South Pars Renaissance

$17bn SP Gas Compression Deal Signed

On March 8, one of the largest contracts in the history of Iran’s petroleum industry was signed, while President Masoud Pezeshkian and top oil officials were in attendance. National Iranian Oil Company (NIOC) signed a $17 billion agreement with Petropars, Khatam al-Anbia Construction HQ, Oil Industries Engineering and Construction Co. (OIEC), and MAPNA for gas compression at the massive South Pars gas field. Minister of Petroleum Mohsen Paknejad said at the signing ceremony that South Pars gas accounts for about 40% of gasoline produced in the country, not to mention gas condensate used to feed refineries.

“Materialization of the quantitative objectives of the 7th National Economic Development Plan regarding gas and gasoline production depends on this project,” he said.

Paknejad said the gas compression project would add $780 billion in revenue by 2051, noting the urgency of the plan.

Decision-Making Process

Iran’s gas recovery from South Pars started nearly 30 years ago. Along with the phase development of this massive field, Iran expanded its gas network. Currently, more than 75% of energy consumption in Iran depends on gas. South Pars alone accounts for 70% of Iran’s total gas production. Iran is recovering nearly 700 mcm/d from this field. The latest data show that the bulk of feedstock for the petrochemical and many other industries is supplied by South Pars. In the meantime, power plants receive nearly 85% of their feedstock from gas. It is not strange to call South Pars, Iran’s energy heart. South Pars is currently in the second half of its lifecycle. Gas recovery, which used to rely on natural pressure, should now continue artificially and by applying compression technology. Qatar, which shares South Pars with Iran, moved to focus on gas compression three years ago, for which purpose, it signed agreements with top technological companies. It is set to receive remarkable results in gas production in two years. Qatar’s share of South Pars is 70% and Iran’s share is 30%. Although Iran’s gas recovery capacity is higher than that of Qatar, the latter would see a significant jump in its gas recovery from South Pars. Iran started its studies for gas compression in South Pars years ago. It finally signed agreements with local contractors as sanctions prevented it from partnership with foreigners.

President Pezeshkian said at the ceremony that opportunities should not be lost. “Should we fail to do our job on time we risk losing opportunities,” he said, adding: “We have to shorten the process of decision-making as much as possible.”

He said thanks to efforts made by the ministries of Petroleum, Energy, and Interior, the country left behind a tough winter.

Energy Waste Reduction

Given the significance and necessity of building compression infrastructure, NIOC concluded that any delay in implementing this project would not be in national interests; therefore, the project had to be implemented in the shortest possible time. For this purpose, NIOC signed deals with local companies. Iran’s petroleum industry is entering a new phase of sustainable operation of the largest gas field in the world, which is instrumental in sustainable gas supply and economic development. However, on a larger scale, it has to be said that significant measures are underway for optimum use of energy and preventing waste.

Referring to flare gas gathering in Khuzestan, Pezeshkian said: “Major efforts have been made in this regard. About 40 mcm of gas has been captured and another 40 mcm would have been captured by next April. Within one year, we would no longer see any gas flaring that would waste energy and cause extensive pollution.”

7 Hubs and 4 Platforms

As Pakzad explained at the event, this project comprises seven compression hubs, each of which has four platforms – a power generation, a living quarter, and two turbocompressor platforms. Totally 56 high-power turbocompressors would

be required at the seven hubs. Necessary equipment for these hubs would be supplied locally and by foreign partnerships.

The minister estimated that the construction of each hub to cost $2.5 billion.

South Pars would be divided into seven gas compression hubs, each containing 60,000 tonnes of structure, 70% of which would be sourced domestically.

Hubs Arrangement

Hubs 1 and 7 are to be constructed by Petropars for $4.8 billion; Hubs 3 and 6 are to be handled by Khatam al-Anbia Construction HQ for $4.9 billion; OIEC is to build Hubs 2 and 5 for $4.8 billion; and MAPNA (Neyr Perse) is to build Hub 4 for $2.36 billion. Each compression hub in this project comprises several phases. Hub 1 covers phases 12A, 11B, 12B and 11A while Hub 2 includes SP15, SP16, SP3 and SP21. Hub 3 comprises SP1, SP5, SP17 and 18. Hub 4 covers SP2, 19C, 19AB, SP6 and SP20; Hub 5 includes 13AB, SP10, 13BD and 14AC; Hub 6 covers SP11, SP22, 24A, SP23, 24B and 14BD; and Hub 7 covers SP4, SP7, SP8 and SP9.

