New Chapter in Energy Diplomacy

Ali Forouzandeh
Director General of Public Relations

Energy diplomacy, defined as one of the prioritized policies of the 13th administration’s Ministry of Petroleum, has over recent months made good headway with a view to pursuing national interests in spite of international sanctions and restrictions imposed on Iran.

OPEC SecretaryGeneral Haitham Al Ghais’s official visit to Tehran to meet with Iran’s president and minister of petroleum; Russian Deputy Prime Minister Alexander Novak heading a high-ranking business delegation to Tehran and signing 10 energy documents, RIPI hosting CIS nations’ gathering; Chairman of Türkmengaz State Concern BatyrAmanov’s visit to Tehran to settle a gas dispute with Iran; and finally the strong presence of foreign companies in the latest Tehran oil show are just examples of the success of Iran’s energy diplomacy.

Iran’sPetroleum Ministry has indulged in efforts to benefit from energy diplomacy and pave the ground for removing international obstacles in the way of global oil, gas, refining and petrochemical trading. To that effect, by relying on Iran’s huge oil and gas reserves, it has favored interaction over conformation in global markets.

Recentdevelopments indicate that OPEC and other nations have come to the conclusion that despite US sanctions, the Islamic Republic could not be set aside due to its energy prominence. Therefore, they have chosen to improve their ties with Iran in the energy sector.

Ahmad Assadzadeh, deputy minister of petroleum for international affairs and trading, recently said: “Efforts aimed at isolating Iran have foundered. Gone is the multipolar world and era of unilateralism. What matters is that foreign countries and companies properly welcome Iran’s new approach.”

Al Ghais:

OPEC Will Welcome Back Iran Full Return to Market When Sanctions Lifted

OPEC Secretary General Haitham Al Ghaishas said the OPEC family welcomes back full return of Iran’s oil production to the oil market once sanctions against its oil sector are lifted. Al Ghais was talking in an exclusive interview with the “SHANA news agency” and the “Iran Petroleum” monthly, both affiliated with the Iranian Ministry of Petroleum.

The following is the full text of the interview Al Ghais gave to SHANA and the monthly during his official visit to Tehran on May 27.

OPEC’s voluntary production adjustment has not been as effective as expected with regard to oil prices. Do you think the policy has already been instrumental enough or will it be effective in the future?

As you may know, this is my first official visit to the Islamic Republic of Iran as the OPECSecretary General, and indeed this visit is very critical as the Islamic Republic of Iran is one of our founding member countries.

Today, I had the honor to meet with the President of Iran, His Excellency Ayatollah Ebrahim Raeisi, and listen to His Excellency’s words of wisdom and receive his kind guidance on both the affairs of OPEC, as well as its surrounding challenges, both current and future. Also, I had a great meeting with Minister of Oil, His Excellency Javad Owji.

In regards to your question, and as you know, there are many factors that are affecting oil prices. In OPEC, I will be very frank with you, we don’t target a certain price level. All our actions, all our decisions are made in order to establish a good balance between global oil demand and global oil supply, and this is a function of many moving elements. To start, we look at the macro-economic indicators globally, and as you know we are still recovering from COVID-19 consequences, which has severely affected the market for past three years, and have not fully recovered, especially in the area of travel which affects jet fuel consumption globally.

Indeed, it is still a dynamic situation, and in this year i.e. 2023, we forecast that global oil demand will surpass the pre-COVID levels, reaching almost 102 mb/d. This is taking into account all issues facing the global economy, including banking issues, higher inflation levels requiring tighter monetary policies, and the high debt levels in many key economies. All these variables do affect global economic growth, and hence global demand for oil.

With this, our latest forecasts shows that growth for oil demand this year, is around 2.3 mb/d year-on-year, and this is a quite robust number, looking at the historical average of the past few years. The demand for jet fuel and gasoline are expected to pick up with the coming summer travels, and demand for other products is expected to improve as China continues opening up, as inflation and debt challenges are addressed. Therefore, we expect to have a proper demand growth this year and this will support the market stability.

Now, I would like to ask about underinvestment in both upstream and downstream oil sectors, which you mentioned in the Dubai conference that may destabilize global markets in the long term. Meantime, investment in renewable has exceeded investment in fossil energies for the first time. Does it mean the end of the Age of Oil? And how do you see the future of the petroleum industry in case of underinvestment?

That is an excellent and important question. Since I have been appointed Secretary General of OPEC, I have been highlighting the grave risk of underinvestment that has been happening actually over most of the past eight years, since 2015, when we had the first big downturn.

Unfortunately, the industry’s investment in upstream oil sector has been significantly lower than theaverage of 2010-2014 period. This has gotten worse in 2020 when COVID-19 pandemic struck, and the industry started to suffer from financial losses, affecting how much investment is going to not only the upstream industry, but also midstream and the downstream industries, including refining and petrochemicals.

OPEC has been very vocal about this alarming underinvestment pattern. I have been very vocal myself, and many of our ministers have been vocal, too. As you rightly said, in a conference– the Middle East Petroleum and Gas Conference – in Dubai last week I again highlighted the importance that the oil industry has to step up and increase investments, not only by national oil companies (NOCs), but generally around the world. This is a global responsibility.

Why do we say this? We say this because oil is a major component of the energy mix today, and we are sure it will continue to be a major component of the energy mix in the future. Our projections in the OPEC Secretariat, which are done by my colleagues in the Research Division, are very clear, showing that global economy will at least double in size compared to what it is today. Furthermore, we will see an increase in the global population of today by 1.6 billion people up to 2045.

In OPEC, we welcome the increased current levels of investment in renewables but these levels will not be enough, as renewables alone cannot fuel the upcoming economic and population growth levels, especially that most of this growth will be coming from non-OECD countries including Asia, the Middle East and Africa. Yes, there will be a decline in OECD but we see the growth in non-OECD compensating for that decline.

Therefore, we believe it is essential that this increase in demand for energy, which we estimate it to be around 23% from now to 2045, to be fueled by all sources of energy, including oil which is expected to remain dominant, retaining its top share. The demand for oil will enhance versus what it is today by nearly 13 mb/d by 2045, requiring significant investment. According to our estimates, $12.1 trillion will be required by 2045, including $9.5 trillion for the upstream sector – i.e. exploration and production – $1.5 trillion in the refining and downstream and another $1 trillion in the midstream sector.

This is a complete value chain and investment has to happen throughout the chain; otherwise, this will have implications in the future for the price of energy. Investment is the word I say at all occasions. It is very critical.

Do you think that underinvestment may cause market imbalance and high oil prices in the future?

This is likely, as a scenario. When there is continued underinvestment, it is likely that

the world will definitely have to see a potential rise not only in the level of prices, but also volatility of it. Volatility is very harmful to consumers, producers and of course the whole of global economy. Countries need to plan for their national budgets. Companies, businesses, people like myself, like yourself need to be able to plan budgets and expenses.

Volatility is the most harmful enemy for consumers as much as it is for producers. Therefore, underinvestment, as I have repeatedly said, will cause more volatility. It will lead to higher prices in the future. It will lead to inflation in the future. This is a very clear sign because we are seeing the volatility already happening as a result of massive underinvestment in the years in the past.

Before the market downturn of 2015-2016, and before COVID-19 happened, annual investments were in the range of $500-600 billion. Today, we’re talking of levels that are around $300-400 billion. It has improved slightly, but still not significant enough, and what OPEC tries to do is to create the right atmosphere, the right marketing environment where there is stability in the market, with less fluctuations up or down. OPEC tries to improve the balance between supply and demand, and when this stability is achieved, this will attract and incentivize national oil companies, international oil companies to cooperate and invest more in this key industry.

What do you think of oil producers’ responsibility vis-à-vis the zero-carbon policy?

This is an excellent question. Decarbonization must go hand-in-hand with investment. Although there is a belief out there that oil is a cause of pollution, we say yes, there may be pollution but oil is not the only source of pollution. There are many other sources, as well. There is the agriculture industry; there is the coal industry and many other industries that cause pollution.

Also, I must be very clear, and let’s be honest. What is the carbon footprint of electric vehicles? The electric vehicles will still require many components that heavily depend on the petrochemical industry. What happens to the battery waste? How will that be disposed of? What is the carbon footprint of producing the raw materials and minerals that are required to manufacture these batteries?

Therefore, when we say oil companies should invest, yes, they have to invest, but they also have to improve their operations and this is happening already on the ground. We are proud to see all OPEC member countries have signed to the Paris Agreement. That is number one. Number 2, many of our national oil companies and oil ministries in OPEC are putting in place serious plans to decarbonize, and limit the emissions from upstream and downstream oil operations in their countries, which is aimed at achieving Paris Agreement goals.

In addition to that, our member countries and their national companies are investing as well in renewables, in hydrogen projects, in circular carbon economy projects, and in even planting trees, like the Saudi or Middle East Green Initiative. These are all examples of how we can limit emissions and reduce carbon footprint of our countries and our industry. So that misconception, if I may put it, is something that we are working on to make clear to everybody around the world the role that OPEC member countries are playing in order to mitigate the carbon footprint and emissions from the oil industry.

OPEC and the IEA have on some occasions given different accounts of the market situation in terms of demand. Why is there such difference?

First of all, I would like to say that I am very proud as Secretary General of OPEC that in the Research Division at the OPEC Secretariat, my staff – some of whom are actually from the Islamic Republic of Iran – are very dedicated people, very professional, technically qualified and competent, and they have been able to deliver some of the most robust and accurate forecasts and research results. It is not only me, because I am OPECSecretary General, but this is also quoted from international experts and media sources who have been praising the OPEC forecasting for its accuracy.

Clearly, I do not want to talk about other agencies and how they do their forecasting. That is their own business. For OPEC, we leave politics out of our technical work and this is critical to ensure that our numbers are robust, solid and based on economic factors and sound details and figures that lead to accurate and precise forecasting. So again, I would like to take this opportunity to thank all of my colleagues who work in the Research Division for their excellent work. I am really proud of this team.

How do you assess Iran’s role and more generally OPEC’s role in the market situation? How do you think Iran’s full return to the market affect the situation?

Iran is a founding member of OPEC and a key player in the global oil market. Iran is currently under sanctions and this is limiting its production level. We know that Iran has the capacity to bring significant production volumes within a short period of time. This was demonstrated in 2015-2016 when the sanctions were removed. I believe Iran has managed to enhance its production by almost 1 mb/d of crude oil and condensate.

I heard today from His Excellency Minister Owji that Iran continues to invest in its oil sector, not only

in the upstream but also in the downstream and petrochemical sectors. So, Iran as a fundamental key player, along with all other OPEC members, continue their role in providing stable and reliable supply of oil to customers and countries around the world.

Indeed, we welcome the return of Iran’s oil production in the future, when sanctions are lifted. We look forward to that day. The market is growing. There is increasing demand and we believe that Iran is a responsible player amongst its family members, the countries in the OPEC group. I am sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years.

Will OPEC go ahead with its initiative to bring back Qatar, Ecuador and Indonesia?

One of the first things I’ve been saying since I took office, and this is a continuation not for me only but for the policy of our ministers and our leaders, is that OPEC has an open-door policy. OPEC is an organization that has been around since 1960. Some members have left, some members have left and returned, some members are interested to join, whether it is Qatar, whether it is Ecuador, whether it is Indonesia or any others.

We have now developed the Declaration of Cooperation in 2016. This is an alliance where we have 10 producers from outside OPEC, working with us very closely. In the future, I hope to see that some of these members on the OPEC Declaration of Cooperation will be willing to join as OPEC members. Our door is open. We welcome producers to come and work with us and to join in this collaborative effort where we really try to ensure stability of supply and to fuel the economic growth around the world. So, yes. Qatar, Ecuador, Indonesia and all others are welcome if they are interested to join. Our door is open.

There is speculation that OPEC has lost its status to keep functioning as an effective independent organization, especially after OPEC+ was formed. What do you think?

Absolutely not. I think this is not a fair assessment. I believe OPEC, since 1960, has been playing a dominant role in stabilizing the global oil market. As I mentioned, OPEC has managed to bring onboard with it 10 countries in the Declaration of Cooperation, in order to bring back the stability and balance in the market. OPEC has been a steady player despite all the volatilities and all the challenges of over 60 years, since it was created. Turbulence in history has never prevented OPEC from being a significant player on the global energy scene.

The calls on OPEC to act whether this way or that way are, in fact, a testament of the key role of OPEC. The recent collaboration with 10 countries in the Declaration of Cooperation is an international effort made in order to bring more players together in order to stabilize the market. This does not mean that OPEC has lost its significance and its role. No! If OPEC had lost its role, I don’t think these countries would be interested to collaborate with OPEC again.

OPEC believes in international cooperation, dialogue not only with producers as we are also actively involved in dialogue with many of the key consumers around the world such as the European Union, China, and India. Just to mention few. And we are working on developing more with key consumers around the world such as Japan, South Korea and others. So, OPEC is all about dialogue. Again, our door is open. Collaboration is the way to go forward whether it is in energy or other aspects.

How do you see Iran in your first visit?

I’ve had an excellent time. The welcoming here for me and my delegation has been very hospitable. I am really happy amongst my brothers, sisters and family. I really feel at home. I’m from Kuwait, which is very close to Iran. This is my first visit, but I guarantee it will not be my last visit. I look forward to coming back again.

The aboveinterview was conducted jointly by SHANA’s Amir Dashti and JavadAsghariand Iran Petroleum’s Negar Sadeghi.

