Iran Catalyst Export, a Dream Coming True

Ali Forouzandeh

Director General of Public Relations

Until a decade ago, catalyst export by Iran was more of a dream than a reality. Although sanctions were tightened against Iran’s petroleum industry, dissuading foreign companies from granting licenses to Iran’s petrochemical industry, the Iranian Ministry of Petroleum managed to draw up plans for producing catalysts at home. Over the past two years, in light of Iran’s energy diplomacy, the country has joined the club of catalyst exporters. Iran hopes to become self-sufficient in catalyst production by the end of the term in office of the 13th administration. At first glance, it seemed unreal, but it has proven to be possible.

As Petrochemical Research and Technology Company (PRTC) focuses on petrochemical technologies, ranging from polymer to catalyst, chemical processes, chemicals, and development of products, about 270 licenses have been obtained for technical know-how in the petrochemical sector. PRTC has facilitated the granting of about 40% of these licenses in the petrochemical industry.

Granting licenses and catalyst production capacity has enabled Iran’s petrochemical industry to pursue its plan for value chain competition. As a result, Iran’s petrochemical production capacity has reached 92 million tonnes a year, which is set to rise to 110 million tonnes in two years.

Locally manufactured catalysts are all of high quality, and many CIS and South American nations have formally requested to receive technical know-how for catalyst manufacturing. AnIranian knowledge-based company exported $9 million of catalysts to Russia in the first half of the current calendar year.

Given the 13th administration’s policy of development of technical know-how and local catalyst production, which would be economically viable in Iran, it seems that the tough road towards catalyst production has paid off as Iranian experts are now able to produce catalysts.

Karoun Oil Output Set to Rise

Negar sadeqi

Sepehr and Jofeir oil fields, located in West Karoun, are among the independent Iranian fields in the cluster and are set to come online soon. They have been developed by Pasargad Energy Development Company (PEDC) based on an IPC deal. The 13th administration is developing both independent and shared fields as part of its plan to boost its power of haggling in global oil markets.

There are 11 oil fields in the West Karoun cluster, holding 67 billion barrels of oil in place. Azadegan, Yaran, and Yadavaran are jointly owned fields. They contain heavy crude oil and have started production in recent years. Sepehr and Jofeir are independent fields in the same area. The latest Platts survey by S&P Global Commodity Insights indicates that Iran produced 3.05 mb/d of oil in October, reaching five-year highs.

Iran shares at least 28 oil and gas fields with neighboring countries. The oil fields in West Karoun are known as green fields, which start from the city of Ahvaz and extend as far away as Iran’s border strip. The West Karoun area comprises two oil zones: Azadegan (North Azadegan, South Azadegan, North Yaran, South Yaran) and Yadavaran (Koushk and Hosseinieh). National Iranian Oil Company (NIOC) hopes to bring production from the West Karoun cluster of oil fields to 1 mb/d. Due to US sanctions, Iran does not reveal oil production data; however, there is evidence of growing production from joint fields.

What matters now is that independent fields are being prioritized for development.

Iran’s petroleum industry has been facing financial strain due to sanctions, but it has not been kept from planning to develop its oil and gas fields.

Two years ago, the Ministry of Petroleum focused on developing independent fields in a bid to respond to new demand. The fields have been assigned to local contractors to be developed.

NIOC signed an IPC deal with PEDC in March 2018 for the integrated development of Sepehr and Jofeir to reach 110 tb/d of oil, which would total 512 million barrels after 20 years. The project’s direct CAPEX is about $2.427 billion with indirect capex at $413 million. The three-phase contract would see 135 wells be drilled. In Phase 1, production would reach 36 tb/d from 12 wells, 11 of which have so far been spudded. The 12th well is in its final stage.

PEDC experts say the wells spudded in the Fahlyan layer and the depth of 4,600 meters with 10,000 psi pressure have struck oil. Due to the high pressure of this oil reservoir, it was impossible

to use ordinary wellhead equipment. Therefore, for the first time in the country, well-completion equipment was manufactured locally. According to the latest reports, over 60,000 meters of drilling has been done in these fields as five drilling rigs are operational.

The duration needed for drilling has been down from 330 to 90 days in the deepest wells. An official has said one of the most challenging and deepest oil layers in West Karoun lies in Sepehr and Jofeir. A key point is that oil production from the wells drilled in Sepehr and Jofeir has increased, which would change recoverable oil estimates for these fields.

The development of Sepehr and Jofeir is indicative of the high expertise of Iranians in oil development, Iranian E&P companies can develop oil and gas fields, either on theirown or in partnership with foreign companies.

The development of Azadegan, Yadavaran, and Yaran have been prioritized by NIOC as they are jointly owned by other nations. Talks have been held over the past two years to enhance production from West Karoun.

Azadegan is specifically important for NIOC as it is the largest oil field Iran shares with Iraq. NIOC decided to develop Azadegan entirely. Six banks, the National Development Fund of Iran (NDFI), and six E&P companies are engaged.

Azadegan is being developed with a $7 billion investment to produce 570 tb/d of oil. Enhanced recovery by water injection is envisaged. The contract for its development has been signed for a seven-year period, which may be extended up to 20 years.

Furthermore, a catchup plan has been presented to compensate for the delay in production from this joint field. In parallel, 60 new wells have been drilled in South Azadegan over the past two years, leading to a 65 tb/d output hike. Over two decades, 100 wells had been drilled in Azadegan, while since the 13th administration took office, 60 wells have been drilled. Thirty-eight wells are still to be drilled.

South Azadegan would have a total of 206 wells, including 201 wells for oil production and 5 wells for waste disposal. The oil produced from these wells is gathered in 10 manifolds to be separated at two separation units.

The first exploration well was drilled in this oil field in 1976, but the second well in 1999 revealed the huge reserves there. Due to the extent of the Azadegan field, its development was divided into northern and southern sections. But NIOC recently decided to develop the field as a whole.

Phase 1 development of North Azadegan has become operational with 75 tb/d output from 58 wells. Phase 1 development of South Azadegan would see a total of 201 wells producing oil. Azadegan is estimated to hold 27 billion barrels of oil in place.

Azadegan is the third largest oil field in the world, only behind a Saudi and a Kuwaiti field. South Azadegan is estimated to hold 25.6 billion barrels of oil in place.

Yadavaran which is shared with Iraq, located near Sepehr and Jofeir, is highly attractive to investors. Yadavaran is estimated to hold 17 billion barrels of oil in place, 3 billion barrels of which is recoverable.

Yadavaran is to be developed in three phases. Phase 1 should reach 85 tb/d of oil, but current data shows higher output. Phase 2 targets 180 tb/d and Phase 3 300 tb/d. Phase 1 had been developed by a Chinese contractor. Talks are underway for the second phase of development of this field.

NISOC Output up 47% in 2 Years

Iran has managed to increase its crude oil and gas condensate exports over the past 20 months by adopting active energy diplomacy despite international sanctions against its petroleum industry. National Iranian South Oil Company (NISOC), the largest oil producer in Iran, has recently brought its output to a record 2.45 mb/d. Gholam Reza Nourani, the acting director of production at NISOC, tells “Iran Petroleum” the company increased its oil production by 47% in two years.

The following is the text of “Iran Petroleum’s” interview with Nourani.

How do you compare NISOC’s oil output before and after former US President Donald Trump re-imposed sanctions on Iran’s oil sector in 2018?

At domestic refineries, we did not even reduce output due to a shortage of feedstock resulting from sanctions. About 85-90% of local refineries’ feedstock is supplied by various fields like Ahvaz, Maroun, and Gachsaran. Currently, due to international conditions and sanctions, production from some export reservoirs like Ab Teimour, Mansouri, Gachsaran, and Aghajari has declined, which we are reforming. NISOC’s crude oil production capacity reached 2.9 mb/d in early 2022, i.e. pre-sanctions levels, which can be increased if suitable conditions are prepared. NISOC’s output ceiling was 2.8 mb/d before Trump imposed sanctions. But after sanctions were reinstated, it dropped to 1.1 mb/d in June 2020, which was the lowest since the 1979 Islamic Revolution. Oil exports also hit their lowest. With arrangements made thereafter, oil production started increasing as of December 2021, which is now standing at 2.4 mb/d.

How much has NISOC’s output grown over the past two years?

We have come from 1.6 mb/d in autumn 2021 to 2.35 mb/d in June 2023, which means we have had a 750 tb/d increase, i.e. 47% up.

Which of NISOC’s subsidiaries were most affected by sanctions?

I would like to note that we make no difference between companies. For instance, Maroun Oil and Gas Production Company (MOGPC) feeds refineries in the country. Therefore, it was running at 90-95% capacity in the midst of sanctions, but it is now close to 100%. Therefore, sanctions have not had any impact on the company. However, Gachsaran Oil and Gas Production Company (GOGPC), Aghajari Oil and Gas Production Company (AOGPC), and Karoun Oil and Gas Production Company (KOGPC) have been the most affected, because, in addition to supplying local refineries’ needs, they supply oil for export.

Which field is the most productive among NISOC-run reservoirs?

The Ahvaz field has the highest output, followed by Maroun and Gachsaran. It should be also added that we are facing 350-500 tb/y of decline in all oil fields, which is natural. Therefore, in order to preserve their oil output, we consider drilling development wells. We have also to maintain surface installations.

How many oil grades does NISOC supply?

We have so far had only two grades (light and heavy) for exports. However, with some modifications, we are now able to produce two new grades – extra-heavy and blended oil. Blended oil is mainly used for lighter products like gasoline and gasoil. Due to the national demand for gasoil and gasoline, this grade is helpful to refineries to boost their products.

