26th GECF Ministerial Meeting

Underinvestment in Gas Potential Threat to Energy Security

GECF Instrumental in Global Gas Market

The 26th Ministerial Meeting of the Gas Exporting Countries Forum (GECF) was held in Tehran from 6 to 8 December. Minister of Petroleum Mohsen Paknejad presided over the meeting. The GECF ministerial delegations exchanged views on various issues, including gas trading and gas output hikes.

Addressing the meeting's inauguration, Minister Paknejad said the GECF was fully aware of the significance of improving cooperation and adopting a unified approach to overcome challenges.

“The Forum is fully determined and ready to play a daily increasing effective role in global gas and energy developments,” he said.

Underscoring the international significance of the meeting, he added: “This meeting provides a good venue for the exchange of views and thoughts among GECF member and observer states as well as pundits and export of the gas and improve bright horizons for cooperation.”

Gas Output Hike

While referring to Iran’s natural gas reserves, Paknejad said: “As a leading gas producer in the world, Iran has managed to make valuable achievements in developing the required infrastructure for enhanced natural gas supply, despite pressure caused by sanctions slapped on the oil and gas industry.”

“Despite unjust and unilateral sanctions imposed by the United States in recent years, a significant portion of projects planned in the [upstream and downstream] gas sector development have come online, bringing Iran’s natural gas production to 275 bcm a year,” he added.

Paknejad said the share of natural gas in Iran’s energy mix had grown to above 70%, adding: “Using untapped domestic and international potential for increasing natural gas production, energy efficiency and optimizing consumption are among key objectives of Iran’s gas industry.”

“While proceeding with natural gas production, Iran remains committed to environmentally friendly methods. Iran is also determined to be a leading nation in the development of technologies and methods that would help boost the efficiency of gas recovery while minimizing negative environmental impacts,” he said.

Fossil Fuels

Paknejad said adopting unilateral approaches and hasty transition from fossil to non-fossil fuels had faced the world with more complicated hazards, adding: “These approaches would stoke up energy instability, injustice and poverty in the world. Even the most upbeat energy perspectives indicate that oil and gas would continue to meet at least half of global energy needs by 2050.”

“Therefore, making efforts to eliminate or replace fossil fuels would be unrealistic and threatening global energy security,” the minister said.

He stressed that natural gas had proven its vital role in filling globally growing energy demand thanks to its economic and environmental advantages, not to mention its abundance and expanding infrastructure.

“Based on the latest forecasts by the GECF Secretariat, the share of natural gas in the global energy mix would reach 26% by 2050,” he added.

The minister said: “Achieving such standing would not be possible without proper energy policymaking, massive investment in the natural gas supply chain, and all-out support for natural gas use at the international level.”

Energy Security

Paknejad said energy policy and the current status of investments had laid bare concerns about the future of the gas industry.

“In light of growing gas demand in the post-Covid-19 pandemic, geopolitical developments and imposition of extraterritorial sanctions on oil and gas exports by some GECF member states, the fragility of the global economy came to the limelight as energy security was threatened,” he added.

Paknejad underlined the necessity of energy supply and demand, saying advancing collective interests would depend on the freedom of economic exchanges between nations. “Therefore, we should not disturb such conditions by unilateral trans-territorial sanctions and intervention.”

“Development of cooperation between energy producers and consumers would be instrumental in global energy stability and security, which would clear the way for investment in the natural gas sector,” said the minister.

GECF Standing

Paknejad said investment in the gas industry was expected to increase in the short- and long-term, adding that it was unlikely to get closer to the levels seen in the past, thereby posing a potential threat to global energy security.

He said making collective endeavors by GECF member states to preserve their status in the global gas market was important. He added that the development of giant natural gas reserves held by GECF member states by reliance on cutting-edge technologies would be an effective measure towards a green economy and ensuring global energy security.

“In a coordinated manner and with the help of the GECF Secretariat, we should try more than ever to win international recognition for natural gas as part of the final solution to sustainable development,” he said.

“Dialogue, cooperation, and strategic alignment among GECF member states pave proper ground for its strength. As a founding member of the GECF, Iran has been playing a fundamental role in formulating its objectives and strategies,” said Paknejad.

He said the GECF was well aware of the significance of upgrading cooperation and adopting a united approach to overcome challenges. He added: “The GECF is determined and prepared to play a more effective role in global gas developments. Such determination and preparedness is a priceless asset that would enable us to reach our common objectives.

Paknejad welcomed the new ministers of Bolivia, Egypt, Equatorial Guinea, Libya, Russia, Venezuela, Mauritania, Peru, and Senegal, wishing them success in their new positions.

He appreciated the Secretary General of the GECF, Eng. Mohamed Hamel, and his team for their contribution to the ministerial event.

Prosperous Future

Hamel, in his opening speech, praised Tehran as the birthplace of the GECF, saying the GECF was established in the Iranian capital in 2001 as a global platform for cooperation in the natural gas sector. He said there was a spirit of cooperation and solidarity between GECF member states.

Noting that the GECF is seeking to guarantee a prosperous future for natural gas, he said it had to adapt itself to the globally changing perspective.

He said the world has seen a significant 70% growth in demand for natural gas since 2001, highlighting resilience against the COVID-19 pandemic, economic developments, and geopolitical crises.

Hamel said natural gas consumption increased significantly in 2023, adding: “The importance of natural gas as a clean, accessible, reliable and flexible source of energy has never been so evident.”

He reiterated the GECF’s mission to promote natural gas as a key element in sustainable development, energy, and food security.

He said that the GECF had absorbed new members and established partnerships in terms of dialogue with consumer nations and international bodies.

Hamel said that the GECF had improved the quality of its analysis and publications, actively supported its member states in the course of UN-led talks, and operationalized the Gas Research Institute (GRI).

The GECF secretary-general heaped praise on Paknejad and his team. He also admired the unrivaled arrangement made by them for holding the Ministerial Meeting and appreciated the Iranians' hospitality.

He also welcomed the new ministers and appreciated their predecessors.

26th GECF Ministerial Meeting

Gas, Key to Global Energy Future

Tehran hosted the 26th Ministerial Meeting of the Gas Exporting Countries Forum (GECF) on 6-8 December 2024. As one of the founding members of GECF, Iran hosted the Ministerial Meeting for the fourth time. GECF member states exchanged views on global gas markets. Iran took the chance to introduce its potential for gas sector development and declare its openness to attracting foreign investment. In addition to gas imports and exports, Iran is ready to cooperate with regional nations in gas swapping, combined trading, and barter.

Energy Diplomacy

The 26th Ministerial Meeting of the GECF was held in Tehran against the backdrop of tumults in the Middle East. Speculation was rife that the meeting would be held remotely; however, the ministries of petroleum and foreign affairs made arrangements for the meeting to be held in person. Since taking office, the Ministry of Petroleum of the 14th administration has tried its best to enhance Iran’s oil and gas production capacity while introducing the country’s potential to foreign investors and broadening its ties with neighbors and trading partners. This meeting also enabled Iran to strengthen its links with fellow member states and inform global trading actors about Iran being a key and influential player due to its massive hydrocarbon reserves and strategic geographical position.

Energy Transition

The world energy outlook is inevitably prone to fundamental changes. Natural gas lies at the heart of the energy transition, and while it is a cleaner, reliable, and multipurpose source of energy, it plays a key role in addressing the challenge of supplying growing energy demand and cutting GHG emissions. Ali Mohammad Mousavi, Deputy  Petroleum Minister for international and trade, told an expert-level meeting of the GECF that for most GECF member states, gas is not merely a source; rather it is a driver for economic growth, a path towards energy security and the cornerstone of sustainable development.

Regional and geopolitical developments, in recent years, have shown that natural gas and its international trading would remain a vital factor in the energy security of the human community. In spite of steps taken in favor of geopolitical and environmental objectives and liberalization of energy markets, wherever energy security is threatened by severe hazards, energy policymaking is shifted to energy security.

Gas producers and exports have indicated, in recent years, that they have been taking steps towards energy transition. But it should be noted that gas would remain a major source of energy. Due to its low pollution, it is instrumental in development and productivity.

Iran’s Role

Mohamed Hamel, GECF Secretary General, said Iran has historically played a key role in the future of energy.

He recalled the first discovery of oil in Iran in 1908 in Masjed Soleiman where the first oil well in the Middle East was drilled.    

He referred to the 1951 nationalization of Iran’s petroleum industry as a historic event, saying: “This audacious gesture served as a model for oil producers to manage their own oil assets. That also paved the way for the adoption of key resolutions about permanent sovereignty on natural resources as the General Assembly of the United

Nations in December 1962.”

Hamel went on to highlight Iran’s pivotal role in the establishment of the Organization of the Petroleum Exporting Countries (OPEC) in 1960, saying the producer group enabled exports to set up global oil markets.

“In 2001, Iran was instrumental in the establishment of the GECF,” he said, adding that the GECF development continued when Iran’s Mohammad Hossein Adeli was elected secretary general.

He said owing to its massive resources, technological expertise, and futurist perspective, Iran is the cornerstone of progress in global oil and gas markets.

“The perseverance Iran has shown in overcoming numerous challenges including unilateral bullying tactics is remarkable and deserves praise,” he added.

Hamel referred to supply and demand security as two sides of the same coin, adding: “Guaranteeing the security of supply depends on timely and sufficient investment. The investment needed in the upstream and downstream sectors for supplying growing gas demand and guaranteeing natural gas supply security is forecast to exceed $9 trillion.”

He said the GECF’s position was based on reality and not imagination, adding: “To achieve 17 sustainable development goals (SDGs) set forth in the agenda of the UN Development Program for 2030 and realizing the goals of the United Nations Framework Convention on Climate Change (UNFCCC), the world should use all available energy sources and technologies. There is no single solution to all questions. Energy routes should adapt themselves to national priorities, circumstances, and capabilities.”

Hamel said the GECF forecasts primary energy demand to grow 20% in the coming three decades, particularly in developing nations as the world population is set to increase 1.7 billion by 2050, urbanization is to expand, the global economy is set to double and global demand for higher living standards is poised to accelerate.

“Energy transition could not be simply seen as an on/off switch; rather it is an evolutionary and transformative process which needs time to prove its cost-effectiveness.”

Three-Day Meeting

The extraordinary meeting of the Executive Board of the GECF was held in Tehran on 6 December.

Delegates from GECF member states also visited the Research Institute of Petroleum Industry (RIPI) on 7 December to get familiar with the latest achievements of Iran in the oil, gas, refining, and petrochemical industries.

Azim Kalantari-Asl, director of RIPI, told the visitors: “RIPI is ready for cooperation with GECF member states in the upstream and downstream oil industry.”

He said “conventional and unconventional gas reserves (exploration and production)”, “gas storage technologies (ANG, underground)”, “enhanced oil and gas recovery”, “CO₂ capture and use”, “separation and management of advanced chemicals (polymers, catalysts, nanoparticles, etc.)”, “petrorefinery design and engineering”, “flare gas recovery (FGR)”, “helium, blue hydrogen production”, “mini-LNG technologies”, “energy efficiency” and “training courses” were among grounds for cooperation between Iran and fellow GECF member states.

During the December 7 expert meeting in Tehran, GECF experts held three workshops to review the “short-term gas market report”, “global gas outlook in 2050” and “GECF data exchange mechanism”.

In the first workshop, reports were presented on maintaining the accelerated growth of the global economy, global gas consumption growth in Asia, mainly in China and India, and power generation as the main driver of global gas demand growth. It was also stressed that the transport sector was emerging as a key driver of gas demand.

Global gas production hikes to meet growing gas demand in parallel with global gas trading growth due to China’s imports were among other issues discussed in the first workshop.

It was noted at this workshop that LNG exports had increased 70% over the past decade. In the meantime, capacity building for LNG regasification to increase Asian LNG imports, and the oil price index for spot trading were also discussed.

Discussing key issues on the global gas model as a precise energy system model, hypotheses associated with the global economy and prices as well as energy and natural gas demand outlook were among issues discussed at the second meeting.

The primary energy demand across the world is forecast to grow by 20% by 2050. Natural gas would also remain an essential element in the global energy mix. It has a 23% share now, which is set to rise to 26% by 2050.

The third workshop was focused on data quality management, the GECF Secretariat’s cooperation with the Riyadh-based Joint Organizations Data Initiative (JODI), and a quick review of statistics.

GECF member countries account for 70% of global gas reserves, 40% of production, 47% of piped natural gas exports, and 51% of LNG exports. That is why gas-rich nations are interested in joining the GECF. The body has been growing since 2009. Its members have seen their share of world energy mix growing, particularly in the fossil fuel sector. Natural gas is bracing for a bright future.

Of 12 full members of the GECF, five countries were represented by ministers and the rest by deputy ministers during the Tehran Ministerial Meeting.

The next Ministerial Meeting of the GECF is set to be held in Qatar in 2025. The GECF is to hold its next summit in 2026.