Fourteen compression platforms are to be constructed for South Pars under this agreement which also requires 600 km of subsea pipeline. The first date of commissioning is set for March 2029.

Experienced Contractors

Explaining how contractors had been chosen, the minister said: “The main capacity of these contractors lies in their valuable experience in developing the South Pars gas field. These general contractors award the contracts to private subcontractors and the private sector’s capacity would be utilized effectively.”

Apart from the significance of the project for national energy security, it is instrumental in job creation.

Mohammad Reza Aref, the first vice president, said recently that the South Pars gas compression project would contribute to job creation.

Paknejad said: “This project would create 17,000 direct and 50,000 indirect jobs. I ask the president to accelerate the execution of contracts and finalization of financing so that these projects would be started soon.”

The minister expressed hope that the project would come online according to the timeframe set for it so that national interests in the joint gas field would be protected while energy imbalance would be managed in favor of the objectives of the 7th National Development Plan.

Recovery Up 21%

Mohammad Mehdi Tavasolipour, manager of the South Pars compression project, said it would enhance recovery from South Pars by 21%.

“By implementing this project, the field’s recovery would increase from 54% to 75%and we hope that by fully operating this project, NIOC and Pars Oil and Gas Company (POGC) would be able to significantly manage national gas imbalance,” he said. “After full implementation of this project, gas production will become stable in the country while through upgrading technical know-how and creating job opportunities, a greater step would be taken in favor of the development of Iran’s oil and gas industry.”

POGC is in charge of developing South Pars. It has studied 20 scenarios for this purpose. Tavasolipour said offshore and onshore compression or even onshore-offshore compression options were reviewed until the offshore option was chosen based on economic and environmental indicators.

The compression agreement was signed at a time when Iran’s petroleum industry remains subject to tough sanctions and international investment is faced with restrictions. However, E&P companies, which are the main contractors in this giant project, are handling the operation of this megaproject. Foreign companies can build partnerships with Iranian companies in this project.

Compression Vital in Gas Output

The massive South Pars (SP) gas field currently accounts for 70% of Iran’s gas and 40% of its gasoline supply.  As gas recovery from this field is reaching a limit after which pressure fall-off would start, Minister of Petroleum Mohsen Paknejad has announced the planned implementation of compression projects in the offshore reservoir as a key project of the National Iranian Oil Company (NIOC). Reza Dehqan, director of engineering and development at NIOC, said seven agreements worth $17 billion would be implemented for this purpose.

As recovery from South Pars is nearing three decades, production currently stands at 715 mcm/d. However, NIOC has forecast pressure fall-off to start in three to four years. South Pars is jointly owned by Iran and Qatar with the latter holding 70% and the former 30%. Qatar has over the past two years signed agreements for further studies on how to prevent production fall-off in the North Dome field. For its part, Iran has signed agreements with local contractors.

Studies on Compression

Pars Oil and Gas Company (POGC), which is in charge of the development of South Pars, embarked on a joint conceptual study with a French company on the gas pressure in South Pars. The French side submitted its proposals, but the cooperation ended as the United States pulled out of the 2015 Iran nuclear deal. POGC officials said 90% of studies had been conducted by the French. Therefore, their findings would have been fruitful for Iran. However, POGC had two causes of concern: How could compression projects go ahead under sanctions? Are local companies including contractors and consulting firms able to handle this job?

To allay such concerns, numerous studies were conducted on compression from 2018 to 2022, but at the end of the day, no concrete decision was made. The issue was becoming more sensitive and more worrying until NIOC decided in 2023 to set a framework before assigning the task to POGC.

From Paris to Nargan

Dehqan, who was secretary of the South Pars Compression Ad Hoc Committee, said: “It was in July 2023 that two agreements were signed with Nargan Engineering Co. (NECO) for onshore and offshore compression. The idea was that NECO would proceed with the study so that we could finally choose to do the job offshore or onshore. That was the most important decision that had not been adopted until that point. NECO’s studies continued for 6-7 months until the results showed the work had to be done offshore. The French company had reached the same conclusion before. After NECO’s studies, we reviewed the results more precisely.”