Has this grade been supplied on markets?

This grade has been developed for local refineries but is now ready to be exported although sanctions pose a threat to our country.

How much time do you need to reach maximum production?

Ever since it was required to reduce output, NISOC embarked on a cohesive plan to overhaul its installations, which had not been done before due to maximum production. In 2022, nearly 50% of the repair work was done and now we are ready for a full return to market. Some imagine that it would take NISOC many years to return to oil markets, claiming that Iran would need 6 months to 1 year to make up for the 1 mb/d output cut. However, everything was done within two months in two phases. We have now restored the bulk of oil production and reached 80-90% of production capacity.

What percentage of NISOC’s production is spent on feeding petrochemical plants?

Petrochemical plants receive a variety of feedstock, including gas, LPG, and oil, from us. For instance, 65 tb/d of liquid feedstock is delivered to the Bandar Imam Petrochemical Plant. Furthermore, the Bu Ali Sina Petrochemical Plant receives 21 tb/d of naphtha and the Persian Gulf Bidboland gas refinery receives 30 mcm/d of gas from NISOC. NISOC fully supplies the Razi Petrochemical Plant’s 1.8 mcm/d of gas needs. Finally, NISOC supplies 25 mcm/d of gas to the Maroun Petrochemical Plant and more than 90% of oil refineries’ feedstock.

What are NISOC’s future plans?

Given the good situation of oil sales and exports, we expect to return to our production ceiling before next March. We’ve hit records in the past two winters in gas supply. We supplied about 80 mcm/d of gas to resolve the gas imbalance. Given our oil production from oil fields, we predict to deliver another 4 to 5 mcm/d of gas condensate to processing facilities to be finally fed into the national network.

NISOC PGCup 250 tb/d

Ramin Roghanian

Technical Director, NISOC

The studies conducted over the past two years at National Iranian South Oil Company (NISOC), new“planned guide capacity” (PGC) has been determined for the six reservoirs of Ahvaz Bangestan, Mansouri Bangestan, Ab Teimour, Golkhari, Balaroud, and Mansourabad Bangestan, promising a total of 250 tb/d. This amount is 7% of NISOC’s current PGC. A 250 tb/d increase in production from NISOC-run fields would bring the company’s potential output from the current 3.4 mb/d to 3.65 mb/d, which is a breakthrough for Iran’s petroleum industry. That would yield an approximate $7 billion in revenue.

NISOC, running 45 fields and 65 hydrocarbon reservoirs of various sizes, covers more than 70,000 square kilometers extending from Bushehr to Khuzestan provinces. NISOC accounts for about 75% of Iran’s crude oil output and 16% of national gas production. Such massive fields as Ahvaz, Gachsaran, Maroun, Aghajari, Karanj, Parsi, and Bibi Hakimieh lie in this area. NISOC’s current oil production capacity is 2.94 mb/d, which is set to reach 2.97 mb/d by March 2024.

PGC Up

Chief among the key upstream activitiesof NISOC’s Directorate of Technical Affairs is to determine planned guide capacity (PGC) for various fields. PGC figures set the basis for all production plans. To determine PGC data for oil reservoirs, a variety of petrophysical, geological, production engineering, and reservoir engineering activities have been carried out. The figures are determined based on the performance of reservoirs and the simulation of production potential.

The enhanced output plan for the current calendar year envisages enhancing the production capacity by about 30 tb/d year-on-year. To that end, new development wells would account for 58 tb/d, workover wells for 143 tb/d, and restored wells for 257 tb/d.

Key Obligations

NISOC’s five-year production plan envisages bringing output potential from 2.933 mb/d in March 2022 to 3.28 tb/d. One of the key obligations for adding another 350 tb/d to NISOC’s output capacity over five years is to drill more than 300 development wells, conduct workover on 550 wells, and perform more than 3,350 restoration operations.

Production plans are the result of enhanced production activities and output decline. Key factors involved in production fall from a hydrocarbon reservoir may be divided into surface and underground factors. As far as surface factors are concerned, decrepit installations, defective equipment, and the necessity of building new units like desalination units may be cited. Reservoirs see their pressure fall as long as production continues as the oil column becomes thinner. That would cut and even stop oil production from wells, which would in turn affect reservoir output. This decline depends on a variety of factors including depletion percentage and production mechanisms. The level of production decline differs from one field to another. The average is 350 to 400 tb/d.

Of course, due to the obligation for production cuts in recent years, such a decline should be revised in maximum output. Therefore, in assessing one-year production performance, in case 20 tb/d is reported to have increased, the annual activities have been such that in addition to the annual decline of 350-400 tb/d, 20 tb/d has been added to the output. The bulk of NISOC’s enhanced output has been realized by restoration activities, in which coiled tubing is used to bring wells back to production. Therefore, procurement of drilling rigs and coiled tubing is essential for the production plan.

Since last calendar year, 6 agreements have been signed for using 18 coiled tubing systems owned by the private sector. All restoration work conducted by the coiled tubing, as well as those owned by the National Iranian Drilling Company (NIDC) amounts to 375 tb/d. Last calendar year, 400 tb/d of oil was forecast to be added to NISOC’s output, versus 330 tb/d decline. However, it was partly not realized due to the problems with mounting drilling rigs, unprepared commodities and drilling materials, and inactive wells.

Recovery Rate at 28%

The rate of oil recovery from NISOC’s reservoirs currently stands at 28%, which is a modest figure. We have some reservoirs with about 60% recovery. The rate of recovery from reservoirs depends on a variety of factors, including reservoir rock, reservoir fluid, and production mechanisms. For instance, the Ahvaz Asmari recovery rate is estimated at 57% while it is below 20% for Ahvaz Bangestan which is deeper underground.

Ahvaz Bangestan is the largest reservoir of Bangestan. With more than 37 billion barrels of oil in place, it is a candidate for pilot water injection. Many activities have so far been done in this regard and the pilot water injection project is expected to become operational next calendar year. Water injection is forecast to double the rate of recovery. In case this water injection proves successful, it will be repeated in other parts of the reservoir. Then, it may apply to all other reservoirs of Bangestan, which would significantly boost the volume of recoverable reserves.

Drilling Rigs Repaired in Kish Island

Negar sadeqi

Kish Island is a 91.5-square-kilometer island in Bandar Lengeh County, Hormozgan Province, off the southern coast of Iran in the Persian Gulf.  It is 87 km from Siri Island and 225 km from Qeshm Island. Iranian Offshore Oil Company (IOOC) is in charge of oil and gas operations in Kish Island. Shahsavar Arghash, head of the Kish division of IOOC, tells Iran Petroleum that IOOC is for the first time repairing a drilling rig. He expressed hope that Alvand Rig would be ready in two years to allow for an output hike from the Siri oil field. The following is the full text of the interview he gave to “Iran Petroleum”.

Kish Island operations are new. Would you please tell us about IOOC’s handling of Kish operations?

Operations began at Kish Island in 1996 when IOOC carried out a feasibility study there to explore the Persian Gulf’s gas potential. After that, the previous well was extended and a new well was drilled until 2001 and 2004. As hydrocarbon potential was proven in the Dehram reservoir of Kish at 48 tcf, IOOC had a fresh impetus to start work in this area. Gas supply to Kish Island, building a gas compressor station, developing the Kish gas field, and other favorable conditions in this island for logistics systems entirely represent a key and potential factor for the island to become an operational zone. IOOC’s activity in Kish comprises steering an FPSO in the South Pars Oil Layer. I have to add that Pars Oil and Gas Company (POGC) is tasked with operating and developing the gas section of the South Pars gas field while IOOC deals with the South Pars Oil Layer. Another segment of our activity on this island was to supply gas from Siri Island to Kish Island. Until July 2022, we were delivering on average 25 mcm/d of gas to power plants in the north and south of the island by two gas compressors. But since then onwards, the bulk of gas needs of the island have been supplied from the mainland. Gas supply to Kish Island was handled by IOOC for 15 years. As of February 2023, owing to our management of the Kourosh FPSO in the South Pars Oil Layer, at the discretion of the CEO of IOOC, steering and repairing Alvand Rig was assigned to the Kish division of IOOC. Currently, a 12-member team is drawing up a plan for the overhaul of the rig. Alvand Rig would be soon moved from Siri Island to Kish where we would start overhaul operations in March 2024.

When will the overhaul of Alvand Rig end?

We have divided the project into 18 subprojects. According to our schedule, we need to finish the overhaul within 24 months. We started work in July and we will try to finish the job in the shortest possible time because of lucrum cessans amounting to dozens of millions of dollars per annum.

Could you tell us the technical specifications of the Alvand Rig?

Owned by IOOC, Alvand Rig was constructed in 1975. It has long been carrying out reparations. It was put out of service nearly a year ago. From 2018 to 2021, it worked over 10 wells. When it is overhauled, oil fields in Siri Island would see their oil output rise 4 to 5 tb/d.

How much has been allocated for the overhaul of this rig?

$10 million has been earmarked, while 400 persons would be directly engaged during the overhaul. Iranian engineers and technicians would be in charge of the rig overhaul. I should note that it is the first time such an operation is underway in Kish.

The flare of the first gas well was recently turned on in the Kish field. How many wells have been drilled in this field?

The Kish gas field, comprising the Kangan and Dalan gas reservoirs

  3,200-5,000meters deep underwater, is located 60 km east of Lavan Island. With an estimated 40 tcf of gas reserves, it is the 17th largest gas reservoir in the world. Once it is fully operational, it will be producing the equivalent of three South Pars phases. The Kish gas field is divided into two clusters, one cluster with 6 and another with 8 wells. They include 14 onshore and 2 offshore wells. Nearly all wells are completed and are in their final stage. The onshore wells are about 5 km deep.