Iran to Preside Over OPEC 2025

The Organization of the Petroleum Exporting Countries (OPEC) during its 180th ordinary ministerial meeting appointed Mohsen Paknejad, Iran’s minister of petroleum, as the rotating President of the OPEC Conference from 1 January 2025 for 1 year.

Paknejad said: “As the OPEC Conference president in 2025, I will fully remain committed to using all our capacity to boost the morale, coherence, solidarity and progress of the Organization.”

He expressed his gratitude to the OPEC President and OPEC ministers for their confidence in Iran’s minister of petroleum to serve as President in 2025.

“Undoubtedly, holding such a position would be a source of pride for me and my country, the Islamic Republic of Iran, as a founding member of OPEC,” he said.

“We are all well aware of the sensitivity and complexity of the global situation and the significance of maintaining internal unity and coherence of OPEC and continuing interaction and cooperation with non-OPEC partners within the framework of the Declaration of Cooperation (DoC),” he added.

Paknejad took the opportunity to congratulate OPEC and its partners on the occasion of the eighth anniversary of DoC.

DOC Turns 8

The Declaration of Cooperation between OPEC Member Countries and non-OPEC oil-producing countries adopted by 12 OPEC and 10 non-OPEC oil producers turned eight on 10 December 2024. Eight years ago, on this day, OPEC Member Countries and Azerbaijan; the Kingdom of Bahrain; Brunei Darussalam; Equatorial Guinea, which later joined OPEC; Kazakhstan; Malaysia; Mexico; the Sultanate of Oman; the Russian Federation; the Republic of Sudan; and the Republic of South Sudan, met in Vienna, Austria, to discuss the conditions of the global oil market and identify possible means to restore market stability.

These historic, constructive efforts resulted in the establishment of a unique platform to facilitate cooperation and dialogue among its participants – the Declaration of Cooperation (DoC). Notably, other non-OPEC oil producers attended the meeting in support of the initiative.

The resounding success met on 10 December came about following the achievement of two landmark milestones in the history of the global oil industry: the Algiers Accord, which was signed on 28 September 2016 in Algiers, Algeria, at the 170th (Extraordinary) Meeting of the OPEC Conference; and the ‘Vienna Agreement’ adopted on 30 November of the same year in Vienna, Austria, at the 171st (Ordinary) Meeting of the OPEC Conference.

Reflecting on the occasion, Haitham Al Ghais, Secretary General of OPEC, stated: “Eight years ago, a group of leading oil producers, including OPEC Member Countries and some non-OPEC oil-producing nations, decided to join forces to address the instability the global oil market was then facing, marking the beginning of a new chapter in multilateralism, international cooperation and the history of the oil industry.”

“These courageous and vital efforts have continued benefiting the industry as a whole, its stakeholders, and the global economy, as clearly demonstrated during the market downturn caused by the COVID-19 pandemic, despite the criticism and skepticism by some industry stakeholders,” Al Ghais added.

Since its inception, the DoC framework has aimed at facilitating cooperation and dialogue, including at the technical and research levels, among its participants in the interest of oil market stability.

Petroleum Ministry 100-Day Performance Review

Three months into office, the Ministry of Petroleum has released a brief report of its 100-day performance. Minister of Petroleum Mohsen Paknejad had announced enhanced oil and gas production focusing on shared fields as one of his top priorities. Iran’s oil and gas output has reportedly grown over this time. That has materialized against the backdrop of tough sanctions remaining effective against Iran’s petroleum industry, thereby restricting Iran’s petroleum industry development. However, it has managed to increase its oil output by 60,000 b/d, gas production by 30 mcm/d, and gasoline supply by 8 ml/d. Iran has also gained $6.2 billion from selling petrochemicals.

Upstream Sector

One of Paknejad’s plans has been to enhance oil and gas production, mainly from shared fields. He has already said Iran would see its output grow 400,000 b/d by March 2026. Less than one month into office, the Plan and Budget Organization authorized the Central Bank of Iran to pay $3 billion in facilities through agent banks to the National Iranian Oil Company (NIOC) to increase crude oil production from hydrocarbon fields from 1.939 mb/d to 2.189 mb/d. At its discretion, the Central Bank of Iran (CBI) can offer the most suitable financing method.

The private sector may use instruments such as “Sukuk bonds”, project funds, crude oil commodity deposit certificates, crude oil delivery drafts, payment commitment certificates, and various banking facilities to finance these contracts. This new policy which gives the green light for the first time to private investment in oil and gas field development, has results and advantages.

Owing to this policy, oil production increased by 60,000 b/d over this short time. The bulk of production came mainly from areas run by the National Iranian South Oil Company (NISOC), the West Karoun cluster of fields, and areas run by Arvandan Oil and Gas Production Company (AOGPC). In the meantime, at Iranian Central Oil Fields Company (ICOFC), several projects have become operational, new wells have come online and desalination projects are underway. According to NIOC planning and owing to a $3 billion loan, oil production is projected to increase by 200,000 to 250,000 b/d by next March.

Iran’s petroleum industry needs $200 billion in investment. The bulk of this investment should come from abroad; however, domestic resources are prioritized as the objective is to reach maximum production.

Gas on the Rise

Iran’s gas production capacity is close to 1 bcm/d. However, due to the extension of Iran’s gas grid and the 75% share of gas in Iran’s energy mix, there is an imbalance challenge. More than 75% of Iran’s gas comes from the massive South Pars gas field whose output has crossed 710 mcm/d. Although overcoming this challenge requires massive investment in this sector, including the operation of gas fields in Iran and building gas compression platforms at South Pars to boost pressure in the giant offshore field, the Ministry of Petroleum has tried to lift gas production to guarantee energy security in addition to the network stability. Therefore, production from some new wells has added about 30 mcm/d to national gas output.

South Pars recently supplied a record 711 mcm/d of rich gas, up from 706 mcm/d registered last year. National Iranian Gas Company (NIGC) data show Iranian refineries are currently supplying 840 mcm/d of gas. In the meantime, for maximum gas production, the 13 refineries of South Pars are producing 600 mcm/d of gas.

Gas Trading Share

NIGC is considering talks with neighboring nations to enhance its share of global gas trading. Talks have been finalized for Iran to import gas from Russia. An agreement is expected to be signed shortly. Iran and Turkey are also getting close to reaching a deal on extending their gas agreement. Talks are underway with Azerbaijan’s SOCAR to extend the swap deal as the two parties are willing to do so.

Talks for gas transit from Turkmenistan to Turkey via Iran’s territory are set to start soon. The Ministry of Petroleum is also intending to hold talks with Turkmenistan for gas imports. NIGC and the Turkmen side have already signed an MOU to that effect.

Petroleum Products

The 14th administration took over when production and consumption were far apart. Under such circumstances, the first step was to reduce the gap between production and consumption, prevent gasoline imports, and supply local needs by short-term and mid-term solutions. That explains why a crash plan for increased gasoline production was adopted by the 14th administration to counter the gasoline imbalance.

National Iranian Oil Refining and Distribution Company (NIORDC) has increased gasoline production by more than 8 ml/d during 76 days. The Bandar Abbas Gas Condensate Refinery has increased its output by 4 ml/d to 44 ml/d, the Theran refinery has seen its output rise by 2 ml/d to 9 mb/d, the Isfahan refinery has increased its output to 14 ml/d, up 2 ml/d, and the Tabriz refinery has boosted its output by 500,000 l/d to 4 ml/d.

The refineries have also increased gasoil production by 5 ml/d. In addition to the quantitative rise in petroleum products supply, quality has been focused upon by the Ministry of Petroleum. Official data indicate that 70% of national gasoline and 64% of gasoil output in Iran has been Euro-4 and Euro-5 grade.

National Iranian Oil Products Distribution Company (NIOPDC) figures show that a total of 4 billion liters of liquid fuel (gasoline and fuel oil) was delivered to power plants in two and a half months in the current calendar year, up from 2.186 billion liters a year, and 3.171 billion liters and 3.735 billion liters the preceding years.

$6.2bn Petrochemical Gains

Over the past 100 days, the petrochemical industry has earned Iran $6.2 billion from 12.3 million tonnes of products. That includes 22 mt domestic sales for $3.2 billion. Petrochemical exports have also earned the country $3.8 billion.  According to a report received from the CBI, $3.1 billion has been deposited by petrochemical companies after providing the necessary financing to companies (chemicals and catalysts, feedstock, improvement projects, development projects, facilities, and hard currency liabilities).

In the meantime, during this period, the process of spatial planning studies was initiated to formulate optimal investment opportunities in the petrochemical industry and complementary industries per the capacities and requirements of each province, laying the groundwork for the implementation of the natural gas consumption management plan in the construction sector with investment from petrochemical companies, MOU with petrochemical holdings to implement a 150,000-barrel refining project to supply liquid feedstock to petrochemical companies, planning for the renovation of Mahshahr and Assaluyeh jetties, etc., has also been carried out in the petrochemical industry.

OPEC Endorses Iran

Under Paknejad, Iran showed the highest monthly production hike among fellow OPEC members. A report released by the Organization of the Petroleum Exporting Countries (OPEC) showed that OPEC’s overall output was down 2.5% on September month-on-month, while Iran had increased its output by 0.6%.

According to the secondary sources Iran produced 3.316 million barrels of crude oil in September, up 21,000 b/d from the month before. Iran’s October oil output grew 21,000 b/d month-on-month, while Saudi Arabia and Iraq saw their output down respectively 23,000 b/d and 155,000 b/d.

PSEEZ Investment Tops $150bn

The CEO of Pars Special Economic Energy Zone (PSEEZ), Sekhavat Assadi, said investment in the zone totaled $150 billion.

“By supplying about 45 million tonnes (mt) of petrochemicals, it makes up about 50% of national petrochemical production capacity,” he said.

Assadi said the massive South Pars gas field’s production capacity had reached 712 mcm/d, adding: “This is the highest gas production record in recent years. It is fed into 13 refineries.”

He said, referring to the operation of eight refineries in Assaluyeh and five more in Kangan, “The gas delivered onshore is processed at these refineries before being fed into the main grid.”

Noting that 860 mcm/d of gas is being processed to be injected into the national grid, Assadi said: “This is much more than Europe’s total gas consumption.”

He said PSEEZ was producing 700,000 b/d of gas condensate, 480,000 b/d of which is delivered to the Bandar Abbas Gas Condensate Refinery to be converted to gasoline. The refinery accounts for 45% of the national gasoline production capacity.

Assadi said South Pars was Iran's most strategic zone, adding, “This zone produces 70% of national gas.”

He said about 50% of petroleum products’ feedstock came from PSEEZ.

Petchem Plants Help Manage Gas Use

National Iranian Gas Company (NIGC) and National Petrochemical Company (NPC) have signed a memorandum to promote the culture of energy efficiency and consumption management.

The memorandum is titled “Cooperation for 10% Reduction in Gas and Power Consumption in Household and Business Sector”.

Saeed Tavakoli, CEO of NIGC, said the MOU was signed with a view to guaranteeing uninterrupted use of gas and power in the country.

“Under this MOU, the potential of petrochemical companies is used for engaging NGOs and investment companies in the campaign to cut 10% from gas and power consumption in cold months,” he said.

He added that the memorandum was aimed at scaling back on gas and power consumption by attracting public participation by engaging NGOs, schools, and local media that can promote efficient energy use in cold months to help stabilize the distribution network.

“In a bid to win partnership of household and business sectors, investors in this project would be awarded valuable social prizes and customers would receive highly-efficient gas equipment,” said Tavakoli.

He appreciated the NPC’s involvement in the project, adding: “We should try to benefit from such tools more than ever in a bid to keep the economic cycle of the country, of which the petrochemical industry is a key element, running.”

He said one effective solution in managing energy imbalance would be to rearrange consumption in winter. “It occurs everywhere in the world and it’s nothing new. But since gas consumption is overtaking production in the country, we have had to impose restrictions to spare the domestic sector any problem.”

Hassan Abbaszadeh, CEO of NPC, said: “I believe that empathy in every sector can help spare the industry and people serious harm.”

“Planned reductions in gas delivery to industries have reduced harms to them. Furthermore, it has been a big step towards consumption management,” he said.

Noting that in every industry, administrators should make arrangements to prevent possible secondary impacts in case of any halt in fuel supply. “We did so about the petrochemical companies, and we achieved good results.”

South Pars Recovery Record Hits 712 mcm/d

CEO of Pars Oil and Gas Company (POGC) Touraj Dehqani has said that the massive South Pars gas field has supplied a record 712 mcm/d of gas.

He said that more than 1,500 persons are working on 39 offshore platforms to recover gas from 350 wells without interruption. “Especially after the unexpected arrival of cold weather, our staff on these platforms made huge efforts to reach 712 mcm/d output,” he added.

Dehqani referred to the challenge of imbalance between energy production and consumption in Iran, saying: “Iran is the second largest holder of gas reserves, the third largest producer, and the fourth largest gas consumer in the world.”

He said energy consumption was high in Iran when compared to demographic, geographical, and industrial conditions.

He added that such high energy intensity was not optimal specifically when it came to gas as the main source of power generation.