Iran Eyes Bigger Gas Trading Share

Iran’s Minister of Petroleum JavadOwji said in a recent meeting with BatyrAmanov, chairman ofTürkmengaz State Concern, Iran would be starting gas imports from Turkmenistan very soon.

Owji said Iran had capacity to receive 40 mcm/d to 50 mcm/d of gas from Turkmenistan, which holds the world’s largest gas reserves. “We plan to increase our share of gas trading (swap, transit, sales) in the region,” he said.

Resuming Gas Ties

Expansion of gas supply network in Iran has resulted in increased gas consumption in the country. Last calendar year, it peaked 850 mcm/d in winter. This issue was taken into consideration by Minister Owji ever since he took office. Only three weeks into office, Owji left for Turkmenistan to settle a gas dispute between the two countries. His talks there came to fruition several months later when Iran, Turkmenistan and Azerbaijan signed a trilateral gas swap agreement on the sidelines of an Economic Cooperation Organization (ECO) gathering. The agreement was implemented in January 2022, which was instrumental in the gas network stability particularly in northern and northeastern Iran.

It did not end at this point. In early June 2022, Minister Owji travelled to the Republic of Azerbaijan where he signed an MOU to double the volume of Turkmenistan’s gas delivery to Azerbaijan via Iran.

Under the trilateral agreement, Turkmenistan is required to deliver 10 mcm/d of natural gas to Azerbaijan. Iran-Turkmenistan ties were not limited to these agreements; rather, they inked protocols for exporting technical and engineering services, as well as refined petroleum products, which resulted in the reopening of Turkmenistan’s border terminals. 

Majid Chegeni, CEO of National Iranian Gas Company (NIGC), said the volume of Iran’s gas swap increased 358% in 2022 year-on-year. He added that the figure was expected to grow 70% in 2023 year-on-year.

It was in October 2022 that the issue of gas imports from Turkmenistan was raised in the parliament by Minister Owji. NIGC officials noted that Iran’s gas imports from Turkmenistan were aimed at gas supply stability in northeastern Iran particularly in cold days, compensating gas imbalance and enabling Iran to raise its gas exports to neighboring countries. To that effect, Minister Owji travelled to Turkmenistan on a one-day state visit in November 2022 to meet with Turkmen president and senior energy officials. And finally in May this year, Owji said that following his meeting with Amanov a new agreement had been signed for Iran to import gas from Turkmenistan.

Iran, Only Channel

Iran is a reliable channel for Turkmenistan’s gas exchange. Iran was the first country to offer geopolitical gas export overture to Turkmenistan in 1997 in a bid to streamline dependence on the former Soviet Union’s transmission lines. In the light of developments at the regional and international levels, the Turkmen government concluded that the most reliable market on hand was Iran’s. Turkmenistan is traditionally oriented towards Russia. In 2019, Gazprom signed a 5-year contract with Turkmengaz to purchase natural gas. Under the deal, Turkmenistan would supply Gazprom with up to 5.5 bcm of natural gas per year. But as the Russians have lost their market following their invasion of Ukraine, their market is unlikely to be revived in any near future. The Russians are currently faced with surplus gas exports and Gazprom would not absorb Turkmen gas. After Iran, Turkmenistan was willing to improve ties with China. Turkmenistan signed a deal to export 40 bcm a year of gas to China via Central Asian pipelines, but due to China’s concentration on LNG imports, shale gas development and local development projects, Turkmenistan and other Central Asian nations faced restrictions in their gas exports. On the other hand, Turkmenistan’s southern market does not augur well due to the situation in Afghanistan. Unstable security in Afghanistan and absence of any logic for investment there and building pipelines in an environment with no infrastructure development pose challenges to Turkmenistan. The Turkmenistan–Afghanistan–Pakistan–India (TAPI) Pipeline has not elicited enough optimism. The biggest challenge to Turkmenistan’s presence in Europe’s market is the legal

regime of the Caspian Sea, which has blocked construction of the trans-Caspian pipeline. Apart from that, it seems that in light of gas prices, gas perspective, transit payments and ambiguities over the future of gas in Europe following Russia’s war on Ukraine and Europe’s shift to LNG, the Europeans are reluctant to build a long pipeline. It would not be economically attractive to the Turkmens either due to gas prices.

Gas Trading Share

If we assume the annual growth of gas industry development in Turkmenistan at 2%, gas production in this country would reach 75-90bcm in ten years.Unlike the 2019-2022 period when local downstream projects in Turkmenistan consumed gas, there is no clear outlook in sight for domestic gas consumption in that country. Therefore, Turkmengaz is facing the prospect of increased gas exports.

The Ukraine crisis’s indirect impact on Turkmenistan pushed the Turkmens further towards Iran, because Russia has switched from Europe to China and Turkmenistan’s share of China’s market has been given to Russia.

Russia also intended to deliver Turkmenistan’s gas to Europe via the Nord Stream 2 pipeline, which did not materialize after Russia’s aggression of Ukraine and bombing of the pipeline. Therefore, the only safe market for Turkmenistan would be Iran. First, the issue of gas swap was raised and now Turkmenistan is willing to export gas to Iran.

Despite all restrictions for payment, Iran settled its gas debt to Turkmenistan. Iran is now the most important transit market to Azerbaijan and is an accessible market with necessary infrastructure.

Iran and Turkmenistan rank respectively the 2nd and 4thin terms of gas reserves in the world, whileRussia and Qatar rank the 1stand the 3rd. These four gas-rich states lie in the same geographical sphere, which gives them an opportunity to develop a special mechanism to manage regional gas trading. That would not be limited to Middle East, Central Asia and Southwest Asia; rather, it would cover the entire global gas trading. Iran’s geographical position is different when compared to fellow gas producers in the world. Iran has 15 neighbors, 12 of which need Iran’s gas. For instance, Turkey has diversified its market by receiving gas from Russia and the Shah Deniz field, shared by Iran and Azerbaijan, before transiting gas to Europe. However, it needs Iranian gas imports. Iraq is also a buyer of Iran’s gas. It recently signed a $27 billion deal with France’s TotalEnergies in a bid to reduce its imports from Iran; however, it would continue to need Iran’s gas to inject into some of its oil fields which are planned to undergo enhanced recovery.

Iran’s southern neighbor off the Persian Gulf also need its gas. Some experts see them as gas-thirsty customers as their gas consumption peaks in summer and Iran can supply their gas need by simply striking a balance to its own consumption.

Bargaining Chip

Gas exports are among top priorities of Iran’s Vision. Therefore, over the past four years, Iran has been boosting recovery from the giant South Pars gas field and National Iranian Gas Company (NIGC) has been following up on gas export plans.

Energy and gas market elements have changed significantly. The first change pertains to prices which are now normal. In the past, gas sold $20/ MMBtu in Asia and $12/MMBtu in Europe, which are now down respectively to $6 and $4. Although prices have become normal, new suppliers have emerged, mainly the US. Until 2005, the US was among leading gas importers, but now its gas cargoes have reached as far away as the Persian Gulf. Australia was a small producer and it has now become a top producer. Australia is expected to outstrip Qatar in LNG production within years from now. These new players have created a new dynamic in the market. For instance, Japan will stop becoming the top gas importer in coming years as China and India would replace it. There is tight competition in the gas market. Gas contracts in Europe have changed drastically because Europe is attracting all exporters due to its concentration on LNG.

Energy Hub

Gas corridors bring security to all nations, from primary suppliers to final consumers. For a big supplier like Iran, gas exports would bring about regional strength. Iran owns 39,000km of gas pipelines. Such big infrastructure can yield both economic and geostrategic interests.

Pricing is another issue to be taken into consideration by regional nations. The Henry Hub, based in Louisiana, is the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX) and the OTC swaps traded on Intercontinental Exchange (ICE). It acts like Brent for North Sea oil. Iran and regional countries can establish a pricing reference. One may ask why these countries can be instrumental in gas pricing. The regional nations’ share of natural gas supply in the world amounted to 38% in 2021. Central Asia (Russia excluded) supplied 100 bcm and Iran supplied 200 bcm a year of natural gas. With such big share of global gas supply, regional countries can set gas prices so as to secure collective interests. Energy supply security will largely be linked to the corridor linking Central Asia and the Persian Gulf, i.e. Iran. Cooperation between countries should go beyond gas swap and transit. Global demand for natural gas is projected to grow 1.5 times by 2035. The region will come to the spotlight and therefore regional countries can cooperate in investment and technical exchanges with a view to safeguarding their own interests and supply Europe’s energy needs.

Iran, Russia Ink 10 Protocols

                The outstanding role of Iran and Russia, both oil and gas-rich, in global energy trading cannot be denied. Amid tight competition in the energy market over recent months between energy holders for winning as much bigger share as possible from this global trade, Iran and Russia have broadened their strategic ties in the economic and energy sector, particularly under the 13th administration of the Islamic Republic.

Reciprocal visits by high-ranking Iranian and Russian delegations indicate firm determination on the part of both states to improve their relations. From May 16 to 17, delegates from 80 Russian companies travelled to Tehran and held meetings with 100 Iranian companies at the venue of the Research Institute of Petroleum Industry (RIPI) to explore avenues of energy cooperation.

Iran’s Minister of Petroleum Javad Owji hosted Russian Deputy Prime Minister Alexander Novak who headed Russian delegations. The talks resulted in signing 10 documents for cooperation between the two countries.

Owji said NIOC and Russia’s Gazprom had agreed on $40 billion deals, adding that contracts would be signed to that effect.

B2B Talks

Intensive talks were held between the Russian delegations representing 80 companies with 100 Iranian companies about manner of finding grounds for cooperation in the oil, gas, petrochemical, atomic energy and electricity sectors. In the oil sector, it was agreed that the Russian side complete its studies on Iranian oil fields and present its assessments. Cooperation was also promised in the gas sector with a view to striking agreements.

Ahmad Assadzadeh, deputy minister of petroleum for international affairs and trading, was leading Iranian delegations. He said despite good cooperation between state-run companies, they need to deepen their ties.

The most significant development was the $40 billion memorandum with Gazprom for operating oil and gas projects in Iran. The Iranian Ministry of Petroleum is seeking to engage medium-sized Iranian and Russian companies in oil projects in Iran. Assadzadeh said as experience has already shown, better communications would be established between small and medium-sized companies.

Mohsen Khojasteh-Mehr, CEO of NIOC, in his meeting with Vitaly A.Markelov, CEO of Gazprom, discussed models of investment for developing oil and gas fields in Iran.

In a joint press conference with Novak, Owji said: “Over coming months, agreements associated with the $40 billion NIOC-Gazprom MOU would be signed.”

Hossein Shameli, special assistant to Assadzadeh, said Iran-Russia long-term cooperation would have a stable and long-term horizon. He also said that Iran-Russia cooperation would help stabilize global energy supply and engage the private sector in oil and gas projects.

Iran and Russia are both under international sanctions, but they depend on cutting edge technologies to develop their oil and gas industry. Therefore, they can help each other in this sector. It would not be unilateral cooperation as Iran has managed to export catalysts to Russia, and Russian companies are highly interested in receiving technical and engineering services from Iran’s petrochemical sector. Iranian companies have moved to manufacture many oil equipment which Iran cannot import due to sanctions. That would be a good domain for helping Russian companies. Reciprocally, Iran would benefit from Russia’s aid in developing its oil and gas industry.

Mohammad SadeqJokar, head of Institute for International Energy Studies (IIES), said: “We share approaches with Russia at high decision-making levels in line with international environmental, security, economic and energy developments, which are visible in the inclination of both sides for cooperation. Therefore, these inclinations are required to turn into plans of action.”

Follow-Up

So far, Iran and Russia have held 16 joint business forums in the banking, trading, industrial, customs, shipping, oil and gas, petrochemical, refined products, power plants and railway sectors. Owji and Novak have been following up on the decisions made by these forums. During the 17th forum which is to be held in Tehran, the result of follow-up on the previous decisions would be presented.

In his joint press conference with Novak, Owji said sanctions-hit Iran and Russia enjoy good potential for cooperation, adding that they can together neutralize sanctions.

“Iran and Russia enjoy great potential in the energy sector, particularly oil and gas. Under the 13th administration, following Iran-Russia meetings, good memorandums have been signed in the oil, gas, petrochemical and refined product sectors.”

The Iranian minister also said during Novak’s visit, the issues related to 10 oil and gas fields considered for development were settled, thereby clearing the way for agreements to be signed. Iran and Russia also plan to swap petroleum products, given existing potential in northern Iran.

Owji also highlighted Iran-Russia cooperation in OPEC+, saying: “Iran and Russia share views within OPEC+ and support each other.”

He also said that Iran and Russia would reach agreement on oil pricing.

INSTC Completion

Novak referred to railway agreements signed between Iran and Russia, adding: “The agreement signed for the construction of the Rasht-Astara railway is a key measure within the framework of the International North–South Transport Corridor (INSTC). We believe that if this missing link is completed, we would soon see major changes in Iran-Russia connections.”

“INSTC comprises three sections – western, eastern and Caspian. The eastern and western sections crossing neighboring nations would be by railway, while the maritime section cross the Caspian Sea,” he said.

“This pathway can currently handle up to 18 million tonnes of freight, which can be brought up to 30-60 million tonnes if we can increase commercial cooperation between the two countries, which would be a good alternative for the transfer of commodities and freight to the Suez Canal. Apart from that, it would be saving on cost and time,” he added.

Novak said the Rasht-Astara project was estimated to cost €600 million, adding it would start next year.