What does the Kish gas field development plan involve?

The Kish gas field development plan involves gas transmission to the Kish power plant, offshore and onshore installations, the transmission of natural gas from Iran Gas Trunkline 7 (IGAT-7) from Bastak in Hormozgan Province to Bandar Aftab and then into Kish Island via onshore and offshore pipelines. The objectives of this project include replacing gasoil with natural gas for fueling power plants in Kish Island, saving costs, guaranteeing a stable power supply to the island, and preventing environmental pollution. Phase 1 development of the Kish gas field includes offshore and onshore installations, completing facilities (completion of 14 wells, wellhead line pipes, and auxiliary installations), laying 220 km of subsea pipeline from Kish Island to Assaluyeh, and building auxiliary installations in the current refineries of South Pars.

What is the objective behind developing the Kish gas field?

The objective is to produce and transmit 1 bcf/d of gas from clusters 1 and 2 of the Kish field to Assaluyeh to make maximum use of the refining capacity of the refineries in South Pars and recover about 10 tb/d of gas condensate. Furthermore, the development of Phases 2 and 3 of the Kish gas field includes offshore and onshore installations around Kish Island, building offshore pipelines, and auxiliary installations for integrated work. In phases 2 and 3 of the Kish gas field, the idea is to produce and transmit 2 bcf/d of gas from the offshore platforms of the Kish field to Assaluyeh and recover about 20 tb/d of condensate.

How much oil can Kourosh FPSO store?

The oil extracted from the wellhead platform of the oil layer is piped to Kourosh FPSO where it is refined and stored. The vessel can store 730 thousand barrels of oil.

Why is crude oil transmission on this vessel among the most sophisticated?

Because oil transfer and exports are done offshore, FPSO is on the water. Therefore, the tanker is connected to this vessel to receive and export oil and is exposed to water flow, which carries out loading operations. It is noteworthy that more than 250 FPSOs are currently operating in deep waters across the globe, while in the Persian Gulf, Kourosh is the only one. I would like to note that few Iranians would be able to steer this vessel as we did not have much experience; however, our team managed to steer it effectively.

Planning to Capture 2 bcf of Flare Gas

The Iranian Ministry of Petroleum has extensive plans for associated petroleum gas (APG) gathering. Minister of Petroleum Javad Owji has said under the 13th administration, flare gas gathering had increased from 2.3 mcm/d to 11.5 mcm/d, which would reach 18 mcm/d by next March.The ministry’s plan for gathering 2 bcf of flare gas would be carried out under five long-term plans.

Over the past century, associated petroleumgas flaring has produced harmful environmental impacts while threatening the health of local communitiesin oil and gas areas. No-flaring is significant for the Ministry of Petroleum both from an economic standpoint and from the viewpoint of the fulfillment of international obligations.

However, implementing flare gas capture projects always face many problems due to the lack of financial resources. Therefore, the Ministry of Petroleum encouraged petrochemical holdings to invest in this sector to provide stable feedstock for downstream plants. This is a win-win game.On the one hand, reliable investment is made inthese projects, and on the other hand, petrochemical holdings receivefeedstock.

Mazaher Ansari, “HSE and Civil Defense” director atthe Ministry of Petroleum has said that $5 billion has been invested in this sector, adding that all flare gas gathering projects are operated by the private sector. All costs would be recouped by feedstock supply.

Greenhouse Gas Obligations

Iran’s petroleum industry is committed to reducing its greenhouse gas emissions by 4% unconditionally and 8% conditionally, by 2030. To prevent more environmental pollution, Iran’s Ministry of Petroleumconsidered gathering APG. One of the main priorities of the Ministry of Petroleum in the field of environment is the management of associated and flaregases, as well as the reduction of atmospheric pollutants, which would save costs and improve the environment.

Management of associated gas with a view to zero flaring is a key plan pursued by the Ministry of Petroleum. The bulk of efforts is focused upon zero-flaring, backed by the Minister of Petroleum in person. Thanks to precise planning, all flare gas capture projects are hoped to become operational by the end of the term in office of the 13th administration.

In the current calendar year (ends on 19 March 2024), the National Iranian Oil Company (NIOC) produced on average 113.6 mcm/d of associated gas, 65% of which (74.6 mcm/d) was gathered by gas compressor stations. Thanks to short-term and long-term projects, 5 mcm/d of gas was being gathered. Gas flaring accounted for 30% of gas output, i.e. 34 mcm/d, which would have been captured by March 2026. It isworth mentioning that 37.4 mcm/d of flare gas is being fed into the Iran Gas trunk line(IGAT).

Minister Owji has touched on the switching off of 43 gas flares, adding that flare gas capture would reach 32 mcm/d next calendar year (starting on 20 March 2024) and 62 mcm/d the year after.

Long-term projects for flare gas capture include building LPG plants and flare gas capture stations. These projects are expected to come on stream by March 2026.

The first phase of the NGL 3200 plant has become operational in West Karoun. To supply feedstock to this plant, Persian Gulf Petrochemical Industries Company (PGPIC) has been awarded the Darquain surplus gas transmission pipeline project and the West Karoun flare gas gathering station with a capacity of 100 mcf/d under a 72-million-euro deal.

Furthermore, NGL 3100 with a capacity of 240 mcf/d in Dehloranhas had 85.38% progressandwill come online by March 2024. To guarantee feedstock supply to NGL 3100, the Dehloran gas compressor station with a capacity of 85 mcf/d, worth 128 million euros, and the Dehloran pipeline, worth €85 million, have been awarded for operation, which would become operational by March. Meantime, the Cheshmeh Khosh and West Paydar gas compressor stationshave been awarded under a 53-million-euro EPCF deal.

Kharg Iran gas and LPG plant with a capacity of 300 mcf/d in Kharg Island is now 67.1% complete andwill become operational by March 2026. Flare gas gathering in East Karoun with a capacity of 593 mcf/d and in Maroun with a capacity of 249 mcf/d is underway under two deals with PGPIC. They are expected to come online by March 2026.

Shot-Term Projects

Short-term gas gathering projects include Parsi Cluster Maroun 3, Mansouri, Maroun 6, CheshmehKhosh, Sarvestan and Saadatabad, MasjedSoleiman, NaftSefid, Tombi, Par Siah, Zilaei, Haft Shahidan and Nargesi, Anbar and Lali, Qale Nar, Khesht, Sakuy-e Salmak, Sarkan and Maleh Kuh. Parsi cluster with 3.5 mcf/d capacity, Maroun 3 with 15 mcf/d capacity, Mansouri with 10 mcf/d, Maroun 6 with 22 mcf/d, and CheshmehKhosh with 60 mcf/d capacity came online last March. The rest with a capacity of 101 mc/f is under way.

The Salman and Serkan/Malekouh platform projects with a capacity of 104 mcf/dare being auctioned off, while permission is sought for the gathering of 60-64 mcf/d of gas.

Flare gas gathering from facilities in the three provinces of Khuzestan, Bushehr Kohguiluyeh, and Boyer Ahmad is planned under a $1.1 billion with Persian Gulf Bidboland Gas Refining Company. That would help capture 593 mcf/d of gas, thereby supplying 1.5 tonnes of feedstock to refineries per annum.

Cutting Air Pollution

Protecting the environment and reducing the emission of pollutants has always been one of the main demands of the government and, of course, one of the most important goals of the Ministry of Petroleum,given the concentrated areas of the petroleum industry. Therefore, the establishment and development of upstream, midstream, and downstream industries of the oil industry in the Pars Special Economic EnergyZone (PSEEZ) and the concentration of activities of gas refineries and petrochemical units in that region, has caused an increase in environmental pollution in this region.

In this regard, alocal air quality improvement working group was formed and various meetings were held with experts and managers of companies based in Assaluyeh, and various steps were taken according to the aforementioned working group’s strategy (including analyzing the results of air pollution monitoring in the region, determining emission values and determining emission reduction priorities to achieve (to the optimal air quality in the region), which finally led to the formulation of a strategic document for improving the air quality of the region.

Documentation of ambient air quality, reduction of 501,500 tons from sulfur dioxide emission and cutting2,344 mcm of flare gas, reduction of BTEX compounds emission by 9 micrograms per cubic meter, construction of production wastewater treatment plants (with a total capacity of 1,810 cubic meters per hour) and special and industrial waste management (with a capacity of 100,000 tonnes per year), construction of Phase 2 gas refineries and petrochemical complexes is one of the important tasks of the Ministry of Petroleum in flare gas gathering.

IOOC Persian Gulf Oil Out Up 30 tb/d

Iranian Offshore Oil Company (IOOC) is set to see its production grow 30 tb/d as output rises from the Abuzar oil field, a senior official said.

Ali Reza MotaaliJahromi, head of the Kharg operations division, said: "By implementing the Abuzar production capacity enhancement project, construction and installation of heat exchangers at the Abuzaronshore facility, IOOC would see its output rise 30 tb/d."

"For increasing output from the Abuzar field, about 2 km of 18-inch pipeline was laid. Despite using a 26-inch offshore pipeline over the past two years, debottlenecking was necessary," he said.

"In the first phase of this project, a pipeline was stretched from the compressor station to the Abuzar facility, which was followed by a 500-meter-long pipeline as far away as loading stations," he added.

Referring to the construction and installation of heat exchangers at the onshore Abuzar facility, he said: "Given the vital role of heat exchangers in the quality of oil supplied by Abuzar and Foroozan and a large number of these transducers being out of service, their renovation was envisaged. For the first time in the history of the facility, several tube bundles were built and installed."