There were also reasons to do the job onshore, but experts focused on offshore work. Another key issue that had to be prioritized in decision-making was the arrangement of work. It was necessary to define several hubs and compression layers that ended in seven hubs with two platforms. Numerous decisions were also adopted about equipment. To save time, most activities were done in parallel. According to Dehqan, one manifestation of time-saving measures was a seven-hub design. The timing of the design was shortened. Second, compression platforms were designed similarly to have the chance to change them.

Time Loss Prevention

Another measure carried out to save time and accelerate the project was to put decisions into action during studies and design. Since conceptual studies by the French company and basic studies by NECO were already available, the main contractors were engaged; Petropars, OIEC, Khatam al-Anbia Construction HQ, and MAPNA Group. That was for the completion of technical and engineering documents to facilitate studies based on feedback. For instance, due to the early involvement of contractors, complementary geophysical and geotechnical studies were activated. Meantime, negotiations with offshore platform builders and foreign suppliers could have occurred more quickly. According to Dehqan, preliminary agreements were signed for compression platform construction in March 2024 with four contractors for $400 million. After studies were concluded, seven construction agreements were prepared for a $17 billion investment.

Dehqan said South Pars is projected to earn the country roughly $780 billion in revenue from gas and condensate by 2051. The first production following compression is expected by March 2029.

420,000-Tonne Installations

Preliminary calculations show that each hub incorporated 60,000 tonnes of installations and equipment to be installed offshore. That was twice the equipment used in South Pars platforms. In total, 420,000 tonnes of equipment will have been installed in the seven hubs offshore, while 200,000 tonnes of offshore equipment has been used in the 39 South Pars platforms. Furthermore, 600 km of sour gas pipeline is expected to be installed subsea. 

According to Dehqan, the project is forecast to engage 17,000 persons directly and 50,000 persons indirectly.

One of the key agreements signed for the South Pars compression project is to supply turbocompressors. To that end, Dehqan said, talks have been held with MAPNA Turbine Engineering and Manufacturing Company (TUGA) and Oil Turbocompressor Company (OTC) affiliated with the Oil Industry Pension Fund (OIPF) over the past months. Technical and financial talks have been finalized, and the delivery time has been set. Turbocompressor manufacturers are now expected to sign agreements with main contractors.

Dehqan said although international firms were involved, local contractors and manufacturers implement 70% of the project.

SP12 Prioritized

The SP phases that experience fall-off sooner than others are prioritized for compression. For instance, in SP11 and SP12, the first hub, there are signs of fall-off, so they are prioritized. SP12 lies easternmost, very close to the border with Qatar.

The South Pars gas field is facing a challenge. The deeper part of the field lies in Qatari waters and its structure shows that the more Qatar recovers the more gas and condensate migrate to that country. After nearly three decades of recovery from this field, more protection is required. These seven hubs are now expected to prevent a pressure fall-off so that Iran would not see its share decline from the jointly-owned field.

Touraj Dehqani, CEO of POGC, said: “When we intend to boost pressure, we can maximize our recovery in the long-term if we install the compression equipment towards the source. It means that recovery goes up when the equipment is close to the sea. Therefore, installing equipment offshore would be a better decision. The only cause of concern would be that installing offshore equipment is time-consuming. However, if we can manage the time, and launch the first compression hub by 2030, implementing this project offshore would be better and prioritized. But since the first hub is facing more pressure fall-off, we have defined an onshore hub, for which a contractor has been chosen to operate the project with a $300-400 million investment.” 

Minister Paknejad has time and again said compression in South Pars is a must. He had warned that without compression, South Pars would be losing 25 mcm/d a year. To counter this threat, South Pars compression is a strategic priority. That would be instrumental in sustainable gas supply while being vital in terms of economic considerations. Therefore, the implementation of this project would be a big step in preserving national gas production capacity and generating value-added for the country.

