was realized through the efforts of my colleagues at the National Iranian Oil Refining and Distribution Company (NIORDC).

“This effort saw its starting point in Venezuela and plans are in place to replicate the project in other regions.”

The use of the idle capacity of the offshore refinery does not end only at "El Palito". The Ministry of Oil is prepared to repair the "Paraguana" refinery, the largest oil refinery in Venezuela with a capacity of 955,000 barrels per day. The Paraguana refinery complex is located in Punto Fijo, Venezuela, which is known as the third largest refinery in the world. This refinery complex consists of three refinery units namelyAmuay Refinery, Cardon Refinery and Grande Refinery. The refinery is worn out and out of order after the Venezuelan embargo and due to lack of major overhauls.

The eighth refinery whose capacity Iran plans to use is the 100,000 barrel refinery called “SupremoSueño de Bolivar” in Nicaragua.

€1bn Investment for 100 Vessels

The CEO of National Iranian Oil Company (NIOC) has said that there is an opportunity for €1 billion investment in building 100 vessels.

“NIOC is currently putting on the table an investment opportunity for the construction of 100 vessels. Initial estimates put it at €1 billion,” Mohsen Khojasteh-Mehr said.

Noting that petroleum industry projects are capital-intensive, efficient and long-term, he said: 

“Some of our projects have now been in operation for over 110 years because they are connected to underground reserves that have not been depleted,” he said.

Referring to 160-170 offshore oil and gas platforms in northern and southern Iran, Khojasteh-Mehr said: “Vessel services for these platforms are mainly provided by foreign countries and even the rest is handled by foreign vessels.”

“Phasing out rented dilapidated vessels, which are charging the country €4,000 to €5,000 per day could prevent spending more than €1.2 million a year,” he said.

Referring to signing MOU with local companies and banks for the development of the Azadegan field, he said: “The largest oil fields of the country that are shared are located in the West Karoun area and in Khuzestan Province, where a total of $10 billion has been invested. In general, 96% of oil and gas fields are now in production.”

Regarding the Azadegan field, he said: “In the 13thadministration, we promised to enhancerecovery from the field to 570,000 b/d, and so far 20 new wells have been drilled for this field and the contract to supply 70% of the equipment from domestic companies has also been fulfilled.”

“Development of this field required $7 billion ininvestment, which due to the sanctions, it was not possible to provide it from foreign sources, and the domestic capacity to provide it was not available. Therefore, by using specialized topics, it was planned in such a way that domestic investors may advance the project by providing only $2.5 billion and with early production,” said Khojasteh-Mehr. “NorthAzadegan field, which has an investment of $2 billion, produces about 75,000 b/d, and the joint Yadavaran field in West Karoun also produces about 100,000 b/d, but for the South Azadegan field, in the 10th administration, an agreement was signed with China’s CNPCI worth $5.6 billion to produce 320,000 b/d.”

He said that under the 13th administration, banks were financing development of fields. “Previously, the banks only paid facilities for the development of fields and we had many problems to accept the risk and collateral from the bank, so we decided to lower the risk of the projects to increase their attractiveness and thus involve the banks themselves in the development.”

PSEEZ More Welcoming to Foreign Firms than Ever

Since 1998, Iran’s Petroleum Ministry has invested $81 billion in the upstream sector and $30 billion in the downstream sector of Pars Energy Special Economic Zone (PSEEZ). Now the CEO of the organization says that thanks to the bylaw recently signed off on by Minister of Petroleum Javad Owji, the conditions have dramatically improved for the presence of foreign companies through just registering their company in the Islamic Republic of Iran. This is while the Petroleum Ministry sticks to its policy of supporting domestic and foreign investors. The exclusive interview of “Iran Petroleum” with Sakhavat Asadi, the PSEEZ CEO, is as follows:

How much capital has been invested in PSEEZ since the 13th administration took office, and how much has the total investment in the region been since its establishment back in 2008?

In general, in 2020, five in-principle approvals were issued for an investment of Rls. 44,000 billion and $900 million; most of these agreements in principle have been issued in the field of petrochemical and chemical industries. In the calendar year 1400 (March 21, 2021-March 20, 2022), a total of 14 approvals in principle with an investment volume of Rls. 17,000 billion and $4.5 billion have been issued by the organization. As expected, most of the projects in question are in the petrochemical, downstream petrochemical, chemical and small refinery projects, and the rest were in the field of supporting upstream industries.

In response to the second part of your question, I must say that the total investment of the National Iranian Oil Company (NIOC) in the region since the establishment of this organization has been $81 billion in the upstream sector and $30 billion in the downstream sector.

Bearing in mind the policies of president Raisi’s administration on expanding relations with countries and attracting foreign investment and the visits that the minister of petroleum has had to different countries, have any foreign delegations paid a visit to the region so far?

Yes, since the beginning of the 13th administration, several delegations from different countries have visited PSEEZ to hunt out investment opportunities; for example, the Russian and Chinese delegations as well as the Cuban ambassadors have visited the zone being accompanied by economic delegations, and their desire was to invest in production, development of fields and downstream industries. In the downstream chain due to its high value added, billions of dollars could be invested. Major holdings are also very interested in financing in these sectors.

How much capital is estimated to be provided by the holdings in the downstream chain and is it possible to develop this sector in PSEEZ?

South Pars region or, in other words, the country's energy hub, with huge gas refineries and petrochemical plants and projects, has been widely considered by domestic and foreign investors, which is the result of large investments of state and private sector in the region. $81 billion of investment by various administrations has resulted in the construction of 23 gas refineries for South Pars phases in the onshore and offshore sectors, which feed more than 40 petrochemical projects and production complexes with an investment of roughly $30 billion dollars. This volume of investment, especially in the petrochemical sector, as the most profitable industry in the country by the private sector, draws a clear outlook for the development and growth of the region, and the private sector is expected to provide the largest volume of investment in downstream industries in PSEEZ, because in addition to creating more value added, it has one of the most important advantages of investment, i.e. proximity to feedstock and the high seas through the Persian Gulf.

What kind of financial instruments are you going to provide for the potential investors?

The investment capacity in the upstream sector and the mid- and downstream chains of the petrochemical industry is very high. To facilitate investment, we have cut the red tape for obtaining permits and have tried to carry out inspections and approvals in the shortest possible time. Currently, almost all major companies and even the petrochemical plants operating in the region have development plans. Pars Petrochemical Plant, for instance, broke grounds for a nearly $1 billion PDH project last year. It has also applied for acquisition of land and granting permits for operation of the unit and has also received a feedstock permit from the Petroleum Ministry. This is besides the fact that the company does supply part of the plant’s feedstock on its own; or consider Parsian Sepehr Holding, which is currently running several projects. The Persian Gulf Petrochemical Industries Company (PGPIC) is also pursuing extensive investment in the methanol and sulfur chain.

What is the current production capacity of petrochemicals in PSEEZ?

Thirty million tons per year, which will increase to 60 million tons per year with the implementation of projects that are being implemented.

Are there any land restrictions for implementation of these projects?

We have restrictions in some areas such as Kangan, but we do not have any problems in Pars I (Assaluyeh) and Pars III (Dayer) regions.

What incentives have you considered to attract foreign investment in the region?

Before answering your question, I would like to say that the parties to the contract for domestic and foreign investments in the upstream sector are the private and state-owned companies, which are concluded based on the model of current development contracts with NIOC or other companies, and their development model is also clear in the contracts. Of course, at times the impact of sanctions was great, but now its impact has diminished and the conditions for investment have been prepared. But for investing

 in the downstream sector, foreign companies have no investment restrictions and could be partners or owners according to the laws of the Islamic Republic. The most important incentive that we have considered for investors is the bylaw that was recently signed off on by the Minister of Petroleum based on which the conditions for the presence of foreign companies have been facilitated by registering their company in the Islamic Republic of Iran.

What is stipulated in the document?

One of the important points of this bylaw is that in the past we used to rent out land to investors and this was not attractive to them, but now, if the investor implements his plan and it comes on stream or the progress of the project reaches the point where it is confirmed that the project will be implemented or it cannot be reversed, we are authorized to grant the ownership of the land to the investor. The bylaw of investment in PSEEZ had created restrictions for investors in the past years, in such a manner that many investors were not interested in continuing to work or invest in the zone.

Is the bylaw enforced with retrospective effect for the companies that have already implemented projects in the area?

Yes, if these companies have fully implemented their plans, then everything is OK, but if they fail to complete them, they will be vetted by a committee.

Given the sanctions, how do you think foreign investors will welcome implementation of downstream projects considering the incentives provided by the Petroleum Ministry?

According to the laws of the Islamic Republic of Iran, foreign companies have no restrictions to invest in Iran; Iran’s Petroleum Ministry is no exception to this law; the model of contracts that foreign or even domestic companies operate in the region is in the form of lease: we lease the land to them. I think this will be a great incentive to attract investment in PSEEZ.

Certainly, considering the conditions of PSEEZ, the policy of the Petroleum Ministry is to support domestic and foreign investors, and with the incentives that we have considered and speeding up obtaining the permits, the companies that enter Iran will reap beautiful profits. Due to the measures taken by the 13th administration to attract foreign capital and expand relations with neighboring countries as well as others, very good conditions have been provided for foreign investors in the region over the last few months.

Considering the emphasis of the 13th administration on the development of petro-refineries, how many petro-refinery projects are currently being set up in PSEEZ?

Four gas condensate petro-refineries with a capacity of 280,000 barrels are currently being built in PSEEZ; the 60,000-barrel South Adish Refinery, which has had 75% physical progress and that we hope to reach early commissioning by the end of the current calendar year, which began on March 21, the 120,000-barrel Setareh Sabz Siraf Refinery which belongs to the pension fund of the armed forces, the 60,000-barrel Pishgaman Siraf Refinery, which recently started its activities in the region and we expect it to come on stream by the end of president Raisi’s administration, and the 40,000-barrel Farzanegan Refinery which have recently received the approval for financing instruments from the National Development Fund of Iran and its construction has started. There were some ahead of implementing the projects, which we have sorted out, such as the fact that we provide part of the infrastructure, including the port or water and electricity.

What measures has president Raisi’s administration taken to curb gas flaring?

According to the government’s approval, the minister of petroleum recently handed over management of the collection of associated gases and in other words reduction of flaring to the National Iranian Gas Company (NIGC), which in my opinion was a very good decision and will speed up the work in this field. The Regional Environmental Strategic Council holds regular meetings. Moreover, online monitoring of air, land and sea is also done on a daily basis, and based on the plan and according to the schedule, flaring will be reduced.

What are you going to do to reduce flaring and which parts of PSEEZ are prioritized for flaring reduction?