The first tube bundle was installed in Khargand resulted in a significant increase in output.

3bcm Gas Stored at Shourijeh D, Sarajeh

Abbas Khazaei, acting director of production at Iran Central Oil Fields Company (ICOFC), has said 3 bcm of gas has been stored at the Shourijeh D, and Sarajeh gas storage facilities of Qom since the beginning of the current calendar year.

He said the volume of stored gas set a record in the decade-old history of these two storage sites.

"For sustainable and maximum supply of gas during winter, the overhaul of three ICOFC subsidiaries – South Zagros Oil and Gas Production Company, East Oil and Gas Production Company, and West Oil and Gas Production Company – and the Sarajeh area was planned and carried out," he added.

Referring to a 50% increase in overhaul projects in the current calendar year, he said: "The time spent on overhaul at the three offshoots and the Sarajeh area was 367,000 person-hours."

Breaking down the figure, he said 245,000 person-hours were for SZOGPC, 84,000 person-hours for EOGPC and 38,000 person-hours for WOGPC.

E&P License Facilitates Project Procédures

The director of supervision on hydrocarbon reserves and exploration at the Ministry of Petroleum has said that the issuance of an E&P license would facilitate procedures for the implementation of projects.

DarioushLali said there is a focus on increasing oil and gas production, boosting the rate of recovery, and engaging the private sector more than before.

"The issuance of license as a legal capacity dates from the beginning of the 5th Development Plan, which has been through ups and downs," he said.

Lali said 130 licenses had been issued in recent years, adding that a regulatory agency is to be set up by the Ministry of Petroleum for that purpose.

"The bylaw on issuance of license has been drawn up and we need to share experience and exchange thoughts to take effective steps," he said.

"The Ministry of Petroleum intends to benefit from this legal capacity to make timely use of God-given resources," said Lali.

First-Time Manufacturing Contracts Up 2.5-Fold

Reza Assadifard, a top official with the Office of Vice President for Science and Technology, said contracts on first-time manufacturing for the petroleum industry have increased 2.5-fold compared with the previous round.

"In the petroleum industry, we are witnessing increased use of first-time manufacturing potential. During the fourth round of first-time use contracts, 130 contracts pertained to the Ministry of Petroleum, which was up 2.5-fold compared with the third round," he said.

"The Ministry of Petroleum has revived projects that had been abandoned with interest damage amounting to several million barrels of oil. It also helped knowledge-based companies become more active," he added.

"All organs in the establishment have concluded that the only way for the survival of the country and the upsizing of the economy is to embrace value generation by science, in which case the petroleum industry represents a major domain," he said.

AI Envisaged for 15 Oil and Gas Fields

National Iranian Oil Company (NIOC) and the Office of Vice President for Science and Technology have signed an MOU for the future use of artificial intelligence (AI) at 15 oil and gas fields.

The MOU is for the establishment of a Strategic Center for Artificial Intelligence and Digital Oil and Gas Fields. The idea is to locally develop RSS.

NIOC is planning to enhance recovery from oil and gas reservoirs, for which it decided to create digital oil and gas fields.

That would cut capital and operational costs while facilitating real-time monitoring of oil and gas production and possible problems in an intelligent manner.

Three key measures are required to be taken. The first is to set up working groups at the level of subsidiaries accounting for the bulk of oil and gas production and draw up necessary plans in the presence of experts from NIOC and knowledge-based companies, as well as E&P companies and the academic elite.

 $50bn Oil Projects Adopted Under 13th Administration

Minister of Petroleum JavadOwji has said that more than $50 billion worth of new oil and gas projects have been adopted in the petroleum industry.

He said the 13th administration invested $28 billion in the upstream and downstream oil sector as 132 half-completed projects were completed.

Owji put Iran’s total oil, gas, and condensate reserves at 320 billion barrels of oil equivalent, adding that 23 gas refineries and 68 petrochemical plants are operating in the country.

"Today, 98% of urban and 84% of rural households are connected to gas. Most industries are also connected to gas," he said.

The minister boasted of Iran’s self-reliance in developing oil and gas fields, building refineries and petrochemical plants, adding that drilling oil and gas wells up to the depth of 6,000 meters was possible now. "80% of the equipment needed in this industry is supplied locally," he said.

Owji said Iran was the most sanctioned country in the world, adding that new markets had been created for Iran’s crude oil.

"To recover 1 bcm/d of gas in the country, 800 tb/d of condensate is produced," he added.

Owji said purchasing 12 very large crude carriers had been suggested to resolve the problem of gas condensate. "As the 13th administration took office, in parallel with increased condensate consumption, we focused on international trading. Although we receiveda permit, no new condensate was stored while we also balanced production with consumption. Thanks to energy diplomacy, we have no longer even a single barrel of oil and condensate on water. As much as we produce oil and condensate, we sell it."

He said that Iran had settled all its hydrocarbon exports.

Owji said Iran shares 18 oil and gas fields with neighboring countries, adding: "Currently, there is no undecided joint field and operating joint fields is the petroleum industry priority," said the minister.

Owji said gas output had increased 50 mcm/d since the 13th administration took office, adding: "More than 70% of gas production and 500 tb/d of oil output comes from joint fields."

The minister also said Iran had added 5 million tonnes to the petrochemical production capacity, adding the petrochemicals, while being non-sanctionable, may generate high value-added.

 $52mn Value-Added from Fuel Oil Projects

 The CEO of the National Iranian Oil Refining and Distribution Company (NIORDC) has said implementing fuel oil upgrade projects at refineries would earn the country $52 million in revenue.

Noting that technological development has begun in the refining industry, which was being exported overseas, JalilSalari said: "Today, we have reached a good level of technical know-how in all domains of quality and quantity upgrade. The main challenge about fuel oil quality has also been overcome."

He said that Iran was self-reliant in refining catalyst manufacturing, adding: "Fortunately, we have crossed the frontiers of technical knowhow and we have stepped into exports. Iranian catalyst is used for gasoline production at refineries overseas and today we boast this breakthrough. Iranian gasoline fuels Venezuelan cars, thanks to the Iranian petroleum industry."

He said that ExirNovinFarayand Asia and Azar Energy Tabriz were two leading knowledge-based companies taking steps towards mastering technical know-how for upgrading the quality of fuel oil.

Salari said foreign companies were seeking partnerships with NIORDC for the commercialization of technical know-how.

Integrated Policy for Petchem Exports

CEO of National Petrochemical Company (NPC) Morteza Shah-Mirzaeihas said Iran is exporting its petrochemicals at the best quality to various nations.

He said on the sidelines of the 6thChina International Import Expo (CIIE) that exporters needed to exercise convergence.

Negative competition has to be avoided among petrochemical exporters, he said, noting that NPC had made necessary arrangements for cooperation between exporters.

"We need to identify target markets and take into consideration national interests when it comes to supply and sales," said Shah-Mirzaei.

"Having adopted coherent and strategic policies, NPC is seeking to facilitate the integrated presence of Iranian petrochemical exporters in target markets," he said.

"China is one of the largest producers of methanol in the world while being also considered one of the largest importers of petrochemical products, which is the main market for Iranian producers of this country due to the amount of methanol production capacity in Iran's petrochemical industry," said Shah-Mirzaei.

Highlighting the growing trend of development of Iran’s petrochemical industry in the 7th and 8th National Economic Development Plans, he reaffirmed full support for foreign investment in new petrochemical projects.

Petchem Credit Sales Hit 29% of Mercantile, Energy Exchange

The director of downstream development of National Petrochemical Company (NPC) said credit sales of petrochemical products increased to 29% of total sales on the Iran Mercantile Exchange (IME) and Iran Energy Exchange (IRENEX).

Abbas Gholami said the sales reached IRR 72,000 billion by the end of the first month of the third quarter of the calendar year.

"NPC is encouraging petrochemical companies to sell their products on credit," he said.

"Most petrochemical companies and holdings are involved in this national strategy to complete the value chain," he added.

Credit sales during the first six months of the current calendar year were respectively IRR 32,000 billion, IRR 55,000 billion, IRR 58,000 billion, IRR 60,000 billion, IRR 70,000 billion, and IRR 62,000 billion.

The main challenges posed to petrochemical actors have reportedly been insufficient money supply and capital.

Currently, 15,000 to 16,000 industrial units supply feedstock to petrochemical plants. Therefore, boosting credit sales of petrochemicals on IME and IRENEX would facilitate feedstock supply with a view to value chain completion.

As a result of this strategy, about IRR 340,000 billion worth of petrochemicals was offered during the first half of the current calendar year.

Energy Efficiency Projects to Yield $100bn

CEO of Iran Fuel Conservation Company (IFCO) Hossein Abniki has said energy efficiency projects would help reduce environmental pollution while earning the country $100 billion in annual revenue.

He said one mechanism for resolving imbalance was energy efficiency and management, adding: "Energy consumption in the country amounts to 7 million barrels of oil equivalent, which could be halved after implementation of energy efficiency projects."

"Such imbalance and unbridled energy use is on the rise, which would cause serious problems in the future because Iran’s energy intensity is twice the world’s," he added.

Abniki said the potential for energy efficiency had been identified in all sectors, including the oil, gas, and petrochemical industries. "In the domestic sector, there is also great potential for efficiency," he said.

"The investment required for energy efficiency projects in the country is about $150 billion; $50 billion has to be spent while $100 billion may be received in facilities," he said.

"Meantime, the petroleum industry ecosystem should also improve to become suitable for private companies in terms of law and regulations," he added.