Paknejad:

Sanctions Risk Destabilizing Oil Markets

OPEC Secretary General Haitham Al-Ghais traveled to Iran on a one-day visit on 12 February and met with Iranian President Masoud Pezeshkian and Minister of Petroleum Mohsen Paknejad. Pezeshkian told Al-Ghais it was important for OPEC to stay clear of political games. Minister Paknejad told the OPEC secretary general that depoliticizing the oil market was vital for energy security, particularly for its players. The minister said that unilateral sanctions against key oil producers in the world and ramping up pressure on OPEC would destabilize oil and energy markets, not to mention harm consumers all across the globe.

OPEC Unity

In his talks, Pezeshkian said: “As much as we are seeking consensus, cohesion, and unity inside the country, we were working in favor of strengthened brotherly ties among neighboring and Muslim nations as we attach great importance to having a single language, vision and policy among OPEC member states.”

“Sharing experience and achievements as well as collective management of oil market are among grounds for partnership among OPEC member states. They should act so as not to harm fellow members.”

The Iranian president said the United States could not impose sanctions on a single OPEC member state should they remain united.

Iran Backs OPEC

Minister Paknejad touched on OPEC+'s historic performance in helping market stability and global economic growth and development, saying: “As a founding member of OPEC, Iran has always supported responsibly OPEC decisions in favor of market stability. As President of the OPEC 2025 Conference, Iran will seek to strengthen unity among fellow OPEC member states and boost cooperation with non-OPEC allies in favor of oil producers.”

He said as OPEC plays a vital role in strengthening solidarity among OPEC+ producers while interacting constructively with energy consumers in the world, it was crucial to depoliticize the oil market to ensure energy security.

He said that imposing unilateral sanctions against major oil producers and exerting pressure on OPEC would destabilize oil markets while harming consumers in the world.

Ever since the OPEC establishment, Iran has been a key player and instrumental in its decision-making. According to the first report of the OPEC Secretariat in 2025, Iran supplied 3.314 mb/d of oil in December 2024, finishing third among fellow producers.

OPEC Family

Al-Ghais has acknowledged Iran’s role in founding OPEC with a positive role. He told President Pezeshkian that OPEC was bent on advancing the interests of all member states in the light of market stability.

“We’ve sought to boost cooperation among OPEC member states like family members in favor of collective interests. Boosting such spirit of cooperation would be key to the future of member states as Iran-Saudi improved ties have made OPEC stronger in the market,” he said.

Al-Ghais’s meeting with top Iranian officials came as Iran recently took over the OPEC Conference presidency. That occurred during the 189th OPEC ministerial meeting presided over by Gabon, the rotating chair of OPEC. After being voted to chair the OPEC 2025 Conference, Paknejad offered his gratitude to fellow member states for their trust. He pledged to make his best efforts to further boost cohesion, solidarity, and progress within the OPEC.

Iran, 3rd OPEC Producer

According to OPEC reports, Iran’s oil production averaged 3.259 mb/d in 2024, up 400,000 b/d year-on-year. That placed Iran in the position of third OPEC producer. Iran exported a total of 587 million barrels of oil in 2024, up 10.75% from the year before. Iran has always maintained its position among the top three OPEC producers.

More than 64 years have passed since OPEC was established. Despite ups and downs, it has continued to play a key role in the global oil market. It is known specifically for its support of member states’ interests and market management. OPEC has been focused on cooperation with consumers, and by regulating production, it has balanced oil prices. Other positive effects of OPEC include preventing oil shocks, breaking big oil companies’ monopoly on the global oil market and petroleum industry, controlling oil resources, and achieving reasonable levels of revenues projected by OPEC member

states. By tying member states’ economic interests, OPEC has increased ties between member states and brought about unity and coordination in the policy of member states, each of which plays a decisive role in the oil market. Of course, it is part of the mission defined for OPEC, which would finally guarantee economic security for consumers, fixed revenue for producers, and a fair return on investment to those investing in the petroleum industry.