“POGC, as the main producer and supplier of natural gas, is supplying more than 70% of the country’s gas,” said Dehqani.

Referring to the favorable effect of an overhaul of previous months on safe and continued gas production from South Pars, he said: “We have development plans to increase gas production capacity, but due to various reasons, we have reached the point that we have significant energy imbalance.”

Dehqani said part of the energy imbalance pertains to increased production and supply. But policies are not limited to this as demand requires policymaking as well. He noted that demand management had been ignored in previous decades.

“In the short-term, i.e. coming winter, saving should be taken into consideration so that midterm and long-term plans would enable us to reduce this imbalance,” he added.

No Barrier to Oil Sales

Minister of Petroleum Mohsen Paknejad has dismissed allegations of Iran facing challenges in selling its oil.

He said rumors of Iran facing challenges, circulated on social media, are part of the psychological operations of the enemies of the Islamic establishment.

“Currently we have no problems with oil sales. Of course, some measures have been undertaken so that we would face fewer challenges in the future,” he added.

Paknejad said some significant agreements aimed at gas production hike would be finalized soon.

“It will naturally take time from the signing of these contractors to reach results,” he added.

Simultaneously with managing the fuel basket of power plants, some initiatives have been undertaken with regard to energy diplomacy with neighboring countries, the minister said.

He expressed hope for an initial agreement about gas swaps or imports.

Noting that Iran and Turkmenistan had no gas deal, Paknejad said: “We are in talks with this country for gas swap to two neighboring nations. Such swap would prevent possible pressure fall-off in northeastern gas distribution.”

Referring to the increased production capacity of petroleum products in recent months, he said: “Over the past two months, in light of processing transformations at oil refineries and increased feedstock supply, our staff have managed to add more than 10 ml/d to gasoil production. We have a

similar situation with gasoline production.”

“Fortunately, power plants in the country changed their fuel mix after some time. Therefore, they face not much concern when gas consumption peaks,” he said.

Paknejad said liquid fuel delivery to power plants during the four months into office of the 14th administration was about 50% higher than last year. He added that more than 2.2 billion liters of more liquid fuel had been delivered to power plants during the four-month period.

Petroleum Products Distribution at 320 ml/d

CEO of National Iranian Oil Refining and Distribution Company (NIORDC) Mohammad Sadeq Azimifar said more than 320 ml/d of refined petroleum products was being distributed across the country.

He said 16,400 tanker drivers have been working round the clock and under unfavorable conditions to distribute fuel across the country.

“Currently, 10 refineries in the county are operational in the country with a refining capacity of 2.4 ml/d. The refined products are distributed across the country by more than 16,000 takers, 3,000 rail tank cars, and 14,000 km of pipeline,” he added.

“During the first four months into office of the 14th administration, an additional 2.2 billion liters of liquid fuel compared with the same period last calendar year has been delivered to power plants, showing a 48% growth,” said Azimifar.

Compared with two years ago, liquid fuel delivery was up 1.5 billion liters, he said, adding that average gasoil delivery to power plants reached 48 ml/d during the last month of autumn, ending the third quarter of Iranian calendar year “because we have needed to increase production to feed power plants.”

Azimifar said gasoil production in the same month reached 125 ml/d. He added: “By launching fast-yielding projects and processing modification at refineries we managed to increase gasoil production by 15 ml/d.”

Referring to gasoline production during the four-month period, he said that gasoline production was up 10 ml/d year-on-year during the last month of the third quarter.

He also said that the first phase of the new Bandar Abbas-Rafsanjan pipeline, 450 km long, came online under the 14th administration. He said that product delivery capacity to northern Iran increased.

Intl. Interactions Instrumental in the Petchem Sector

CEO of Persian Gulf Petrochemical Industries Company (PGPIC) Mohammad Shariatmadari has laid emphasis on the completion of downstream units to complete the value chain, saying: “International interactions are key to developing the petrochemical industry.” 

Underscoring the necessity of maximum observance of safety and efforts for sustained production, he said: “Downstream units should become operational at a higher pace to help complete the value chain.”

“With empty hands, we have managed to build big petrochemical plants in Iran. Other countries like Saudi Arabia have followed suit, but there is a significant difference here that they have proceeded with development by completing the value chain while we have been moving less fast,” said the NPC chief.

One key objective should be financing and capital generation for sustainable development. “We can guarantee financing by increasing international activities. Through PGPIC’s working capital, we can develop numerous new financing instruments, which is an undeniable necessity. Some steps have been taken to that end, but they are insufficient.”

Shariatmadari said another challenge faced by petrochemical production was feedstock supply, adding: “The significance of resolving the feedstock problem is understood when we see most companies would see their products affected due to their chain communication.”

“We have held good talks with the Ministry of Petroleum and we hope to reach favorable results,” he said.

Shariatmadari called for the launch of the Sadaf Petrochemical Plant as soon as possible, adding that PGPIC was ready for any help.

He said the Sadaf project would be expected to become operational in 2025.

He stressed the need for safety and emergency control systems in this project, saying all safety aspects needed to be taken into consideration in this project.

Noting that the Sadaf project was respecting environmental issues, he said that PGPIC was targeting zero pollution in Bushehr Province.

“Our priority at PGPIC is not production; rather it is people’s lives and we hope that we can reach this objective by benefiting from the ground flare technology of Sadaf and similar facilities by other companies,” he said.

North Pars Development Examined

The technical broad lines of a proposal for the development of the North Pars gas field have been reviewed during a joint meeting of the National Iranian Oil Company (NIOC), Pars Oil and Gas Company (POGC), and the Department of Environment (DOE).

Ahmad Reza Lahijanzadeh, deputy head of DOE for maritime environment and wetlands, stressed the need for compliance with environmental obligations in the development of new gas fields.

He demanded that arrangements be made to control consumption and prevent energy waste, particularly in transport, power plants, and heating systems.

Abdorrahman Moradzadeh, the director of the Bushehr branch of DOE, said all industrial measures should be based on sustainable development.

Abbas Razmi, director of HSE and civil defense of NIOC, said more than 90% of POGC’s operations were offshore, adding: “POGC’s activities in the gas industry, particularly in Bushehr Province, have brought about economic growth, generated wealth and guaranteed social welfare across the country.”

Noting that Persian Gulf littoral states have turned to artificial islands to develop their industries, he said: “In Iran, there is potential for optimal development of offshore industries in consultation with DOE.”

He said the petroleum industry was compelled to protect the environment in oil and gas-rich areas, underscoring the need for specialized meetings with representatives of DOE to discuss various aspects of the development of untapped gas fields with a view to obtaining acceptable results for stakeholders.  

Mohammad Reza Chalipa, director of construction engineering at POGC, highlighted the necessity of energy security by developing new gas fields.

“Taking into consideration all legal issues and obligations and developing constructive cooperation with DOE, which is the main external stakeholder, development of new gas fields would go ahead more smoothly,” he said.

He emphasized the development of the North Pars gas field as the second largest gas field, behind South Pars, adding: “After development, this field would be yielding gas equivalent to four standard phases of South Pars.”

Amin Khorramabadi, director of development of North Pars, touched on the 1-3% annual growth of gas demand and noted the significance of the development of new gas fields to cover gas shortages.

“The independent North Pars gas field is a prioritized field whose first offshore development phase has been adopted by NIOC by using local resources,” he said.

Enumerating the advantages of development in this field, he referred to accessible technology, applying common offshore development patterns, long-term stable gas production, reduced investment costs, and the possibility of using new methods of development.

The first phase of North Pars is aimed at supplying 1bcf/d of rich gas.

 

Iran Nov. Oil Output Up 37,000 b/d

Iran’s November oil production increased 37,000 b/d month-on-month, the latest report by OPEC Secretariat shows.

OPEC secondary sources show that 12 members of the producer group produced 26.657 mb/d of oil in November, up 104,000 b/d from October.

Saudi Arabia (8.963 mb/d), Iraq (4.043 mb/d) and Iran (3.323 mb/d) are the three top producers of OPEC.

OPEC+ also produced 14.008 mb/d of oil in November up 219,000 b/d month-on-month.

Overall, OPEC and allies supplied 323,000 more oil from October to produce 40.665 mb/d in November.

The latest monthly OPEC report showed that Iran’s crude oil traded 1.7% lower than in November month-on-moth. Iran’s heavy crude oil traded for $72.81 a barrel in November. Iran’s heavy crude oil averaged $80.3 in 2024.

The OPEC oil basket price reached $72.98 in November, up 2% from October.

OPEC has also forecast global oil demand in 2024 to be up 1.61 mb/d to reach 104.3 mb/d.

Demand for oil in November was 110,000 b/d higher than in October.

OPEC has also forecast global oil demand in 2025 to grow 1.45 mb/d to 105.57 mb/d, down 30,000 b/d from the previous month’s projections.

Local Technology Available for Oil Sector

Deputy Minister of Petroleum for Engineering, Research, and Technology Omid Shakeri said local manufacturers have for the first time outnumbered suppliers.

“Local companies have reached technological maturity and the petroleum industry can easily use their products,” he said.

Referring to the Ministry of Petroleum’s measures for the development of science-based companies in various sectors, he said the number of science-based companies listed by the Ministry of Petroleum has tripled in three years to 674.

The number of local manufacturers listed by the Ministry of Petroleum has jumped from 1,500 to 2,500.

Referring to mainly first-time manufacturing by science-based companies, Shakeri said more than 2,000 contracts worth $890 million plus IRR 380,000 billion had been signed over the past three years. He added that the petrochemical industry had relied justly on science-based companies.

Most equipment manufactured for the first time by science-based companies has been used in the petroleum industry value chain, said Shakeri.

He added that first-time manufacturing contracts can generate $1.7 billion in value for the total petroleum industry value chain while only $172 million has been spent.

Shakeri said innovation in the financing of science-based companies was another valuable measure by the Ministry of Petroleum, adding: “The capital of Iranian Oil Industry Ventures (IOIV) has grown seven-fold to IRR 7,500 billion over this short time. A total of 36 companies have received IRR 8,300 billion in facilities.”

“Other measures in the field of ​​financing include a guaranteed purchase agreement, the signing of two product liability insurance contracts, the reduction of contractual claims of 24 companies worth IRR 2,700 billion to increase the companies' confidence, the conclusion of a letter of credit agreement in rials for science-based companies, which has so far opened a credit line of up to IRR 50 trillion, and venture capital in specific areas of the oil industry, including artificial intelligence, which has so far invested in seven projects worth IRR 2,500 billion,” he added.

Shakeri said exporting technological services would serve as an indicator to gauge the success of science-based companies. “For instance, more than $350 million worth of engineering services have been exported by Iranian companies to Venezuela and Russia.”

Enumerating Petroleum Ministry measures for facilitation and regulation, he referred to addressing technological and research needs, assigning intellectual assets, banning the import of science-based commodities whose similar prototypes are manufactured in Iran, and offering cut-price feedstock in value chain completion projects.

Budget Allocated to Metering Project 

Deputy Minister of Petroleum for Supervision on Hydrocarbon Resources Sajjad Khalili said that, in the current calendar year, over IRR 70,000 billion had been allocated to metering projects.

“Under the 7th National Economic Development Plan, refining and monitoring of oil products transactions are among prioritized projects of the 14th administration,” he said.

Khalili said the Ministry of Petroleum is responsible for national energy security, adding: “In this long chain, more than 1 billion barrels of oil, over 270 bcm of gas, upwards of 110 billion liters of petroleum products, 300 million barrels of condensate and more than 6 million tonnes of associated gas liquids are produced every year. It must also be added that in addition to production, the Ministry of Petroleum is responsible for delivering this volume of petroleum products or gas to consumer points.”

He said that under the 7th Development Plan, monitoring petroleum products transactions is envisaged in two structures: installing metering systems and setting up an integrated database and databank system.

“We hope that integration of existing systems will become effective by March 2026 as scheduled,” he said.

Khalili referred to the background of the national metering project and the real-time monitoring of petroleum products’ transactions, saying this project was first adopted in 2010 but has been considered seriously under the 14th administration.

He said that 588 points of transactions in the oil and gas production chain have been identified, which need a new system or upgrade of the current system. He said about $1 billion would be required for that purpose.

Among spots identified for installing or upgrading metering systems in the oil and gas production chain, 220 points are highly prioritized. They include 64 points administered by the National Iranian Oil Company (NIOC), 86 points run by the National Iranian Refining and Distribution Company (NIORDC), and 70 points administered by the National Iranian Gas Company (NIGC).

Khalili also said that the NIOC was chosen to operate the metering project, adding that contractors had been selected for 23 points.

Value Chain Key to Petchem Zone Development

Hassan Abbaszadeh, the CEO of the National Petrochemical Company (NPC), has highlighted the role of the petrochemical industry in economic and industrial development.

“The second phase of the Special Economic Petrochemical Zone would be developed in light of value chain completion and for balanced development,” he said.

Emphasizing the role of the petrochemical industry, he said it was the main driver of value generation and economic and industrial development. He said the petrochemical industry was on the path toward growth and balanced development due to the necessity of preventing crude sales and completing the value chain.