"Another one is to make petroleum industry installations efficient to enhance the possibility of optimal use of existing potential," said Abniki.

$250bn Investment Opportunity in Iran Oil Sector

CEO of National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehrsaid recently Iran would offer opportunities for investment in the oil sector, amounting to $250 billion over eight years.

"The world’s energy future is determined by major players. In Iran- one of these actors- there is a change for $250 billion investment in the petroleum industry over eight years in the future," he said.

Speaking at the China International Import Expo (CIIE), he said: "This exhibition is indicative of the commitment of both Iran and China for bilateral cooperation and suitable communications between Iranian and Chinese markets."

Iran and China are opening doors to one another, he said, adding: "We are seeking to set up a stable platform at the strategic level and establishing a market-oriented and international commercial platform. The Islamic Republic of Iran has shown in practice to be a reliable and stable market for trading."

"Iran holds the top rank for oil and gas reserves combined. It holds about 340 billion barrels of oil equivalent," he said.

"In the upstream sector, we have about 100 projects on oil and gas field development, worth about $160 billion. We plan to produce 5.7 mb/d of oil and 1.5 bcm/d of gas," said Khojasteh-Mehr.

"There is $35 billion investment potential for 40 mt capacity building in the petrochemical sector and $80 billion potential for 1.5 mb/d refining capacity," the NIOC chief said.

"The bulk of needs in these investments pertains to the purchase of a commodity. In addition to benefiting from local capacity in this sector, Iran is using the potential to exchange commodities with China," he said.

CIS Potential Market for Iran Catalysts

Iran’s petrochemical catalyst export has grown significantly over the past two years. Petrochemical Research and Technology Company (PRTC), currently accounting for 30% of Iran’s petroleum industry catalyst, has announced that the technical know-how for 97% of the catalyst is now homegrown. Majid Daftari, the CEO of PRTC, tells “Iran Petroleum” that Iran would be able to export 1,000 tonnes of catalysts a year, noting that CIS and South American nations would be among the major buyers.

The following is the full text ofIran Petroleum’s interview with Daftari.

How do you evaluate PRTC’s performance during the first two years in office of the 13th administration?

Under the 13th administration, in the light of special attention paid to PRTC by the minister of petroleum and deputy minister of petroleum for petrochemical affairs, it has embarked on extensive activities in the field of processing, catalyst, and chemicals’ technologies and has made good achievements. We have managed to commercialize our products in many fields. Over the past two years, we have been recognized as the world’s largest licensor.

On what basis?

In terms of the number of processing and catalytic technical know-how presented by PRTC, the company is among the world’s top petrochemical industry licensors. Currently, PRTC is the proprietor of technical know-how for 19 processes and chemicals, 16 of which have been licensed to applicants. The key technical know-how pertains to methanol, polyethylene, polypropylene, methanol-to-propylene, ammonia, vinyl acetate monomer (VAM), and ethylene propylene diene terpolymer (EPDM). Most proprietors of this know-how receive catalysts from other companies, but PRTC has both together. Furthermore, 24 catalysts and initiators of the petroleum industry have been developed with PRTC technical know-how, for which commercialization agreements have been struck. Rarely can a company have the technical know-how for this number of catalysts in the world.

Has access to all these processes been facilitated by the 13th administration?

On average, achieving know-how in the petrochemical industry takes 16 years, which may even be extended to 20 or 30 years. We’ve been pursuing this process ever since the company was established in 2013. Currently, every technological need from lab studies to bench, demo plant, pilot, and commercialization is available here. The 13th administration has bolstered self-belief in private companies and holdings.Rather than wasting time on foreign licensors, the 13th administration decided to benefit from PRTC’s potential to accelerate the projects, which was of great help in the nationalization of processes. Meantime, special attention has been paid to the domestic manufacturing of equipment. We manufactured the bulk of equipment foreign licensors imposed heavy prices upon. That was instrumental in job creation and currency saving.

How many technical know-how licenses have been granted by PRTC?

We have obtained 270 technical know-how licenses in the petrochemical industry, 40 of which may be granted.

Which companies have been granted processing know-how over the past two years?

Over this time, a high-density polyethylene (HDPE) license has been granted to the Bushehr and Tabriz petrochemical plants, allowing them to reach an agreement with EPC companies for the application of these licenses. In the current calendar year, an agreement has been signed with the Maroun Petrochemical Plant for HDPE and linear low-density polyethylene (LLDPE) gas phase, for which engineering documents are being prepared. Furthermore, the “EslamabadGharb” project will involve converting methanol to propylene and subsequently to polypropylene, using PRTC technical savvy. The Lorch megamethanol project is also using our technical know-how. There are other finalized projects, for which effective agreements are yet to be signed. One case in point is the 500,000-tonne PVM project of Setareh Parsian, 2 HDPE units of the Kian complex, 2 polypropylene projects with the Persian Gulf Bidboland refinery, and 2 polypropylene and methanol-to-propylene agreements with Petrokymia Qeshm. The number of our agreements with petrochemical companies is rising.

What about catalysts?

The catalyst document was updated and unveiled last calendar year. Of the total petroleum industry catalysts, 14 remained to be nationalized. Ten were developed on a lab scale and we’re

currently signing agreements with 6 prestigious universities and the Research Institute of Petroleum Industry (RIPI) to acquire technical know-how for four more and update 2 catalysts. We have promised the minister of petroleum to develop all catalysts, absorbents, and additives of the petroleum industry before the 13th administration reaches the end of its term in office. I should also note that PRTC’s objective and strategy is to focus on the manufacturing of four remaining catalysts which are uneconomical due to low consumption to achieve their technical know-how to be used if they would be needed one day.

What percentage of petroleum industry catalysts is technically built with PRTC know-how?

About 30% of catalysts used in the petroleum industry use our license and 85% of them are being produced in the country. There is technical know-how for 92-93% of them. In terms of weight and price, the technical savvy of 97% of catalysts in the country has been acquired.

How much catalyst is Iran exporting per annum?

More than 1,000 tonnes a year.

Are there any mechanisms to compare the quality of PRTC catalysts with those of foreign rivals?

Each know-how has its standard with the best way of assessment being to compare their performance and mechanical specifications. Therefore, we compare our products with foreign prototypes in terms of performance. Normally, PRTC and RIPI serve as reference bodies in catalyst purchases in the country by doing performance tests on foreign catalysts.

What is PRTC’s policy vis-à-vis foreign markets?

PRTC is not a manufacturing company. It develops technical know-how to be supplied to local companies, which would in turn sell its products internally or externally. For instance, numerous local companies have exported the catalysts developed with PRTC technology to neighboring countries.

How has the 13th administration’s energy diplomacy affected your foreign cooperation?

Several countries including CIS and South American nations have asked for our catalyst know-how, but our catalyst producers are not willing to transfer their know-howbut they prefer to sell their products. Some CIS nations have formally applied for our catalyst technical know-how to start production in their plants, for which talks have been held. We’re currently reviewing markets in the CIS area, after which we will decide to grant them a license or sell them products. Moreover, following their visit to PRTC, some South American countries showed a willingness to cooperate with us in catalyst production. Talks are set to be held on that topic.

Does PRTC have any joint cooperation with foreign countries to access technical savvy?

PRTC has long had cooperation in the process of methanol-to-propylene with Germany’s Lorgi of Basel; however, sanctions have brought everything down to a minimum. However, talks are set to be held with East Asian and North African nations for cooperation.

What program does PRTC have for value chain completion and what steps has it taken to that end?

We have embarked on almost all of the value chain operations mandated by the National Petrochemical Company (NPC). First, technical, economic, and research studies started by our company or a peer company, 17-18 of which have led to agreement. We don’t believe that we should always start from scratch. We can benefit from the experience of other countries and develop their technology.

How many cases of technical know-how do you plan to master?

We have started 14-15 cases. NPC has instructed us to master 26-27 cases.

How many of them do you think would be complete by the end of the 13th administration’s term in office?

Three to four are estimated to have been finalized by then.

How many cases of PRTC know-how have been commercialized?

PRTC has acquired 19 cases of technical know-how in chemical materials and processing, 16 of which have received licenses. PRTC has also managed to acquire 24 cases, 15 of which have been licensed.

How much are the 13th administration’s agreements valued at?

The agreements total €11 million, while the agreements for presenting licenses amount to €1.5 million a year.

Quality Upgrading at 9 Refineries

Upgrading the quality of refined products has always been a key issue with treatment facilities. Currently, with about $8.72 billion investment, 13 quality upgrade projects are underway at 9 refineries, some of which will become operational by 20 March 2024. These projects are not limited to upgrading the quality of fuel produced at refineries; rather, they would include a variety of projects including reduction of heavy products’ output and launching a coke production unit at refineries. These projects have been highlighted in the 7th National Economic Development Plan.

Legal Obligation

The current refining capacity of the country totals 2.2 mb/d of crude oil and gas condensate, which is planned to reach 3.5 mb/d. This target is expected to be achieved by building new refineries, as well as launching refinery-integrated petrochemical plants. Meantime, upgrading the quality of refined products has become a must in the world due to changes in the consumption paradigm. Meantime, changing the refined products mix and increasing the share of light products by converting heavy products to lighter and middle distillate ones are among issues enshrined in law.

Currently, on average 65 ml/d of fuel oil is produced in the country, constituting about 18% of total refined petroleum products.

The 7th National Economic Development Plan requires “fuel oil” production in the country to be cutby 5% to 49 ml/. Meantime, in a bid to incentivize refining companies to implement quality upgrade projects, these companies are required by the national budget to allocate 40% of their refining margins to these projects so that they would continue to benefit from a 5% reduction in feedstock prices.