Crude Oil Cut

OPEC members, currently numbering 13, account for 30% of global oil supply. OPEC+, comprising OPEC and 10 allies led by Russia, was formed in 2016. OPEC+ is currently supplying about 40% of world oil production. The alliance is led by Saudi Arabia and Russia, producing 9 and 9.5 mb/d of oil respectively. OPEC+ was mainly designed to regulate oil supply on world markets. In endorsing OPEC+'s contribution to market stability, the decision to cut output is a case in point. In late 2022, as the US and other producers started oil production, concerns over a supply glut struck markets. OPEC+ then decided to scale back on production. OPEC+ countries had planned since August 2024 to gradually reduce production restrictions to restore their normal output. They had even set a timetable for that purpose; however, deciding about enhancing production was postponed several times until it was decided to take effect by the end of the 1Q 2025. Russia’s Deputy Prime Minister Alexander Novak said OPEC+ measures aimed at preventing oil market instability would be undertaken during lower winter demand. Eight members of OPEC+ intend to go ahead with the voluntary 2.2 mb/d output cut into the 1Q 2025.

Market Balance

Following such a decision, OPEC+ played a remarkable role in the 2024 market balance. It moved in the direction of stability and sustainability in the market. Such smart decisions are expected to lead to market control during the 2Q 2025 because market balance and calm would benefit all member states as well as consumers.

OPEC member states are trying to play their role in favor of all member states’ interests. Although there are restrictions, consultation between member states in addition to market monitoring would help resolve issues.

Another point is that Iran is also a founding member of the Gas Exporting Countries Forum (GECF). That is helpful in market monitoring because as the most important intergovernmental and international gas body, the GECF is blossoming and its contrition to growing structures and arrangements in Iran would be of high significance.

Market Forecast

Most analysts maintain that should geopolitical tensions subside in the region and crises go away, market disruption would ease, in which case both producers and consumers would benefit. Geopolitical tensions transpiring in the Middle East in addition to Russia’s war on Ukraine have affected oil prices.

Tensions in oil-rich areas always worry market actors. However, forecasts take the upper hand remains to be seen in 2025: concerns over undersupply or oversupply due to lower demand. The oil market has always been unpredictable and volatilities may emerge at any time.

Of course, this is not only the case in OPEC, but also the future of oil and gas in the region and the world; both short-term and long-term. Although the energy transition is a topic of discussion and many countries are trying to achieve it, the necessity of fossil fuels cannot be ignored, because a large part of new energy equipment is supplied by the petrochemical industry. Therefore, this same perspective may in a way support the oil and gas markets in the world. How the market moves towards enhancing production and market growth is under the control of intelligent decisions that depend on the global economy, the decisions of major countries, and developments in the Middle East and the world. According to many analysts, Trump seems to be intending to force OPEC and OPEC+ countries to increase production by increasing tariffs. On the other hand, some analysts believe that Trump’s policies could support oil demand, which would also benefit OPEC+.

In any case, the future is uncertain, and possible scenarios regarding the outlook for the oil market fluctuate widely, from optimistic to pessimistic. Therefore, we must wait until the real results of Trump’s decisions on oil and gas production and supply become clear, far from speculation. The reality is that the oil market is very complex and what seems to be happening now is that the market is being influenced by fundamental factors.

46 Years of Sanctions

Iran Oil Industry Review; 1979-Present

The Iranian calendar year is coming to an end, while the Iranian petroleum industry has just marked its 46th year following the Islamic Revolution. Despite all the ups and downs caused by the imposed war and unilateral US sanctions, the Iranian oil industry has since maintained its growth. The giant South Pars gas field has been developed, and petrochemical production has grown 46-fold while gas production has seen 10-fold growth. Furthermore, Iran’s oil refining capacity has reached 3.6 mb/d while gas refining capacity has exceeded 1 bcm/d. In the meantime, oil production and exports have continued despite sanctions.

“Iran Petroleum” offers a review of the performance of the petroleum industry spanning 46 years following the victory of the Islamic Revolution.

Oil, Gas; Harbingers of Development

Over the years, the gas industry has been a key source of energy production and hard currency generation for the country, displaying a strong presence in global markets.

Iran’s unprocessed gas production has grown 10 times since 1979 while condensate production has experienced a 24-fold increase. Under the 14th administration, gas production has increased 30 mcm/d.

In addition to South Pars, the Naar and Kangan, Aghar and Dalan, Sarkoun and Gourzin, Gonbadli and Khangiran gas fields have been developed following the Islamic Revolution. South Pars is currently producing 715 mcm/d of gas from 27 phases that have been developed.