Reduction and recovery of flared gases is one of the priorities of the Petroleum Ministry. In this regard, programs are being implemented at the level of PSEEZ to reduce and recover flare gases. According to available figures and data, gas refineries account for about 83 percent of the total flaring in the zone and petrochemical plants operating in the zone account for the remaining 17 percent; therefore, reducing flaring of gas refineries is the first priority. Due to the fact that gas refineries are state-owned, it was necessary to obtain the necessary permits and allocate credit, and with the follow-up of the PSEEZ organization, the projects of recovery and reduction of flaring of gas refineries in the region were approved by the government cabinet, and technical, economic and environmental studies on the recovery of gas refineries' flare gases were carried out and relevant permits have also been obtained.

South Pars Gas Complex Company is also responsible for implementation of the aforementioned projects on behalf of NIGC and the Petroleum Ministry, and its implementation process will begin in the second half of the current calendar year. It will be divided into three categories, including short-term plans (resolving operational problems), three-year mid-term plans (equipment purchase and installation) and the long-term five-year plans (correction of processes). A considerable amount of flaring of gas refineries will be prevented by these projects. At the same time, in NIOC, the flare gas recovery project of the LPG export terminal of Pars Port Complex has been designed and implemented, which is now 90% physically advanced and will be put into operation in the second half of this calendar year.

In the petrochemical companies of the region, the flare gas recovery project has been designed and implemented in Nouri, Aria Sasol and Morvarid petrochemical companies, and we hope that all three projects will come online in the second half of the current calendar year (started on 21 March 2022).

Higher Gas Supply Eyed

During the past year, along with the significant boost in Iran’s energy diplomacy in the region and Latin America, petroleum industry experts have been seriously thinking about increasing the gas production capacity in order to get a larger share of the gas trade, and in this context, the South Pars gas field has always been a source to rely on.

Iran has, over the past year, taken a series of measures to curb increased domestic consumption and guarantee gas distribution stability. These measures include following up on the implementation of a package for the development of 11 gas fields administered by the Iran Central Oil Fields Company (ICOFC), second-phase development of the Aghar field and construction of a gas compressor station for the Sarkhoun field, 4% increase in rich gas recovery from the South Pars gas field, increasing domestic gas supply by 70% with the operation of new phases of South Pars, natural gas output exceeding 1 bcm/d for the first time, and following up on the SP11 development. 

The consumption of natural gas in Iran saw a 3.2% growth in 2021 compared to the previous year, and the total consumption of natural gas in Iran reached 241.1 bcm in 2021. Therefore, the growth of natural gas consumption in Iran during this year has been higher than the growth of production. Last year, Iran consumed 234.3 bcm of gas. The 10-year average growth of natural gas consumption in Iran was 4.6% per yearbetween years2011 and 2021.

Globally, 4037.5 bcm of natural gas will be consumed in 2021, which is a 5.3% growth compared to the previous year. The Iranians have consumed 6% of the world's total gas consumption this year and are known as the fourth largest gas consumers in the world this year.

17.3 bcm Gas Consumed in 2021

In its recent report, BP announced that in 2021 the total global trade of natural gas through pipeline was 704.4 bcm, of which only 2.4% was Iran’s share. Despite the fact that Iran has a share of 6.4% of total natural gas production in the world, due to high domestic consumption, it has only been able to capture a 2.4% share of the global gas market.

Iran’s total natural gas export in 2021 has been calculated to be 17.3 bcm, of which 9.1 bcmwas exported to Turkey and 7.7 bcm to Iraq. Half a bcm of Iran's gas exports was also destined to CIS countries.

Gas Output Capacity Hits 1bcm/d

Iran’s natural gas production capacity exceeded 1 bcm/d for the first time last calendar year with recovery from the giant South Pars gas field up 4% year-on-year.

Iran has set the agenda to focus on the development of the South Pars gas field, take the necessary measures and use all available capacities to increase the production of rich gas from this common gas field, and in line with this, by operating the phases of the South Pars gas field, the volume of Iran’srich gas production has surpassed that of Qatar despite the country's double share of this joint gas field.

Currently, development of SP11 is underway, and initial production from this phase is expected to start in the current calendar year. The project had 34% physical progress last calendar year.

The average production of rich gas from the joint South Pars gas field has experienced a significant increase over recent years. It reached a record 705 mcm/d last January.

South Pars, Key Economic Driver

The development of the phases of the South Pars gas field disrupted many equations and assumptions of the tightening of US sanctions against Iran’s oil industry, so that Iran's oil and gas industries were able to overcome many challenges facing the export of energy resources, and by diversifying in this sector and selling the products obtained from the refining of oil, gas and related products will make the passage through the embargo bottleneck smoother.

The increase in gas extraction from the world's largest independent gas reservoir is not only due to Iran's dependence on gas imports from the neighboring country, but also caused the development of exports in this area with the support of the hike in production capacity from South Pars.

Today, in western Iran, gas is exported to Turkey and Iraq, due to US sanctions waiver. As the second largest producer of OPEC oil, Iraq relies on Iranian gas to generate electricity for a number of its power plants. Also, Iran is developing a plan to export Iranian gas to Afghanistan, which is carried out by the private sector.

Iran's gas exports to neighboring countries reached 17.4 bcm last calendar year. Thefigure was about 9 bcm in 2013, which shows that gas exports have grown by more than 93% in the last seven years. According to National Iranian Gas Company (NIGC), in addition to the supply of domestic gas, industries, power plants, etc., 70 mcm/d of gas is currently exported to neighboring countries on average, which, is a big achievement despite some negative measures by rivals.

Neighbors Prioritized

The Petroleum Ministry’splan for gas export is to focus on cooperation with neighbors. He believes that we have so

much opportunity among our neighbors that Europe is our next priority, of course, if the Europeans are interested, we may negotiate to meet their needs. However, it requires that Europeans vote independently and not follow America.

While the price of gas in world markets has been constantly increasing over recent years, Iran's share of gas exports is only less than 2%, and due to the increase in gas supply in Iran's provinces and on the other hand, the drop in natural production in gas reservoirs like South Pars, within 4 years, it seems that in order to achieve the export goals in the development vision plan, we should think of optimizing gas consumption inside the country at the same time as developing new gas fields.

Therefore, in addition to the full development of South Pars and using pressure compressor platforms in this field, in the long term, we must also develop other fields such as North Pars, Ferdowsi and Farzad in order to increase the gas production capacity of the country, while also pursuing the efficient use policy. We must increase production to the extent to be present in the market as the first holder of gas reserves in the world, just as Russia has a strong presence in the European market and uses the capacity of diplomatic relations and imposes its political sovereignty on countries. We need to seriously enter the markets of our neighbors, especially the Persian Gulf, because if they are dependent on energy, diplomatic relations will take a different form and this will be a good tool in our hands.

The geographical position of Iran is different compared to other gas producers in the world, we have 15 neighbors, minus Russia, Azerbaijan and Turkmenistan. They all need our gas. For instance, despite the fact that Turkey has diversified its market and has a pipeline from Russia and even from the joint Iran-Azerbaijan Shah Deniz field in the Caspian Sea, and transits the gas received from these two countries to Europe, it still needs Iran’s gas. Iraq is also our customer. Although it has signed a $27 billion contract with Totalenergies to reduce its dependence on Iran’s gas, it still needs Iran’s gas in order to inject water and gas into its oil fields for enhanced recovery.

On the other hand, the southern Persian Gulf neighbors need more of our gas. Some experts consider them to be the best customers and the thirstiest for Iran's gas, because the peak consumption of these countries is in the summer, so we can always have a balance of consumption and manage the peak consumption of these countries in such a way as to continuously supply the gas they need.

Reliable global sources such as BP have always declared that Iran has the highest gas reserves in the world, therefore it is natural to expect that Iran be, at least on paper, the world’s most important exporter and occupy a significant share of the world market. However, in practice, it has only two percent of this market due to US sanctions that have halted Iran’s exports and barred others from investing in Iran.

Gas Exports

NIGC has been seriously following up on gas exports as a priority set out in the 6th National Development Plan over the past four years by increasing recovery from South Pars.

The energy and gas market processes have undergone tremendous changes. The first change is the price change, which is now normalized. In the past, the price of gas in Asia was $20, in Europe it was $12, while now these prices have reached $6 and $4, respectively, and therefore, the price has been normalized. Meantime, new suppliers like the US have emerged. This is despite the fact that this country was one of the world's largest importers until 2005, and now the country's gas shipments have even reached the Persian Gulf, as well as other countries such as Australia.

These new players have created a new dynamic in the market. Or the new actors have changed not only in the export sector but also in the import sector, for example, Japan is currently the largest importer in the world, but in the next few years it will not be anymore and will become a fourth-rate player in the import sector.

Unfortunately, due to the sharp increase in consumption and non-compliance with the consumption pattern in Iran, the rate of gas production and consumption has become almost the same and it will take several years for Iran to increase its gas trade and export balance, but there are different ways to cooperate with neighboring countries. In the same situation, there is also gas export, including buying gas from neighbors, transferring and selling it to other neighbors or other countries, transferring neighbors' gas from Iran to the desired destinations by receiving the right of passage (transit).

Natural gas production in Iran has always been on an upward trend since 2011, and the US sanctions against Iran have not been able to stop or reverse the growth of gas production in Iran. During these years, natural gas production in Iran has grown by an average of 5.4% annually, which is more than twice the global average growth. The world’s natural gas production has grown by an average of 2.2% per year during this period.

In 2021, Iran's natural gas production grew by 3.1 percent compared to the previous year and has increased from 249.5 bcm in 2020 to 256.7 bcm.

Transit and Swap Capacity

The country’s gas transmission network is a flexible network whose transmission capacity is a function of the natural gas consumer and producer. Therefore, according to the production and development of transmission lines, the amount of sweet gas transmission in its maximum state is forecast to reach 881 mcm/d in the current calendar year.

According to the latest available reports, the average daily gas transmission in the first three months of this year was 700 mcm, which is a significant indicator for the efficiency of the transmission network in the spring. In the first three months of this year, 65 bcm of natural gas was transmitted via the network.

LPG Exports to Earn Iran $360mn Annually

Having exported 2,000 tonnes of liquefied petroleum gas (LPG) offshore for the first time from the Shahid Bahonar jetty, Iran has joined countries exporting LPG offshore. With the offshore export of LPG, some obstacles ahead of transiting this valuable product have been removed and transportation costs have been saved on at National Iranian Oil Products Distribution Company (NIOPDC). Meantime, according to National Iranian Gas Company (NIGC), LPG exports have increased 20% year-on-year, which would earn the country big hard currency revenue.