Optimization

In a bid to reduce fuel oil production and subsequently increase the margins of refineries, the Ministry of Petroleum has given the go-ahead for the optimization of 9 refineries. It is said that 13 refinery-integrated petrochemical projects have received licenses, which would be fed with crude oil and gas condensate. Besides, 3 of these projects, named Shahid Soleimani, Morvarid Makran, and Mehr Khalij Fars, have been shortlisted by the Economic Resilience Committee. Currently, for all refineries in the country, quantitative and qualitative upgrade projects have been defined, and engineering studies are now over. For instance, the project to upgrade gasoil quality at the Isfahan refinery is over while other refining projects are 20-100% completed.

Fuel Oil Projects Prioritized

The shift in the pattern of fuel oil consumption in the world has made it obligatory for countries to upgrade the quality of fuel oil. Jalil Salari, the CEO of the National Iranian Oil Refining and Distribution Company (NIORDC), has stressed that in light of the change in the percentage of crude oil recovery, fuel oil quality projects should be prioritized. Fuel oil quality upgrade projects have already become operational at the Bandar Abbas and Shazand oil refineries. The Shiraz refinery is producing 1.3 mb/d of fuel oil and a pilot project is currently under way to boost the quality of this product.

By operating fuel oil quality projects, NIORDC has contributed to the desulfurization process and value-added generation in favor of environmental obligations.

Needle Coke

Currentlycutting the rate of heavy products output at the Tabriz oil refinery, reducing fuel oil production at the Shiraz oil refinery, building fuel oil desulfurization unit, building CCR units at the Tehran oil refinery, building 81 tb/d desulfurization unit at the Isfahan refinery, building a fuel oil quality unit at the Kermanshah refinery and upgrading the quality of heavy products and delayed coking at the Bandar Abbas refinery isunderway. Furthermore, upgrading the quality of gasoil and gasoline at the Shiraz oil refinery, launching the coke petroleum unit and building a distillation unit at the Lavan refinery, building a needle coke production unit at the Shazand refinery and the second phase development of the Abadan refinery isunderway.

Project Details

Isfahan refinery:Residue hydrotreating unit (RU), desulfurization, and increasing low-sulfur fuel oil by 300,000 tonnes a month, which come online by March 2026.

Abadan refinery:Bottom upgrading studies to reduce fuel oil production and increase the quality of products in line with environmental obligations.

Shiraz refinery: Light naphtha isomerization unit by building a naphtha desulfurization unit and naphtha splitter with 6.5 tb/d capacity; building a new isomerization unit with 5 tb/d capacity to produce Euro-5 gasoline and building a unit to desulfurize middle-distillate products to reach Euro-5 gasoil.

Bandar Abbas refinery: The objective behind upgrading the quality of heavy products at this refinery is to minimize fuel oil production, supply higher-value products to increase the refinery profitability, increase products including diesel fuel in line with international environmental standards, produce oil coke at quality needed for aluminum manufacturing, producing Euro-5 gasoil and gasoline, propane, butane and varieties of solvents as well as base oils. The project is expected to come online in three phases by March 2026.

Shazand refinery: Needle coke production to reduce fuel oil output and produce 95,000 tonnes a year of coke based on national needs. It is expected to come online by 2025 with technical know-how provided by the Research Institute of Petroleum Industry (RIPI).

Tehran refinery: Building heavy naphtha processing units and CCR to reduce benzene content in gasoline and increase Euro-5 gasoline production from the current 6.5 ml/d to 8 ml/d, which is expected to come online by March 2025.Other plans underway at this refinery include a bottom upgrading product and completion of the petrochemical value chain.

Tabriz refinery: Implementing a comprehensive plan to increase gasoline and gasoil production from the current 3.8 ml/d and 7.2 ml/d to 4.9 and 9 ml/d respectively, while minimizing fuel oil production. This project is scheduled for 2026.

Lavan Refinery: Building a new vacuum distillation unit and bitumen production to convert residues of the atmospheric distillation tower to higher-value products. This project is expected to become operational by 2025.

Kermanshah refinery: Upgrading the quantity and quality of products to reduce fuel oil sulfur, coke production, hydrotreating of naphtha, and isomerization. This project is scheduled for 2025.

Venezuela Oil Market Comeback Amid Fragility

Fereydoun Barkeshli

Energy Market Analyst

Venezuela and the United States of America signed a protocol on 24 October that indicated a partial and conditional removal of US sanctions on Venezuelan oil, gas, and gold. The agreement was reached when President Madura agreed to facilitate the participation of opposition leaders in exile to participate in the country’s 2024 presidential election. However, it is worth noting that negotiations between the sanction-evicted US government and Venezuela started back in late 2022 when global oil markets began to tighten up and OPEC plus ministers agreed to tighten output in other to stabilize the market.

Multinational oil giant Chevron has been in talks with Venezuelan National Oil Company PDVSA since November 2022 to convince Caracas of an oil deal on the country’s offshore and onshore oil fields. Chevron moved into Guyana offshore in 2020 and invested to dig fresh oil from that country. Most of Guyana’s offshore fields are located in disputed waters with Venezuela. Caracas had repeatedly warned Guyana and foreign oil companies to leave disputed waterways or face consequences. Chevron lobbied with Washington to ease Venezuela’s oil sanctions so that both the Venezuelan oil and Guyana resources were tapped.

As such the late October finale agreement has a history of its own.

Venezuelan Oil Industry

The first oil well was excavated in Venezuela in 1914. The country was the second Latin American nation to extract oil after Mexico. American companies were in total control of US and European oil majors well into the 1970s. Although Venezuela obtained partial control of its oil sector, it was in 1976 that the Venezuelan government nationalized the industry and createdPetróleos de Venezuela, S.A., internationally referred to as the PDVSA. The company got full control of all the operations, though certain specific areas of operations were supported by American companies. Those operations included refining and marketing of refined products.

PDVSA pioneered joint ventures with US companies and ventured into refining projects in the US and setting up pump stations in the US and Europe. However, PDVSA experienced a couple of swings during the last decades.As such the company changed directions and that impacted its course of development strategy. Oil is inherently a long-term venture. Swinging visions proved to be harmful, but the US sanctions and American malicious global energy policies burdened the Venezuelan oil sector the most.

Venezuelan oil reserves are ranked first in the world. The country sits on 303 billion barrels of crude oil reserves. Saudi Arabia is the second largest crude oil owner with 267 billion barrels followed by Iran with 208 billion barrels of reserves. It is noteworthy that, the Venezuelan oil industry is now some 120 years old. Producing oil fields have passed their prime and are in the process of aging. As such to keep the production up and running requires massive investments and advanced technology. Sanctions deprived PDVSA of sufficient options to raise production inline with the huge crude oil reserves.

Venezuela produced 3.65 mb/d during its peak back in 1967 when the oil industry wasn’t fully nationalized yet.

It’s important to note that the quality and specifications of most of the Venezuelan crude oil are heavy, extra heavy, and high sulfur.Most multinational oil companies preferred to invest in fields with relatively light crude oil. Although there aren’t many refineries in the world that can process Venezuelan oil,there are some refineries in China and India. Though transportation cost would be very high. A VLCC oil tanker reaches US coasts in five days, while the same vessel could take up to ten weeks to arrive in China or India. Therefore, it is clear that most of the crude oil from Venezuela will be shipped to the United States of America. American downstream companies built refineries specifically for Venezuelan crude oil since the 1970s. Years before, refineries weren’t sufficiently sophisticated and technologically advanced to refine and process extra heavy grades of crude. Most of the Venezuelan crude turns into a solid state during transportation and storage. It is somehow costlier to refine such grade crudes. The issue of crude specifications is a limitation in most of Latin America, including Mexico. However, as the world runs out of light crude grades and as the refineries are more advanced, attention is moved towards Venezuela and other Latin American reservoirs. It’s also worth noting that extraction and development costs per barrel of Venezuelan crude is sometimes 4 to 6 times higher than the world average extraction investment costs.

Strategic Aspects

As mentioned earlier, the United States of America is now trying to back off from its initial policy of crippling the Venezuelan oil industry by imposition of sanctions. During some years of harsh sanctions on Venezuela; China, Iran, and Russia moved to Venezuela and cooperated with the country to support each other based on mutual respect and interests.

Iran and Venezuela have cooperated long before the new round of sanctions in 2019. Venezuelan oil industry strikes during the late 1990s and early 2000s crippled the country’s oil and gas sectors. Iran supported the Venezuelan government and helped the country to overcome obstacles. During the later years, Iranian service companies entered Venezuela in a big way. The impact of Iran’s investments and presence in Venezuela was so powerful and outstanding that US General, Laura Richardson believed that Iran’s presence in Venezuela was rivaling the United States. It is important to note that the Iranian presence in the Venezuelan economy goes beyond the oil sector and includes construction and manufacturing. China entered into the Venezuelan oil sector as well as other sectors of the economy in a big way, too. Russian oil and gas companies actively participated in the country’s economic life, too.

The United States of America was troubled noticing that the countries considered as unfriendly by Washington are active and present right on their southern neighborhood. Service companies belonging to the so-called global south are actively participating in the oil, gas, and mining sectors in Venezuela. US companies have a historical link with Venezuelan oil and gas sectors and should be embarrassed to see companies from other distant countries break into their realms and

challenge their interests. With the US influence in the Middle East fading and other regional and international powers, substituting, America is now doing all it can to strengthen its footprint in Latin America. It is a nightmare for America to see other countries replacing the United States.