Joint Fields’ Output Hike

These figures are not limited to gas. Crude oil production capacity also experienced significant growth under the 14th administration. Crude oil production has grown 60,000 b/d after making up for shortfalls. The bulk of production comes from the Karoun, Rag Sefid, Haftkal, Nargesi, Dehlorna, South Azadegan, Darquain, Sepehr and Jofair, Cheshmeh Khosh, Dalpari and East Paydar, Yaran, Aban and West Paydar, and Sohrab fields. Development of the onshore section of some joint oil and gas fields like the Reshadat, Forouzan and Salman, Mubarak, Nosrat, and Naftshahr had started before the Islamic Revolution, but their offshore section was developed after the revolution.

The production capacity from joint oil fields has reached 490,000 b/d with shared gas fields having a production capacity of 720 mcm/d. West Karoun fields, South Pars, Azar, and Khanigran are active. There are 20 joint oil fields, which are either active or under development. Three joint gas fields are operational, three others are under development while another two are under study.

Recoverable Hydrocarbons

Iran has recorded valuable data on hydrocarbon discovery and recoverable reserves. For instance, recoverable liquid hydrocarbon reserves have jumped from 88 billion barrels in the early days of the Islamic Revolution to 156.5 billion barrels by March 2024. Such an increase comes against the backdrop of more than 46 years of extraction from these deposits. Recoverable natural gas reserves have also increased significantly over the years, coming from 8 tcm to 32.3 tcm over the same period. As exploration operations go ahead, these figures are expected to keep growing. Currently, exploration operations are underway in various parts of Iran, from the Persian Gulf to Abadan Plain, North Dezful, Kopet Dag, Lorestan, Moghan, Gorgan Plain, and the southern Caspian Sea.

Oil Refining at 2.386 mb/d

In the oil refining and petroleum products sector, the refining capacity has increased from 1.1 mb/d to 2.386 mb/d over the said period. The 14th administration accounts for over 90,000 b/d of this increase. Gasoline and gasoil have increased 9 and 5 times, respectively in production. Gasoline production has increased 6.7 ml/d while gasoil output has grown 7 ml/d.

Construction of the Imam Khomeini oil refinery, the Bandar Abbas oil refinery, and the Bandar Abbas gas condensate refinery, development of the Tehran, Isfahan, Lavan, Abadan, and Tabriz refineries have all contributed to enhanced refining capacity.

Some measures associated with the refining sector have gone beyond borders, including an overhaul of the 140,000-b/d El Palito refinery in Venezuela for €110 million and exporting technical and engineering services.

Gas Refining at 1bcm/d

The natural gas refining and dehydration capacity stood at 36 mcm/d during the early days of the Islamic Revolution, which has now reached 1.087 bcm/d. During the years following the Islamic Revolution, only 2,500 km of natural gas pipeline had been installed and is now at 40,200 km.

Thanks to extended natural gas pipelines, 1,259 cities, and 40,755 villages have been connected to the national gas grid. Before the revolution, only five cities and one village were connected to the gas network.

As far as natural gas export is concerned, gas exports to Turkey started in 2001, which crossed 10 bcm by 2007. Natural gas exports to Iraq became operational in 2017 under the Baghdad Agreement (Naftshahr) and in 2018 under the Basra Agreement (Shalamcheh). Iran exported 16.6 bcm of gas to Iraq last calendar year.

Petrochemical Output Up 46-Fold

The petrochemical industry is a main pillar of the petroleum industry in the production chain. It is also the driver of economic, political, and social development in the country. It plays a key role in GNP. Iran’s oil industry is seven decades old, but the bulk of its development has occurred in the wake of the Islamic Revolution. Iran’s petrochemical production capacity was 2.5 mt in 1979, which has now reached 96.3 mt. Iran produced 1.6 mt of petrochemicals in 1979, which hit 74.3 mt last calendar year. Since the 14th administration took office, 24.2 mt of petrochemicals have been produced with exports reaching 13.4 mt.

Petrochemical production reached 5.9 mt during the first three quarters of the current calendar year, up 3.5% year-on-year.

As far as the petrochemical sector is concerned, petrochemical sales and exports are defendable. Petrochemical exports hit 23.9 mt during the three quarters of the current calendar year, up 6.7% year-on-year. Petrochemical sales have grown 4.7% year-on-year to hit 33.2 mt during the first three quarters of the current calendar year.