Saving LPG

Mandatory LPG export is a highly significant issue in exporting valuable gas resources, which has been included in the national budget for the current Iranian calendar year. The government is required to prevent LPG from being wasted away and instead facilitate LPG exports. To that effect, the Petroleum Ministry is required to use private investment to finance projects which would prevent valuable gas products from being wasted away. The projects include flare gas recapturing and processing to produce at least 300,000 tonnes a year of ethane and heavier products in South Pars and Masjed Soleiman, completing propane and butane (LPG) recovery, refining, cooling and transmission at South Pars gas refineries, supplying necessary equipment, enhancing ethane recovery at gas refineries in the country to guarantee feedstock supply to petrochemical plants and recouping investment from the profits to be gained from the implementation of projects. After 2,000 tonnes of LPG was recently burnt at the Bandar Abbas Oil Refinery and Bandar Abbas Gas Condensate Refinery, an ad hoc committee was set up at National Iranian Oil Refining and Distribution Company (NIORDC) to prevent LPG wasting. The committee helped facilitate offshore LPG exports. After the first cargo of LPG was exported offshore from the two Bandar Abbas refineries, 2,000 tonnes a day of LPG was saved while 6,000 tonnes a day was exported.

Simultaneous Loading/Unloading

Ali Akbar Nejad-Ali, CEO of NIOPDC, said the company was the exclusive distributor of petroleum products in the country. He said that a working group had been established within NIOPDC to make planning for an optimal transport of oil products in the country while lowering transport costs.He said that nine platforms could handle 6,000 tonnes of cargoes a day, noting that loading and unloading could be done simultaneously. This project would earn Iran up to $360 million a year.

Iran is determined to focus on offshore LPG exports. Maximizing LPG exports is an objective set by NIOC under the 13th administration. Recently, LPG storage and loading installations and a full export chain became operational in Assaluyeh, which would generate $1 billion in annual revenue for Iran. A private firm is in charge of the project. Mohsen Khojasteh-Mehr, CEO of NIOC,said the private firm has built a terminal or $100 million next to other terminals. Experts believe that the LPG terminal would put an end to monopoly by some countries in the region in this sector.

The LPG storage and loading facilities and the full export chain, including land transport and gas-carrying ships, may become operational by foreign investment. In addition to preventing LPG waste, they can help earn Iran nearly $1 billion in revenue.

LPG Exports Set Record

A review of Iran’s LPG exports indicates that Iran has set a two-year record of LPG exports. Iran’s LPG shipments are around 440,000-450,000 mt in October compared with 556,000 mt exported in September 2021, largely to Asia, and are expected to rebound in November. Exports up to Oct. 13 were around 220,000 mt, the sources added.

“The export volume in October will be lower in comparison to September. The export volume is fluctuating between 450,000 mt/month and 530,000 mt/month,” a trade source told S&P Global Platts. “November figure will be estimated to be the same as September in case we don’t face shutdowns.”

That would help meet China’s demand as more power plants would be back to service after overhaul. Wanhua Chemical has announced that its power plant had resumed work after a 40-day shutdown on October 13 with a capacity of 750,000 tonnes a year.

According to the report, LPG prices rose in Asia as heating demand increased ahead of winter in the Northern Hemisphere and worries about global gas supply.

The price of the product hit $910 /mt on Oct. 6, the highest since July 2, 2014, when it hit $918 /mt, Platts data showed.

LNG prices fell to $870.50/mt on Oct. 15, as the buying and selling market temporarily subsided and competition among sellers intensified.

LPG Exports Forecast

Iran's LPG exportsvolumeis projected at around 6 mt in 2022, with China poised to remain the main buyer, and in case the US sanctions imposed on Iran’s energy sector during Trump administrationvolume could be higher, sources familiar with the matter said.

"The export volume is between 450,000-530,000 mt/month, depending on vessel availability," a source told S&P Global Platts.

"The production is increasing, but the problem is the limited number of vessels that are calling at Iranian ports. China is the main and biggest importer of Iranian LPG and without any change in 2022."

Other trade sources estimated Iran's 2022 LPG exports at around 5.6 mt, from 5.5 mt last year. But analysts have expected Iran to increaseits LPG exports volumeby 1.9 mt this year. Iran also intends to increase its daily gas production by 130 MCM/d.

Foreign Customers viewing Iran Catalysts as Hot Cake

The CEO of Petrochemical Research and Technology Company (PRTC) says the company could provide the facilities of this research complex to companies for joint or exclusive research projects. He also underlines the desire of foreign companies to implement joint research projects with PRTC.

Noting thatforeign companies have welcomed Iranian catalysts, Majid Daftari says that these companies are interested in implementing joint research projects with the group and some of them are also willing to import Iranian catalysts.

The following is an in-depth interview of “Iran Petroleum” with PRTC CEO Mr. Daftari:

What is the total amount of contracts and memoranda (number and value) that PRTC has concluded in the past one year (under PresidentRaisi’s administration)?

Twenty-two contracts, agreements and memoranda concluded in the 13th administration until August. The value of the concluded contracts is varied, and sometimes some technical knowhow worth about $5 million has been provided.

Have you exportedany technical knowhow related to catalysts?

One of the most important measures that PRTC hopes to succeed in doing under the 13th administration is export of technical savvy and catalysts of the company and other knowledge-based companies. For this purpose, we have signed good memoranda and contracts with friendly countries and we are finalizing deals for sending catalysts from the knowledge-based Iranian firms with the PRTC technical knowhow.

The same is true for licensing (the right to transfer technical knowhow). I must also add that several foreign companies are currently applying for a number of Iranian licenses and we have concluded confidentiality agreements with them regarding the exchange of data. After the data exchange, we will consider finalization of contracts.

In the past year, have foreign companies been willing to participate in the production and investment in the field of Iranian licenses?

Yes. One of the solutions for the development of Iranian license at home and abroad is to attract the interest of investors and banks to participate in the sector, so that we may guarantee licensing and it will be a good support for promotion of PRTC.

Since the beginning of the current Iranian calendar year (started on March 20), we have taken effective measures in this field. We have had a good exchange of information with foreign companies and we have established a good relationship with petrochemical investors so that they provide our licenses to Iranian and foreign companies. Considering that PRTC licenses can be an umbrella for domestic and knowledge-based companies in terms of work guarantee and the domestic market, the Oil and Petrochemical Industry Investment Company has a great desire to establish this link.

In what fields do foreign companies tend to cooperate with you?

Considering that PRTC is a research company, we are interested in having joint research projects with well-knownforeign companies, and this desire is also very high on their part. We also enjoy vast potentials and facilities within PRTC that could be made accessible for joint or even exclusive research by the interested firms. Moreover, there are very good researchers and specialists inside PRTC, who can provide technical and research solutions to production problems and research companies abroad by using their technical and specialized capabilities, which foreign companies also have a great desire to use the experience of our forces in this field and we have signed memorandawith foreign companies in this regard.

Considering catalysts and chemicals, the most important issue is access to high-tech technologies,and foreign companies are very interested in cooperating in this field.The last instanceis the equipment being manufactureddomestically by Iranian engineers and has prevented the gas and petrochemical industries to import the items.

Have European research companies applied for investment and implementation of joint projects over the course of the past year?

Yes. Most of them were from Eastern Europe. Actually, before the sanctions were intensified, some European majorhad concluded weighty agreements and memoranda with PRTC regarding production of catalysts and chemicals, which are currently suspended, but we are sure that as soon as the changes happen with regard to the sanctions, many of these companies will return to Iran.

Given the expansion of Iran-Russia ties, were Russian companies also willing to cooperate in this field?

Yes. Russians happen to be very active in this sector. In the past few months, we have paid a visit to Russia, and board members and experts of reputable Russian petrochemical companies have visited PRTC several times. We expect the Russians to start extensive activities in this sector in Iran within the next few months. Regarding catalysts and equipment, I must say that they are often interested in importing items from Iran.

Have you had any catalyst exports to Russia during this period?

PRTC is not a production company, so we do not export catalysts to other countries. The framework of thecompany is knowledge-based, but since we are a state-run enterprise, we cannot enjoy the full benefits of being knowledge-based. We have the permission to produce on an industrial scale for the first time to test our knowhow. As soon as the process of catalyst is proven on an industrial scale, we offer its knowhow to the development and knowledge-based companies for production all over the country. Right now, these companies have started exporting polyethylene and polypropylene catalysts to countries like Iraq, Afghanistan and Russia with the technical knowhow of PRTC.

The technical knowhow of the

catalysts exported to Russia belongs to PRTC, but the production and delivery of the catalystsis done by one of the catalyst producingcompanies. Due to the credit of the National Petrochemical Company (NPC) and PRTC, Russian companies are willing to conclude joint contracts with the catalyst producers, the licensees, NPC and PRTC.

Did you offer any proposals for cooperation with Latin American countries following the petroleum minister's visit?

PRTC already had good relations with Brazil, but due to the sanctions, this relationship weakened to some extent; but now, Iran's petrochemical industry has established extensive relationships with Latin American countries regarding certain products, especially ammonia and urea. One of our goals is to enter Latin America in the research and technology sector, and for this reason we have started negotiations with Latin American countries.

What measures have you taken in PRTC in the past year?

PRTC has taken effective steps to establish the knowledge base of the oil industry in the past year and with the beginning of the activities of the 13th administration; one of the most important achievements has been in the field of completing the technical savvy of catalysts required by the petrochemical industry, in which a significant progress has been made in PRTC as well as other knowledge-based companies active in this field.

Fortunately, the promise we made to the Petroleum Ministry in the calendar year 1400 which ended on March 20 to localize all the petrochemical catalysts is progressing very quickly. Soon, the new version of the catalyst document of the oil industry will be unveiled, in which it is specified that about 85% of the 99 catalysts, adsorbents and initiators that are being used in this industry (including all sectors of the refining, gas and petrochemical industry), and about 97 percent in terms of weight have been localized and regarding the price, the figures are almost similar.

Wasn't it possible to domestically produce the remaining 15 percent or is it not economical to build them inside the country?

With the analysis we conducted, we came to the conclusion that production of this 15% is not economically justified for knowledge-based companies. But since these materials, although in small quantities, are strategic for the oil industry and their absence may lead to the haltin some production units, we have planned to take action ourselves if knowledge-based companies are unable or unwilling to produce them.

The oil Industry Catalyst Document will also be presented to the catalyst producers after beingunveiled, and we invite the domestic catalyst producers to focus on locally producethe rest of the catalysts and absorbers to make the country self-sufficient in this field.

Is the remaining 15 percent more in the petrochemical industry or refining?

Most of this 15% is used in the petrochemical industry, although in our categorization, between catalysts, adsorbents and initiators, the greatest reluctance was in the initiators’ sector, because their consumption is very low and they are used in linear low density polyethylene and PVC units, hence PRTC has focused on this issue in order to solve the problem of this sector as well.