During the 27th Tehran Oil Show, which was held May 17-20, Russian companies were strongly present, indicating a new chapter of cooperation between Tehran and Moscow as both sides are determined to overcome obstacles in the way of Iranian and Russian businesspeople. Iran’s petroleum industry welcomes foreign investors to help enhance the rate of recovery from Iranian oil and gas fields.

During a 17 May meeting between Iranian and Russian delegations, linking Iranian, Russian and Azeri power grids was discussed.

Financing the second and third phases of the Bushehr nuclear power plant were also discussed to overcome possible challenges.

Potential for Cooperation with CIS

Mehdi Seyedi, acting head of the Ministry of Petroleum’s Europe, Americas and CIS Affairs Division, has said that Research Institute of Petroleum Industry (RIPI) engineers and specialists have contributed to $200 million commercialization and development of new oil and gas technologies.

“Exporting technical and engineering services, creating knowledge communications and increasing R&D cooperation between the scientific and research sectors of Iran’s petroleum industry and international bodies is on the agenda of the Office of Deputy Minister of Petroleum for International Affairs and Trading,” he said at a gathering of ambassadors of Commonwealth of Independent States (CIS) at the RIPI head office. 

Seyedi said Minister of Petroleum Javad Owji’s strategy is focused on expanding international cooperation in all sectors of the petroleum industry, i.e. oil, gas, refining and petrochemical.

“The 13th administration’s policy is based on increasing regional transactions and convergence and broadening cooperation with neighbors. To that effect, expanding ties with CIS nations is specifically significant in light of geographical proximity, as well as many historical, cultural, religious and economic commonalities,” he said.

Noting that the geopolitical position of Iran and CIS nations should be instrumental in expanding energy corridors and winning strategic toehold in global energy markets, he said: “To put this potential into practice, it would be important to identify the capabilities of research centers.”

“Nations are actively looking for ways to enhance their own energy security through diversifying fuel supply sources, creating economic corridors for carrying and exporting crude oil and natural gas, optimizing processes of oil and gas extraction from fields, producing and refining gas and petroleum products,” said Seyedi.

“Although due to sanctions, some restrictions have been created for supplying parts or obtaining various technologies for the oil and gas industry, we feel compelled to access them. To that effect, RIPI specialists have developed and commercialized new technologies in the oil and gas industry,” he added. 

“In spite of restrictions caused by sanctions, valuable experience achieved over years has earned us significant hard currency in a way that over the past one year, more than $200 million in financial contribution has been reported,” he said.

Seyedi said Iran was among several proprietors of knowledge and technology in the petroleum industry, adding: “Although the bulk of Petroleum Ministry’s activity has been limited to selling crude oil, gas condensate and petroleum products, exporting technical and engineering services, establishing knowledge communications and upgrading R&D cooperation between the scientific and research sectors of Iran’s petroleum industry and international bodies is on the agenda of the Office of Deputy Minister of Petroleum for International Affairs and Trading.”

Seyedi played down challenges to plans for expanding joint research and scientific programs, saying: “With strong steering and commitment to cooperation, we can overcome these challenges. That may include setting up joint research institutes and sharing scientific data for joint development and commercialization of technology.”

Seyedi said Iran’s embassies were expected to announce grounds for joint cooperation based on their knowledge of RIPI activities and potentialities, adding diplomatic missions can facilitate relations between RIPI and its counterparts within CIS nations.

He proposed establishment of an energy working group, saying: “There is potential for bilateral or multilateral cooperation within the Iran’s petroleum industry for transfer of knowledge and experience to other nations, particularly CIS nations as we believe that Iran’s expansion of scientific, research and knowledge-based cooperation with other countries can bring about a bright and win-win future for the region.”

RIPI Ready to Savvy Export

Azim Kalantari-Asl, head of RIPI, referred to the 60-year age of the research institute, saying: “RIPI is one of the oldest research institutes in the region, covering many activities associated with Iran’s petroleum industry.”

According to Kalantari-Asl, RIPI is exclusively involved in oil and gas production, exploration, enhanced recovery, petrochemical, refining and environmental sectors. By staging training and practical courses in the petroleum industry and lab services, covering more than 1,600 varieties of services to the petroleum industry and technological cores, it serves its clients.”

“The most significant assignment assigned to RIPI over the past 15 years, in light of unjust sanctions imposed on Iran, has been to accompany Iran’s oil and gas industry and move along the petroleum industry knowhow. In this regard, RIPI has concentrated on developing necessary technologies for the petroleum industry in various sectors from exploration to exports,” said Kalantari.

Referring to RIPI’s proper ties with Eastern and Western nations, he said: “In cooperation with Iranian universities, particularly Petroleum University of Technology, we can host PhD exchange students. We have also submitted a proposal to Russia to grant scholarship to students. We are also ready to organize various training courses in different sectors of the petroleum industry in target nations.”  

He said RIPI was instrumental in developing technical knowhow, adding: “RIPI is ready to transfer and export technical knowledge to target countries.”

“We have also proposed to Russia establishing a union or association in the oil and gas sector with CIS nations, which we believe can be of help in further cooperation with those nations,” he added.

Mutual Cooperation

Tajikistan’s Ambassador to Iran Nezamoddin Zahedi said: “Iran has transformed sanctions imposed for more than four decades into opportunities. Meantime, we are well aware of the Iranian petroleum industry’s capabilities and in many cases we need Iran’s cooperation.”

“Exchange of experience in extraction, exploration and refining of oil, environmental protection and lab services can be the subject of Iran-Tajikistan cooperation in the upstream and downstream petroleum industry,” he said.

He said that there is already ground for cooperation between Iran and Tajikistan, adding: “Currently, Tajikistan is importing Iranian crude oil and petroleum products. In some cases, we do bartering.”

Iran Refining Savvy

Vardan Kastanian, the commercial attaché of the Armenian Embassy in Tehran, touched on proper energy ties between Iran and Armenia, saying: “We have currently an energy-for-gas trade with Iran. Iran is also exporting petrochemicals to Armenia.”

He said that Iran supplies 90% of Armenia’s bitumen needs, noting: “In the near future, Iran would be opening a commercial center in Armenia, which would pave the ground for cooperation between the two nations.”

He said that Armenia would need Iran’s cooperation in building an oil refinery.

Brilliant Record

A deputy ambassador of Kazakhstan said Iran’s scientific and technological capacities in the petroleum industry were significant. He said Iran had a brilliant track record in the petroleum industry.

“There is great potential in Iran’s petroleum industry for international cooperation with friendly and neighboring nations. In the future, Iran and Kazakhstan can cooperate in the domain of RIPI technologies,” he said.

Iran Seeks to Sweeten Oil/Gas Deal Terms 

The Iranian Ministry of Petroleum has adopted a new plan to sweeten terms of oil and gas contracts. Potential contractors can now file demand for exploration and production (E&P) license to develop oil and gas fields. Until recently, such licenses were granted exclusively to National Iranian Oil Company (NIOC), but now qualified E&P companies would be granted license. The advantage with this new policy is that the procedure is reduced and companies receiving such licenses might no longer need to sign any contract. Iran’s deputy minister of petroleum for supervision on hydrocarbon resources, Sajjad Khalili, tells Iran Petroleum E&P license would make the upstream oil sector attractive to potential investors.

Here is the full text of the interview Khalili gave to Iran Petroleum:

Negar Sadeghi

The Ministry of Petroleum has decided to grant E&P license, so far exclusively granted to NIOC, to E&P companies too. What’s the logic of this policy?

We intend to increase the production rate and recovery factor of oil and gas fields and benefit from hydrocarbon potential through improving business in the upstream petroleum industry So far, negotiations, signing of contract and decision-making about the development of oil and gas fields has been in the hands of NIOC. Due to the complications in the awarding of contracts for oil and gas field development and the time-consuming process currently in effect, the Ministry of Petroleum has been authorized by law to decide about exploration, development and production of hydrocarbon resources and outsource its activities outside of the contractual framework by granting license. NIOC’s awarding of fields to other companies is a time-consuming and complicated procedure. For each oil and gas field to be awarded, 14 steps have to be exhausted since the beginning of negotiation sup to effecting the contract ,which would take three to five years. The point is that many factors may change in the field in the process, leading some companies to give up development of fields or fail to work under previous terms and conditions. That is while normally a field may be developed during the five-year period to let production start.

In Iran’s petroleum industry, there are other methods for awarding fields to companies, the most common of which are, buyback, IPC and EPC among others. Why have you decided to opt for E&P license?

We intend to facilitate the process of awarding oil and gas fields for development in Iran. For this purpose, over the past two years, we have studied models of development of oil and gas fields across the globe, which bear the most resemblance to the model of development of oil and gas fields in Iran. We concluded that we can follow the model of countries where recovery from oil and gas is considered as national wealth, like in Iran, and we decided to apply their model for outsourcing oil and gas projects. We intend to apply the E&P license method in parallel with buyback, IPC and other types of contracts for developing oil and gas fields.

What’s the advantage of E&P licensing over other methods of awarding fields to oil and gas contractors?

License is a sovereign instrument for authorizing corporate activity in the upstream sector. Companies granted such license would be authorized to operate in the upstream oil and gas sector. The advantage over signing contracts is that after license is issued, the number of steps for obtaining permit and winning ratification would be slashed from 14 to 5, which would subsequently reduce the length of the 3 to 5-year process to one-third. We’ve in fact diversified models of awarding fields. When IPC was developed, buyback was not sidelined. Now, E&P license does not mean other contract methods would be set aside.

Which body endorse the competence of companies bidding for E&P license?

According to law, the Ministry of Petroleum is tasked with examining and endorsing companies qualified to operate

in the upstream and downstream oil sectors. The ministry has already cleared 19 Iranian E&P firms for upstream oil contracts. The Office of Deputy Minister of Petroleum for Supervision on Hydrocarbon Resources would be responsible for evaluating and endorsing companies applying for license.

Can foreign E&P companies also demand such licenses?

Due to sanctions and restrictions for foreign companies the Ministry of Petroleum will initially grant license to local companies. If foreign firms apply they may also receive E&P license.

How can this method be helpful in attracting investment, transferring technology and project management, which constitute the main challenges to oil projects?

Oil and gas production is an economic activity. If an economic activity is attractive, investment will definitely happen. The Ministry of Petroleum and the Office of Deputy Minister of Petroleum for Supervision on Hydrocarbon Resources are required to sweeten terms of contracts to investors. We enjoy a special status in the world in terms of hydrocarbon reserves (158 billion barrels of crude oil and 34 tcm of natural gas in place); nonetheless, we have not been successful enough in attracting investment and technology and project management. To overcome this challenge, we decided to add E&P license issuance to other methods of awarding contracts. We believe that investors would step in if modalities of contracts are simple and attractive enough. I should note that by issuing E&P license, we are transparent enough to regulatory bodies to be assured that all activities comply with law and negotiations and text of licenses are not confidential. One fault with current deals is that except for the framework of the deal, the entire provisions are negotiable, which means that the text of the agreement and all appendices are decided after negotiations, which would automatically lengthen the process of awarding of fields. But that is not so with E&P licensing. The text has been prepared and only some segments proposed by the applicant and confirmed by the Office are rewritten.

Aren’t any talks held about the provisions of the license?

The provisions are not negotiable and they have already been decided based on peremptory norms. But for various oil and gas fields, some clauses may change and the contractor’s share varies depending on the specifications of the field.

What would be NIOC’s role then?

Currently NIOC represents the Ministry of Petroleum in contracts, but based on its new Articles of Association, NIOC is a commercial and E&P company like others. It has now carried out E&P activities like others. The regulatory agency in the issuance of permits is again the Office of Deputy Minister of Petroleum for Supervision on Hydrocarbon Resources. NIOC can obtain permit from us for developing oil and gas fields. In fact, we intend to prepare the ground for the more active presence of other companies in Iran’s petroleum industry. Therefore, when we sign a contract with contractors, we will no longer need to issue a license and when we grant a license to a contractor, no agreement would be needed to be signed. In order to succeed in implementing oil and gas projects, we believe we should make the business environment competitive. Only within the framework of competitiveness, can we witness reduced costs, upgraded quality, improved services, customer satisfaction and innovation. 

When will the Ministry of Petroleum start issuing license?

Issuing a license is in the hands of the Ministry of Petroleum. But we need green light from the Council of Ministers, after which we would be able to issue licenses. We hope to issue the first E&P license this year.

How optimistic are you about this method to win over contractors?

We are at the beginning of the road and we received opinions of some E&P companies in this regard. I should say that the Ministry of Petroleum, holding sovereignty over oil resources, should shun monopoly and instead promote competition. We have 70 oil and gas fields to be developed. We have abundant unconventional resources which have been explored, but we lack technology to develop them. They all need technology behind NIOC’s for development and production. The government lacks sufficient investment for this purpose. Our estimates show that we would need $140 billion in investment to reach 6.5 mb/d production. At current condition this sum may not be provided by the government and NIOC. Issuing a license would centralize affairs within the ministry and will help improve the business environment and competition, and make the upstream sector attractive to Iranian and foreign investors because the length of the issuance of license will be much shorter. Then, the license holder can carry out its E&P activities with peace of mind and without facing any government barriers. We believe that issuance of a license would improve decision making processes and bring good governance in the upstream oil industry.

Do you think that Iranian oil and gas fields are still attractive to investors?

Despite the high rate of return on investment in E&P projects in Iran, due to sanctions and bureaucracy, the number of foreign companies willing to develop oil or gas fields in Iran is not high. However, owing to some initiatives with regard to energy diplomacy and removal of barriers, companies will have tighter competition and more companies will volunteer to develop oil and gas fields in Iran.