Noting that Iran’s petrochemical production capacity has reached 100 million tonnes, Abbaszadeh said: “By implementing development plans under the 7th plan, a 30-million-tonne growth target has been set, which would bring the production capacity to 131 mt.”

“Today, Iran’s petrochemical industry is a leading company in this industry in the region and Mahshahr is a petrochemical hub in Iran, supplying key products,” he said.

Abbaszadeh said most products in the zone were destined for domestic purposes, adding that a diverse mix of feedstock would result in the supply of various products by petrochemical plants to address national needs.

He laid emphasis on the operation of such projects as NGL 3100, adding that it was key to feedstock supply to the petrochemical zone.

Touching on the role of private investment in the petrochemical sector, he said: “We should prepare conducive conditions to attract investors and avoid imposing unnecessary restrictions.”

Abbaszadeh also said that the second phase of development of the petrochemical zone would bring about economic prosperity and job creation.

Private Sector to Ease Oil Intl. Cooperation

Pouneh Torabi

Iran’s petroleum industry is estimated to require $200 billion in investment in 10 years to raise the country’s oil production capacity to 5 mb/d and national gas output capacity to more than 1 bcm/d.

Masoud Pezeshkian, who took office as president in August, is firmly determined to boost ties with the world, which would help attract investment and blunt the impact of sanctions on Iran’s economy and petroleum industry.

Minister of Petroleum Mohsen Paknejad has a comprehensive plan to enhance Iran’s oil and gas production capacity. The attractiveness of investment in Iran’s oil sector due to low production costs, Iran’s strategic geography, the high quality of Iranian oil, and the high rate of return on investment are no secret to oil investors across the globe.

Intl. Cooperation

The current administration hopes to pursue increased crude oil production and export. To that end, the National Iranian Oil Company (NIOC) has been assigned to follow up on raising crude oil and petroleum product exports besides broadening diplomacy bolstering cooperation with the world, and attracting investment into oil and gas fields. To expand collaboration with the traditional and new buyers of Iranian oil and petroleum products, such measures as negotiation with countries with refineries and presenting them with diverse packages, repaying costs spent on the development of fields, engagement of private companies and other state bodies for increased exports are envisaged.

This is a mutual process. The world energy market needs Iranian oil while the latter depends on international interactions to develop technology, improve production, and increase access to new markets. Many countries are boosting their technical know-how, which requires Iran to consider better international ties urgently. Using advanced technology will finally result in increased and diverse production, which would develop new markets.

It is noteworthy that most oil and gas fields in Iran are in the second half of their life cycle, which would require Iran to have access to advanced technologies e.g. EOR and IOR to develop them. Sanctions are hampering such access, but Iran has to interact with a variety of nations in a bid to have access to new technologies. Arrangements should be also made for the private sector to be strengthened so that related hurdles can be cleared.                                                                    

Oil and gas Exchanges

Since sustainable energy supply or demand remains a major cause of concern for governments today, energy diplomacy and international cooperation would be a key chapter in energy trading across the globe.

In line with such objective and in spite of sanctions, Iran has, in recent years, bolstered its oil and gas cooperation with neighboring nations, including Russia, Tajikistan, Uzbekistan, and the Republic of Azerbaijan. Furthermore, Iran revived its gas cooperation with Turkmenistan.

Africa Opportunities

Eastern countries and Southeast Asian nations are among the countries that have oil cooperation with Iran. China, in East Asia, is Iran’s biggest trading partner. China buys oil as well as petroleum products and petrochemicals from Iran. Iran’s 25-year cooperation pact with China includes the oil and gas sector.

Economic interaction with China has many advantages for Iran under conditions of sanctions. China is the world’s second-largest economy and desperately depends on energy. That explains why it has been an official and unofficial buyer of Iranian oil.

A review of details of Iran-China foreign trading indicates that sanctions have blocked Iran’s access to European technology. Therefore, China has replaced them as it faces fewer restrictions.

In Southeast Asia, Iran and Indonesia have focused on oil and gas cooperation, which has led to agreements.

Cooperation in the downstream sector in South Africa and Latin America, in the upstream sector in Kenya, Angola, and Zimbabwe as well as exporting technical and engineering services to Algeria are cases in point.

China’s teapot refineries have shown interest in buying Iranian crude oil. That has empowered Iran to restore its oil sales back to pre-sanctions levels. Such cooperation allows Iran to diversify its export markets and reduce its dependence on traditional buyers.

Global Markets

The spokesman for the Iranian Oil, Gas and Petrochemical Products Exporters’ Union (OPEX), Hamid Hosseini, has reviewed the significance of Iranian oil in global markets, calling for international cooperation.

Referring to the history of the Iranian petroleum industry, he explained to “Iran Petroleum” that the petroleum industry has from the very beginning been dependent on foreign cooperation.

“Then formed a consortium to replace the D’Arcy Concession with European companies. Therefore, the Iranian petroleum industry was not local and the oil market was international. NIOC was an international company because NIOC had to purchase its equipment from abroad,” he said.

Noting that Iranians have gained experience in the petroleum industry gradually, Hosseini said: “Many fields have been jointly developed by Iranian and foreign companies and Iranian companies have specialized in decision-making, project management, and gas refinery construction. Equipment has been gradually manufactured and now we have something to say.”

In the oil sector, cooperation with big oil companies was developed after the imposed war ended, letting Iran acquire the necessary know-how and technology.

Neighborly Ties

Hosseini touched on new chances of cooperation between Iran and neighboring nations like Iraq, Oman, Qatar, and the Republic of Azerbaijan, particularly in infrastructure projects and oil and gas transmission, saying: “The most natural route of energy transmission from the Caucasus and Central Asia is Iran. However, due to sanctions, we have failed to serve as the energy corridor of Central Asia and Eurasia. However, there is bilateral cooperation.”

“Iran has gas ties with Iraq and is in talks with Pakistan for gas delivery. It has also cooperation with the Republic of Azerbaijan and Turkmenistan. Although the ties are not yet at a high level, it is a big achievement under sanctions. We can also expand our ties with Russia. International cooperation with neighboring countries would be of great help to the Iranian petroleum industry under the present circumstances.”

Based on the approach adopted by the current administration, the way has been cleared for the private sector to get engaged in this industry and contribute to international cooperation.

Due to its energy advantage and geopolitics, Iran is attractive to investors. Private sector and foreign investors can make a cost-benefit analysis before investing in the upstream and downstream oil sectors of Iran. Iran is also offering good incentives to would-be investors in investee zones, particularly special energy zones.

Maximum Output in South Pars

Technology Development, Priority in Foreign Partnerships

The massive South Pars gas field supplies 70% of Iran’s gas needs. The field’s gas production capacity has already reached 711 mcm/d. Sepahdar Abbaszadeh, deputy CEO of Pars Oil and Gas Company (POGC) for operations and logistics, tells “Iran Petroleum” that the company has fulfilled 99% of its obligations in gas recovery from South Pars. He says POGC plans to enhance production from the field’s platforms whose first one started production 23 years ago. To that end, he said, POGC would be open to domestic and foreign investment.

The following is the full text of his interview with “Iran Petroleum”.

What duties must the Office of Deputy CEO of POGC for Operations and Logistics fulfill?

The Office of Deputy CEO of POGC for Operations and Logistics is one of the two offices tasked with steering production. In other words, once the construction of platforms and refineries is completed and ready for operation at the Office of Deputy CEO for Development Projects, offshore installations including platforms and subsea pipes are assigned to this Office for maximum efficient recovery from the largest joined gas reserve in the world.

How much is the current gas production capacity at South Pars?

From the beginning of the current calendar year (21 March 2024) until November 9, the National Iranian Oil Company (NIOC) has seen its target of gas production from the South Pars met by 99%. We have managed to recover 153 bcm of rich gas from this field. On average, POGC’s commitment to recover gas from South Pars has reached 703 mcm/d. POGC is committed to bringing rich gas production from South Pars to 705 mcm/d in the coming months and to 706 mcm/d by next March. We have so far fulfilled our commitments. I have to add that due to the fall in temperature this year sooner than in previous years, we have been recovering at maximum capacity from South Pars which set a record 711 mcm/d output in November.

How many platforms are operational in South Pars?

There are currently 39 gas platforms in the South Pars gas field which Iran shares with Qatar. Of 39 installed platforms, 37 are production platforms, 1 is a processing platform and 1 is the residential platform. We have also over 6,000 km of 32-inch, 18-inch, 20-inch, and 4-inch subsea pipelines.

More than 70% of gas consumption in Iran is supplied by South Pars, which adds to the commitments of POGC. What have you done to keep platforms at the highest level of readiness?

Despite all the problems emanating from sanctions for the Iranian petroleum industry, we have managed to proceed with maximum production capacity at South Pars. That indicates relentless efforts made by our colleagues at POGC in all sectors including production and logistics units. Therefore, I am confident that our platforms are at the highest level of readiness for gas supply in the country.

Which are parts whose localization is prioritized at South Pars? What have you done for that purpose?

In cooperation with the Directorate of Logistics and Finance, over recent years, we have established the Domestic Manufacturing Committee. Over the past five years, very valuable measures have been undertaken concerning domestic manufacturing with the focus being on the local manufacturing of sanctions-stricken parts. These measures have been specifically important in electronic equipment.

What is the key challenge you are faced with in the operation sector?

As you know, the special position of Persian Gulf gas platforms and temperature and environmental conditions have turned pipeline corrosion into a serious challenge in production. There is also the challenge of processing at platforms, for which we are making the required planning. Natural pressure fall-off in the South Pars reservoir is set to be a challenge in the coming years. Hopefully, NIOC is severely following up on compression.

Will we see any production hike this calendar year?

Several wells are planned to come online by the end of the current calendar year (to 21 March 2025), which would boost our production.

In light of sanctions and restrictions, how are you monitoring repair and equipment standards?

Due to the sensitivity of gas production at South Pars, although sanctions have made it more difficult for us to have access to cutting-edge technologies, we have never scaled back on our standards. We have remained committed not only to the Ministry of Petroleum standards but also to instructions adopted by POGC.

In light of the 14th administration’s approach to improving ties with friendly nations and the Ministry of Petroleum’s openness to foreign investment, how can POGC cooperate with foreign companies?

There are many grounds for cooperation, the most important of which is to bring new technologies into South Pars. Other priorities include implementing development projects to boost output and prevent production falls in South Pars. There is great potential for investment in these sectors. In coordination with NIOC, we welcome investment in these sectors.

Capital and Tech Needed in the Refining Sector

Pouneh Torabi

Value chain completion and quitting crude sales are two key objectives of the National Iranian Oil Refining and Distribution Company (NIORDC). It is in line with the “Downstream Oil and Gas Condensate Industry Development Support Act” based on which, the private sector would finance crude oil, gas condensate, and petrochemical refineries with a high Nelson Complexity Index (NCI). Furthermore, optimization and upgrading the quantity and quality of refined products should be done to give a higher share to lighter and middle-distillate products.

Official data indicate that over the past five years, on average 2.1 mb/d of crude oil and gas condensate has been consumed by refineries with condensate accounting for 21% and crude oil for 79%. Condensate accounts for 41% of gasoline and 13% of gasoil production.  

340 ml of Products

During the last calendar year to March 2024, refineries across Iran supplied 340 ml/d of petroleum products. Gasoil and gasoline topped the list, respectively 106 ml/d and 100 ml/d output.

Reviewing the refining margin across the country over the past five years indicates that the Arak refinery has had the highest value generation with $13.6 per barrel. The other eight refineries in Iran come next.

Meantime, in the 7th National Economic Development Plan, gasoline production should reach 129 ml/d. Therefore, a focus on increasing high-quality petroleum products at current refineries and future facilities would be pursued by NIORDC. It has already taken primary steps for that objective as attested by an 8 ml/d gasoline output hike in two and a half months. Gasoline production at the Bandar Abbas Gas Condensate Refinery, known as the Persian Gulf Star Refinery, grew 4 ml/d to 44 ml/d while the Tehran refinery saw its output increase 2 ml/d to 9 ml/d, the Isfahan refinery saw its gasoline supply grow 2 ml/d to 14 ml/d and the Tabriz refinery experienced a 500,000 b/d increase in its gasoline output to reach 4 ml/d.

Refinery Optimization

Development and optimization of refineries have always been emphasized by successive administrations because it would help improve the quality of products, which would directly impact filling domestic needs and finding new influential export markets. Since two decades ago, necessary planning and measures have been underway for the quantitative and qualitative development of refineries as well as the construction of new ones. It has been decided that in addition to plans to develop the existing 9 refineries, new refineries be designed and built to supply high-valued hydrocarbon products like gasoline and gasoil to prevent the sales of crude oil and gas condensates.

Therefore, permits have been given for 20 crude oil and 22 gas condensate refineries in recent years. Five key ones are the Pishgaman Siraf refinery (gas condensate), Mehr Khalij Fars refinery (gas condensate), South Adish refinery (gas condensate), Anahita refinery (gas condensate) and Makran petrochemical refinery (crude oil).