What is the share of PRTC in the 85% of localized catalysts?

The share of PRTC is about 30%. Currently, 10 important Iranian companies with the PRTC licenses are producing all over the country.

What catalysts are strategic?

From our point of view, strategic catalysts are those whose absence causes the production of gas, refining and petrochemical industries to face problems in terms of volume. These catalysts have a great impact on production and have a high FOREX generation value, and they affect several petrochemical units. Some of these catalysts are produced domestically.

For instance, the new version of the methanol catalyst has been localized by PRTCand knowledge-based companies, and has born very good results in the industry. In the polymer sector, the technical know-howof polyethylene and polypropylene catalysts and in the non-polymer sector of ammonia catalysts, they have been finalized in PRTC, and we are in the commercialization process, so that after that they will be available to the applicant companies.

How many strategic catalysts will you release by the end of the calendar year?

By the end of this calendar year, several very strategic catalysts, including the technical know-how to produce ammonia catalysts and propylene production from methanol, will be finalized and ready to be supplied to the industry. Moreover, production units for methanol synthesis catalyst, acetylene selective hydrogenation catalyst, catalyst production raw materials including nitrates, ethylene oxide catalyst will also officially come on-stream.

How much hard currency savings will be made from localization of all catalysts?

Localization of all catalysts will result in hard currency savings of about $1,150 million. Of course, we believe that the price of catalysts in the petrochemical industry has no value compared to the whole project, but if there is no catalyst, the producers will either shut down or have low-quality output.

How have Iranian petrochemical companies received domestic catalysts and their technical know-how?

It is getting better day by day and their trust in Iranian catalysts is increasing. Legal frameworks have also been formulated to make it more difficult for foreign items and catalysts to be imported. All this helps to improve the status of domestic producers day by day.

Of course, in the catalyst document of the oil industry, we have also announced that from now on, catalyst producing companies and PRTC will focus on the new generation of catalysts, and the catalysts will be updated. In addition to the fact that many catalyst producing companies in the world create process licenses in addition to catalysts, therefore, I believe that domestic catalyst producers should also move in this direction to set up their process licenses domestically.

What are your plansfor producing the procedural technical knowhow?

For years, the company has focused on localization of petrochemical know-how that was bought in large quantities from abroad in the past. Eight technical savvy has been produced in the company and has been sold to Bushehr, Tabriz and West Islamabad petrochemical companies. I would like to remind you that the entire West Islamabad line is set up from methanol to propylene and propylene to polypropylene with the technical knowledge of PRTC. Fortunately, all petrochemical catalysts in West Islamabad are supplied domestically.

These 8 localized processes by PRTCcover 40 to 45% of the petrochemical industry, and the company has prioritized localization of process knowledge that is highly applicable at home.

Planning for Petchem Chain Completion

Baran Mohammadi

Iran’s petrochemical industry is one of the most reliable suppliers of petrochemicals in the world. Its main advantage is access to rich hydrocarbon resources. Holding 1,200 billion barrels of oil equivalent of hydrocarbon reserves, including 159 billion barrels of oil and 34 bcm of gas, Iran would be able to supply the feedstock of its petrochemical industry for long years. The petrochemical industry has turned into a mature and leading sector in the value chain of the petroleum industry. Currently, its production capacity stands at more than 90 million tonnes a year with its annual sales at $25 billion. Iran is expected to earn $18 billion from petrochemical products this year.  The present report is aimed at reviewing programs designed for the completion of the value chain:

Value-Generating Industry

The petrochemical industry has always been considered as a value-creating industry in Iran’s economy. During the past years, the increasing growth of various usages of petrochemical products in the world and the creation of a wide market in this area and significant forex revenue have provided the basis for the development of the petrochemical industry with the aim of meeting the needs of domestic industries. On the other hand, implementation of development programs in the petrochemical industry of Iran in parallel with the economic activities in this country has promoted the petrochemical industry in the world class.

After 6 decades since the creation and development of this important industry, its constructive role in the economic prosperity of the country, sustainable development, local development of technology, development of downstream industries, non-oil exports, development and completion of the value chain of the oil industry, creation of added value and job creation are no secret to anyone.

Morteza Shah Mirzaei, CEO of National Petrochemical Company (NPC), has said new records have been set in the petrochemical sales. During a period starting in August 2021 and ending in June 2022, Iran produced 62.3 million tonnes of petrochemicals, up 8% year-on-year. During the same period, Iranian petrochemical plants sold $15.6 billion worth of products, up 60% year-on-year.

Iran is currently producing 500 grades of petrochemical and polymer products. Officials express hope that Iranian research centers and academics would help supply more grades of petrochemical products in the country.

Feedstock, Market, Savvy

Over recent years, natural hydrocarbon resources have helped develop the upstream sector of the petrochemical value chain. The high rate of basic petrochemical output proves sufficient development of the sector. For experts, the objectives set by NPC include drawing up plans for industrial development, like effective development of the petrochemical value chain and full self-sufficiency in terms of feedstock supply and technical knowhow, facilitation of conditions for the present and future producers and development of global markets for petrochemical products. That is being pursued in the three sectors: feedstock, market and technical knowhow.

In the feedstock sector, imports for downstream plants will cost Iran hard currency, but feedstock production to serve downstream industries would be largely helpful.

In the market sector, Iran’s domestic market as well as attractive regional markets may create incentives for investors. Therefore, adopting a strong diplomacy vis-à-vis neighboring states and providing necessary infrastructure would provide a reliable market for the petrochemical industry.

As far as technical knowhow is concerned, since access to technical knowhow is a major requirement for balance in the value chain, knowledge-based companies and universities may help provide conditions for the transfer of technology from reliable sources or local development of technology with a view to developing these chains.

Development Plans Revision

Currently, future-oriented approach for the petrochemical industry, revision of development plan with a focus on the completion of the value chain based on maximum use of feedstock and market have been planned.

According to the CEO of NPC, 68 petrochemical projects are under way, which would come online within five years. Since the 13th administration took office, two petrochemical projects have become operational while four more projects would come online by March 2023.

He said other approaches by NPC included signing agreements for knowledge-based production, economic resilience and domestic manufacturing for the purpose of implementing macro-policies and the contribution of advanced technology and knowhow to all aspects of the petrochemical industry with a view to reducing productioncosts, boosting productivity, upgrading the quality of products, making products competitive in global markets and reducing cost prices on local markets.

Meantime, the Petroleum Ministry has taken fundamental steps for the development of the petrochemical industry. It has adopted certain plans like amendments to the bylaw on the incremental price discount for feedstock, amendment to customs regulations, proposing tax exemption for the value chain developers and management of feedstock in a bid to remove some challenges in the way of development of the petrochemical industry for the completion of the value chain.

Cooperation with Neighbors

Another approach by NPC is to expand cooperation level with neighboring countries, which is being pursued by increasing the production capacity of the petrochemical industry and considering the needs of the neighboring countries for the equipment and products of the petrochemical industry, the development of the export markets of petrochemical products. In this regard, cooperation has been established between NPC and neighboring countries, including Russia and Pakistan, in order to exchange technical knowhow, have knowledge-based cooperation in the field of petrochemical industry equipment, and attract investment.

Value Chain Completion

Based on what was said, NPC has devised strategy for the development of the petrochemical industry’s value chain in a bid to explore indicators of value chain completion, supply local markets, draw a long-term plan for attracting foreign investors and enhance the private sector’s investment demand. Once this strategy takes effect, with an investment of $41 billion, 20 new products would be added to the petrochemical mix by 2032, in which case, the rated capacity of the petrochemical industry would reach 199 million tonnes with an income of $55 billion.

Based on the new plans, the surplus methanol produced in the country would be transformed into products of higher value at Iran’s new petrochemical hubs. Meantime, 21 strategic products in the petrochemical sector have been identified to be produced through the methanol value chain. Iran’s 7th National Economic Development Plan envisages more than 67 petrochemical projects, only 15 of which would pertain to upstream petrochemical production. The rest would concern the value chain completion. In the current calendar year which end on 20thMarch 2023, except for two, other projects that would come on line would concern the value chain completion.

35 PP Projects

Meantime, NPC considers 35 propylene production projects for its 10-year horizon with a rated capacity of 13 million tonnes a year. About 78% of the propylene currently produced would go to polypropyleneproduction and about 14% to other products of the PP chain. It may be a step ahead, but it is far from the global scale. The NPC chief said plans were under way for reconsidering some projects and diversifying the PP chain.

Shah-Mirzaei said the PP production capacity would reach 14 million tonnes a year, 11 mt of which for polypropylene production and 3 mt for other PP chain products.

PP is currently produced at crude oil refineries, olefin plants, MTP and PDH units. Recently, Bid Boland gas refinery’s PDH facility came online.

PP is a strategic petrochemical product, on which many petrochemical productsdepend. Investment has been made in this sector and a promising horizon is envisaged.

Iran is forecast to be producing 40 mt a year of methanol by early 2033, 14-15 mt of which would be converted into products of higher value-added.

Iran Ready for Playing Role in Global Gas Industry

Natural gas, as a source of energy, has taken up added significance over recent years as the environmental concernshave become the center of attention. The countries that have this source of energy are highly important. The Gas Exporting Countries Forum (GECF) member countries are now playing a significant role in this market more than ever before. The GECF member states account for  43% of the world's gas production, hold 72% of the world's gas reserves, account for 55% of gas transmission by pipeline and 50% of the liquefied natural gas (LNG) trade. Addressing the 24th ministerial meeting of GECF in Cairo, Iran's petroleum minister, Javad Owji, said that Iran is ready for any cooperation in exploration, drilling, development, operation and distribution of natural gas.

“Considering the strategic position of the member countries of the Forum, which hold more than 70% of the world's gas reserves and over 50% of the world's gas exports, whether through pipelines or in the form of LNG, this forum can take important steps in improving the status of natural gas in the world's energy mix,” he said.

Owji stated that it is necessary for the GECF member countries to enhance the level of synergy and collective coordination to secure the interests of members of the Forum and contribute to the security of the global supply of natural gas. “Despite the numerous challenges in the global gas market in recent years, the GECF has been able to strengthen consultation, coordination and cooperation among the member countries within the framework of its long-term strategy and statute,” he added.

He said that owing to these strategic preparations, the GECF has been able to play its key role in improving global energy security during the outbreak of the COVID-19 pandemic and afterwards.

“As one of the largest holders of proven natural gas reserves in the world and one of the largest owners of the domestic natural gas distribution network in the world, Iran is ready for any cooperation in the fields of exploration, drilling, development, operationand distribution of natural gas,” he said, adding: “That requires improvement of strategic potential and management and technical and engineering capabilities, which in this context, encouraging international joint investments plays a prominent role. This strategy is a collective one and through it, the technological power of the member countries of the Forum is strengthened in the development chain of the natural gas industry.”