Venezuela was the first country in Latin America that fought for independence from Spain in the 17th century and helped a couple of other nations in the continent to gain independence and freedom. As such Venezuela has a deep-rooted tradition of anti-colonial dominance.

Conditional Sanction Relief

Venezuelan government representatives have been in negotiations with US officials since late 2022 and early 2023. Under the protocol signed, the Venezuelan government agreed to allow opposition candidates who fled the country and exiled themselves to neighboring Barbados to participate in the presidential election in 2024. Opposition candidates won’t be those who instigated violence during the last presidential election. New candidates will be welcomed. Representatives from the European Union will be allowed to fly to Venezuela and oversee the ratified fairness of the election. No observers will be present for the US. These are the major conditions demanded by Washington.

As mentioned, the removal of the sanctions is partial:Venezuela’s PDVSA is allowed to extract and sell any quantities of oil to any destination for six months.

All revenues from the oil sales will be allowed to be transferred to the Venezuelan government.

Chevron Oil Company is allowed to invest and participate in any oil and gas operations both onshore and offshore.All secondary sanctions will be lifted.

A total volume of $3 Billion of Venezuelan assets that was frozen by the US since 2019 will be unfrozen and free.

All foreign companies’ licenses have to be renewed every month.

The extension of the sanctions postponement beyond six months is subject to the Venezuelan government’s commitment to the outcome of the election considered fair by the observers.

Mergers and Acquisitions

Let me get back to a phenomenon that is more and less common in various sectors of the economy; but particularly important in the oil and gas business. From time to time, companies under stress financially, technology-wise, or other social and political stresses, opt to merge and acquire each other’s assets in a bid to strengthen their positions and stand in the market.

Excessive climate and environmental policies and the Net-Zero goals put oil and gas industries under stress. As such a trend towards joining hands and strengthening position have emerged. In this context and framework, oil major Chevron acquired HESS another major oil company that is relatively smaller in assets compared to Chevron. Both companies are currently active in Guyana, a promising oil producer in Latin America that neighbors Venezuela and shares offshore fields between them. Guyana has so far a much smaller volume of reserves compared to Venezuela. Its crude oil reserves are estimated at 24 billion barrels. Excavations are relatively lower cost and with generous terms and conditions from Guyana, sound quite attractive. Chevron which is more powerful nowis attempting to move back to Latin America in a big way.In the meantime, enlarged Chevron has entered into the US Shale oil and gas operations and acquired proposition in the Shale and cracking. Shale, has been considered the poor man’s oil and gas sector. Most activities in Shale are carried out by small to medium companies and individuals. However, with the presence of Chevron, Shale is entering a new era. Market watchers expect that in the next move, BP and Shell may merge a much bigger oil company. These mega-mergers will make the oil economy more competitive and in a position to survive in a challenging global economy where the fourth industrial revolution is posing to distance from oil and gas.

It would perhaps be timely if National Oil Companies envisaged the possibilityof merging and setting up Mega NOCs. It is worth knowing that Mergers and acquisitionsare not limited to major International Oil Companies, or IOCs. Medium and family business oil companies are expanding and merging to strengthen their market position to the extent possible to protect themselves.

As such, the move by the US was calculated and based on the interests of the major oil companies that are going to re-engage with the Venezuelan oil sector after a long interval since early 2019. However, it is noteworthy that oil investments are always based on long-term calculations. No major oil company enters oil and gas and mining for six months and is subject to renewal every month. To the best of my understanding, Chevron would have not agreed to get back to Venezuela unless it was ensured that the temporary exemption would continue over a long period. We are not yet at the stage where we can figure out the terms and conditions under which PDVSA and Chevron agree to cooperate.

Impact of Sanctions Halt

In recent years, Venezuela hasn’t been a majoroil-producing member of OPEC. Reserves are abundant but limitations are many. For Venezuela to return to an output level of above 3 mb/d, we may assume that some 7 to 8 years of hard work will be necessary.

Some of the possibilities and openings to the Venezuelan oil sector and the economy in general are obvious:

Vast oil reserves can be transferred into higher oil output with massive investments to achieve economic recovery. For a country whose economy is not diversified and almost solely dependent on this industry, a recovery in the oil industry and output would make the livingstandard better.

Lifting of sanctions can lead to more foreign investments and joint ventures.

Improved access to technology. The country is virtually technology-starved. Transfer of technology is a priority.

Global market reach for oil and refined products.

However, the actual impact will depend on several factors including the extent of sanctions removal and relevant oil sector governance. Nevertheless, the United States has shown that sanction is one policy by which the country manipulated supply and demand factors for the US and the world economy. On the eve of the country’s presidential election, the removal of sanctions on the Venezuelan oil sector will translate into some 300-350 thousand barrels of oil per day.

Global Markets

As indicated earlier, one should not expect a major or immediate impact on prices and oil fundamentals. Its impact on WTI and America’s oil balance may be more noticed. However, when Venezuela misses out on Asia, shortages will be impacted on the China and other South Asian markets. That impact will be limited anyway.

Under the conditions that the United States is doing whatever possible to pose itself relevant to the Middle Eastern countries, a footprint in the Latin American country will be advantageous.

There’s little likelihood that OPEC and OPECPlus react to the resumption of oil flow from Venezuela. OPEC and OPEC+ ministers may meet in November this year to discuss and decide on the official oil production of member countries for the year 2024. Nevertheless, holding the conference will be subject to the agreement of all the members. Under the ongoing arrangements, Venezuela and the Islamic Republic of Iran are exempted from the quota system. Venezuelan official quota from the 2018 level is 1.9 mb/d. Secondary sources, however, indicated that the country wasn’t producing enough crude oil to meet its official quota.

In my opinion, the market will take note of Venezuelan oil production but will not necessarily take action to price in an additional output from Venezuela. As a matter of fact, as for OPEC and the international oil market, there is a lot more concern than that of Venezuela.

America has weaponized sanctions as a means of the war of attrition against oil producers. As such there could be a possibility that the United States may reverse its sanctions removal policies, once the market sentiments change. G7 members collectively sanction the energy sector of any oil producers at will. This warfare between the US and the Western countries backfires when it leads to constraints on supply capacity and higher oil prices. Easing sanctions on the Venezuelan oil and gas sector shows that Americans have kept world energy as their captive.

CGX, FronteraConsider Project Offshore Guyana

CGX Energy Inc. and Frontera Energy have discovered 114 ft (35 m) of net oil pay in the Wei-1 well in the Corentyne Block offshore Guyana.

The well was drilled by the semisubNobleCorp Discoverer (ex-Maersk Discoverer) 14 km northwest of the Kawa-1 discovery in 1,912 ft (583 m of water) and about 200 km offshore the capital Georgetown, Guyana.

The partners believe the rock quality in the Maastrichtian horizon of the well is analogous to that reported for the Liza Field on the Stabroek. Results, they add, strengthen the case for a potential standalone shallow oil resource development across the Corentyne Block.

Wei-1 targeted Maastrichtian, Campanian, and Santonian stacked sands within channel and fan complexes in the northern section of the block.

VAALCO Fixes Leak a Gabon Feed Gas Line

VAALCO Energy is reviewing locations for its next planned drilling campaign around the Etame Field offshore Gabon, the company said in a results update.

Production performance in the period to Sept. 30 was strong, supported by improved operational uptime. The newly installed FSO has reduced OPEX costs at Etame. However, marine costs have risen due to inflation arising from supply vessel rates, transportation, and contractors, along with higher diesel costs with the feed gas line being temporarily suspended due to a leak.

Equinor, SLB to Decide About Platform

Equinor and SLB have until the end of this year to respond to a report by Norway’s Petroleum Safety Authority (PSA) concerning a well-control incident on the Gullfaks C platform in the North Sea.

This occurred on Jan. 25 and involved fractured cold tubing. Issues arose in connection with cleaning up, supported by coiled tubing (CT), following a fracturing operation in a Gullfaks production well.

According to the PSA’s investigation, during circulation, a fracture occurred in the CT on the surface. Further fractures followed in the vicinity of the reel and injection head.

When CT fracturing also occurred down the well, the blind shear ram on the BOP used for the CT operation (CT-BOP) was activated to shut in the well and restore the primary barrier.

ONGC Expands Work Scope for KG-DWN-98/2

ONGC has awarded McDermott a transportation and installation contract for the KG-DWN-98/2 project offshore in eastern India.

The company will deliver and install a central processing platform (CPP) and living quarters. The platform will process wet gas, which will then be exported to an onshore terminal.

This represents an expansion of McDermott's current scope of work under the KG-DWN-98/2 project, originally awarded in 2018 and currently nearing completion.

Heerema Vessel Removes Australia Riser Turret Mooring

Heerema Marine Contractors has lifted the Nganhurra riser turret mooring (RTM) onto a barge offshore North West Cape in Western Australia for operator Woodside Energy.

The system is now heading to the Australian Marine Complex near Perth where it will undergo cleaning of marine growth and deconstruction, with a target to recycle and reuse 95% of the structure.

According to Woodside, the removal operation was a world first. The heavy-lift vessel Heerema Aegir, with three supporting tugs, lifted the 83-m long, 2,500-metric tons RTM onto the 120-m barge where it was secured for its onward journey.

Green Hydrogen Global Outlook

Shuaib Bahman

Over recent years, the global determination has become firmer than ever for the generation of renewables. Most developed and even developing nations are largely inclined to supplant renewables for oil and gas. What further motivates nations to develop renewables is environmental concerns and global warming, blamed mainly on fossil energies.