As far as upgrading refineries is concerned, transforming the Bandar Abbas oil refinery into a petrochemical refinery and access to technical know-how to produce sponge coke is underway. Sponge coke production for the aluminum industry at this facility would push Iran into the group of the seven top sponge coke producers in the world.

Meantime, the “Isfahan Refining Holding” would be ready to become a petro-refinery by 2027 as its NCI has been increased to 12.6, which would be the highest in the region. The gasoil production unit of the Isfahan oil refinery came online with a production capacity of 16 ml/d of Euro-5 grade. This project is aimed at reducing the sulfur content of gasoil to below 10 ppm and supplying 16 ml/d of Euro-5 grade gasoil. That would also prevent the emission of 300 tonnes a day of sulfur, let alone would set the stage for the competitiveness of Iranian-made gasoil in global markets.

Catalyst is a refinery byproduct in Iran and has been jointly produced by the Shazand oil refinery and a science-based Iranian company.

Capital & Tech

Abbas Kazemi, a former CEO of NIORDC, has highlighted the need to upgrade refineries across Iran.  In an interview with “Iran Petroleum”, he also emphasized the necessity of attracting investment and technology.

Touching on the project to convert fuel oil to petroleum products at Iranian refineries, he explained that “deep-converting” projects began at refineries in 2006 to convert fuel oil into lighter products like gasoline and gasoil. However, this project came on-stream only at the Arak refinery.

Kazemi said the main obstacle to the success of the project at other refineries was the lack of access to financing and cutting-edge technologies. He said that refineries would be upgraded once these challenges are overcome.

Regarding ways to counter energy imbalance, he said the production boost prerequisite, is making some arrangements to control consumption.

Underscoring the necessity of upgrading refineries, he said that 90-million-strong Iran desperately needed development.

“The prelude to upgrade is the attraction of investment, which has been eclipsed by political interactions and sanctions. The issue of sanctions needs to be resolved,” Kazemi said.

He added that investment would come after the sanction removal because foreign investors need guarantees for the return on their investment. Kazemi noted that capital loss should be also prevented.

Kazemi also said that aging refineries should stop fuel oil supply as this product is being eliminated across the globe.

Open to Investment

Kazemi said refineries should consider projects that would prevent crude sales, adding: “This process needs both development and capital to clear the way for the transfer of technology and development of downstream industries.”

“In the end, development requires both domestic and foreign investment, regardless of being from West or East. We should welcome any foreign investment. We should also ensure domestic investors that their investment would be protected,” he said.

The CEO of NIORDC Mohammad Sadeq Azimifar also came out in support of the private sector investing in the refining and distribution sector, saying: “The private sector can be instrumental in increasing petroleum products’ supply by engaging in this sector.”

“We believe that investment in this industry can directly upgrade domestic production and reduce dependence on imports,” he said.

Investment Opportunities for Gas Pipelines Optimization

Elahe Baqeri

The pipeline is an influential component in gas transmission. Like liquids, gas is delivered to the end user by pipeline. Less than a year ago, Global Energy Monitor, a research firm, said in a report approximately 69,700 km of gas transmission pipelines are under construction globally, an 18% increase y-o-y, for $193.9 billion. Globally 228,700 km of gas transmission pipelines are in development — counting projects that are in construction or have been proposed — at a total price tag of $723 billion. Asia leads the world in pipeline construction, accounting for 82% at an estimated cost of $117.2 billion, with China and India responsible for 65% of global construction.

Iran is building the 1,200-km Iran Gas Trunkline 11 (IGAT-11), estimated to become operational by 2026 for $4 billion. IGAT-11 is projected to deliver 40 bcm a year of gas. Construction of IGAT-9 started in 2022 after repeated delays. Known as the 6th longest gas transmission pipeline under construction in the world, it would enable Iran to supply its needs during the gas demand peak in the domestic and industrial sectors. IGAT-9 is 1,900 km long and can transmit 40 bcm a year of gas. It is estimated to cost $3.4 billion. In addition to 5,000 km of gas transmission pipelines under construction in Iran, there is a plan for another 1,600 km at the cost of $9.8 billion.

Corrosion, Main Cause of Damage

Iran has been faring well in gas pipeline transmission and expansion. However, what matters is that oil and gas pipelines face accidents all across the globe. Global studies list internal and external corrosion as the top cause of pipeline damage. After that comes natural disasters which may damage pipelines, the main concern with corrosion or damage to pipelines would be gas loss, which along with flaring, may inflict significant damage on the gas industry.

Utilizing aging and outdated technologies at refineries, gas leakages from pipelines, and inefficient use in the domestic and industrial sectors cause widespread gas loss. According to official data, 10-15% of gas produced is lost during transmission and distribution processes. Such loss imperils national resources, not to mention its impacts on GHG emissions and climate change.

One key challenge in the oil, gas, and petrochemical industry is that pipelines destined to carry energy may face corrosion that would reduce the thickness of their walls, whose repair would require a transmission halt.

From Leak to Loss

Replacing gas transmission pipelines and halting the flow of gas would be costly, and that would bring about a loss of resources. Therefore, the renovation of pipelines, procurement, and installation of modern equipment for transmission and smart control systems would significantly prevent gas loss.

Iran is estimated to need about $2 billion in investment to renovate gas transmission pipelines and installations. Renovation would require replacing decrepit pipes and installing advanced leakage detection systems. With the renovation of infrastructure, gas loss would be cut by 20%, which would improve efficiency and save on consumption. Such projections are that Iranian knowledge-based companies may source valuable equipment and present plans to attract investment. Using modern technologies to monitor transmission and installing smart sensors may help identify and stop gas leaks.

A plan has got underway for installing smart sensors on 1,500 km of pipelines to facilitate leaks. Using smart systems for gas consumption management may help reduce loss, and optimize consumption.

Investment Opportunities

Javad Noferesti, expert in energy economics, says new technologies may help reduce gas loss.

“Of course, it should be noted that we have already the required equipment and technology to undertake gas pipeline renovation and optimization projects,” he told “Iran Petroleum”. “One case in point is the nanocomposite technology.”

In 2015, Iranian researchers were reported to have produced nanocomposites through the prepreg method to be used in repairing oil and gas pipelines.

They designed a formulation and developed a machine to produce composite walls by using nanotechnology and prepreg methods. In the study, moisture-cure polyurethane resin was used which contained clay and silica nanoparticles. One of the properties of moisture-cure polyurethane resins is their short curing time which makes it possible for them to be completely cured and turned into hard, solid composite before being installed around the pipes. The advantages of this project include the integration of two nanocomposite coating processes one in the factory and one at the repair place, the adequate flexibility of curing method, ease of use, and precise control of properties.

Touching on the necessity of replacing traditional repair technologies with new ones, Noferesti said: “Oil and gas pipelines suffer corrosion and it is likely to occur daily, which is nothing strange. However, what should be taken into consideration is that traditional methods are still used for repairing pipes.”

Explaining traditional methods, he said: “No matter the level of transmission, it should be halted. That would cause resource loss besides other problems. Then the damaged segment of pipes should be taken out and replaced with pipes of identical diameter. That would be tough and costly.”

“Old mechanical methods like replacement of pipelines or welding give rise to such problems as high costs, tough pipeline installation, which may cause a life-threatening accident,” he said, adding: “But nanocomposite technologies allow this to happen without any halt or energy loss. They use a composite coating to repair the pipe to become stronger than steel. The advantage with this technology is that hot repair would be eliminated, i.e. welding would no longer be needed,” he said.

Noferesti said this technology has already won approval and some local companies are developing it.

“The nanocomposite technology has been endorsed for more than a decade. Even rather than replacing decrepit pipes, we may use a composite coating to use an extra 20% of the rated capacity of pipes. Our pipelines are decrepit and they are exposed to leaks and serious damage. Therefore, it is necessary to specifically focus on the optimization of transmission pipelines from origin to destination,” he said.

Capital, a Must

Another issue to take into consideration about gas loss is the flaring of associated petroleum gas.

“In this case, it is also necessary to brace for new technologies. Investors have already expressed their willingness to finance such projects. They are ready to convert flare gas to products at their own expense,” said Noferesti. 

He said that Iranian knowledge-based companies had all the necessary equipment and technologies for the optimization of pipelines and preventing gas loss. What is needed, he added, is to increase investment for serious action.

Iranian officials and specialists are firmly determined to embrace modern technologies and equipment with a view to preventing gas loss. Such inclination for equipment renovation is while there is necessary know-how in the country. What matters now is to attract investment in favor of the development of infrastructure and modern technologies.

Iran Set to Meet Underground Gas Storage Target

Iran is a vast land with a specific climate, thereby requiring precise planning for energy distribution across it. Meanwhile, Iran is home to only 1% of the world’s population, who are by themselves consuming about 6% of the world’s natural gas. Iran is ranked fourth in the world in terms of gas consumption. Natural gas nearly meets 75% of Iran’s energy needs. Iran’s gas transmission network spreads from the south to various areas. Since 2007, urban gas supply has been up nearly 69% while rural gas supply has increased seven times. Currently, 95.54% of Iran’s population has access to gas. Therefore, gas transmission to northern and northeastern provinces during winter remains a key challenge for the gas industry. For this purpose, Iran has in recent years invested massively in underground gas storage to overcome this challenge.

Based on international data, Iran produced 292 bcm of natural gas in 2023, coming third after the United States and Russia. Iran’s gas goes mainly to refineries and households.

Underground gas storage history dates from 1915 in Canada where the first underground gas storage test was conducted. A year later, the first natural gas storage facilities were built in the US in depleted fields. There are currently more than 400 of them.

In Iran, the process of underground storage began in 2010 when gas was fed into the Sarajeh storage site in the vicinity of Qom. That integrated Iran into the club of countries with gas storage facilities. The gas stored in Sarajeh was used for domestic and business purposes during peak shaving in winter. Currently, Sarajeh and Shourijeh are two important underground gas storage sites in Iran. Sarajeh supports Tehran, Qom, and north-central provinces while Shourijeh, in the Khangiran zone, supports gas supply to the northeast in winter.

217 Projects Reviewed

Until the 2000s, underground gas storage was limited in Iran. But in the aftermath of a cold spell in the mid-2000s, storage was focused upon more seriously and some measures were taken, including studying 217 underground oil and gas storage projects. More than 10 salt domes and sites were identified for storage. In the end, the Shourijeh storage site in Khorasan Razavi Province with a 2.2 bcm/y capacity, and the Sarajeh storage site with a 1.2 bcm/y capacity near Qom Province came online to meet gas needs during cold months.

In light of the necessity of storage, natural gas storage has been prioritized in recent years. In 2021, seven projects were considered for a five-year period leading to 2026 to build the capacity to withdraw 114 mcm/d of gas during cold days.

Efforts for More Storage

The Ministry of Petroleum and the National Iranian Gas Company (NIGC) together have implemented the following projects that are expected to supply 25% of national gas needs in five years:

Second phase development of the Shourijeh natural gas storage site to enhance annual storage capacity to 4.5 bcm/y by drilling 28 new wells, development of natural gas storage in Sarajeh with to 1.5 bcm, natural gas storage pre-feasibility project in the Mokhtar field to enhance annual storage capacity to 1.5 bcm, natural gas storage feasibility project in the Nasrabad salt dome near Kashan to enhance annual storage capacity to 500 mcm, securing four natural gas storage wells in Yurtesha aquifer, natural gas storage feasibility project in the Qezel Tappeh structure to bring national gas storage capacity in cold seasons to 28 mcm/d and the Bankol natural gas storage feasibility project to enhance national storage capacity by 11 mcm/d.

The Iranian Gas Engineering and Development Company (IGEDC) is in charge of underground storage projects. It hopes to distribute 110 mcm/d of gas from storage sites by 2028. Six gas storage projects are now operational and two more are ready for development. Iran’s gas production capacity has reached 1 bcm/d.

10% Storage

Energy experts say gas supply during cold months could be largely managed by underground storage.

Mohammad Sadeq Mehrjou, a senior oil and energy expert, told “Iran Petroleum” that in European nations, 10-14% of gas consumption during peak shaving is provided by storage, while in Iran only 3% of the produced gas is stored.

“That indicates we should focus further on gas storage projects,” he said.

Referring to demographic distribution in Iran, he added: “We see demographic concentration mainly in northern, western and southwestern areas. Therefore, gas resources should be considered for better consumption management in various areas.”

He said that the Ministry of Petroleum hoped to enhance gas storage share from 3% to 10% by 2027.

Reza Noshadi, CEO of IGEDC, recently said: “The technological peak in storage is compressor manufacturing with 350 Bar. We’re crossing it. Furthermore, technologically speaking, we face no restrictions in storage projects.”

He expressed hope that IGEDC would be able to deliver the second phase of the Ilam refinery in terms of compressor stations by next March. He added that major projects had been implemented in northwest and northeastern Iran to expand the underground storage network.

Mehrjou highlighted the high technical know-how of Iranian experts in storage, saying: “National Iranian Oil Company (NIOC) has decades-long experience in storage site development, particularly underground storage.”