Owji said: “Iran is ready to cooperate with all member countries in all fields of development of the gas industry, including joint investments, natural gas swaps,and cooperation in the framework of gas contracts, development and export of technical and engineering services, transfer of knowhow and development of expert human resources. It has also experience in the field of expanding the domestic pipeline network and developing CNG stations, which it can share with GECF members.”

Sanctions to Have Irreparable Fallout

Owji also said imposing sanctions on natural gas reserves holders would yield irreparable consequences. “I believe that the realization of the global ecosystem with zero carbon emission, without political will, financial resources, investment in infrastructure and serious scientific and technological cooperation of all stakeholders will remain as a slogan.”

Stating that natural gas plays an important and decisive role in the energy transition period, and due to its environmental advantages, it has a stunning ability to replace other fossil fuels, including coal, he said: “However, due to the importance of enhancing the volume of natural gasand defining new routes, it is essential to put new policies on the agenda of theGEFC members.”

He stated that in line with improving economic efficiency and the expansion of natural gas trade, it is necessary for developing and especially developed countries to pay serious attention to technologies related to gas trade, including technologies related to LNG, and breaking monopoly in technologies related to gas trade as an accepted principle, adding: “On the other hand, using political tools and sanctioning the most important natural gas reserves holders will bring about irreparable consequences to the environment and will make it impossible to achieve the sustainable development goals approved by the United Nations.”

“Avoiding actions that will face the human society with unfortunate consequences and is an obstacle in the way of trading natural gas as a clean fuel is another principle that should be considered by countries. The policies of theForum in support of the two mentioned principles will have a significant impact on the development of global natural gas trade and securing the economic interests of theForum,” said Owji.

Environmental Concerns

Owji emphasized the need for paying attention to environmental issues and stated that the GECF member countries need to be directed toward the issue of reducing the volume of carbon produced from the natural gas production process, he said: “As a person who has worked in engineering and management activities in Iran's gas sector for many years, I believe this is possible due to the political will and existing technical and engineering capabilities.”

Emphasizing that it is essential for developing and especially developed countries to pay serious attention to new technologies such as carbon capture, utilization and storage, reducing the leakage of methane or blue hydrogen, he added: “Fortunately, carbon reduction technologies from the natural gas production cycle are available.

Global Energy Security

Minister Owji stated that due to the strategic position of the GECFmember countries and their nearly 50% share in the global gas and LNG export portfolio, it is essential to strengthen the power, capabilities and arrangements required by the Forum. He added: “Promoting synergy and collective coordination is the reason for securing the interests of the members and the protection of the security of the global supply of natural gas.”

Owji stated that these strategic arrangements have enabled the Forum to play its key role in maintaining and promoting global energy security in the COVID-19 and post-COVID era.”

“We have a long way ahead full of uncertainties, which requires the promotion of solidarity and cooperationamong GECF members,” he said.

Noting that improving the status of the Forum in the global gas markets and playing a more effective role in ensuring the world’s energy security is an inevitable necessity for the growth and development of developing countries, he said: “Therefore, I suggest consultation and cooperation of GECF members to be promoted at the strategic, managerial and technical levels. I believe that exchange of successful experiences among member countries at the mentioned levels is very important.”

Progress despite Sanctions

Owjisaid development of gas industry and ensuring gas supply and demand security in the world markets required global peace and depoliticization of energy trade. He said: “Therefore, imposition of any unilateral or multilateral sanctions on any member of the GECF is a political action in contradiction with the principles and standards of international law and against economic rationality.”

Noting that ordinary people, mainly in developing nations, would fall victim to any actionsjeopardizing energy security, Owjisaid: “The fact is that despite the unilateral and unjust sanctions by the United States, Iran has been able to make significant progress by relying on domestic power and development of foreign markets.”

“As the Minister of Petroleum of the Islamic Republic of Iran, I support the interests of gas production and exporters who are members of the GECF. I am confident that by strengthening synergy and cooperation between member and observer countries, we will have a bright future in facing the challenges of the global gas market,” he said

Why OPEC+ Output Cut Proves Shocking

Fereydoun Barkeshli

Energy Market Analyst

Since 2016, Russia and Saudi Arabia have pursued a high level of cooperation in oil markets under the banner of the expanded OPEC, commonly referred to as OPEC+. That collaboration has resulted in higher oil prices and a successful drive to curb oil supply during the pandemic and consequent loss of demand for oil.

The alignment of short-term commercial and economic interests that has united Riyadh and Moscow coincides with cracks in the deeper relationships that tied Saudi Arabia and the USA for some eight decades, and referred to as strategic alliance. Some sort of relationship that extends to political, military and security spheres in and around the Persian Gulf.

The Saudi leadership seems to have grown more assertive about projecting its own economic interests and preparing for a potential future in which the US is less engaged in the Middle East and oil as was the case through past decades. As said earlier, Saudi-US relations is beyond oil, but all those strategic alliance was built around oil in the first place. For the Russians, tight coordination and coordination of energy policies with countries such as Saudi Arabia and United Arab Emirates brings respite and space from international sanctions and US-led pressures to isolate Moscow in the global economy and oil and energy markets. This new partnerships also provide Russia geo-strategic wins by undermining US scope of influence in the Middle East and beyond. The Saudi-Russian friendship is showing signs of durability that has gone beyond expectations.

President Biden visited the Middle East and Saudi Arabia back in July and participated in meeting of Persian Gulf Cooperation Council heads of state and asked them to boost oil production to the maximum. Biden emphatically asked the Saudis to raise output. None of the Persian Gulf heads of states responded in a promising gesture. In fact, Saudi Arabia’s crown prince body language was noticed by many observers as not accommodating. Prior to the 5th of October OPEC+ conference in Vienna which was the first in-person conference since early 2020 and lasted for half an hour, most observers guessed OPEC+ ministers might cut about a maximum one mb/d. However, the outcome was a two mb/d cut. Oil analysts and OPEC watchers such as myself realized that the high level of cut was symbolic since most member countries can’t meet their assigned quotas anyway and as such the actual physical crude evaporation from the market is even less than one million.

OPEC+ and US

Having said that, Washington and political circles in the United States were quick to politicize the decision by oil producers. Most American news agencies and think tanks began a furious attack on OPEC+ and Saudi Arabia as having adopted a politically-motivated decision against American consumers in an attempt to deface Biden on the eve of crucial mid-term election that will probably shape up the faith of 2024 president of the country.

The extent of anti-OPEC+ sentiments was so high that Saudi Arabia’s foreign minister and then defense minister had to go public and make official announcements that the decision by OPEC+ was based on the technical grounds and not political ones. Several other ministers joined in and defended the decision in the course of days and weeks after the 5th of October ministerial conference in Vienna.

The focus on this particular decision by OPEC+ and Saudi Arabia as the biggest global oil exporter stems from the fact that Russia and all Russia-related issues are under very close scrutiny of the Western countries and international media. I trace different factors that contributed to the decision taken by OPEC+.

Shale Aftermath

The rise of US Shale oil production, which undercuts OPEC+ market power, pushed the organization to cooperate more closely with Russia and non-OPEC oil producers. Unlike conventional crude oil, Shale and non-conventional oil isn’t under close scrutiny of Petro- journalists around the world. In fact it is not a subject in financial quarters and stocks. Shale producers aren’t major companies, but its right there in the market and appears as major competitors for OPEC.

Then comes environmentalists’ sentiments that keep pushing to eliminate oil (and gas). What are the incentives for a producer to boost capacity, while they keep telling you that more we do not want you anymore. Environmental agencies and COP addicts have a huge impact on OPEC+ not to be enthusiastic towards capacity built up and go for less production at higher prices. International oil companies, as well as some National Oil Companies earn money but prefer to invest somewhere outside oil industries. This phenomenon is evident in the level of investment in oil sector. API estimates that underinvestment in oil industries in the US alone may lead to a 35 percent drop in American conventional oil production by 2027. To remedy the situation, as much as half a trillion dollars is required.

It is noteworthy that OPEC as an organization helped to stabilize global oil market for four decades. OPEC was responsible for around 60 percent of traded oil on international markets. Member countries’ domestic consumption was less than ten percent of their oil production. In the course of time, global consumption went up and OPEC didn’t add to output proportional. As such OPEC production relative to world demand declined. This could even render OPEC irrelevant as it didn’t have enough market share to help market stability. As such, OPEC was virtually redefined after Russia joined the Organization. Prior to 2016 OPEC+ formation, the Russians were in and out depending on the market situations. Russia considered OPEC more as a rival than friend. This was also the case for OPEC versus Russia. However, once Russia joined the twenty-three member OPEC+ was once again back in the driver’s seat. Having said that, OPEC+ needs to stay coherent in order to achieve its goal for market stability. This is particularly important given the Shale factor and energy transition trap.

OPEC+ and Geopolitics of Oil

On geopolitical and security fronts, the situation is even more perplexing. Washington had been signing confused and negative moves towards the Middle East and Saudi Arabia for the last couple of years. Although most Middle Eastern countries traditionally are more coordinated with the Republican parties in America, even former US President wasn’t friendly with Saudi Arabia and treated them with humiliation. Americans had somehow concluded that the international oil market matrix has changed forever. US is self-sufficient in oil consumption and even is a net exporter. America had begun to view Middle East as a rival. As such decades-long Saudis partnership was no more relevant.

This was sufficient to push the country towards engineering a different protection alliance. Lengthy meetings between Russia and Saudi Arabia began to heighten the level of understanding and cohesion that ultimately led to formation of OPEC+. Unlike the USA that had portrayed itself as an unreliable partner, Russia was more aligned with the social and political climate of the countries neighboring Persian Gulf. Issues such as human rights or justice system is considered as domestic for Moscow. Washington left friends like Hosni Mubarak of Egypt on their own during the so called Arab spring.

The Saudi-Russian friendship already seems to be countering and weakening US influence in Riyadh. Continued improvement in relations with Moscow could portend serious repercussions in Washington. Most significant is the vanishing Saudi willingness to heed President Biden’s call to temper global oil prices in line with Political needs of Democrat Party just prior to the crucial mid-term Congress election. OPEC+ and Saudis even rejected a call by the US President to delay the decision to after November 2022. Those in opposition to Biden were quick to condemn his energy policies as disastrous and empowering US enemies. It is in fact somehow true. President Biden first marginalized US oil and gas producers as they harm environment and future generations of Americans. Then came Ukraine war and Russian sanctions. Biden changed tune. Opened up large part of Alaskan land for oil excavations. Then travelled to the Middle East and asked for more oil.