$20bn Investment Up for Grabs

The head of corporate planning of National Iranian Gas Company (NIGC), Hossein-Ali Mohammad-Hosseini, has said over $20 billion investment would be offered to the private sector.

Iran’s gas industry, he said, would need about $40 billion investment by the end of the 7th National Development Plan. “The figure envisaged for the private sector is $20 billion,” he added.

He said opportunities for investment involved gas transmission lines, for which investors can apply in the current calendar year.

“One of the most important projects is Iran Gas Trunkline-11 (IGAT-11), 1,500km long, which would come online with an investment of $3 billion,” said Mohammad-Hosseini.

He said that NIGC was the third largest gas producer, behind the US and Russia, in 2022, adding that during the calendar year to March 2023, NIGC produced 291 bcm of gas and fed 271 bcm of sweet gas to the 40,000-km-long gas transmission network.

“Totally, 240 bcm of gas has been consumed, 73 bcm of which by power plants, 104 bcm by household sector, business and minor industries, 25 bcm  by steel, cement and major industries, 23 bcm as feedstock and fuel, and 8 bcm by the private sector,” he said.

12 New Petchem Plants to Come On-Stream

CEO of National Petrochemical Company (NPC) Morteza Shah-Mirzaei said 12 new petrochemical plants would come online in the current calendar year.

“We expect to bring on average one petrochemical project online per month in the current calendar year,” he said.

“NPC is making endeavor to end 15-25% dependence on foreign-made commodities and equipment in some projects so that the petrochemical industry would supply its commodity and equipment needs through local manufacturers,” he added.

Noting that Iranian scientists and experts enjoyed necessary potential for self-sufficiency in the petrochemical industry, he said: “The NPC plans to become self-sufficient in catalyst production by the end of the term in office of the current administration and in commodity and equipment supply in 5-6 years.”

He said petrochemical market control was a principled policy pursued by NPC, adding: “Following an MOU signed last [calendar] year between NPC and Iran Small Industries and Industrial Parks Organization (ISIPO), IRR 45 trillion in capital has been provided, which we intend to increase it.”

Refinery-Integrated Petchem Plant Due in 5 Years

CEO of National Iranian Oil Engineering and Construction Company (NIOEC) Farhad Ahmadi has said a refinery-integrated petrochemical plant named after Gen. Qasem Soleimani would come online in five years.

He said that the ground would be broken soon for the project which NIOEC would bein charge of building.

It would be one of the largest refinery-integrated petrochemical plants in the region, which is financed by €9 billion investment.

Ahmadi said the private sector has been offered to build refinery-integrated petrochemical plants with capacity of 2 mb/d.

“In the technical section of refining projects, over 80% has been handled domestically. The figures are 70% for commodity supply and 100% for implementation,” he said.

NIOEC, he said, is the executive arm of refining projects and can export technical and engineering services pertaining to the refining industry.

He added that NIOEC had outbid Russian, Chinese and European companies for overhaul of the El Palito refinery in Venezuela.

NIDC Operating 64 Drilling Rigs

A deputy head of National Iranian Drilling Company (NIDC) has said that the company is operating 64 onshore and offshore drilling rigs.

“Renovating 9 more rigs and supplying new ones are among NIDC’s priorities, which is seriously pursued,” Mehran Makvandi said.

“In light of emphasis laid by the Minister of Petroleum and CEO of National Iranian Oil Company (NIOC) on development of fields and maximum use of local capacities and potential in line with petroleum industry objectives, NIDC concentrated its strategic plans on offering integrated specialized and technical services in drilling,” he said.

Referring to the arrangement of NIDC rigs, he said: “Currently 37 light and heavy onshore rigs are being used in the projects operated by National Iranian South Oil Company (NISOC).”

“Furthermore, seven drilling rigs are active in the development of 28 reservoirs run by NISOC, seven rigs in development of West Karoun fields (10 wells in the South Azadegan oil field), West Paydar, Sepehr and Jofair with Petroleum and Engineering Development Company (PEDEC) being the client, as well as six others in the projects operated by Iranian Central Oil Fields Company (ICOFC),” he added.

Iran, Japan Cooperating in Gas Gathering

Soleiman Qasemian, general directorfor Asia, Africa and Oceania Affairs at Office of Deputy Minister of Petroleum for International Affairs and Trading, has said Iran and Japan were developing training cooperation in flare gas gathering.

“There is good potential in this domain in the country. Japanese companies have also good experience and we have held expert meetings,” he said at a seminar on capacity-building for GHG emission reduction, where Japan’s ambassador to Tehran was in attendance.

He said Iran was facing restrictions due to sanctions targeting its petroleum industry, adding that ground was paved for Iran-Japan cooperation during a visit to Japan by Iran’s minister of petroleum.

“Based on agreements reached between the two countries, the first forum was held last year so that Iran would benefit from Japan’s experience and Iranian and Japanese oil companies would exchange views on limiting GHG emissions,” he said.

Floating Condensate Stocks Down to Zero

Minister of Petroleum Javad Owji said Iran had no gas condensate stocks on water, adding the country had sold all the 87 million barrels of condensate.

He also told a group of Iranian ambassadors and heads of diplomatic missions that Iran had managed to increase crude oil and condensate exports and set good records owing to energy diplomacy success.

Referring to the capacity of domestic manufacturers in the petroleum industry, the minister said: “Today, we are almost self-sufficient in this sector as we supply 70-80% of our petroleum industry equipment. Moreover, all rotary machinery in the petroleum industry is manufactured by local producers.”

Owji said that 550 knowledge-based companies were involved in the oil and gas industry “to help the Ministry of Petroleum in various domains including gas imbalance and energy efficiency.”

The minister said terms and conditions of oil contracts had been sweetened, adding: “These contracts are devised so as to be attractive to investors. I’m sure no other project is sweeter to investors than investment in the petroleum industry.”

“Good agreements have been signed in the gas sector and we have seen good developments in gas swap and sales. We have also achieved big success in the petrochemical sector. We have earned $14 billion in revenue from petrochemical exports. We’re also producing 67 catalysts and we are now exporting some catalysts,” said Owji.

Noting that good agreements had been signed in gas transit, the minister said: “Iran is ready to cooperate with other countries in refinery-integrated petrochemical plants, as well as overseas refineries.”

The minister also said that Iran was offering good incentives to potential investors in the country’s LNG industry.

NIGC head: Iraq pays all gas debt to Iran; talks with Türkiye, Turkmenistan underway

The National Iranian Gas Company (NIGC) managing director here on Sunday said Iraq has paid its gas debt to Iran.

Majid Chegeni, who made the announcement in his talks with reporters on the sidelines of a conference on retrofitting natural gas production, transmission, and distribution systems and grid, added Iraq’s Ministry of Electricity has cleared all gas debt.

On June 10, Iran-Iraq Joint Chamber of Commerce Chairman Yahya Al-e Es’haq said $2.7 billion of Iran's assets frozen in Iraq due to U.S. sanctions on Iran were released.

Iraqi Minister of Electricity Ziyad Ali Fadel has also said Baghdad has paid all its gas debt to Tehran.

Gas talks with Türkiye, Turkmenistan

Chegeni said Iran is holding gas negotiations with Türkiye and Turkmenistan.

The deputy oil minister added Türkiye has called for extending its contract on importing gas from Iran and the two sides’ talks are underway.

Touching upon importing gas from Turkmenistan, the NIGC CEO said Tehran and Ashgabat are holding talks.

Minister remarks

Last month, Iran’s Oil Minister Javad Owji said a gas contract would be signed with Turkmenistan soon and imports would begin.

OPEC+ to Extend Adjustments in Oil Output Into 2024

The influential Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, made no changes to its planned oil production adjustments for this year, as coalition chair Saudi Arabia announced further voluntary declines.

OPEC+ also announced in a statement that it will limit combined oil production to 40.463 mb/d over January-December 2024.

Previously, the alliance agreed to a 2 mb/d decline in October. Some OPEC+ members also announced some voluntary drops of just over 1.6 mb/d in April. Russia’s Deputy Prime Minister Alexander Novak said all voluntary adjustments, which were initially set to expire after 2023, will now be extended until the end of 2024, in comments reported by Reuters.

Asked whether Russia, hit by Western sanctions, will carry out its pledge to cut output, UAE oil minister Suhail al-Mazrouei on Sunday acknowledged there were discrepancies between figures supplied by Moscow and the independent Russian production estimates of analysts and trade publications.

“Some of the things that we have seen from Russia on a technical basis just ... [don’t] add up from some of the independent sources, and we will be reaching out to those independent sources,” he said during a press briefing after the OPEC+ meeting.

ICOFC to Lift 10 mcm/d Extra Gas from3 Fields

CEO of Iranian Central Oil Fields Company (ICOFC) Mehdi Heydari said 10 mcm/d of gas was planned to be extracted from three fields next winter.

He said the fields in question were Dey, Aghar, and Tous, adding that another 10 mcm/d was planned to be recovered from the Khartang field next calendar year.

Noting that ICOFC was supplying one-third of national gas output, Heydari said: “The bulk of ICOFC’s oil production is done in western provinces in the Khesht, Sarvestan and Saadatabad fields.”

He said some of the projects envisaged to come online in the current calendar year included development of the Danan field, pressure compression at Varavi and Homa in Fars Province and the Dehloran field in Ilam, as well as early production from Dey, Aghar and Tous.

He said National Iranian Oil Company (NIOC) had developed a number of packages, including 15 gas packages which would require $4 billion in investment to add more than 120 mcm/d of gas to national output over five years. He said this amount of gas equaled production from five phases of the giant South Pars gas field.

Heydari said the 15 packages included Tous in Khorasan Province, Baba Qir in Ilam Province and Bistoun in Kermanshah, Sarkhoun, Dey, Aghar, Eram, Pazan, Khartang, Gordan and Shanol in Fars Province and Maar in Bushehr Province.

Gas Transmission to Hit 280 bcm This Year

CEO of Iranian Gas Transmission Company (IGTC) Gholam-Abbas Hosseini said natural gas transmission via Iran’s national network is expected to reach 280 bcm in the current Iranian calendar year.

Last calendar year, 274 bcm of gas was transmitted via pipelines to certain points which is expected to increase to 280 billion cubic meters this year, Hosseini said.

Iran’s gas transmission level rose 2.2 percent last calendar year compared with a year earlier, he said, adding, “There are 39,000 kilometers of high-pressure gas transmission pipelines, 90 gas pressure reduction stations, 61 operation yards, and 33 compressors in total.”

Referring to a 17-percent rise in gas exports in last Iranian calendar year, he noted Iran exported 20 bcm of gas last year, up from 17 bcm a year before.

Hosseini said the volume of gas transmitted through the country’s network increased by 2.2 percent in the previous year.

“Gas is also stored at Shourijeh and Sarajeh storage facilities and injected into oil wells at three points,” he added.

According to the official, the company also managed to complete 107 cases of major overhauls last year, and while conducting smart tracking on 3,000 kilometers of pipelines, 1,100 cases of minor repairs and 48,000 kilometers of leak detection were also carried out on the facilities and lines operated by the IGTC.

NIOC Ready to Hire Drilling Rigs for Long Term

CEO of National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehr said the company was ready to lease drilling rigs for as long as five years.

“If qualified companies can provide us with rigs we will be ready to hire them for five years. That would let contractors to own a rig under rent-to-own agreements,” he said.

Khojasteh-Mehr said: “Since two decades ago we have tried our best to upgrade management of oil and gas projects. Now the conditions have improved although we are still far from the ideal conditions. Contractors can play a key role so that we would extend our work to beyond borders.”

“We need to be strong enough so that an E&P company can take rigs out of the country and return. So contractors should not remain dependent on the government. In some cases, companies are not ready to assume risks while risk could be measured and managed,” he said.

The NIOC boss said terms of agreements were not immutable, adding: “We don’t say that we should always have a single model of contracts. Terms and conditions of contracts change gradually. We have to remove weaknesses and add to our strengths. We should also shorten the timing. In some cases, it takes 800 days from the start of negotiations to the signing of contract.”

He referred to the 34 EPD/EPC packages, adding that contractors had failed to push ahead with some of these agreements.

“On the other hand, the process of termination of contracts takes years. We had to find a way to let contractors overcome challenges. Therefore, we have modified some projects,” he said.

Talks Under Way for Gas Engineering Service to Iraq

Iran, holding 33 tcm of gas reserves in place, is producing more than 1 bcm/d of natural gas. Gas distribution is carried out through 38,000 km of pipeline serving 95% of the country’s rural and urban population.

Sprawling on 24,640 square kilometers, Kermanshah Province makes up 1.5% of Iran’s total area. Kermanshah shares 371 km of border with Iraq. More than 99% of urban and rural population in Kermanshah are connected to national gas grid. Nasser Hosseini, acting heading of Kermanshah Province Gas Company, says: “The extent of gas distribution network in this province has enabled us to engage in talks with the Iraqi side with a view to exporting gas technical and engineering services to areas bordering Kermanshah Province.”

99% Urban Coverage

Kermanshah Province enjoys a highly special geographical position. It is home to many mountainous and rugged areas; however, gas distribution in the province has remained unaffected. According to the latest administrative division, Kermanshah counts 35 cities and 2,545 villages. Technically, gas supply to 2,305 villages is possible there. So far, 2,021 villages have been connected to the gas grid with gas penetration among the rural population at about 90%. The rate stands a 99.91% in cities as 33 out of 35 cities are connected to gas supply.