“Today, we have two major storage sites in the country; Sarajeh near Qom, center, and Shourijeh-D in Sarakhs, northeast. More storage facilities are considered in other areas of the country. If we can accelerate the implementation of these projects, we will be able to increase storage in coming years for consumption management, particularly during peak shaving,” he said.

“We should keep in mind that we have the latest technology and equipment for underground storage projects and access to new technologies may be needed in details like in horizontal drilling. But generally speaking, we face no shortages now,” he added.

Mehrjou said Iran offers significant opportunities for investment and presence in global markets. “We have significant access to technology and equipment needed for storage site development and we are using state-of-the-art technologies and tools in studying reservoirs.”

He added: “Maybe for access to some details like the pace of drilling, we may need new tools. Regarding attracting foreign investment and international interactions, it should be said we face many restrictions because of sanctions but we can maintain our ties with smaller companies so that gradually energy ties would be established with leading countries.”

“In fact, in a bid to have access to modern technologies, we should take steps in favor of foreign diplomacy and removing obstacles to interaction with advanced countries in the world because once sanctions are lifted, even energy giants would be willing to cooperate with us,” said Mehrjou.

New Energy Era:

Navigating Geopolitical Landscape

Fereydoun Barkeshli

Energy Market Analyst

The transition to renewable energy promises to change the dynamics of energy trade and economics in a way that has not been experienced before. Changing patterns of oil production trading routes, technology, and investments, impact the geopolitical landscape of energy in a way that, has so far, been experienced by the major stakeholders. Renewable energies and electricity are localized by nature and structures. Geopolitics doesn’t play any role in renewable sources of energy. This leads the world to a gradual shift from our traditional and historic view of energy, most notably oil and gas. As I will further elaborate, this does not mean that the world is going to liberate itself from fossil fuels. The world will only shift from oil minerals, namely oil and gas to other natural resources such as lithium and cobalt. Concentrations of these minerals in a smaller number of countries will make it harder to extract and transport them to the global markets. As such the world will potentially face a new and less known dependence on minerals. It is noteworthy that the market fundamentals of energy is demand and supply. As such, will remain dependent upon market conditions and price reactions.

Demand Side

Conventional energy security and policy have often been overlooked in favor of supply. When discussing energy security, analysts turn to the supply side of the equation. This is evident in most International Energy Agency reports whereby energy security is referred to as supply side. Most IEA estimates portray consumers as innocent victims of oil producers. IEA reports and forecasts often start with the demand side but end up blaming the supply. According to the IEA, the world will roughly consume one million barrels per day of oil through the current decade, after which it will peak and continue to decline. OPEC Secretariat has a demand addition, of an estimated two million barrels per day through 2040.

As such according to the OPEC Secretariat report, consumers will need nearly 30 million barrels per day of additional oil by the end of the next decade, that is 2024. Current investment patterns and projections do not support so much additional capacity in oil supply. OPEC and most members of OPEC and non-OPEC have frequently raised alarms about an eminent shortage of oil within a decade. IEA and consuming countries are misled by the current surplus capacity with OPEC+ unconcerned about the seasonality of oil markets. Several OPEC members have repeatedly hinted that the oil industry requires some $15 trillion of new investments to build new production capacities. Most OPEC members including Iran and Saudi Arabia need massive investments to add to capacity. New wells have to come on stream. In most of the Middle Eastern oil industries, wells have passed their prime age. Most wells have been producing for over half a century. New wells have to come up to support the existing oil fields.

Having said that the IEA’s focus on climate change policies has shifted attention from energy security to the Paris Accord of holding carbon emissions at 1.5 C by 2050. The importance of limiting carbon emissions is a significant and vital factor in every energy aspect and policy. However, the energy security of the next generation should not be undermined.

Rethinking Energy Security

The 1970s oil crisis and supply embargo prompted the rethinking of national energy policies and strategic planning of the consuming countries forever. The issue of renewable sources of energy emerged in the energy policy mix of the industrial countries right after the first post-World War crisis. When the Atlantic Alliance decided to create the International Energy Agency back in 1974, what most analysts and market observers noticed was the creation of the Strategic Petroleum Reserve ( SPR), and other oil-related measures to combat oil embargo measures by the producers. The US had turned into a net importer of oil and as such what mattered most was energy security.

When the COP21 in Paris agreed to adopt the United Nations Climate Change Agreement in 2015, many oil producers took it lightly or turned their face the other way. In reality, there were three and half decades of background negotiations between the OECD countries behind the accord. In Paris, it was declared that all member nations of the United Nations had to take measures to achieve the goal of 1.5 C by 2050. Such an objective was set by countries that had been the major oil consumers that had benefited from oil to industrialized and prosper from oil. This was made imperative to countries whose share in carbon emissions was negligible.

As mentioned in reality a great deal of emphasis and policy objectives were in the IEA declaration that remained unnoticed and hidden behind the headlines of oil and petroleum derivatives and prices. Fast forward to the present, the energy crisis of 2022 marked a turning point in the global energy discourse arising from the pandemic, as governments sought to stimulate economic recovery in their energy perspectives. The Russian war in Ukraine was a blow to the idea that the emergence of renewable sources of energy is imminent. This was a harsh wake-up call for European countries, in general, and Germany in particular.

Europe had prospered vividly from cheap oil and gas from Russia and cheap manufactured industrial products from China. Both factors were interlinked and one could not persist without the other. As such Germany, the Eurozone’s powerhouse began to slow down and named the sick man of Europe. Nevertheless, the problem was not limited to Germany. It spread to the rest of Europe. In the meantime, China’s growth and economic strategic mindset began to be diverted from the global factory and export-dependent economy to a more inward-looking and domestic-oriented economy. This was spelled out during

the inauguration ceremony of the third term of President Xi in Beijing back in September 2022.

It is right here that the rethinking of international oil policy comes into play. China has been the engine of global oil demand growth for over three decades. China experienced two-digit growth of GDP for several years. Such a huge GDP growth, for a country as large as China means massive oil demand growth. Chinese GDP growth is estimated at slightly below 4 percent for 2024. It has to be noted that China is still a major oil consumer and will remain so for the next decade. However, at a much slower rate compared to the years before the pandemic and severe public lockdowns in 2020. OPEC and the alliance did not volunteer for a reset in their oil policies but faced a reality that dictated its market conditions for the supply side. It is important to understand that a development strategy reset for China wasn’t decided overnight. It comes at a high cost and will take quite some time to be implemented. China is a country of 1.3 billion population. This size of population must be provided with full-time employment. In the meantime, an inward-looking economy where demand consumption should come first means that the urban population should have enough income to consume. The Chinese are cautious not to touch their savings as the future of the economy is not yet clear.

The rest is about the oil demand as far as the oil producers are concerned.

Geopolitics of Transition

The demand-side limitations highlight the need for a more balanced and forward-thinking oil policy by the producers. As mentioned earlier, China is the focal subject of any oil producer. As such we need to touch upon China frequently. China is one of the most rapidly growing Electric Vehicle, EV manufacturers in the world. In 2024 estimates, two out of every three vehicles produced and sold in China are EVs. China is currently producing more solar panels than any other country in the world. The country is moving away from oil, at a faster pace than the Eurozone.

However, the electricity that must be generated to allow such a rapid pace of energy transition policies comes from coal and petroleum products. This is where the OPEC alliance is at a crossroads. The energy transition is not a clear path. Climate change and environmental enthusiasts are at pause, too.

Solar panels and EV production require batteries that would require critical minerals. China has great reservoirs of critical minerals and has penetrated into the African and Caribbean countries for rare earth, too. Nevertheless, all end up in electricity that should be generated by fossil fuels.

This is where the geopolitical aspects of energy transition come into play. For the last century, oil has been the key driver for energy geopolitics. International oil companies( IOCs), and the National Oil Companies( NOCs) were the dominant forces behind major global energy policies. Oil has been a major component of any international geostrategy and, of course, is still a major player. It is astounding to many oil market stakeholders how there’s a big war in Europe and the second largest oil producer in the world, Russia is under sanctions and a price cap. A devastating war in the Middle East is underway. Red Sea and Suez Canal are under siege and the ultra-strategic Strait of Hormuz is at risk. International oil markets don’t consider any hefty war premium for oil.

The OPEC alliance indeed has some crude that is kept away from the global markets to support prices. Nevertheless, the volume of oil that is kept out

of the market is not quite big. The market is aware that parts of the 5.8 million barrels per day capacity that is kept away from the market, are already there in the market from some member country’s leakages. It is also true that not all the quotas restricted from the market may not be quite real. It is difficult to say fact from fiction when it comes to oil production and capacity. Having said all that, the market does not solidly hold anywhere that it was about a year ago.

Security-Consumption Crossroads

Having said that, are we in a position to suggest that the global geopolitical dimension of oil and energy is marginalized. Are we entering a period where oil will be considered just an important commodity. However, this phenomenon may not be sustained. Donald Trump intends to take office with the slogan of “Make America Great Again”, by calling back the industrial activities of the US from China and elsewhere to America. That would mean the country will begin to consume a lot more oil and energy than today.

America consumed 20.3 mb/d of oil in 2023. Once even parts of US manufacturing somehow return to America, the volume of oil consumption will be significantly higher. Certainly, higher than what the country can produce at current levels of capacity built up. America will become a net oil and energy importer again. An indication that the US will go back to the 1070s era. This has been spelled out by prominent thinkers such as Prof. John Mearsheimer of Chicago University who believed that even the most carbon-conscious countries in the world can not live without oil once they embark upon full-scale industrial activities similar to that of the 20th century.

As such the sole pragmatic approach is to advance technologies towards carbon capture and de-carbonized use of oil and gas in the process of production of goods. Oil has a powerful supply chain and resilience. Dioxide emissions are fully understood and totally supported by major stakeholders in the industry. However, politicizing energy transition is harmful to the global economy and the well-being of billions of people in less developed countries.

OPEC and Alliance

Given the fact that the US and several other oil producers have either entered or are in the process of entering the international oil market, OPEC + will not be able to sustain its traditional role of stabilizing the oil markets. The United States and countries like Mexico, Guyana, Argentina, and Brazil have to join in and share the burden of market stability. The issue was vaguely raised during the OPEC International Seminar in September 2023.

Saudi Arabia’s energy minister mentioned that most OPEC countries have already bottomed out their oil capacity and that sufficient and proportionate investments have not been undertaken. As such, with no or limited excess capacity, members cannot keep lowering production and let the newcomers in the global market eat their lunch. If market stability is the ultimate objective, a collective responsibility will have to be shared.

I am concerned that once the newcomers to the market, fail to appreciate the significance of global oil market stability and the services that OPEC and now the OPEC alliance have rendered to the world oil markets, oil prices will collapse and once prices fall below the level of production of new barrels, the entire energy supply chain collapses.

Discipline and adherence to quotas are the golden keywords for the future OPEC alliance. In a few years, we may no more have the Organization of the Petroleum Exporting Countries (OPEC), as we know it today. There will be a winter group of oil and petroleum producers.

Middle East Tensions Impact on US Oil Price

Shuaib Bahman

Oil Price Unfazed by Oct. Operation

In contrast to preliminary estimates, the war erupted in the Middle East on 7 October 2023 did not significantly impact oil prices; supply was not disrupted significantly and demand has kept a low profile. However, oil prices increased after Iran struck the Zionist Regime with missiles on 1 October 2024, and kept rising as the world was waiting for the Zionist Regime to retaliate. Speculation was rife that the Zionist Regime would target Iran’s energy infrastructure, in which case a significant portion would have been removed from the oil market supply. Such a scenario could have been painful for the entire US, particularly Democrats as gasoline prices would have increased in the run-up to the presidential elections. High oil prices could be a severe challenge to Democrats. Nonetheless, the victory of Donald Trump in the presidential race might seem to have eclipsed the oil issue; but, energy can continue to play a key role as long as Trump remains in office.

Oil and Mideast Instability

Crude oil prices have been varying between $66 and $96 a barrel in the past year. The prices dropped to their l6-month lows in September as economic concerns overshadowed geopolitical risks. China’s weak demand and disappointing global economic data give the oil market a gloomy perspective. At the same time, global markets are also facing a decline in demand for fuel due to the seasonal shift from the busy summer to the fall. Normally the summer is the driving season in the US and tourism activity all over the world. During these months, demand for gasoline peaks, but as autumn approaches and travel decreases, this demand decreases. As a result, the world will not witness growth in energy demand in the short term.

Mideast Worries Affect Prices

Despite such optimism, one cannot deny that intensifying Iran-Zionist Regime tensions could drive oil prices up drastically. Iran exercises control over tankers crossing through the Strait of Hormuz where nearly 15% of the world's oil supply is transited. Any intensified conflict may restrict Iran’s oil production or transport via the Strait of Hormuz, affecting global supply and subsequently increasing prices. Therefore, any further escalation in the Middle East would stoke up worries about oil supply as an escalation is likely to transform into a regional war, especially because there is no evident diplomatic attempt to contain tensions in the Middle East.