Investment in renewables is not limited to oil and gas consumers as many fossil energy producers are also concerned.For instance, over recent years, Arab nations’shift from oil to green hydrogen has been so tangible that some see the Persian Gulf as the future exporter of clean energy. Several Arab nations including Egypt, Oman, the UAE, Saudi Arabia, Algeria, and Morocco have embarked on new ambitious projects for green hydrogen production in recent years. These projects are indicative of the daily growing significance of the Middle East and North Africa (MENA) in global green hydrogen production and export.

Towards Green Hydrogen

A variety of estimates is given about green hydrogen production. According to the International Energy Agency (IEA), although green hydrogen projectshave led to a big jump in low-carbon hydrogen production in the world, the number of projects should increase at least nine-fold for the country to move towards zero greenhouse gas emissions by 2050. The current perspectives show that low-carbon hydrogen production may reach 17 million tonnes by 2030, which is currently less than 1 million tonnes. However, for carbon neutrality, the IEA has fixed a 150-million-tonne target by 2030.

Despite all the shortcomings in green hydrogen production, some believe that the oil and gas industry is close to a major development as it is likely to be eliminated from the energy mix. Some oil producers are moving towards hydrogen production, indicating their long-term strategy for the period following the exhaustion of fossil energies.

Europe’s long-term approach vis-à-vis clean energies, including hydrogen, is clear. The European Commission in May 2022 presented a fuel scheme aimed at reducing EU nations’ dependence on Russian fossil fuel and finding an alternative clean fuel. In the 20-page document, the word "hydrogen" has been cited 54 times. The EU stresses that green hydrogen can be an alternative to natural gas, coal, and oil in the transport sector where decarbonization is difficult. The EU’s objective is set for the production of 10 million tonnes of renewable hydrogen by 2030. The EU would need €28-38 billion for hydrogen production infrastructure and €6-11 billion for its pipeline and storage.

Green Hydrogen Restrictions

Although some governments firmly keep presenting hydrogen as the solution and clean fuel for the future, despite all its environmental advantages, renewables such as green hydrogen cannot be easily relied on. Green hydrogen would cause technical and financial problems which would in turn give rise to consequences concerning pollution, safety, and efficiency.

First and foremost, the use of green hydrogen requires major investment. This investment is not only limited to the production of green hydrogen or other renewable energies butalso the issue of changing the energy consumption base in large industries is raised, which simply cannot be entered in this field. Because it requires very large investments that currently no country can fundamentally change in this area.

The second point is about the environmental consequences of the mass production of green hydrogen. Although hydrogen is abundant in nature in combination with oxygen in the form of water or the composition of various substances and gases, its separation and extraction to convert it into energy is flammable and therefore, would increase GHG to a large extent.

Another limitation of green hydrogen is its portability, which must be kept under high pressure due to its low weight. Another main limitation of hydrogen is related to poor efficiency. The use of hydrogen in industries requires several changes such as electrolysis, compression or liquefaction, transportation, storage, and conversion. Each of these steps can reduce the efficiency of different industries. Because most of the industries in the world are designed to use fossil energy as the base fuel.

Having said that, despite the widespread acceptance of many countries for the production of clean energy such as green hydrogen, the use of this energy still faces significant limitations. Paying more attention to these restrictions may reduce the competition to produce this type of energy. There have been speculations about the decline in demand for the use of green hydrogen in the world.

Iran and Energy Transmission

Shuaib Bahman

Iran’s geographicalposition has historically been a key factor in boosting the country’s standing. Iran has always been known to connect the West and East and North and South. Historical records also show Iran’s important role in international trading in different periods, the most important of which has been the Silk Road.

This geographical feature has won Iran, already rich in energy resources, recognition as a key route for the transfer of oil and gas and even new energies. This issue takes up added significance when we find out that the countries surrounding Iran are making significant investments in renewables generation and their distribution across the globe.

Special Position

When it comes to Iran’s geopolitics, a flurry of assumptions takes shape in everyone’s mind. Political and geopolitical literature has always underscored the point that owing to its unique geographical position, Iran can link Europe with Africa and Asia. That is what one can simply realize on the map. Another point with Iran’s geopolitics is its strategic position in the center of energy production, i.e. Persian Gulf.

Meantime, the location of Iran between the Caspian Sea and the Persian Gulf gives rise to the assumption that Iran is a safe, inexpensive, and short route for the transfer of energy from one point to another. Iran also shares border with 15 nations, thereby being potentially able to link them in the energy transport sector. Over recent years, it has been said time and again that Iran may link energy producers and consumers located in its surroundings.

Therefore, Iran enjoys a geopolitically important standing. In addition to being rich in energy, it offers unrivaled opportunities in energy transfer. However, in recent years, Western policy in general, and US policy in particular, has prevented Iran from extensive involvement with major regional projects. Ever since the collapse of the Soviet Union, the US has been seeking to deprive Iran of engagement in any regional and international project associated with energy transfer. As a result, Iran’s energy sector has been sanctioned by the US whose secondary sanctions prevent any third party from engaging with Iran. Consequently, US sanctions have made foreign investment in Iran's energy sector difficult.

Changes in Conditions

Currently, due to significant changes in the international order, Iran and the US have experienced important developments in their standings. The US sanctions tool has become ineffective, while Iran has been empowered enough to cooperate with other important players in the energy sector. Furthermore, US sanctions have resulted in significant progress in Iran’s energy sector.

Under the current circumstances, in light of regional and international rivalry for renewable energy generation and its transfer, Iran is required to draw up a plan. Iran's strategy in this sector can attract foreign investment for financing renewable energy projects while winning over foreign parties’ consent for Iran to become a regional energy hub. What grants Iran such an advantage is the natural geographical position of this country which can serve as the least expensive route for energy transport. Meantime, when compared with its rivals, Iran is more stable and can secure energy supply.

In addition to its geographical position, Iran’s membership in regional and international bodies and mechanisms including the Shanghai Cooperation Organization (SCO) and the BRICS mayboost interactions for attracting foreign investment into the energy sector. Therefore, Iran enjoys a significant position in defeating US sanctions by active participation in energy transfer projects. Of course, such a position requires paying attention to the element of time, as Iran’s rivals are pushing ahead with their initiatives.

Darquain Pumping Station

Darquainwas a village near theRiver Karoun when oil was first discovered in Iran. Its name was derived from Arabic words, indicating the Arab population there.

The village was calm and remote and maybe was not so known until oil was discovered and extracted in Iran to change everything. Darquain was not spared.

Pumping Station

Within two years, the equipment, steam boilers,and huge pumps made in Manchester were transported to these small townsby the river bank. Then Indian and Iranian workers and architects built several tall buildings around the big steam pumps and turbines using London bricks and established offices and workshops in them.

An oil heater was also installed in the way to the pumps to increase the acceleration of the fluid by lightening the oil during winter. Examining the dates on the pumps and equipment installed in Darquain shows that the completion of the pumping station and its operation by the increase in the capacity of the refinery was done gradually between 1915 and 1930.

A cement relief on the façade of one of the pumping stations shows the year 1930, which if this number is the date of completion of the pump house building, the implementation of Darquain development plans has lasted more than 10 years.

Providing amenities was gradual and did not happen all at once, but with the development of the pumping station and due to the increasingnumber ofmanpower, a residential compound including four three- and four-room worker "lanes" and one employee lane with 20 residential units of any type W5 was opened, which was later handed over to the Water and Electricity Organization with the decline of oil recovery.

Darquain had clubs for employees and workers, a school, a dispensary, and a police station. The houses were built 40-50 km off the river. There was also a garden house reserved for top political officials.

Industrial Town

Darquain had a movie theater that projected films twice a week. Like other movies, it had two theaters, one for summer and one for wintertime.

The village, whose residents lived on fishing and dry cultivation, soon turned into an industrial town where engines and pumps revved up everywhere and smoke rose from all chimneys. 

Streets and allies lined with trees, commuting services traveling between KutAbdollah and Ahvaz, and high-rise brick buildings of pumping stations were all reminiscent of 19th-century English architecture, the late Qajar dynasty, and the early Pahlavi dynasty. Foreigners might have recalled Manchester's factories.

Darquain was the last pumping station on the Abadan oil pipeline. KutAbdollah was located ahead of it. The Molla Sani station was still before it. Due to the existence of a similar pumping station and proximity to Ahvaz, KutAbdollah was a major logistics center for the Anglo-Persian Oil Company (APOC). A small airport, a small brick factory, and a power station were established there.

Oil pumping from the Darquain pumping station continued until oil production surged to all-time highs from the Ahvaz oil field in the early 1970s. The new Ahvaz-Abadan pipeline fully met the refinery’s crude oil needs, freeing up MasjedSoleiman’s oil to be exported to Kharg. From that time onwards, these pumping stations lost their significance.

Darquain Today

Darquain, as it is today, is a city located 25 km from no man’s land. It is limited by Ahvaz to the north, Abadan to the south, Shadegan to the east, and the River Karoun to the west. Its location on the main route connecting north and south, the existence of numerous oil wells, the remnants of an atomic power plant, the oldest oil pumping station in the Middle East, the RiverKaroun, palm trees, and proximity to the Iran-Iraq border are among outstanding features of Darquain.

When the city of Abadan was occupied by Saddam, Darquain had become a frontline. During the 1980-1988 war, the city remarkably resisted the enemy, creating epic and unrivaled scenes. The Darquain pumping station was used as a military barracks during the war. The impacts of artillery fire there are reminiscent of the eight years of Sacred Defense and the horrible moments of conflagration.

After the imposed war, due to the physical and apparent attractions of the site, the tall buildings and chimneys were regularly used as locations for shooting films on war. Restoration of the historical pumping station and company sites would be a valuable element in Iran’s petroleum industry heritage.