Last calendar year, one city and 303 industrial manufacturing units were connected to the national gas network. According to provincial gas officials, any industrial unit applying for gas would be connected in the shortest possible time. Last calendar year, 250 industrial units were planned to be connected to gas, but 303 were connected. In the current calendar year, 111 more industrial units are to join the gas network.

Kermanshah Province has 14 countries. Until March 2022, five were green, and now three more are to become green by next March.

Engineering Services to Iraq

Iran and Iraq are strategic trade and economic partners. They have broadened their ties under the 13th administration. FarzadPiltan, director-general for West Asia at Trade Promotion Organization (TPO), has said Iran’s exports to Iraq totaled $10 billion last calendar year, up 15% year-on-year.

Hamid Hosseini, head of Iranian Oil, Gas and Petrochemical Products Exporters Union (OPEX), said $4 billion worth of agreement was signed last calendar year for exporting technical and engineering services to Iraq.

Iraq is also importing Iran’s gas for power generation, with demand rising alongside temperatures.Iraq increased its gas imports from Iran to 30-40 mcm/d in April, up from 10 mcm/d earlier this year, according to Ali Ahmed, CEO of Iraq’s Ministry of Electricity’s Central Electricity Generation Company.

Gas Use Down 15%

Although 80-million-strong Iran is among the top five producers of gas in the world, energy consumption is 2.5 times the global average. Currently, 33% of gas is consumed by power plants, 26% by the housing sector and rest in the downstream industry. Gas consumption reaches 160 mcm/d at summer peak and 700 mcm/d a winter peak.

Meantime, it should be also taken into account that due to the extent of gas distribution network in Iran, consumption grows 6% year-on-year in the housing sector, 5% in the industrial sector and 4% in the power plants sector. Due to the upward trend of gas consumption, the Ministry of Petroleum is focused on reducing energy use intensity. Provincial gas companies have embarked on various plans for gas efficiency.

Kermanshah provincial gas officials say with $1 spent in gas efficiency, $10 would be gained in revenue. Last calendar year, 1,648 central heating systems were fine tuned to comply with energy efficiency requirements. Totally, 2,300 central heating systems have beenfine tuned to adapt with a budget of IRR 150 billion, resulting in 15% cut in consumption in some buildings.

Kermanshah provincial gas officials are looking for modern ways of gas efficiency in the industrial sector. To that end, meeting have been held with the University of Razi and the Kermanshah University of Technology, demanding that they conduct research projects on energy efficiency.Meantime, cement and petrochemical manufacturing companies have been asked to optimize their energy-intensive equipment. Cement factories in Kermanshah are consuming 1 mcm/d of gas, which is hoped to be cut .by 15%

OwjiAddresses Oil Exhibition:

Iran Petroleum Industry Open to Investment

                     The 27th International Oil, Gas, Refining and Petrochemical Exhibition of Tehran was held under the motto of technological production and efficient use. The annual show drew in 1,500 Iranian companies, as well as 200 foreign companies from 13 countries. During the show, which is considered to be Iran’s largest industrial event and the Middle East’s largest oil show, petroleum industry actors, ranging from contractors to investors, manufacturers, knowledge-based companies, and universities, upstream and downstream operators showcased their latest achievements and products. The show provided a venue for companies to exchange views and consider cooperation while noting their needs and challenges.

Subsidiaries of Iran’s Ministry of Petroleum signed more than 200 agreements and MOUs with local and foreign companies. It was one of the highlights of this year’s show. An outstanding feature of the exhibition was its focus on technological production and domestic manufacturing in energy efficiency.

Addressing the inauguration of the annual show, Minister of Petroleum Javad Owji said this year’s exhibition facilitated interaction between all petroleum industry actors. “The Tehran oil show is one of the largest shows in the Middle East and the world, which is becoming more prosperous year by year,” he added.

He said the presence of 200 foreign companies in the event indicated upgraded diplomacy in the 13th administration. “Foreign companies from Russia, Belarus, China, Germany, Austria, Italy, France, Spain, India, the United Arab Emirates, Oman and Turkey were in attendance,” he said.

The minister pointed to the presence of Russian companies and Russian Deputy Prime Minister Alexander Novak, adding: “We have extensive cooperation with Russian companies and the Russian delegation’s presence is indicative of the depth of cooperation between the two countries in the oil and gas sector.”

He said Iran, with recoverable crude oil reserves of 154 billion barrels and 33 tcm of natural gas, was the world’s largest hydrocarbon reserves holder.

Development despite Sanctions

Owji said favorable records had been achieved in the production and export of crude oil, gas condensate, refined petroleum and petrochemical products. He added: “We have made arrangements so that unjust sanctions could not deprive us of maximum development of oil and gas industry.”

“Over the past one year, incomplete oil projects worth $12 billion have come online, all of which directly impacting the production capacity,” he said.

The minister said commissioning the gas refinery of Phase 14 of the South Pars gas field with 50 mcm/d capacity, 2nd phase of the Abadan oil refinery with 210 tb/d capacity, inauguration of the 1st phase of the Persian Gulf Hoveyzeh gas refinery to gather West Karoun flare gas with 250 mcf/d capacity and commissioning several petrochemical plants constituted the most important of these projects.

He touched on the issue of self-sufficiency, saying: “We’re self-sufficient in almost all sectors of the petroleum industry. In parallel with this output hike, we have increased exports. Crude oil and gas condensate exports have doubled since the 13th administration took office despite unjust sanctions. As Central Bank figures show, the oil and gas sector has had the highest economic growth rate.”

$15b Projects

Owji said oil and gas projects estimated to cost around $15 billion were expected to come online in the current calendar year (started on 21 March 2023).

“Among the highly strategic and important projects are development of oil and gas fields particularly SP11, Phase 1 of the South Azadegan oil field, more than 12 petrochemical projects like propylene and olefin plants and oil refining projects like quality upgrade at the Isfahan refinery, commissioning the South Adish gas condensate refinery, petroleum product upgrade at the Shiraz refinery and gas supply to cities and industries,” the minister said.

He added that local companies had over 80% share in equipment and commodity supply for the projects.

$160bn Investment

Owji highlighted opportunities for investment in the oil and gas sector, saying: “We’ve created $160 billion investment opportunity in the upstream and downstream oil sector and we’re ready to engage local and foreign investors in these projects.”

He said that investing in oil and gas field development and completion of its value chain would directly contribute to energy supply stability and improve the rate of return on investment.

$5bn Contracts and $40bn MOUs

Owji said the participation of foreign companies in the oil show was a good achievement. He said the Ministry of Petroleum of the 13th administration had struck $5 billion worth of contracts and $40 billion worth of MOUs with foreign companies for developing oil and gas fields.

During this year’s oil show, he said, more than 200 agreements and MOUs were signed between local and foreign companies. He said that Iran’s upstream and downstream oil sectors needed more than $160 billion in investment for development.

Owji said prioritized projects, particularly in developing joint, offshore and onshore oil and gas fields, building compressor stations, laying pipeline and constructing refinery-integrated petrochemical plants, were on the agenda.

He said that $12 billion incomplete projects in the petroleum industry had been completed last calendar year (Ended on 20 March 2023), leading to a 30 mcm/d hike in national gas output.

“The country’s gas processing volume increased 50 mcm/d. Furthermore, with the inauguration of the second phase of the Abadan refinery, 210 tb/d was added to national refining capacity,” said the minister.

For the current calendar year, he said, projects worth $15 billion were expected to become operational, mainly for oil and gas output enhancement. One of them, he said, is the SP11 project.

Owji said the presence of qualified foreign companies had laid bare the capabilities of local companies and resulted in the export of technical and engineering services. He said the Ministry of Petroleum was firmly determined to build refineries overseas, adding: “One reason explaining Iran’s increased oil exports was shifting to overseas refineries.”

300 tb/d Refineries

Owji said Iran had begun building petrorefineries, adding that a facility was named after Gen. QasemSoleimani.

“We are seriously following up on the completion of two refineries with processing capacity of 300 tb/d. We are also following up on the construction of refineries that had begun earlier in order to move towards increasing more refined products. That would also help boost energy security in the country and create value-added. Moreover, refined petroleum products are not subject to sanctions due to global market demand,” he added.

Noting that investment would be welcomed in Iran’s petroleum industry, the minister said: “We signed good agreements with sweet terms and this exhibition provided a good chance for the Ministry of Petroleum to inform local and foreign companies of its needs and plans.”

Investment Welcomed

CEO of National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehr said the ground was paved for Iranian and foreign investors. “We expressed our interest in the presence of international companies and the strong presence of international companies at Tehran’s oil exhibition bears proof.”

“The Islamic Republic and the petroleum industry of Iran have acquired specific technologies for various sectors, which foreign companies are willing to use,” he said.

The NIOC chief referred to foreign exhibitors visiting Iranian manufacturers at the oil exhibition, adding: “It indicates bilateral interaction which is visible in all sectors of export, operation, manufacturing and installation. These foreign companies believe in the capabilities of Iranian companies.”

He said Iran would need to absorb investment for $160 billion oil and gas projects over eight years, adding that Iranian and foreign companies would benefit from this opportunity for investment.

Stressing the significance of local companies’ engagement, he said: “We at NIOC are trying to increase the share of Iranian companies and maximize the share of the private sector in these projects.”

Khojasteh-Mehr also touched on NIOC’s plan to implement $50 billion worth of projects, saying they were part of Iran’s 7th National Economic Development Plan.

He said boosting pressure at the South Pars gas field was a prioritized project, adding: “Over the coming 10 years, it would be the largest upstream project by NIOC. It is estimated to cost $15-20 billion. Its implementation would be like renewed production from South Pars. An agreement has been signed with an Iranian company for design and feasibility studies. It would be the toughest project for NIOC.”

Other projects, he said, included recovery from the Kish and North Pars gas fields for $15 billion, gas recovery from National Iranian South Oil Company (NISOC) oil fields, integrated development of the North and South Azadegan fields for $7 billion, development of the Yadavaran oil field, and flare gas gathering.

Khojasteh-Mehr also touched on the newly exploration blocks, saying: “Sixteen exploration blocks have been determined. Based on existing evidences, these blocks would need about $1.2 billion. We prefer E&D contracts for Iranian and foreign companies to handle the job.”

He also said that the Bamdad block had been explored in Hormuzgan Province, adding: “Through prospecting and 2D seismic testing associated with geophysical work, the NIOC Directorate of Exploration found a gas structure which covers four gas fields.”

Khojasteh-Mehr also said foreign companies faced no restrictions for investment in Iran. “The investment mix is ready and we review proposals. We have also had talks with some Persian Gulf littoral states for investment and we will consider the easiest option for attracting investment based on economic considerations,” he said.

He said a strategic issue with NIOC was to buy stocks at foreign refineries, adding: “We’re ready for this issue and it has been decided at the Ministry of Petroleum because it is in line with our plan to expand our oil, condensate and petroleum products sales chain. NIOC is legally authorized to buy stocks at overseas refineries or operate them.”

NIGC Ready to Operate Iraq Projects

Majid Chegeni, CEO of National Iranian Gas Company (NIGC), said in a meeting with Iraqi deputy oil MinisterLaith Al-Shaherthat Iran was ready to operate and complete gas projects in Iraq.

“We recently traveled with Minister Owji to Iraq and we held constructive talks on extending the contract for Iran’s gas exports to this country,” he said.

He said Iran was exporting 35 mcm/d of gas to Iraq, adding: “Iran enjoys excellent technical and engineering potential, and the equipment for many projects is manufactured domestically.”

Foreign Investors Lured Into Iran Oil Industry

Mahnaz Mohammad-Qoli

The Iranian petroleum industry is offering $160 billion opportunity for investment by contractors, investors, manufacturers, knowledge-based companies, universities and operators in both upstream and downstream sectors. That was in such context that local and foreign companies attended Tehran’s 27th Oil Show. Iran’s Minister of Petroleum JavadOwji said the presence of more than 100 foreign companies from 13 countries including Russia, Belarus, China, Italy, France, Germany, India, Oman and Turkey was proof of the strong presence of petroleum industry actors. Companies from Russia, the Republic of Bashkortostan. Belarus and China signed MOUs and contracts with Iranian companies.

Attractive to Russians

A total of 28 Russian companies attended in an exclusive pavilion. The Republic of Bashkortostan and Belarus took part independently in the event.

The director of Russia’s pavilion said the Russian companies present in the Tehran exhibition were mainly involved in oil, gas and chemical production, as well as pipe and turbocompressor manufacturing.

“Iran’s petroleum industry is attractive to Russian companies. We participated in this exhibition to assess Iran’s petroleum industry market in terms of commodity and equipment,” he said.

Referring to raw material supply from Europe, he said: “Due to sanctions, we are looking for new sources to supply our raw material needs. Iran represents a good market for achieving this objective.”

He gave a positive assessment of cooperation between Iranian and Russian companies, expressing hope for Russian companies to have constructive cooperation with Iran in the petroleum sector.

Bilateral Cooperation

Belarus was represented by a consortium of state-run companies that were experiencing their first attendance at the Tehran oil show. Zhukovskaya Tatiana, head of Division for Economic Cooperation and Trade with Non-Eurasia affiliated with the Belarusian State Concern for Oil and Chemistry, said: “Six major companies along with their subsidiaries in various sectors of the petroleum industry have taken part in this exhibition.”

Noting that he held a long-term view of cooperation with Iran’s petroleum industry, he said: “We need bilateral cooperation with Iranian oil companies in order to export equipment and spare parts to Iran and import raw materials in return.”

He said Belarus’s state-run companies were under international sanctions since 2005, adding: “Belarusian officials have held several rounds of talks with Iranian officials. During their March meeting, emphasis was laid upon increased economic exchanges, and preparation of ground for the presence of companies.”