Assessments indicate that sudden changes in oil prices may have extensive impacts on market sentiments and political decisions. That is because increased oil prices may drive gasoline prices up, which would negatively impact Trump’s popularity at the beginning of his term in the White House. When gasoline prices grow significantly, negative sentiments may provoke public discontent to the dismay of a new administration.

Gasoline, Politics Intertwined in US

Jon Krosnick, a professor of political science at Stanford University who studies the relationship between gas prices and political perceptions, co-authored a 2016 study that examined the relationship between gas prices and presidential approval ratings between the mid-1970s and mid-2000s. The study found that elevated gas prices drove a president's approval downward. To be exact, each 10-cent increase in the gas price was associated with more than half a percentage point decline in presidential approval, the research showed. Of course, Trump's supporters hope that the American people will not blame him for the conflicts in the Middle East, which are linked to rising prices. However, in recent years, oil prices and their impact on the global economy, and especially on the fuel market, have become a controversial and important issue. Scientific findings show that economics and politics are strongly interdependent and that fluctuations in oil and fuel prices may have profound impacts on the Trump administration.

Opportunity for Trump

The US produces sufficient oil to supply its domestic needs. It can also continue to trade oil at the global level. In 2015, Congress voted in favor of the removal of restrictions that the US had imposed on its oil exports for four decades. American companies were allowed to sell their oil at the highest asking price on the international markets. Although it is one of the largest oil producers in the world, the US is likely to face severe challenges in the energy sector under the impact of international developments. Some reasons are as follows:

While many European and Asian countries have shifted toward alternative sources of energy, the United States has yet to significantly reduce its dependence on fossil fuels for transportation.
Some US refineries are only able to treat a certain type of crude that must be imported, which may complicate the situation for the country.
The increase in oil prices caused by political crises in other oil-producing regions may expose the US’s sustainable dependence on oil – both domestic and imported – to world market shocks.

Oil Prices, a Boon for Trump

In other words, anyone in the White House has virtually limited ability to influence the price of gasoline. About 50% of the price of each liter of gasoline is related to the cost of crude oil, which is determined by market fundamentals. Neither international events nor other countries’ production decisions are under the control of the US President.

Therefore, while the US president wields little clout with the electorate’s fuel prices, Trump is endowed with an unrivaled opportunity as he is being supported by major oil producers, who hold a significant portion of the economy in the US. Oil producers’ strong support for Donald Trump, particularly at a time when everyone is looking for fundamental changes in the energy policy, is a key point. By insisting on oil interests and energy, Trump has managed to build himself a strong base among oil producers, while under the Obama Administration, radical environmental policies were in effect. That would certainly be an advantage for Trump.

Libya Oil in Free-Fall

Shuaib Bahman

Torn by internal crises and disputes, Libya has lost a large portion of its oil production. Libya's National Oil Corporation (NOC) said the recent oilfield closures have caused the loss of approximately 63% of the country's total oil production. Factions in the east of Libya, where oil production is concentrated, shut down the output in August after rival factions dominant in western Libya ousted the veteran governor of the Central Bank of Libya.

The oil industry is the artery of Libya’s economy and resuming production in the country’s closed oil field facilities requires huge costs and double technical efforts.

The key point is that the frequent shutdowns have led to the loss of a large part of Libya’s oil production damage to the infrastructure of this sector and the destruction of efforts to enhance production. That has placed Libya in an unfavorable economic situation on the one hand, and ambiguous conditions for energy production and presence in the world markets.

Oil Supply Status

Libya is one of the largest oil-producing countries in Africa and the world. The country’s oil production, mainly from oil fields in the eastern and southern regions of Libya, began in the 1950s, and the country has become one of the largest oil producers in Africa. Over recent decades, oil has been one of the main sources of income for the Libyan economy and has had a great impact on the entire country’s economy. However, in recent years, political crises and internal armed conflicts have caused the oil production of this country to be affected by internal and external issues related to it and to experience a significant decrease.

According to the OPEC secondary sources, Libya’s oil production stood at 1.18 mb/d in July 2024, which has been on the decline in recent months.

In September, NOC declared a force majeure at the Sharara oil field. This decision comes amid prevailing conditions at the field that have hindered the NOC’s ability to conduct crude oil loading operations. Sharara oil field is one of the country’s largest and most productive oil fields, with a potential output of approximately 300,000 b/d under normal conditions. The field is operated by the NOC in partnership with Repsol, TotalEnergies, OMV, and Equinor.

Libya’s Waha oil company’s production was reduced by 115,000 b/d due to maintenance on the pipeline pumping oil from the Waha field to Es Sider port. The company’s production capacity is about 300,000 b/d, which is exported through the Es Sider terminal.

Waha, a subsidiary of NOC, operates as a joint venture with TotalEnergies and ConocoPhillips.

Should exports from this field remain halted, Libya would see its standing within OPEC suffer big harm.

Currently, the main reason for halting oil production in several Libyan oil fields is related to the dispute between the eastern and western governments over the control of the central bank and oil revenues. The dispute between the government based in the west of Libya (Tripoli), which is internationally recognized as the ruling government in Libya, and the eastern government centered in Benghazi, which is not internationally recognized, has become a complicated issue in Libya.

Most Libyan oil fields are controlled by Khalifa Haftar, the military leader of eastern Libya. Officials in eastern Libya have threatened to keep production shut until all their demands are met. The eastern government has opposed the replacement of the governor of the Central Bank, saying such a decision has been illegal and illegitimate.

Future Outlook

A variety of factors have affected Libyan oil production in recent years, some of which are as follows:

 

1. Internal conflicts: Armed conflicts and political instability have severely affected oil operations. Different groups and militias took control of some oil fields at different times.
2. Sanctions and restrictions: International sanctions and restrictions have had a significant impact on exporting oil and importing equipment needed to extract and refine Libyan oil.
3. Infrastructure problems: Damage to oil infrastructure due to conflicts and unrest has led to reduced production and problems in providing equipment and repairs.

Over recent years, decreased oil production has decreased oil revenue and caused economic problems for the Libyan government and people. This drop in income in the future can lead to a decline in public services and an increase in economic problems in this country. This is while the improvement of Libya’s oil production, to a large extent, depends on the political stability and resolution of the country’s internal crises.

In this regard, diplomatic efforts and negotiations may help to reduce tensions and improve conditions, and of course, the international community may play an effective role in contributing to rebuilding infrastructure and solving security crises. However, to restore oil production to previous levels, Libya needs to invest in new infrastructure and technology to improve oil operations and repair its oil fields.

1-No Bids for Danish North Sea Wind Tender

The Danish Energy Agency’s (DEA) latest offer for new offshore wind capacity in the North Sea drew no bids, according to a Dec. 5 DEA press release.

Three wind farms in the North Sea (A1, A2 and A3) had been offered with a combined generating capacity of 3 GW. Denmark’s Minister for Climate, Energy and Utilities, Lars Aagaard, has asked the DEA to engage with the market to understand what happened, after various companies had expressed interest during the initial market dialogue.

A further tender, covering the Hesselø, Kattegat and Kriegers Flak II wind farms in inner Danish waters, has a bidding deadline of April 1, 2025.

2-Jadestone Rig Drills Offshore Australia

Jadestone Energy is making preparations for a re-drill of its Skua-11 well offshore northwest Australia, the company said in a Dec. 5 operations update.

Assuming the rig arrives on schedule, the program should start in the first quarter of 2025.

Work to optimize production and uptime at the nearby Montara Venture FPSO has delivered positive results. The platform’s current oil storage capacity of about 375,000 bbl should increase early next year following tank maintenance activity.

3-Big Gas Find in Colombia

Ecopetrol and Petrobras International Braspetro - Colombia Branch have confirmed a major gas discovery offshore northern Colombia.

The Sirius-2 well was drilled in 830 m water depth in the GUA-OFF-0 Block, 77 km from Santa Marta.

Analysis of the results suggest in-place volume of more than 6 Tcf. If confirmed, this could increase Colombia's gas reserves by 200%, the partners said.

PIB-COL (operator, 44.44%) and Ecopetrol (55.56%) now plan to acquire meta-oceanic data for the development. This and seabed, bathymetry, geotechnical and geophysical information will support construction of the offshore pipeline that will transport production from Sirius to an onshore gas treatment plant, and also installation of production systems on the sea floor.

4-Oil Confirmed in Namibia

Galp Energia expects a new 3D seismic acquisition campaign to start shortly over its deepwater block PEL83 in the Orange Basin offshore Namibia.

The company also issued an update on the recently drilled, cored and logged Mopane-1A appraisal well, which spud on Oct. 23. This encountered light oil and gas-condensate in high-quality reservoir-bearing sands.

Results confirmed good porosities, high permeabilities, high pressures and low oil viscosity with minimal CO2 and no H2S.

5-Further Seismic Survey Offshore India

Oil India has contracted Shearwater Geoservices Holding to conduct a 14,500-line-km 2D towed streamer seismic survey in the Bay of Bengal offshore the east coast of India.

The acquisition is due to start in early 2025. The five-month survey falls under the umbrella of India’s National Seismic Program (NSP).

This is Shearwater’s third towed streamer project award offshore India in the past few weeks.

 

BP Forms Offshore Wind Joint Venture

BP and Japanese power generator JERA have agreed to join forces to form one of the world's largest offshore wind operators, a major step in CEO Murray Auchincloss' efforts to reduce BP's focus on renewables.

BP's retreat from offshore wind reflects a similar trend at rivals Shell and Equinor, which are trying to boost near-term profits by spending more on higher-return oil and gas operations.

The 50-50 venture, called JERA Nex bp, will pool together almost all of their operating assets and development projects with a potential generation capacity of 13 gigawatts (GW), the two companies said in a statement.

The partners have agreed to provide up to $5.8 billion in funding for projects approved by the joint venture by 2030, with BP contributing up to $3.25 billion and JERA paying up to $2.55 billion as BP's assets in the JV have yet to be developed.

The JV will rank among the world's five largest offshore wind operators behind Orsted, Iberdrola, and RWE, JERA Chief Renewable Energy Officer Satoshi Yajima told reporters.

BP's Auchincloss has been under pressure since taking over as CEO in January as the company's shares have underperformed rivals amid concerns over its energy transition strategy.

Jefferies analyst Giacomo Romeo said the JV confirms his view that BP will be able to lower its annual capital spending below $16 billion and divest over $3 billion of assets.

Offshore wind was a pillar of former CEO Bernard Looney's strategy to reduce BP's greenhouse emissions by rapidly building up renewables capacity and slowing investments in oil.

Surging development costs, supply chain issues, and higher inflation have nevertheless heavily weighed on the offshore wind sector in recent years.

Auchincloss has said he will take a pragmatic approach by focusing on the most profitable operations. BP plans to sell its U.S. onshore wind business and a stake in its solar business Lightsource BP.

"This will be a very strong vehicle to grow into an electrifying world while maintaining a capital-light model for our shareholders," Auchincloss said in a statement.

Reuters reported in October that BP was considering selling a minority stake in its offshore wind business, citing sources with knowledge of the matter. In June Reuters reported, citing sources, that the company had paused investments in new offshore wind projects.

Hours after the announcement, BP's head of offshore wind Matthias Bausenwein informed staff he was leaving the company, a spokesperson said.

BP and JERA will contribute interests comprising around 1 GW of net generating capacity from operating wind farms and a pipeline of projects with around 7.5 GW of capacity, and further secured leases with around 4.5 GW of potential capacity.

JERA, which is owned by Tokyo Electric Power Company (TEPCO) and Chubu Electric Power, first entered offshore wind in 2019. It later spun out its renewables assets into JERA Nex, which owns and operates wind farms in Europe, Asia, and Australia.

"We can't grow just by ourselves. We need scale, we need a more diversified portfolio, we need a fuller set of capabilities, and BP is the best choice for us," JERA CEO Yukio Kani told Reuters.

BP entered the offshore wind market in 2019. It has a development pipeline with a generation capacity of 9.7 GW focused on the British North Sea, Germany, and the U.S. East Coast. It currently does not have any offshore wind farms in operation.

JERA Nex bp will be based in London. Its CEO will be nominated by JERA and the chief financial officer by BP. Kani said JERA will recommend current Jera Nex CEO Nathalie Oosterlinck to lead the JV.

The deal is expected to be completed by the end of the third quarter of 2025.

Bank of America is acting as financial adviser to BP and Rothschild for JERA.

EU Eyes Geothermal in Energy Security Drive

European Union countries plan to promote geothermal energy as they hunt for ways to replace Russian gas and bring down energy prices, a draft EU document showed.

The 27 EU members will jointly endorse geothermal energy for the first time at a meeting of EU energy ministers in Brussels next week, according to a draft document seen by Reuters, and will ask the European Commission to come up with a bloc-wide plan to get projects off the ground.

The draft requests an EU strategy to reduce emissions from heating and cooling systems, and specific EU measures to speed up geothermal projects. Ministers will suggest this includes financial guarantees to de-risk investments and simpler permitting rules, the document showed.