Weaponization of Oil

Current global energy security dilemma is the direct consequence of US short sighted policies, specifically by this president. There are currently more oil reserves under US sanctions than those free from sanctions. Countries like Iran, Venezuela or Russia are now a powerful energy block that insert their influence in the markets. President Biden sanctioned Nord Stream 2 before it goes operational. It was in early 2021 and before Ukraine crisis. Germany objected but Washington did not listen or provide any reasoning to Berlin. It is only now that German Economy Minister says that her country has to import American LNG at four times the price of the same LNG from sources other than the US.

It is the matter of astonishment to hear from the highest US official that OPEC+ should do whatever it can to reduce international oil prices by November and before the mid-term election and then cut production as much as they desire. In response, some major oil producers of the Persian Gulf including UAE and Saudi Arabia who engaged into serious talks with China and Russia for the extension of the current investment, as well as the new investment and cooperation opportunities between them. As such the outlook for cooperation and investments is fast moving eastward from the West.

Price Cap

The issue of imposition of a price cap on Russian oil and gas supply was raised by the United States. The logic behind a price cap on Russian energy supply was primarily meant that Moscow must be deprived from earning windfall income from its energy exports so that its war machines would not function well enough to support war in Ukraine. However, reality is that American crude oil and refined products and LNG will be priced and sold to Europe at higher prices. Europe was first reluctant to accommodate Washington’s demand but had no alternative except giving in.

However, this policy by the United States is a leading reason for Saudi-Russia closer ties. Once America can impose a price cap on Russian oil and gas exports, it can do so to any other oil and gas exporting country; including Saudi Arabia or any other Persian Gulf country.

A price cap on supply means that the consumers are in command and decide on the price. Market will lose its relevance. It’s a cartel of importers. If such a practice is successful with Russia, it will work with Saudi Arabia, UAE or any other exporters. This is a panic that the US administration, mindlessly put on the table and wants European countries to pursue. I believe this policy if implemented may have long lasting repercussions; including some sorts of disintegration among Brussels political circles.

In conclusion, Washington needs to de-weaponize oil and gas. Sanctions, price caps and creation of governmental cartels for political means would be harmful to the concept of energy security.

Contract Extensions for BorrJackups Offshore Mexico

Borr Drilling’s Mexican joint venture company Perfomex has secured new contracts for five jackups.

The Galar, Gersemi, Grid, Njord and Odin are now contracted through year-end 2025 to OPEX Perforadora and PerforadoraProfesional Akal, both integrated well services providers to Pemex.

The combined value of the contracts is $715 million. Borr Drilling provides the five rigs on a bareboat basis to the joint ventures.

Mozambique 1st LNG Exports to Europe

Mozambique expects to ship its first LNG exports to Europe from the Eni-operated Coral Sul floating plant later this month or early November, petroleum regulator INP said Oct. 21 in a supply boost for the energy-starved region, according to a Reuters report.

BP's LNG tanker, British Sponsor, has already arrived offshore northern Mozambique, said Welligence Energy Analytics in a note, with all of Coral Sul's annual gas output of 3.4 million tonnes contracted to BP for 20 years on a free-on-board basis.

Hang-off Systems for Danish Wind Farm Power Cables

Hellenic Cables has contracted VosProdect to supply sealed hang-off systems for the installation of power cables for the nearshore wind farms, Vesterhav Nord and Syd, in the Danish North Sea.

These will provide a power generation capacity of 344 MW and should be fully operational by year-end 2023.

VosProdect will perform sealing and loading tests at its own facility using samples of the 66-kV cross-linked polyethylene (XLPE) insulated interarray cables.

These will verify and confirm that the temporary clamp locks the cables reliably and safely without damaging the cables

Japan to Establish Offshore Wind Training Center

Maersk Training and GiraffeWork, a subsidiary of Daikyo Kenki, have agreed to establish a training center for the wind industry in Japan, offering courses in accordance with the Global Wind Organization (GWO).

The "GiraffeWork powered by Maersk Training” complex will open in March 2024 in Kawasaki-City, with a maximum annual capacity of 1,500 students.

According to Maersk Training, it will include the latest pool equipment and a marine survival course adapted to the needs of the offshore wind power industry.

Santos, Carnarvon Eye Western Australia Drilling

Carnarvon Energy has issued an update on prospectivity and further drilling opportunities on its acreage in the Bedout sub-basin off Western Australia.

Analysis has revealed more than 100 prospects across permits WA-435-P, WA-436-P, WA-437-P and WA-438-P, all operated by Santos, with Carnarvon holding equity of 20% to 30%. The top five prospects in each permit have been reassessed following this year’s Pavo discovery.

Carnarvon estimates mean prospective resources at these top 20 candidates at more than 1.5 Bboe.

Lebanon Long Road to Offshore Gas Recovery

Shuaib Bahman

Lebanon’s Minister of Energy WalidFayad has announced the start of gas exploration operations off Lebanese waters by France’s TotalEnergies. After meeting with a senior delegation of TotalEnergies in Beirut, he emphasized that Lebanon will start of gas exploration operation in its waters as soon as the maritime border agreement with neighboring countries is finalized. Fayadwas referring tothe US-brokered negotiations between Lebanonand Zionist Regime. Due to the finalization of this agreement, the Lebanese government is more than ever willing to prepare for offshore gas exploration because Lebanon hopes to boost its economy, which suffers from severe public debt, by exploring offshore energy.

H/C Resources

The Eastern Mediterranean, which is a very complicated area due to geopolitical reasons, in terms of energy has also received attention in recent years with the discovery and extraction of oil and gas,especially since there are still large untapped oil and gas reserves. Based on the studies and investigations carried out in the last 20 years in the Eastern Mediterranean Sea, the amount of gas in this area is estimated to be around 120 to 130 tcf.

In December 2019, Lebanon’s then minister of energy granted a license to TotalEnergiesto drill the first exploratory well in Lebanon. In April 2019, the minister announced the start of the second round of licensing for oil and gas exploration in five blocks in Lebanon. While it seems that Lebanon's oil and gas contracts have been awarded to French companies including Total, the question arises as to how much energy reserves this country has in the Mediterranean Sea. Another question is to know what percentage of these fields hold “commercial deposits” as the revenues from the sale of oil and gas must cover all costs, including the profit from this, and have a profitable yield to be attractive enough to investors.

There are conflicting estimates and reports on various issues: the size of Lebanon's gas wealth and its value, when exploration and extraction led to sales and how this wealth was used. However, estimates based on 2D and 3D seismic data that have been conducted over the past two decades show that there is in the exclusive economic zone of Lebanon with an area of22,730 square kilometers, about 25 to 32 tcf of gas in the southwest of this area. More than 30% of the Levant's gas-rich basins are located in Lebanon's exclusive economic zone in the Mediterranean Sea.

This area includes 10 marine zones with an area between 1,201 and 2,374 square kilometers, and the search operation in two of them (Division 4 and Division 9) has been assigned to a consortium of 3 companies, TotalEnergies and Italy’s Eni. It seems that if Lebanon succeeds in extracting gas from the waters of its exclusive economic zone in the next few years, it will become an important player due to its geographical location. However, it should be noted that all these numbers are estimated based on seismic surveys and 3D and 2D imaging, and may be completely different and either increase or decrease during drilling and mining.

Economic Opportunity

Since 2019, Lebanon has been experiencing an economic and financial collapse that has had disastrous consequences, with the World Bank ranking it among the worst countries in the world since 1850. As more than 80% of the Lebanese are below the poverty line and the Lebanese currency has been depreciated around 90% in the last three years. The rate of dollar against the Lebanese pound has jumped from 1,500 pounds to the dollar to 40,000 pounds, causing the Lebanese currency to lose its purchasing power and the level of inflation to reach unprecedented rates, especially in the area of ​​food and basic goods prices. For this reason, the World Bank has called the current crisis of the Lebanese economy one of the deepest recessions in the Lebanon contemporary history.

Faced with this reality, the Lebanese are counting on the oil and gas resources in the Mediterranean Sea to get out of the current deadlock and revive their economy. Meanwhile, Lebanon is several years behind its neighbors in the eastern Mediterranean Sea in the process of extracting and selling gas. While Zionist Regime, Egypt and Cyprus have started extracting gas from the sea and selling it on the global markets, Lebanon is still in the exploration phase. The country has succeeded in exploration in only two of its 10 offshore blocks. Blocks 4 and 9 have been awarded to international companies during a tender. A consortium of TotalEnergies, Novatek of Russia and Eni has been responsible for the exploration and extraction of these blocks. Of course, this consortium is managed and directed by TotalEnergies. In the meantime, the war between Russia and Ukraine and the subsequent US sanctions against Russian companies led to the withdrawal of Novatek from the group of companies operating in Lebanon.

Outlook

Although removing obstacles and strengthening the process of oil and gas exploration in the Mediterranean Sea is good news for the Lebanese, the estimates for the start of gas extraction in Lebanon are between 5 and 7 years. Although some experts consider 3 years as enough time for extraction, the important point is the amount of investment and technology used for exploration and extraction. In fact, if all actions are taken quickly and without delay by the Lebanese government and companies with capital and technology start their work for exploration and extraction, then at least 3 years is needed. However, reaching this stage requires reforms by the government because most big companies avoid cooperation with governments where corruption is widespread.

Therefore, if Lebanon seeks faster access to its oil and gas resources in the Mediterranean, it must carry out many essential reforms to reproduce its judicial, financial and economic system as soon as possible. At the same time, the discovery and extraction of energy will intensify the political competition in this country due to the large revenues it has. Of course, the political currents that really want to solve people's problems hope that Lebanon will develop its infrastructure and restore hope to the people by operating these resources.

COP27 Outlook

Shuaib Bahman

The 27th United Nations climate conference known as COP27 will be held in Sharm el-Sheikh to discuss solutions to ongoing climate crisis. Amid numerous challenges and opportunities in the field of climate change,Egypt is hosting this conference. While more than 190 member countries in this conference are expected to reach concrete solutions to advance efforts to limit global warming to 1.5 degrees Celsius and increase adaptation to the effects of climate change, there are still major challengesin such a way that many environmental activists have serious doubts about the implementation of the agreements made in the previous summits.

Glasgow Achievements

For the first time in 1995, world leaders gathered in Berlin to formulate an ambitious plan with the aim of achieving a common approach to reduce the destructive process of climate change. Since that date until today, every year a conference has been held with the presence of the senior officials of the countries.Last year the last summit was held in Glasgow, where, in addition to the heads of state and officials, experts discussed climate change.

A review of the decisions of past summits shows that despite the agreement of all countries on environmental threats and climate change, implementation of agreements has been very meagre. If at the Kyoto meeting in 1997 there was talk about a 5% reduction in greenhouse gases, in recent years due to the deterioration of climate conditions in the world, countries must reduce the production of these gases to reachnet-zero emission by 2050. Considering the current conditions of the world such as free trade, the existence of large and multinational companies, changing the policies of countries with changing governments, the increasing population of our planet and limited resources, such a goal is considered ambitious and unattainable.