He said Belarusian companies were involved in chemical production and manufacturing equipment.

Transactions with Bashkortostan

The representative of Bashkortostan’s Ministry of Foreign Economic Relations said a delegation led by the country’s deputy prime minister attended the Tehran oil show. Nine companies from the Republic of Bashkortostan were in attendance.

“This is the second time the Republic of Bashkortostan is attending the Tehran Oil Show. We intend to upgrade our trade transactions with Iran. To that effect, the petroleum industry offers good potential for expanding cooperation between companies in Iran and Bashkortostan,” he said, adding that Iran-Bashkortostan financial transactions

had increased 20 times year-on-year.

“Iran is ranked the 13th among 120 nations in terms of commercial ties with Bashkortostan,” he said, adding that MOUs had been signed with knowledge-based and other companies. “Following the exhibition, joint cooperation will increase between the companies of both sides,” he said.

“The Republic of Bashkortostan is a leading industrial and agriculture region in the Russian Federation and also a major oil-rich zone, withthe chemical industry and machine manufacturing center. It is the largest oil refiner and is the top supplier of light petroleum products in Russia. It is the first producer of diesel and the second producer of gasoline in Russia,” he added.

“Among other areas in Russia, Bashkortostan enjoys a high position in chemicals’ production. Bashkortostan is the only supplier of terephthalic acid and phenolic antioxidants in Russia, and is one of the exporters of monocarboxylic acids and carbonates,” he said.

Noting that Bashkortostan is one of the most active republics of Russia in foreign trading, he said: “Our major trade partners are China, Kazakhstan, Belarus, India, Germany, Finland, the Netherlands, Latvia and Turkey.”

High Potential

A German investor highlighted Iran’s catalyst production capacity, saying: “The Iranian minister of petroleum has said the country would become self-sufficient in catalyst production in coming years. I believe that with its capacity-building in recent years, Iran would be able to become self-reliant in catalyst production.”

“Iranian petroleum engineers have a good technical understanding of this industry. Therefore, we believe that in light of Iran’s rich hydrocarbon reserves, it offers good opportunities for investment and there is ground for our presence,” he said.

“I’ve studied your country and I realized that Iran is safe for investment, but any prospective investor should get familiar with rules and regulations,” he added.

Iran a Big Market

The head of export for a Russian company said his company has been represented in Iran since 2012. “We are sticking with the strategy of presence in Iran because Iran is a key market for us,” he said.

Noting his company’s presence in the annual oil and gas shows held in Iran, he said: “Given Iran’s potentialities, it is a big market and we are happy to be present in this market.”

Pointing to the competitive atmosphere available to international companies in Iran, he said: “We try our best to be strongly present in this competitive market.”

He said that his company mainly manufactures pumps and centrifugal compressors.

He added that his company was cooperating with the Salman Farsi petrochemical plant and the Persian Gulf Bid-Boland gas refinery.

Int’l Pressure No Big Deal

A top director of a Chinese producer of catalyst said: “Over the past 20 years we have been present in various rounds of the Tehran Oil Show. We are well familiar with Iran’s atmosphere. Given good relations between Iran and China, we understand this issue and we benefit from it.”

He said his company had transferred knowledge to some Iranian companies for catalyst production. “There are good Iranian petroleum industry specialists, but they cannot have access to technologies due to sanctions. Therefore, we are taking benefit from this opportunity to transfer necessary technologies to Iran for catalyst production,” he added.

“Ever since we started work with the Arak and Abadan petrochemical plants in 2010, we have been under tough international pressure, but we didn’t worry at all and pushed ahead with our plans because we don’t care for these pressures,” he said.

“The important thing is that we are involved in transferring technology to Iran’s petrochemical and refining industry. I would like to note that technology transfer is time-intensive. To that effect, we have established a joint company with an Iranian company in order to manufacture catalyst in Iran, using Chinese technology,” he added.

He said his company intended to go beyond the Iranian market to find a toehold in the Persian Gulf littoral states, particularly Oman and Saudi Arabia. He added: “We are cooperating with Russian, Indonesian and Malaysian companies.”

“We are competing with US companies and we are not worried at all because we are familiar with international law. Our focus is on Southeast Asian markets and we have a very good market in Muslim nations like Indonesia and Malaysia. We have a strong legal team and we don’t worry about pressures,” he said.

Valuable Industry

The sales manager of a Chinese company at the oil show said there was great potential for cooperation between Iran and China in the petroleum industry. “Iran’s oil and petrochemical sector is a good platform for commercial and trade cooperation with China because Iran’s exports to China in this sector are high,” he said.

“Iranian companies have made good progress in the petroleum industry in terms of equipment and parts supply. Therefore, competition has taken shape between Iranian and Chinese companies in this field and more Chinese companies are likely to visit Iran in the future to finance oil projects,” he added.

Domestic Manufacturing Showcased at Tehran Oil Show

During the 27th Tehran Oil and Gas Show, attended by more than 1,500 local and 200 foreign companies, one key issue raised was supporting domestic manufacturing based on technological development and energy efficiency. MOUs and contracts were signed between various companies in this regard. According to Petroleum Ministry officials, more than 170 MOUs and contracts were signed between companies, which indicates the significance of implementation of petroleum industry projects in the country. 

Minister of Petroleum Javad Owji said for the first time in the history of Iran’s petroleum industry, equipment manufacturers have exceeded equipment suppliers in numbers in the AVL shortlisted companies. “That is a promising issue for Iran’s petroleum industry,” he said.

He said Iranian manufacturers were supplying more than 80% of equipment and parts needed in the petroleum industry. He added that Iranian companies are gradually stepping into their export market.

Highlighting the strong presence of Iranian manufacturing companies at the 27th Oil and Gas Show, he said: “If you had attended the exhibition 15 years ago, you could have noticed that most Iranian exhibitors were suppliers and intermediaries, but today most of them are manufacturers.”

Knowledge-Based Consortiums

RuhollahDehqaniFirouzabadi, vice-president for science, technology and knowledge-based economy, said: “Our model of cooperation in supplying bottleneck items is that knowledge-based companies teaming up together to develop the required product would be guaranteed 10-15 years of service purchase by National Iranian Drilling Company (NIDC). Therefore, a guaranteed market would be created for standard knowledge-based service.” 

Speaking on the sidelines of the ceremony for signing MOUs and agreements between the Office of Vice President for Science, Technology and Knowledge-Based Economy and oil companies, he said: “A good trend has begun with the petroleum industry since last year, leading to $3 billion worth of agreements for cooperation for four years.”

He said the first agreement, valued at IRR 10,000 billion, involves supply of rotary steerable system (RSS), which is a bottleneck item.

“Besides, $17 million of agreements were signed for first-time manufacturing,” he said. “In market development for knowledge-based companies, $500 million worth of agreements were signed for oil drilling, exploration, bottleneck item and knowledge-based services in the petroleum industry. These agreements would be written into contracts in coming months to be implemented.”

He expressed hope for the creation of IRR 200,000-300,000 billion market for knowledge-based companies in the current calendar year.

Homegrown Turbocompressors

Mohsen Khojasteh-Mehr, CEO of National Iranian Oil Company (NIOC), was present at the ceremony during which an agreement was signed between NIOC and Oil Turbo Compressor Construction Co. (OTCC) for manufacturing 14 15MW turbocompressors.

He said that €683 million would be allocated for local development of turbocompressors and oil turbines. He added: “Rotary equipment is used for carrying oil and gas for injection.”

Noting that “rotary equipment including turbocompressors currently used in oil and gas facilities is decrepit”, he said: “Most turbocompressors manufacturers are foreign companies that refuse to do any repair work. This year, NIOC decided to assign manufacturing of 14 turbocompressors to OTCC within the framework of first-time manufacturing of rotary equipment.”

He said the project was valued at €183 million, adding: “Of course, 60 new turbines

and compressors, worth €500 million, will be assigned to Iranian companies.”

Khojasteh-Mehr said: “When we talk about Iranian petroleum industry we mean that E&P companies should do it, without which, sanctions would be tougher.”

“Currently,we have strong potential and we hope that E&P companies would be recognized as the strategic foundation of the petroleum industry,” he said.

The NIOC chief also said that under the 7th National Development Plan, oil and gas projects valued at $160 billion were envisaged, mainly pertaining to undeveloped fields.

Iranian Gas Compressors

A key point during the Tehran oil show was the signing of contract by Iranian companies to study basic design of gas compressors for the South Pars gas field.

Mohammad Hossein Motejalli, CEO of Pars Oil and Gas Company (POGC), said: “This agreement pertains to the basic design of offshore compressor platforms, but Iranian companies are studying how to construct gas compressors both onshore and offshore.”

Referring to the planned compression for the purpose of output stability at South Pars, he said: “The goal behind implementation of this project is to stabilize the pressure at onshore refineries of South Pars and Kangan.”

NIGC Supporting Manufacturers

Hamid Najafi, a commercial director of National Iranian Gas Company (NIGC), said the company supports local manufacturers of the gas industry, adding: “Given the strategic role of self-sufficiency in commodity manufacturing to meet production, transmission, and distribution needs and to compensate for gas imbalance, creating jobs, saving hard currency, energy efficiency, and carbon emission limiting, the gas industry has made good progress.”

He said it was necessary to promote the culture of using locally-manufactured equipment, adding: “Developing the intra- and extra-organizational culture of supporting manufacturing on the two levels of knowledge-based culture and participatory culture, upgrading public awareness and adapting to changes caused by the supply of locally manufactured commodities are among these measures.”

Referring to specialized supporting measures in favor of domestic manufacturing, Najafi said: “Providing market research and legal services, updating instructions pertaining to commodity supply chain, steering specialized systems of logistics and commodity operations, coding and classification of surplus commodities are among them.”

“All these affairs are done with a view to creating effective communications between domestic manufacturers and end users of commodity and equipment at NIGC through public awareness in addition to reducing commercial technical risks, benefiting from the potential of committed colleagues and upgrading domestic manufacturing,” he said.

80% Domestic Manufacturing

Ehsan Saqafi, head of Society of Iranian Petroleum Industry Equipment Manufacturers (SIPIEM), referred to the capacity of domestic manufactures of oil equipment in supplying national needs, saying: “About 80% of equipment needed by the oil, gas, refining and petrochemical industry is designed and supplied by local manufacturers. Good potential has been developed in the country over recent years and it is possible now to enhance capacity.”

He said in case necessary support is provided, up to 90% of petroleum industry equipment needs would be supplied over four years.

“This [calendar] year (started on 21 March 2023), the focus of domestic manufacturers is upon exporting Iranian equipment because Iran’s petroleum industry is international and it is possible to export industrial parts to other countries,” said Saqafi.

He said that the Ministry of Petroleum has had good interaction with domestic manufacturers.

Iran’s Petroleum Ministry has over recent decades assumed the risk of accepting Iranian-made commodities based on the policy of local manufacturing and supporting domestic manufacturers against the backdrop of sanctions. Backed by the Ministry of Petroleum, local manufacturers have cut short the path of competition with international companies. Thousands of Iranian companies are bidding for petroleum industry commodity orders. Iran’sPetroleum Ministry went even further by assigning manufacturing of upstream oil sector equipment, which is mainly high-tech, to local manufacturers. Regular support for local companies by providing technology and advice and guaranteeing purchase of their products has boosted their self-reliance and helped them compete in global markets.

Venezuela, Trinidad to Discuss Dragon Gas Project

Venezuela and Trinidad and Tobago will continue negotiations on jointly developing a dormant offshore natural gas field, with a meeting scheduled for mid-June in Caracas, according to three sources familiar with the matter.

Officials from both governments last met in March in Venezuela, where they signed confidentiality agreements required to set up a negotiation framework, following the issuance in January of two-year US license green-lighting talks for the project.

The Dragon Field, which lies along the maritime border of the two nations, holds up to 4.2 Tcf of gas.

NNPC Sets Agreements on Deepwater Oil Block

Nigeria's state-owned oil company NNPC Ltd. said on May 25 it had renewed a production sharing contract with Total, China National Offshore Oil Corp. (CNOOC) and others, a major step to resolving disputes on a deepwater oil block in the Niger Delta.

Oil Mining Lease 130 is located offshore Niger Delta at water depths of more than 1,000 meters. The block contains the producing Akpo and Egina fields and the Preowei discovery.

Ireland Rejects Barryroe Offshore Lease Application

Barryroe Offshore Energy has received a letter from Ireland’s Department of the Environment, Climate and Communications (DECC) connected to the company’s Lease Undertaking Application.

The company’s subsidiary Exola DAC operates the SEL1/11 license in the North Celtic Sea offshore County Cork, southern Ireland, containing the prospective Barryroe oil and gas field development.

In the letter, Eamon Ryan, minister for the Environment, Climate and Communications, states that he is not satisfied with the financial capability of the applicants.

ONGC Finds Oil, Gas in Western India

ONGC has made oil and gas discoveries in two blocks in the Arabian Sea offshore western India.

The MBS171HAA-1 (MBS171HAA-A)—“AMRIT”—discovery well was drilled in OALP (Open Acreage Licensing Policy) Block MB-OSHP-2017/1 in Mumbai Offshore (SW), and the MBS182HDA-1(MBS182HDA-A)—Moonga discovery—was in an OALP exploration block in Mumbai Offshore.

Evaluation continues of both sets of results.

Beach Brings More Otway Basin Gas Wells Online

Beach Energy has connected the Thylacine North 1 and 2 development wells in the Otway Basin offshore Victoria to the onshore Otway Gas Plant, boosting supplies to Australia’s East Coast gas market.