Geothermal projects drill underground to access local subterranean heat, which is brought to the surface to provide a constant source of heating to buildings, or to generate electricity.

"The use of geothermal energy contributes to the strategic objectives of the European Union by decreasing energy dependence and fossil fuel imports," the draft document said.

High energy prices for industries and households, and the loss of most Russian gas since Moscow's 2022 invasion of Ukraine, have prompted European countries to speed up their expansion of renewable energy.

But while wind and solar capacity have jumped, geothermal energy - another renewable source that the EU hopes can help replace fossil fuels - remains much smaller. Projects still struggle with high upfront investment costs and complex regulations.

EU data show geothermal produced less than 3% of the bloc's energy in 2022. That's despite it having the potential to cover three-quarters of EU heating and cooling needs in residential and commercial buildings by 2040, according to industry group the European Geothermal Energy Council.

Most EU countries already have geothermal district heating systems, but only a handful - including France, Germany, and Italy - use them to generate electricity.

Five Investors in the UK Nuclear Stake Bidding Process

Five investors are involved in the bidding to take potential stakes in the Sizewell C nuclear plant being built in Britain by the government and France's EDF, the project developer told Reuters.

Britain's Labour government has said nuclear plants will play an important role in helping the country meet its climate targets and decarbonize its electricity sector.

It is seeking investors in the Sizewell C nuclear plant and aiming to take a financial investment decision next year on taking the project forward.

"We have five investors in the process and potentially more," Nigel Cann, Sizewell C managing director, said on the sidelines of an industry event.

The potential investors are split between traditional financial investors, pension funds, and industry, he said.

Earlier this year, the government pledged 5.5 billion pounds ($7 billion) to help support the development of the plant.

It would be only the second new nuclear plant built in Britain in more than two decades, after EDF's Hinkley Point C, which has had several delays and cost overruns.

Cann said lessons learned from the Hinkley project meant Sizewell C would be quicker and cheaper to build than its predecessor and that it could be operational in the 2030s.

Continuum Green Energy Files for $430mn India IPO

Indian power producer Continuum Green Energy filed for an initial public offering worth 36.5 billion rupees ($430.26 million), as it looks to cash in on the country's growing clean energy needs.

The renewable energy sector is rapidly expanding in India, where most power demand is still met with coal.

The government is aiming to add at least 500 gigawatts of clean energy by 2030 to reduce carbon emissions and large power producers are making pledges to expand their green energy capacities.

Companies such as NTPC Green Energy and Waaree Energies have made successful debuts on Indian exchanges amid growing investor bets clean energy will be the buzzword for the near future.

There was a flurry of high-profile listings in 2024 such as Hyundai Motor India and SoftBank-backed Swiggy as the country's markets have remained buoyant.

Before succumbing to a double whammy of foreign fund exodus and dull corporate earnings, India's benchmark Nifty 50 index had hit multiple record highs throughout the year.

About 298 companies listed on the Indian bourses have raised $16.65 billion this year, as per data compiled by S&P Global Market Intelligence - more than double the amount raised in 2023.

Continuum Green Energy will issue fresh shares worth 12.5 billion rupees while existing stakeholders will sell stock worth 24 billion rupees, its draft prospectus showed.

The company's annual restated consolidated net losses for the fiscal year ended March 2024 widened year-on-year to 5.98 billion rupees from 3.67 billion rupees.

Over the same period, its annual revenue jumped over 33% to 12.95 billion rupees.

BP Seeks Buyers for US Gas Pipeline Stake

BP is seeking buyers for a stake in its U.S. natural gas pipeline network, four people with knowledge of the matter said.

The British energy company could raise up to $3 billion from the sale, two of the people said, with one of them adding that BP may sell up to a 49% stake in the business.

The sale process is part of BP CEO Murray Auchincloss's drive to reduce the company's debt levels, which have risen over the past year, another two people said.

BP declined to comment. All four people were speaking on condition of anonymity as they were not authorized to speak publicly.

With its share price languishing, BP is facing investor pressure to improve performance and profitability amid concerns over the company's energy transition strategy.

It has plans to sell stakes in its Lightsource BP solar business as well as its U.S. onshore wind division and offshore wind operations. Auchincloss, who is seeking to increase cash flow and reduce debt, will update the company's strategy in February.

Net debt rose to $24.3 billion at the end of September, from $22.3 billion a year earlier, due to lower-than-anticipated asset disposals, BP said in its third-quarter results.

The company's shares have lost more than 18% of their value so far this year, a worse performance than any of its rivals. Shell's shares are down 3% year-to-date while ExxonMobil is up 14% and Chevron is nearly 7% higher.

The U.S. oil and gas pipeline sector has undergone increasing consolidation in recent years as production grows and problems with permitting for new pipelines make existing assets more valuable.

BP owns around 1,500 miles (2414 km) of pipelines that transport 1.1 million barrels of crude, natural gas, and fuels per day across the United States, according to its website.

Meta Buys US Solar Projects Credits

Meta Platforms Inc. announced a deal to buy the green credits from four large U.S. solar energy projects that will help the Facebook owner meet its clean electricity goals as its power needs surge.

The agreement is the latest in a string of announcements Meta has made this year aimed at meeting the energy needs of its power-hungry data centers without harming the climate. The company has previously announced deals with several large solar projects, and a geothermal startup, and is seeking proposals from nuclear power developers.

In its latest move, Meta signed four contracts with Chicago-based energy project developer Invenergy for 760 megawatts of solar electricity. That is about enough energy to power 130,000 homes.

The projects will connect to the power grid between 2024 and 2027 and will be located in Ohio, Texas, New Mexico, and Arkansas, Meta and Invenergy said in a joint statement.

Meta will receive clean energy credits from the projects rather than using the power directly for its operations.

"These projects will help us continue our commitment to support all of our operations with 100% clean energy," Urvi Parekh, Meta's head of global energy, said in a statement.

Devon Energy CEO Rick Muncrief to Retire

Devon Energy said CEO Rick Muncrief, a U.S. shale industry veteran, will step down effective March 1 and will hand over the reins to Chief Operating Officer Clay Gaspar.

Muncrief, 66, was named CEO in January 2021 following the company's merger with rival WPX Energy.

The oil and gas producer's shares rose marginally in early trading.

Its shares have gained nearly 90% since the $2.56 billion WPX merger was completed in early 2021. However, the Energy Select Sector SPDR Fund, the largest U.S. energy exchange-traded fund, has more than doubled in value during the same period.

Devon had lost bids to acquire at least three of its peers as its shares were spurned as acquisition currency, Reuters reported earlier this year, citing people familiar with the negotiations.

The company lost to ConocoPhillips' $22 billion bid for Marathon Oil, failed to beat Occidental Petroleum's $12 billion bid for CrownRock, and unsuccessfully courted Enerplus before it was sold to Chord Energy for $3.8 billion.

In July, Devon announced the acquisition of some Bakken shale assets from EnCap-owned Grayson Mill Energy in a cash-and-stock deal worth $5 billion.

Under Muncrief's leadership, Devon's total production increased to 728,000 barrels of oil equivalent per day (boe/d) in the third quarter, from 499,000 boepd at the end of the first quarter of 2021.

Muncrief will continue to serve as an adviser until his planned departure as an employee in the second quarter, the Oklahoma City-based company said.

This tennis player is getting tips on his serve from artificial intelligence.

RBC Capital Markets analyst Scott Hanold said the appointment of Gaspar as CEO was anticipated by most energy investors and expects the transition to be "seamless".

Gaspar, who also joined from WPX, will receive $1 million as an annual base salary and a cash bonus target of 130% of the base salary, Devon revealed in a regulatory filing.

Alberta Cleans Up 5% of Inactive Wells

The number of inactive oil and gas wells in Alberta, Canada's main fossil fuel-producing province, fell 5% in 2023 from a year earlier, showing progress in decommissioning and reclamation work, a regulatory report said.

Alberta now has 79,000 wells classed as inactive versus 83,000 in 2022. Inactive wells no longer produce oil or gas and need to be permanently plugged and the land around them restored.

Canada is the world's fourth-largest oil producer and sixth-largest gas producer, and its western provinces are dotted with hundreds of thousands of active and inactive wells. Some of those wells are orphans, meaning the companies that owned them have gone bankrupt or ceased to exist.

Companies spent C$769 million ($548.23 million) directly on well closures. The Alberta government's Site Rehabilitation Program spent another C$174 million, and the industry-funded Orphan Well Association spent C$149 million.

"This year's data indicates the industry is making notable progress on cleaning up oil and gas wells, pipelines, and facilities," said Laurie Pushor, CEO of the Alberta Energy Regulator in a statement.

"The report also shows ongoing attention and effort will be essential to keep the count of inactive wells moving downward."

Alberta's inactive well count grew 5% a year between 2000 and 2020 as the province's energy sector expanded rapidly. Environmental campaigners warned taxpayers could end up having to pay billions of dollars in well clean-up costs unless energy companies were held to account.

The AER introduced a mandatory closure spending quota in 2022, requiring the industry to spend collectively on closure and cleanup work. This year the quota was C$700 million, meaning companies' spending exceeded that by about 10%.

The regulator said 91% of companies holding well licenses in Alberta complied with their spending quota, leaving 54 companies collectively owing about C$5 million.

This included Sunshine Oilsands, which was recently ordered to suspend operations by the AER due to non-compliance with environmental and public safety rules.

Adani Business Won't Impact Renewable Targets

TotalEnergies can still meet its renewable energy targets without developing any new business with India's Adani Green Energy Limited, the French group's CEO told Reuters, shrugging off the impact of a crisis at its Indian partner.

Patrick Pouyanne's comments on the sidelines of an energy conference come after the United States indicted Adani Green Energy's chairman, executive director, former CEO, and five others over an alleged $265 million bribery scheme.

TotalEnergies said it would pause financial contributions to its Adani Group investments until there was more clarity over the case.

The French group is one of a few oil majors continuing to expand in renewable energy, and the rapidly growing Indian solar market has made up a significant share of its expansion to date.

TotalEnergies and Adani Green Energy have 3.8 gigawatts (GW) of jointly held wind and solar projects under construction or in development - which TotalEnergies has already paid into, and which are expected to continue.

"We didn't say we will exit: we will not put new financing in any new scheme," Pouyanne said on the sidelines of the Energy Intelligence Forum.

TotalEnergies has paid a total of $3.24 billion for its 19.75% stake in Adani Green Energy and three renewable joint ventures.

Unfinished projects with Adani are included in TotalEnergies' current green growth targets to add 11 GW of new renewables by the end of next year and reach 100 GW of gross installed capacity by 2030, up from 24 GW currently.

TotalEnergies has relied heavily on buying Indian wind and solar assets to quickly grow its green portfolio, overtaking European oil and gas peers. Adani-linked stakes account for nearly 25% of its currently operating renewable assets.

Pouyanne said the pause on future projects with Adani did not jeopardize TotalEnergies' ability to continue that growth.

"We have other options in our portfolio," said the CEO.

Excluding India, TotalEnergies has 5.6 GW of renewables under construction globally and 53.6 GW under development, mostly in North America and Europe, according to company statements.

KUFPEC Eyes More Oil and Gas in Indonesia

Kuwait Foreign Petroleum Exploration Company (KUFPEC) is looking at more oil and gas opportunities in Indonesia's Natuna Sea, its country representative said, with Indonesian President Prabowo Subianto looking to boost the country's production.

Prabowo, who took office in October, aims to ease dependence on imported fuel and plans to offer dozens of new oil and gas blocks to investors in coming years.

KUFPEC already has operations in the Natuna Sea with a participating interest in Natuna Block A, which supplies gas to Singapore, and the Anambas Block, for which it is in the process of securing development approval.

"We are particularly focused on potential blocks in the Natuna Sea region, which aligns with our ongoing efforts to develop the Anambas Block," Sara Al-Baker, KUFPEC's Indonesian country manager, told Reuters in an interview.

KUFPEC is conducting a study on Natuna D-Alpha gas block, she said, and planning to participate in the government's future block offerings.

Natuna D-Alpha has an estimated 230 trillion cubic feet of gas resources, one of the biggest resources in the world, but has high carbon dioxide (CO2) content.

"At this stage, we are conducting a joint study and conducting our evaluation, it will depend on the result," Al-Baker said. "I think it is a very strategic project for Indonesia. The main challenge is the high CO2."

KUFPEC is also part of two separate consortia that have signed contracts this year to explore the Melati and Amanah blocks.

Al-Baker said the Indonesian government has shown a commitment to offering more attractive contract terms for companies, including by allowing them to choose between the traditional cost recovery model or a gross split scheme.

Recent large gas discoveries in the South Andaman and offshore Kalimantan have also generated excitement for investors, she said.

"This combination of untapped potential and supportive government initiatives strengthens Indonesia's position as a prominent destination for oil and gas exploration," she said.

Once a member of OPEC, Indonesia is now a net importer of oil due to aging wells and lack of investment, as projects have been hindered by red tape and competition for funding, including from renewables.