At the last summit, i.e. COP27 in Glasgow, four goals were announced for the summit, including reaching net-zero carbon by the middle of this century and keeping the increase in global temperature to 1.5 degrees Celsius, protecting communities and natural habitats, mobilizing financial resources and cooperation. Based on this, the heads of state should have reached an agreement on issues such as not using coal, limiting deforestation, using electric cars, and encouraging and investing in clean energy.

Although most countries participating in Glasgow agreed to halt deforestation by 2030, reduce GHG production by six percent and end investment in fossil fuel projects, according to the negotiation process, non-participation of polluting countries in this meeting, as well as the increase in China's operation in coal mines at the same time as the Glasgow climate change conference, practically destroyed the hopes of reducing carbon production to net-zero by 2050.

COP27

In a statement on the website dedicated to this conference, Egyptian President Abdel Fattah El-Sisi stated the priorities of COP27 in areas such as innovation and clean technologies and the centrality of water and agriculture in the climate crisis. He has also mentioned the discussion about the loss of biodiversity, energy transfer, efforts for decarbonization and financing.

The United States, as one of the world powers as well as countries effective in preventing climate change in the world, has emphasized in a statement that it has taken a general approach in all government institutions to take actions at home and abroad to put the world on a path to achieve net- zero emissions by 2050.

Despite the rhetoric that different countries of the world make on the eve of the COP27 summit, the reality is that achieving the big goal of limiting warming to 1.5 degrees Celsius requires reducing GHG emissions and increasing resilience to climate change. All 190 countries will have to respect the Paris Agreement, wherein it was stipulated that the signatory countries will improve their cooperation in reducing carbon emissions, adapting to the effects of climate change, developing technology, and damage caused by climate disasters. These issues were clearly emphasized by all member countries at the COP26 summit in Glasgow.

However, the first half of 2022 was full of unfavorable climatic conditions. Countries around the world witnessed a devastating heatwave and one-third of Pakistan was flooded. Forecasts show that the situation will not improve in the second half of the year, but because of the war in Ukraine, which has created a huge geopolitical crisis, the world must wait for the effects of this war on the energy markets and the use of polluting fuels like coal by some Western countries.

Having said that, in the COP27 summit, in addition to fixed and recurring issues such as examining the reasons for the non-fulfillment of agreements of previous meetings, the present countries are also expected to discuss new issues such as the energy crisis in the coming winter. Also, there are several incomplete issues related to the program of work of the Paris Agreement, which were not finalized at the Glasgow summit last year, and will still be on the agenda. For instance, the methods of market and non-market cooperation foreseen in Article 6 of the Paris Agreement and the implementation of the reduction of GHG emissions, which did not reach a clear result in the Glasgow meeting, will be re-examined at the Sharm el-Sheikh meeting.

Perspective

The planned COP27 in Egypt is very important in a situation where the consequences of climate change have surprised scientists earlier than predicted. However, it is unlikely that such a meeting would lead to fundamental changes in the behavior of countries. The non-binding nature of the possible agreement, the lack of supervision on the performance of the countries, the complexity of the solutions, the economic limitations of the countries, and the resistance of large companies that destroy resources, make it difficult to achieve success in practice.

For this reason, activists and environmentalists seek radical and systemic changes to deal with it and consider such meetings more in line with greenwashing. Greenwashing is an attempt to deflect from the main problem and historical responsibility for global warming by using capitalist "green economy" policies or void promises of environmental protection. Activists and environmentalists believe that such summits are mostly propaganda to erase the unacceptable record of governments in the field of environment than they are actually used to deal with climate change.

Based on this and considering the historical experiences of similar summits, one should not expect COP27 to be a great achievement. Although COP 27 might reacha good agreement in this meeting as in the previous meetings, it should not be expected that such an agreement will remedy all climate change problems in the world. Especially, considering the current state of relations between Russia and the West, European countries should use more polluting fuels such as coal this winter and even in upcoming winters.

Invisible Fleet Carries Iran Oil

Negar Sadeqi

Iran owns one of the largest tanker fleets in the world, distributing petroleum products. Despite imposition of tough sanctions over recent years, the fleet has transported oil and oil products to remote areas in the world, let alone keep Iran’s oil exports flowing.

Invisible Vessels

Iran holds the largest hydrocarbon reserves in the world. Iran’s current oil production capacity stands at 4 mb/d. Minister of Petroleum JavadOwji has said Iran’s oil export rate has not declined in recent years, in the meantimeIran has also found new markets for oil and petroleum products in Latin America, Asia and even Europe. According to Minister Owji, Iran has reached a record 240,000 b/d of gas condensate sales.

In the wake of the tightening of sanctions, Iran’s national tanker fleet, on the frontline of Iran’s oil and petroleum product exports, was at the receiving end of restrictions. The tanker fleet needs to employ methods specific to Iran to skirt around international sanctions when carrying oil and condensate through seas and oceans. Owing to skills acquired under sanctions, National Iranian Tanker Company (NITC) has gained fame as “ghost vessels”, without which no oil may be exported.

Safe Exports

Minister Owji has spoken of Iran’s oil export hike against the backdrop of enemy attempts to sabotage NITC vessels. However, aided by this fleet, Iran has managed to export oil to destinations which the US never imagined. Owji said recently that Iran has delivered oil and petroleum products to customers in full safety. His statement carries the message that Iran is a reliable supplier which would deliver its cargoes to buyers in fully safe conditions. That could not come true unless there is expert manpower in NITC. Iranian tankers are 16 years old on average. During years of sanctions, Iran has been upgrading its fleet. If one day National Iranian Oil Company (NIOC) would not need NITC vessels, the latter would resume its pre-sanctions activities in the Middle East and Africa among other regions. 

Some oil buyers possess their own vessels and some others may need tankers to handle their high volume of oil. Meantime, NITC used to provide its tankers to other companies for crude oil storage, but during sanctions, it did not do so due to NIOC’s need.

Sanctions Ineffective

Kharg terminal is one of the oldest oil export terminals in Iran. Both during the eight years of imposed war and during sanctions, the terminal was and has been one of the most active terminals for the export of Iranian oil. The terminal is also capable of handling very large crude carriers. Due to sanctions, Iranian oil tankers operate in complete silence.

In order to write this article, together with a news team, I got onboard of one of these large vessels for a one-day visit. It was not the first time that I boarded an oil tanker, but the last time was in 2019, one year after the unilateral withdrawal of the United States from the JCPOA. I had witnessed the oil cargo being loaded and transported. At the same time, the crew said that it was not the first time we transported oil under such tough conditions. We know that we have a tough task ahead of us. Iranian oil tankers have since repeatedly transported export cargoes to all parts of the world.

Captain ArdeshirJalali, who is in charge of a2-million barreloil tanker, says: “Although the sanctions have made our task difficult, we still manage to carry out the transfer of oil cargo.” The oil tanker under his management is 333 meters long, 60 meters wide, 30 meters high, and with a 22-meter draft. To walk on this oil tanker, I need to spend half an hour, but the weather is so hot that I can only walk on it for 10 minutes.

My colleagues and I enter the bridge, there are four people working, one of the service workers is very young and I guess he is about 20-21 years old. He says he likes life on the water and its calm. But the sea is not always calm and kind, there are days and nights when tropical cyclones are guests of oil tankers. Captain Jalali, who has 23 years of experience working on oil tankers, says sometimes the impulses caused by storms and lightning are so strong. You lose your vision for a few seconds, total darkness reigns for a while, but we get through it.

We say that you have a very difficult job and every momentsomething unexpected might happen, you shouldn't even be too pleased with the peace and quiet of the sea, the captain says.“The toughest part of the job for us is being away from our family and friends.”

FarhadZilabpour, chief engineer, remembers the tragic death of his father’s friend. They were to inform his son of the sorrowful news, who had failed to attend his father’s burial.

“Such news causes deep sorrow,” he said.

Escorting Tankers

In order to keep on uninterruptedoil exporting, tankers sometimes travel a seven-month round trip, which means that the crew inside the tanker are away from family and friends and on board for seven months. Therefore, anything might happen during this period, the pirates who are ambushing the oil tankers are no exception. Captain Jalali says: “When the pirate boat approached our oil tanker in the Gulf of Aden, due to the escort and support of the Iranian Navy fleet we were not attacked and we continued our way.”

Escorting oil tankers by military forces in insecure areas is natural. Captain Jalali says: “Being protected by this escort, our vessels pass through unsafe areas in complete safety and are immuneagainst pirates.”

Heat Unimportant

Most NITC tankers are brandnew. However, in order for the oil tankers to work like clockwork, the engine room of the oil tanker must be monitored day and night, if there is a need to repair a part, repair that part and if it is necessary to replace another part, we go down 77 stairs to reach the heart of the engine room. The ship does not move, but the noise pollution caused by the engines is so intense that the only way we can communicate with each other is by gesturing and pointing or shouting, the temperature is so high that with the 100-degree weather, after half an hour I feel my body react to heat. Small and large beads of sweat just keep flowing and our breaths are counted, time passes very slowly in the heat. I feel like I've been in the engine room for hours, but my watch says 30 minutes.

The engine room’s chief engineer said: “Some days we have to go down and up these stairs three or four times, but at the same time we are out of breath.” My friend replies:“Wordscannot describe how hard you work and the pressures you endure.”

We spend nearly 10 hours in this oil tanker, which is one of the young oil tankers of NITC.

We leave the vessel at a time the energy crisis has spread its shadow over the economy, the economy is hungry for energy for its prosperity, and on the other hand, due to the lack of global investment in the oil industry, as well as the conflicts between Russia and Ukraine, more than ever before, the nuclear negotiations between Iran and Europe are being looked at. Once the OPEC+ ministerial meeting concluded, MinisterOwji said: “The global energy market needs Iran’s increased oil supply. As a leading supplier of oil and petroleum products in the world, while believing in the necessity of depoliticizationof the energy sector, I declare our readiness to play our role as an oil supplier and contribute to global energy security regardless of political issues.”

HashemiyehMotaghian:

I Target Paris Paralympic Championship

She was born in the southernmost district in the city of Ahvaz. She suffered leg disability when she was just one year old. However, it did not prevent her from progressing in life. On the contrary, she became more determined to step on the echelon of progress. She has been titled the “golden lady” of Iran and Khuzestan, enjoying high popularity in the province and in the petroleum industry. HashemiyehMotaghian was the only female member of Iran’s athletics team, who managed to win the first gold medal in this disciple in Iran’s Paralympics history. Motaghian is with National Iranian Drilling Company (NIDC), known for championship in the Tokyo Paralympics “track and field” matches. She also bagged two more gold in Morocco’s Grand Prix matches. She told us about herself in an interview with “Iran Petroleum”.