Four of the six wells drilled in last year’s campaign are now connected and have increased well deliverability to the plant.

CEO MornéEngelbrecht said, “The seven-well program was the largest in the Otway Basin’s history and delivered one new gas discovery and six development wells.”

The company is working on a solution for connecting the final two wells, as this will require either the repair or replacement of a flowline.

Green Hydrogen; Saudi-Style Brinkmanship

Shuaib Bahman

Scientific growth and progress has exposed the world more than ever to significant and surprising developments. Today, many world challenges and issues may be resolved under the aegis of technological and scientific progress. One case in point is fossil fuels particularly for consumers. They look for a low-cost, clean and environmentally-friendly alternative source to oil and gas.

In addition to consumers, some energy producers have also joined the campaign for developing renewables. One of them is Saudi Arabia. Over recent years, Riyadh has embarked on ambitious projects, one of which is green hydrogen.

Investment in Green Hydrogen

Green hydrogen refers to hydrogen produced by water electrolysis by electricity produced from renewable energy sources such as wind and solar energy to separate hydrogen molecules from oxygen molecules. Green hydrogen has many different applications and can be used in industry and transportation.For this reason, green hydrogen is considered as one of the vital components of carbon emission reduction programs. Especially since hydrogen is the most abundant element in the world and the third most abundant element on earth, and it has significant capacity to fuel vehicles, power plants, and also provide output for other renewable energies without pumping carbon dioxide and causing climate change.

Therefore, hydrogen has been described by the International Energy Agency (IEA) as a “versatile energy carrier” that can be used in various sectors such as industry and transportation. According to estimates, development of green hydrogen could help eliminate 830 million tonnes of carbon dioxide gas emitted each year due to fossil fuels.According to IEA projections, the production of hydrogen at the global level using fossil fuels and renewable energy will reach 30 million tonnes per year by 2030. Meanwhile, the world needs over 400 billion tonnes of green hydrogen every year. For this reason, many countries have tried to invest in this field in recent years.

Along with European countries such as Germany and Spain, which are leading and active in green hydrogen development, in the Middle East region, Saudi Arabia is building a green hydrogen facility in the planned city of Neom, and within the framework of its Vision 2030, it is trying to become the world's largest exporter of hydrogen.This ambitious plan indicates the serious goal setting of Saudi Arabia. At the same time, Riyadh’s initiative to produce green hydrogen indicates that Saudi Arabia is moving away from its previous plans to become an exporter of liquefied natural gas (LNG). In order to obtain necessary technology and infrastructure for green hydrogen production, Saudi Arabia has signed a $5 billion agreement with Air Products & Chemicals, a joint venture of Air Products and Saudi ACWA. That would produce 650,000 tonnes a day of green hydrogen, enough to power 20,000 buses.

Advantages

While Saudi Arabia boosted its economy in the past decades by selling oil and gas, as well as participating in construction projects and banking, it is now looking to penetrate the clean energy sector through green hydrogen. Stepping on such a path has several great advantages for Riyadh:

First, it continues to maintain Saudi Arabia’s position in the global energy markets as a leading and key player, especially since Saudi Arabia has a new competitive advantage in the green hydrogen business due to its abundance of solar and wind resources and vast intact land.

Second, green hydrogen will earn Saudi Arabia big income, which can help the country's economic growth.

Third, with such a project, Saudi Arabia turns itself into one of the leading countries in the field of environmental protection, which has positive aspects for the rulers of Riyadh in terms of global image.

Fourth, with the production of green hydrogen, Saudi Arabia enjoys a significant position to become a clean energy hub in the iron and steel industry, which can supply the needs of new industries under its Vision 2030.

Outlook

Although development of green hydrogen along with phasing out fossil fuels and development of renewable energy is one of the main goals in transition to the new age of energy, which was also emphasized at the Glasgow Climate Change Summit, doubts continue to shadow over the future of green hydrogen. While governments and major energy companies have invested heavily in the development of green hydrogen production, some have issues about its functionality and environmental impacts. Some scientists believe that lack of information on the leakage and possible damage of this fuel may cause many environmental problems because hydrogen reduces the concentration of molecules that remove greenhouse gases in the atmosphere, potentially contributing to global warming.

With such perspective that shows the need for more studies on green hydrogen, there are factors at the global level that have pushed some countries towards adopting new sources of energy. For example, the energy crisis caused by the war in Ukraine has forced European governments to look for alternative energy sources. Of course, in the meantime, green hydrogen has been more attractive because it is much more affordable than other energy sources and it is the simplest and most abundant element on earth, thereby facing no challenge of limitation or scarcity.

Accordingly, although the Saudi Arabian project to turn Neom into an important global center for the production of renewable energy and green hydrogen is very ambitious it seems that due to Riyadh's ability to secure capital and also signing contracts with companies that have the necessary technology in this field, it will be able to advance its plans. In that case, Saudi Arabia will be able to regain the position it had in supplying the world's energy by exporting oil for years, this time through exporting green hydrogen.

Turkey Economy and Energy Exploration

Shuaib Bahman

Turkey has made major energy finds over recent years thanks to exploration technology. It has discovered huge natural gas and crude oil reserves off the North Sea and the East Mediterranean. That can have a significant impact on the Turkish economy because this country, which has been known as an importer of oil and gas, can now transform its internal and external economy. Of course, in the meantime, Turkey is faced with problems and challenges with regard to extracting and exploiting its energy resources.

It was in August 2020 that Turkish President RecepTayyip Erdogan announced the discovery of the Sakarya gas field, around 170 kilometersoff Turkey's northern coasts and deep into the North Sea, with estimated reserves of 320 bcm. Two months later, another field was discovered in the same area, this time with estimated reserves of 85 bcm. That put Turkey in 11th position in the world in terms of subsea natural gas reserves with total amount of 405 bcm of known gas reserves in place. Over a period of five years, Turkey can invest $10-30 billion to extract gas from its reservoirs.

Energy Import Fallout

The discovery of oil and gas reserves by Turkey can turn this country, which was dependent on energy imports in the past decades, into a country that, in the first place, will meet its needs without having to import from other countries, and then it will have the chance to join oil and gas exporters in the world. In the past decades, Turkey imported about 99% of its natural gas and 93% of its oil needs from abroad. This amount of energy import had several major consequences for the country:

Turkey had to spend too much on oil and gas imports, which posed a challenge to thegrowing economy of Turkey. The big sums spent on energy imports could be used in others sectors of the country's economy. Therefore,the discovery of gas resources can cut from the country's $40 billon imports while creating job opportunities and businesses.
Turkish people had to always pay too much for energy, which imposed budget crunch on them. The impact of high energy prices on the ordinary life of Turkish people was significant. Therefore, new gas finds can positively impact their livelihood and fulfil their longtime dream of access to energy. It has to be kept in mind that failure to explore energy resources over recent years had disheartened the Turks.
Energy imports from other countries forced Ankara to have political reservations with regard to its energy resources. In fact, energy supply has always been a major factor in Turkey’s relations with Russia, Iran, Azerbaijan, Algeria, Nigeria, the United States, and Qatar. Undoubtedly, new energy finds would enable Ankara to no longer take seriously its reservations in political ties with other nations.
Domestic energy shortages and dependence on imports had led to Turkey’s increased dependence on goal for power generation over recent years. Now, new sources of energy can reduce coal use and help Turkey achieve its environmental objectives. 

Challenges

If alongside extracting and exploiting newly-discovered reserves, Turkey manages to become the energy hub in the region as it has wished for years, it will be positioned specially to join producer and deliver oil and gas supplied by other countries to Europe. Given Turkey’s geopolitics, that can boost its position. However, conditions are not yet smooth for energy extraction by Turkey to become a leading producer.

In fact, although gas discovery is a blessing for Turkey’s economy, numerous challenges remain the way when it comes to exploiting these new resources. One major challenge is high costs of gas extraction from some fields. For instance, Romania had discovered a field similar to Turkey’s TUNA-1 that required big investment and cutting edge technology, which rendered gas extraction uneconomical. Therefore, Turkey is likely to face similar obstacles as exploiting these resources would not be cost-effective. Under the present circumstances, Turkey’s economy lacks necessary potential for major investments.

Meantime, there are some specific challenges with regard to discoveries in the Mediterranean. Political tensions on ownership of fields and border disputes due to jointly-owned fields add to difficulties of oil and gas extraction in Turkey. Ankara believes that Greece-Egypt maritime agreement has transgressed its exclusive economic zone. That is why Turkey refuses to recognize the agreement. Meantime, Turkey-Libya border agreement on Mediterranean demarcation has elicited objection from Greece, Egypt, Zionist Regime and Cyprus. Efforts to extract oil and gas from the east Mediterranean have stoked up Athens-Ankara tensions because Turkey and Cyprus both lay claim to some fields. In the midst of disputes, Ankara has sought in some cases to pursue its national interests through political agreements or by threatening military action. However, challenges remain.

Finally, despite the fact that oil and gas discovery can take Turkey out of tough energy conditions, it does not necessarily mean that Ankara’s needs would be entirely met. In parallel with investment in new reservoirs, it has to increase the share of renewables and bring into operation its nuclear power plant projects.

Net Zero Carbon Emissions and Energy Transition

FereydounBarkeshli

Energy Market Analyst

The world currently faces two pressing challenges:mitigating carbon emissions and limiting global warming to 1.5 Centigrade; and enabling socio-economic development that is inclusive and equitable. These two challenges should not be considered as contradictoryas they need to be addressed simultaneously. This is particularly important as we move closer to COP28 to be hosted by The United Arab Emirates later this year. COP27 convened in Egypt last year and now for the first time in the heartland of the Persian Gulf and in an aspiring oil producing country. This is a clear shift of emphasis of United Nations’“Conference of the Parties” from northern industrial countries to the Global South.

Background

The first Conference of Parties (COP1),held in Berlin, Germany in 1995 following Tokyo Summit with the objective of regulating the activating of practical move towards a carbon free world by 2040. The mandate initially called for developed countries to take the lead in mitigating GHG emissions and for all countries to work towards stabilizing atmospheric concentrations GHG at a level that would prevent dangerous global warming and climate changes.
Since the first COP held in Germany, twenty six more meetings of the COP have been held all in industrial countries, though with global repercussions.

In fact, as the issue of global warming found momentum and accelerated its paces towards carbon emissions, industrial countries that are responsible for three-fourths of the global carbon emissions, began to lecture developing countries on how important it was for them to distance themselves from carbon emissions by which it meant oil and gas. It is ironic to note that very rarely, coal was referred to COP documents. Needless to say, amongst the three fossil fuels, coal is considered the most highly pollutant compared to oil and gas.

Prior to Tokyo protocol on climate change, Organization of the Petroleum Exporting Countries (OPEC) had already started deliberations on carbon capture and process of cleaning and de-carbonizing oil as pilot projects. OPEC was not alone.Major oil companies in the United States and other countries were also working on carbon capture and process of oil production towards an environmental friendly direction. In fact, COP 1 held in Berlin marginalized the process of de-carbonization of oil and reversed and ultimately pushed carbon emissions issues towards moving away from oil and gas towards new sources of energy.

During COP14 held in Poland in 2007, major industrial countries made it abundantly clear that they expected to demand the developing countries to share the burden of carbon emissions by a big chunk. Developing countries also made it clear that the Northern Atlantic alliance has developed and prospered on fossil fuels for a century and they’re responsible for all the mess in environment. Developing nations and global south must not be held accountable for the current and future climatic catastrophe. It is abundantly clear that industrial countries must quit lecturing Global South for the evils of fossil fuels and carbon emissions.

Status of International Energy Transition

Seventy heads of states gathered in Brazil’s capital, Rio-de-Janeiro in September 1990 under the United Nations Climate Action Plan and agreed to set up a permanent panel to investigate and tackle the climate crisis and environmental hazards that was projected within a single concept namely global warming due to excessive carbon emissions. Iran was among the few major oil producers that was represented at the Vice President level and signed the declaration. Some of oil producers such as Saudi Arabia declined to join in.

Over the course of time, Conference of Parties wasgradually born. However, it is evident that as more committees and panels were created, global warming and carbon emissions kept adding. By that, I don’t intend to conclude that COP meetings were irrelevant but the fact is that to substitute fossil fuels as the soul culprit of global warming, may not be the entire truth in that, renewable sources of energy can be environmentally hazardous, too. Audience were shocked COP27in Egypt when they were informed that China, India,Brazil and several countries in the Middle East and Africa are doing much better in installing solar panels than Europe and the US, that are major pollutants. Nevertheless, the most alarming point is that, solar panels aren’t that clean, either. To produce those panels, we need to use rare minerals including lithium and plutonium and copper which are considered more polluting than fossil fuels.

To say the least, the less we know about climate, the more we cry out about climate. In fact, environmental knowledge is often inversely associated with climate change and carbon emissions anxieties.

As reported by IEA March Quarterly

Investment in energy transition globally totaled stood at $1110 billion between 2004 and 2022. China invested $546 billion, EU spent $180 billion and the US spent the least at $141 billion during the said period. International Energy Agency has predicted a notable slowdown in through 2030 for all the major economies.

In fact, the war in Ukraine and the ensuing energy crisis lead to a retreat from the energy transition in Europe. The ongoing war exposed the vanity of green ideology. The idea that Europe was falling back in love with fossil fuels, is no more a secret.
Though some coal-fired power stations were reopened, these were precautionary measures. However, coal consumption enhanced for months and didn’t return to the level of pre- Ukraine war times.