“I was born in 1986 in Ahvaz. I am active in athletics. I am a member of the national javelin and discus throw team of veterans and disabled and para-athlete team. I have also studied accounting, and now with a bachelor's degree in accounting, I am working in sports and physical education at NIDC. I am the third child of the family and I have thoroughly experienced my father's sufferings and the hardships of living in Malachi, and despite having 70% disability, with effort and perseverance, I have progressed in athletics (discus and javelin) and I’ve been largely supported by my family.

I was 18 when I happened to get familiar with sports for veterans and disabled people. That was what I had long been after and I didn’t know where to begin. Thanks to God, I found my way into professional sport.”

Gold in Tokyo Paralympics

“In 2009, I joined national and international competitions in javelin and discus throwfor veterans and disabled people, and so far I have won 9 gold medals in national championships from 2009 to 2017, as well as 4 gold medals in the club league. I have participated in 4 tournaments and competitions abroad. During my career in Iran's national athletics team, I won the Paralympic berth twice, and for the first time by participating in the 2014 Asian Paralympic Games in South Korea, I won 2 silver medals in discus and javelin throw. In the 2016 United Arab Emirates Asian Games, I won the gold medal in the discus throw championship, and in the 2017 London World Games, I was able to win the silver medal in the F56 class javelin throw. Later, I won the gold medal in the discus throw and the silver medal in the Jakarta Para-Asian javelin throw and the silver medal in the 2019 world javelin throw. Finally, at the Tokyo Paralympics in 2021, I managed to win the gold medal and become a champion. In Iran's javelin throw in the combined F55 and F56 class, I achieved the gold medal in the women's division by recording a record of 24 meters and 50 cm, and I also improved the world record in this field.”

Professional Sport

“Since the first day that I entered the gym for the test, I tried with all my heart. For the first 2 years, I worked in sitting volleyball. But because my physique was not suitable and in the Para-Asian games, my opponent's hands were longer than mine, I was removed from the youth selection and I was demotivated again. But I still did not stay away from sports and with the encouragement of my coach, I entered this field at the age of 23 and after the track and field test. Athletics was a new world for me and I liked its environment. In this sport, I relied on my own strength and energy. This issue gave me a double motivation to make no effort. Athletics has many sub-disciplines, but I chose javelin and discus throw.”

18hrs Weekly Exercise

“I have 6 training sessions in the morning and in the evening per week, and I also do bodybuilding for 3 sessions, which means that I have 9 training sessions in a week and I am free only on Fridays. In order not to miss out on training, my bedtime should not reach midnight. Finally, I sleep between 11 and 11:30 at night and wake up once in the morning for sayingmorning prayers and sleep again and wake up again at 8 to be at the gym at 9:30 after having breakfast. Morning exercises take 2 hours. After training, I return home and after lunch, prayer sand rest, I start aerobic training again between 5 and 6.”

Exercise, Key to Success

In addition to winning the gold medal, Motaghian broke the world record in the Tokyo Paralympic Games. Putting emphasis on practice and repetition, she often mentions these words along with trusting in God, she says: “If someone determines the goal of his choice and his path from the very school days, it is impossible to achieve by repetition and practice If he doesn't reach his goal, even if he falls down, he should get up again with trust in God and continue trying.”

Morocco Grand Prix

Motaghian, who managed to win the javelin gold medalin the Tokyo Paralympics as the only lady of Iran's athletics convoy, now by winning another gold medal in Morocco, she has been called the golden lady of Iran and Khuzestan and is now very popular. The holder of two gold medals in the Grand Prix of Athletics says: “Disability is not limitation. Despite my disability, God has given me great perseverance. The Grand Prix of Morocco was held at a high level and 42 countries participated in the competition, and I won two gold medals in javelin and discus throw”. She also finished runner-up. “I must also add that in these competitions, I improved my personal and the world record. I had previously thrown 24 meters and 50 cm, but in that competition I threw 24 meters and 76 cm,” she says.

Employment

Regarding her employment at NIDC, Motaghian says: “After the Tokyo Paralympics matches and winning the championship title, NIDC managers praised me and later on, thanks to the CEO of NIDC, I had the chance to be employed there. I am currently working as sports affairs office expert.”

Paris 2024 Title

Regarding her future ambitions, she says: “From now on, I am thinking ofacquiring a berth for the 2024 Paralympics and improving my record in the Paris World Games. In July of next year, I will first attend the World Championship in France, where my goal is to win the championship and reserve a berth, and 4 months later, I will go to the Asian Championship. These two matches are the best training for championship in the 2024 Paralympics.”

An Old Oil-Rich Area

Chia Sorkh: Story of 1stOil Discovery in Iran

Masjid Suleiman is widely believed to be the area where the first barrel of oil was pumped out but historical research and authentic documents suggest otherwise; Chia Sorkh (literally the Red Well) area was the place where Iranian oil was found for the first time; events and incidents happened, however, and we lost its oil along with the land.

In this article, a story about the oil of this area is to be reviewed; a story that is somewhat solemn and can be seen alongside the failures and hardships of the Iranian nation under the Qajar dynasty.

Despite the fact that Iranians were familiar with a substance called oil for a long time and benefited from it by extracting it from oil springs, western countries and at the top of them, the UK, entered the Middle East and Iran with an industrial revolution and stunning scientific and technical advances. At the time, they were several centuries ahead of us and could exploit natural resources and God-given reserves of other countries for their benefit. Realizing the strategic importance of oil, the British tried to strengthen their oil foothold in Iran. Around 1280 A.H.,D'Arcy’s agents started their work with exemplary effort, diligence and follow-up to gain their interests from the west to the south of Iran.

Agents at Work

D’Arcy had never visited Iran. The British billionaire, with a splendid backdrop in business, decided to hire someone to recover oil in Iran; someone who was one of the leaders of his country in pursuit and perseverance. Farshid Khodadadian, the author of the book "Khuzestan, Civilization and Oil", writes about this: "D’Arcy did not have the slightest knowledge about oil and its production. He did not know the land where he had won the oil concession and he had never visited it. In order to put things in order and start his operations in Iran, D’Arcy hired a graduate of the Royal Indian College of Engineering, named George Reynolds, who previously had drilling experience in Sumatra, and asked him to take on a working group, list the tools and equipment he needed and get ready for the work.”

The Starting Point

Reynolds engaged in the work and set the starting point of his exploration somewhere in the west of the country, called Red Well,or locally Chia Sorkh. In the documents of oil museums, there are historical origins of Chia Sorkh and very important points that show how this area attracted the attention of foreigners and what historical roots it had: The region of Chia Sorkh had long been famous among the natives and people who visited it due to the presence of oil springs.The existence of these springs, along with the sandstone formations, which were known as natural formation suitable for oil reserves at that time, brought the geologists to the western and southwestern regions of Iran to the consensus that there were huge oil resources under the groundin this region. The first expert who came to this area and visited it was William Loftus, an English archaeologist and geologist. Loftus, who had already made discoveries about the Sumerian civilization, in his report confirmed the existence of oil in areas of the Bakhtiari Mountains in "Dalaki region" of Iran.Hotz, the owner of the Dutch concession, who, according to this report, started drilling in the Dalaki region in 1883, was forced to liquidate the company and declare bankruptcy without achieving any specific results. Years later, Jacques de Morgan, a French archaeologist and geologist - who was looking for Iranian antiquities with the support of the Qajar dynasty - encountered oil springs in the west and south of the country. De Morgan released the results of his observations in Mines of Paris Journal and wrote about the seepage of oil ponds in Chia Sorkh area in the northwest of Qasr Shirin County. This very report was one of the main foundations of William Knox D'Arcy’spresence in Iran and the acquisition of oil concessions on 28 May 1901. In the early summer of that year, D’Arcy, sent H.T. Berles,geologist, to Iran to identify possible favorable places for oil drilling. He proposed two areas for this purpose: one was near Qasr Shirin in Zahab region in Kermanshah, Iran and the next location was in the south, near Ahvaz and around the Naft Serifsprings. Dr. (later Sir) Boverton Redwood, D’Arcy's geological consultant at the time, acknowledged that there were obvious traces of oil in both of these areas; but under the influence of De Morgan writings, he suggested that the work start in Chia Sorkh. He predicted that "the result would be the creation of a profitable industry on a huge scale."

Rough Times

Reynolds was struggling with many problems. Discovering and extracting oil from Chia Sorkh was not aneasy task. Being surrounded by mountains in the west of the country, lack of security, impossibility of transporting equipment and oil facilities were some of the problems that blew away Reynolds. Khodadadian writes about this: "The Red Well was an inaccessible plain enclosed in the mountains of western Iran and near the place that was later identified as the border between Iran and Iraq. This made it very difficult to transfer equipment to that point. The other problem was security. Local tribes and nomads would not remotely adhere to the central government, let alone recognize the concession signed by it. The area was about 500 kilometers from the Persian Gulf, and Reynolds thought it best to transport his equipment by water to the nearest point to the planned drilling site. For this purpose, the drilling equipment and most importantly, the steam boiler and the drilling rig were shipped from Britain to the port of Basra. After that across the plainIn Mesopotamia, the equipment was carried by humans and quadrupeds, and after passing through a very difficult mountainous area, it finally reached the drilling site. Getting the equipment to the place was just the beginning of the problems. He and his Polish, Canadian and Baku workers had to assemble the equipment to begin their work."

No matter how hard D’Arcy's agents tried, they failed to find significant oil in Chia Sorkh. Their efforts were useless, they intended to suck Iran's blood from somewhere else. D’Arcy learned about their failure and this English businessman gave Reynolds a hard message. According to Farshid Khodadadian, "The unsuccessful drilling operations in the Red Well disappointed everyone. D’Arcy, who had solved all the problems with financial charging for nearly two years of exploration operations in the Red Well, finally wrote to Reynolds: "Every bag eventually runs out, and I know the limits of my bag's capacity very well.”"

Fate ofChia Sorkh

Chia Sorkh area was finally abandoned after obtaining unfavorable results in a row and also following the discovery of richer oil resources in the areas around Masjid Suleiman, which also had a better geographical location; the small amount of oil that was extracted from the wells of Chia Sorkh was only used to meet the needs of the area. In the process of determining the border lines, Chia Sorkh was first handed over to the Ottoman Empire and after the collapse of the Ottoman Empire, to Iraq, and today it is a small oil field. Today, Chia Sorkh remains only as a distant memory in the minds of all oil industry researchers; a region that has been forgotten for years as a piece of Iranian land.