Clean Energy Incentives Dialogue that was discussed and approved in Glasgow Climate Summit in 2021, to coordinate and facilitate dialogue between US and Europe, is now a permanent feature in Northern Atlantic Treaty Organization (NATO) and seems to be working well for the alliance. This is an indication that NATO has now weaponized climate policy and carbon emissions against the rest of the world; namely global south. OECD countries exchange new technologies to combat carbon emissions amongst themselves, while developing countries have to rely on the industrial world to obtain technology and knowledge for

aviating climatic hazards. Such limitations together with sanctions and intentional deprivation of developing nations, leads to greater disruptions in climate determination and carbon emissions policies of affected countries.

De-risking of Investment Potential

As already mentioned, renewable investment surged to record levels during the last decade. In solar, Europe is now installing twice its previous record set a decade ago. Here I intend to put forward a question of realism. That is America’s own commitment to a total shifting away from fossil to renewable energy. United States is the world’s largest fossil fuel producer.Can the US be considered a reliable and credible partner in the course of energy transition? Europe is not and has almost never been a major oil and gas producer.
Estimates presented by COP27 suggested the need for an additional $1 Trillion per annum investments in renewable sources of energy for low- income countries and emerging markets in order to reach targeted 1.5 degree centigrade carbon emissions by 2050. Such a huge investment certainly provides massive employment opportunities and job for developing countries. However, the main issue remains where and how the funds will be raised.

As for oil-rich countries, the income for most parts come from oil production and exports. Nevertheless, for oil (and gas) producing countries to generate income to invest on renewables, they must be able to invest in oil and gas first. Other than that, there’ll be no money and required capital to invest on new sources of energy. Saudi Arabia, for one has been repeated saying since 2018 that for the country to move towards green energy swiftly, an oil price above $80 per barrel is crucial. This is five years ago before inflation hit the world economy.

All the twenty seven meetings of COP starting from Berlin back in 1995 have continuously sent misleading or coded signals and information to the world. Institutions that provide and distributed those information are all owned and supported by the Western alliances. South should take all the information at their face value and has limited clue on what environmental protection is all about. At a turbulent time and ecologically destitute world, developing countries are at crossroads. Carbon emissions and the greening of energy sources are technically complex and costly. Developing countries are often barred from acquiring technologies needed for some of the renewables and still are asked to do more to keep pace with the global north. COP has outsourced most of its research and studies to companies that are sponsored by renewable energy think tanks and institutions. Politicians are infantilizing the international institutions dealing with climate issues. Global South require to design own institutions and watchdogs.
EU-US global arrangements on sustainable steel and aluminum production, was first initiated atCOP26 in Glasgow in 2021 to be concluded by October 2023. This arrangement mainly targets China but other steel producers including Iran are also targeted. In a coherent policy, World Bank is initiated by the US to block flow of loans towards developing economies under the pretext that they did not abide by COP meetings’ carbon emissions decisions. Thus politicizing environmental protection is high on the agenda among Northern Atlantic alliance.

Global Environmental Governance

Before embarking on the topic, let’s take a quick look at the history of global governance.
In the early 1970s the United States and much of the Western World was drifting into a stagflation. President Nixon decoupled dollar completely from the gold standard in 1971. Amid this economic malaise, the United Nations and globalist institutions were working hard developing a plan to convince the population to embrace global centralization of power.

By depicting the past, I do not intend to deny that we are living in a real world and the world is facing with realities on the ground. West is prepared to pay heavy price for the implementation of the energy transition and is dead serious about it. This does not mean that demand for fossil fuels will vanish within the next few decades. The world will still need an additional one million barrels of additional supply every year. However, oil and gas producers will be under pressure and have to cope with hostile attitudes by the so called AI generation. What is missing in the equation is the environment that every single country and region’s economy and societal texture is living under. Arriving at 1.5 degree centigrade carbon emissions mitigation within a certain time span is what America calls rules-based order and the rule is defined by the Western world.

Carbon Emissions and Way Forward

It is obvious that the era of cheap labor, cheap capital and cheap energy is coming to an end. Expensive inputs and specifically energy that made industrial revolution possible and relatively easy prevail no more. Carbon emissions is a fact and cannot be denied but it is important to define mechanisms of eliminating carbon from the atmosphere before demonizing fossil fuels.

It is true that in 2022, investments in renewables exceeded investment in fossil fuels for the first time in history. One important reason is that renewables production and distribution system is highly capital intensive and expensive. However, the bad news is that oil and gas production and refining is under-invested. In case inadequate investments in oil and gas persists, there’ll a global energy disruptions that hurts emerging economies the hardest.

COP28 will be held in The United Arab Emirates in November 2023. I believe that the upcoming COP28 in an OPEC member country is an opportunity to raise and address the issues related to ailing investment patterns in fossil fuels and boost the international awareness that carbon emissions does not necessarily contradict establishing an equitable global energy justice. Western capitals have already sensed the risk of an oil producing country hosting climate summit, are engaged in tight lobbying to further pressure oil and gas sectors. We can have clean energy by collective action,but we can’t have clean lithium or clean cobalt. Energy justice for global south is value for the well-being of nations.

Petroleum in Ancient Persia

There is scant information about petroleum both as a word and its mode of use in ancient time in Persia. It may be partly explained by the preference of oral history over written history. Most information available now about Persia has been derived from Greek and Roman classical works. That along with lack of comprehensive research on oil has overshadowed knowledge on the history of black gold in Iran. In 1938, British historian and IranologistLaurence Lockhart, who was with the Anglo-Persian Oil Company for a short period, published an article in the French magazine La Revue Pétrolifèreon the history of petroleum in Iran, laying bare new aspects of oil an ancient history. That article served Mostafa Fateh in his Fifty Years of Iranian Petroleum. The following is a brief review of Lockhart’s article.

Oil in Ancient Time

As Fateh puts it, archeological exploration in Iraq has proven the use of tar mastic in buildings and edifices since 4000 BC. Greek historian Herodotus has written in his famed Histories that in Babylon, people used to carry out pointing in pools, waterways and dams with tar. There are also historical accounts of pointing of roads with tar in order to bear heavy chariots. In Egypt, tar imported from Iran and Palestine was used for the mummification of dead bodies. In some Middle East nations, petroleum products, particularly mineral tar, was used in sorcery. Sometimes, small and large idols were also made of tar.

In Persia

According to Lockhart, in the civilizational domain of the Iranian Plateau, tar was used since the Sumerian period (5,000 to 6,000 years ago) in Susa. The tar was poured instead of concrete between stones and bricks used in buildings. Furthermore, pieces of jewelry were installed with pieces of tar and knife handles were made from reinforced tar. Apart from that, ships and pottery vessels were coated with tar to stop water permeation.

Appellation

The word petroleum comes from Medieval Latin petroleum (literally 'rock oil'), which comes from Latin petra 'rock' (from Greek pétra πέτρα) and oleum 'oil' (from Greek élaionἔλαιον). The root of the term stems from monasteries in southern Italy where it was in use by the end of the first millennium as an alternative for the older term "naphtha". After that, the term was used in numerous manuscripts and books, such as in the treatise De Natura Fossilium, published in 1546 by the German mineralogist Georg Bauer, also known as Georgius Agricola.Following the advent of the oil industry, during the second half of the nineteenth century, the term became commonly known for the liquid form of hydrocarbons.

Greek and Roman References

Classical Greek and Roman sources have provided brief accounts of existence of oil in Persia. Herodotus puts it as follows: “At a region located 22 km from Susa, wells have been dug wheretar and salt are extracted and held until salt deposits and the remainder is liquid.” Referring to the Persian army’s siege on Athens, he writes: “From hilltops, Persians threw glowing tar at Greek embankments and it is clear the arrows were coated with oil; otherwise they would be put off immediately.”

Greek historian Plutarch puts it as follows: “When Alexander was crossing Babylon, people rushed to welcome him in Ecbatana. They poured oil on the roads and set fire to it so that the flames of fire would please Alexander.” But Lockhart says Plutarch had erroneously referred to Ecbatana, which did not lie in Babylon. Plutarch might have meant oil-rich Kirkuk and Mosul. In any case, such historical evidence is proof of oil in Iran and neighboring countries since immemorial as people used it for celebration.

As Roman historian Ammianus Marcellinus, who was accompanying Emperor Julianus in combatting Shapur II, puts it: “Iranians soaked the leaves of a special plant in oil and then added another liquid called petroleum. Then they would put their war arrows in it, set it on fire and throw it towards the enemy, making sure to release the bow slowly so that the arrow is not thrown quickly and its fire is not extinguished. These arrows would hit anywhere, start a fire, and the fire could not be extinguished with water, and only the sand would put the fire to sleep.” 

Two centuries later, Iranians, who were defending Petra in the Caucasus, drove Romans out by oil weapons.

Procopius, referring to history of wars, puts it as follows: “Iranian soldiers set fire to many jars filled with sulfur and tar and threw them at the Romans, and they were able to start a fire that burned almost everything.”

Lockhart’s research offers valuable information on the history of petroleum in ancient Persia, which has inspired modern researchers.

SanatNaft Survives, MIS Down

Iran’s football pro league, in its 22nd season, hosted the Sanat Naft Abadan and Naft Masjed Soleyman teams, both affiliated with the petroleum industry. Due to a variety of problems with regard to management and trainer, both teams were close to collapse from the very beginning. In the end, it was Sanat Naft Abadan which managed to find its way ahead and remain in the pro league for another season.

The Sanat Naft Abadanfootball club is among old and influential teams in Iran’s football pro league. Over the past seasons, it has made surprising achievements. It has been through ups and downs with regular replacement of coaches. However, it has managed to maintain its position in Iran’s professional league.

League 22

Undoubtedly football fans are fully aware that Sanat Naft Abadan has been facing problems over the past season. However, it managed to survive all turbulences and stay for another season. Until recently, it was close to being downgraded to the first league. But thanks to day and night efforts made by the coach and players, the team preserved its position in the pro league. Sanat Naft Abadan defeated Gol Gohar 1-0, thereby allowing players and fans to celebrate their stay in the league, as had promised Abdollah Veisi.

But what happened to Sanat Naft Abadan football club during this season of Iran’s football pro league? At the beginning of the new season of pro league last calendar year, Sanat Naft Abadan football club hired “Reza Parkas” as head coach in order to see major changes. In its first faceoff in the 22nd season of pro league, Sanat Naft AbadanandFoolad, drew in a goalless match. In the second week of pro league matches, was defeated 0-1 in the match withAluminium Arak football club. In the third week, it managed to defeat its rival and score its first goal of the new season. But in the 4th week, was defeated by Persepolis 2-0. Losses in succession and the poor performance of Sanat Naft Abadan in the pro league matches, particularly during the first six weeks of the 22nd league, led club managers to look for a competent head coach as conditions were becoming more difficult for the Sanat Naft Abadan team. Negotiations were held with veteran footballer Firouz Karimi. He agreed to coach the Sanat Naft Abadan team that had scored practically nothing during the first six weeks of pro league. Karimi promised from the very beginning to bring this team up in the table. He said he had to change the arrangement of the team and therefore he invited some new young footballers who had record of playing in the second league matches. This selection elicited various reactions from the fans of Sanat Naft Abadan. 

Until the end of the 11th week, Sanat Naft Abadan had only a draw and had lost the rest. But in the 12th week, made its second win by defeating Nassaji Mazandaran 2-0. Reza Parkas’s score during the first weeks of pro league was more acceptable than Karimi’s. Therefore, managers of Sanat Naft Abadanfootball club decided to try another coach in a bid to upgrade the team’s position and prevent a fall to the first league category. This time, it was Brazilian Edson Tavares whom Sanat Naft Abadan managers chose to lead the team. But could this foreign coach be of help to Sanat Naft Abadan? In the 13th week of pro league matches, Sanat Naft Abadan lost 0-1 to Esteghlal. It achieved a 2-2 draw against ZobAhan in the 14th week. In the 15th week, it lost to Gol Gohar Sirjan and it continued to suffer defeats until the 21st week of pro league. Several weeks had left from the 22nd season and Sanat Naft Abadan would have to play in the first league with such losses. It set alarm bells ringing for the club managers. This time, Abdollah Veisi was chosen as head coach to save the team and breathe new life into it.

Brilliant Record

From the very beginning,Veisi pledged to keep Sanat Naft Abadan from falling into the first league category as the top priority was to preclude such outcome.Veisi focused on training the team in a bid to create better conditions for the players during the remaining weeks. Veisi turned the page in favor of Sanat Naft Abadan and during 70 days under his training, Sanat Naft Abadan defeated Sanat Mes Kerman in the 25th week and Nassaji Mazandaran in the 27th week. It went into a 1-1 draw against Esteghlal and won 1-0 against Gol Gohar Sirjan in the final week. That is how Sanat Naft Abadan managed to stay in the pro league. Sanat Naft Abadan scored 25 points in 30 matches and maintained its ranking in the pro league table in order to have time to make planning for the next season. Veisi made good on his promise and Sanat Naft Abadan players and fans celebrated the team’s stay in the pro league.

Naft Masjed Soleyman Falls

The Naft Masjed Soleyman football team, which had been present in the pro league for five years, fell this time to the first league category by scoring 20 points. In the final week, it thrashed Malavan Bandar Anzali 5-1. The Naft Masjed Soleyman team is now in the bottom of the ranking table. It had a tough sport year. It had to replace three coaches in the current season, which finally led to its failure. Reza Mohajeri, Ebrahim Ashkesh and Reza Enayati were the three coaches.