Flare Gas Value

Iran’s post-revolutionary energy record also pertains to flare gas gathering. Since the 1979 Islamic Revolution, many projects have been completed and come online to generate value in addition to preventing environmental pollution. One case in point is the NGL 3200 associated gas capture project that recently came online. Its second phase as well as the NGL 3100 project is expected to become operational shortly.

Furthermore, 16 flare gas projects have been put out to tender, 6 of which have come online with a capacity of more than 140 mcf/d. Five more contracts are close to being signed. Under the 14th administration, some projects have been implemented for the purpose of cutting environmental pollution and preventing gas flaring.

The first-ever sanctions imposed on Iran’s oil industry were in 1979. The Iranian energy market has since not experienced a single day without challenge from Western governments. However, no restrictions and deprivation could keep this big industry from moving ahead. Despite all sanctions and unilateral decisions aimed at isolating Iran, the country has relied on its domestic capacity to upgrade the quality of life, win a toehold in global markets, and struggle for its standing.

Europe, Potential Market for Iran Petchems

Ameneh Mousavi

Iran’s former deputy minister of petroleum for international affairs and trading, Ali Majedi, has said Iran could find good European buyers for its petroleum and petrochemical products. In an interview with “Iran Petroleum,” he said Iran can export up to 600,000 b/d of oil to Europe if sanctions are lifted. Majedi, who had served as Iran’s ambassador to Japan and Germany, also touched on investment in renewable energies, saying Iran had untapped potential for that purpose.  

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

How do you see the prospect of Iran’s cooperation with Europe in the energy sector? Now that Russian gas exports to Europe has been cut, can we become an alternative for oil, gas, and petrochemical exports to the Green Continent?

Europe needs our petrochemicals, as in line with its plans for using clean energies like hydrogen, wind, and sun, it needs fossil energies. Although welcoming renewables may not be good news for us and other countries that have oil and gas, the world is moving towards renewable energies. France and Germany, like fellow EU members, are going in the same direction. Should we manage to overcome ongoing problems between Iran and EU states, Europe could be a lucrative market for oil products and petrochemicals. We can have reliable customers for this market for another decade. If we return to the decade preceding the imposition of sanctions, we would see that Europe was among our oil buyers, although we have traditional oil customers in Southeast Asia. There was a time when Europe was buying 600,000 b/d of oil from us. Therefore, if sanctions are lifted, we can resume crude oil exports to Europe. But gas has a different story. No new investment has been made in the gas sector, and we cannot make a good recovery from our fields. However, we can invest in gas fields in partnership with European companies.

Do your ties with Russia affect Iran’s presence in Europe’s oil market?

Its impact on the oil market is not significant because we used to export 20-25% of our oil to European countries. We had no competing interests with Russia in this regard. But when it comes to gas, Russia is our rival. If one day we decide to resume energy exports due to the US sanctions lift, we can cooperate with TotalEnergies, Sell, Eni, and even German firms in the development of oil fields and recovery. German companies are not as powerful as other European companies like France’s TotalEnergies, Italy’s Sarace, Greece’s Hellenic Petroleum, Russia’s Lukoil, Spain’s Cepsa, and Italy’s Eni. However, they were extracting 50,000 to 100,000 b/d of oil from Iran. But due to the problems with the Joint Comprehensive Plan of Action (JCPOA), they failed to realize their objectives. To achieve the same status, we have first to take steps for the lifting of sanctions, after which we can seek foreign investment in both the oil and gas sectors. Then, we can pin hope on exports. You should also keep in mind that Germany is a leading state in renewables. German firms are knowledgeable in the renewable energy sector, and they can share it with Iran. Under the JCPOA, German experts were supposed to share their technical know-how with us. That is why they inaugurated Iran’s largest solar power plant in Kerman.

What about petrochemical exports?

As far as petrochemical export is concerned, there is a significant market in Europe. However, due to sanctions, we are yet to find a foothold in these markets. Had the US not quit the JCPOA, we would have had good conditions for selling our petrochemicals because we’re not under UN sanctions. Therefore, if our oil, gas, and petrochemical sales are back to pre-JCPOA levels, we can export up to 600,000 b/d of oil to Europe. Regarding petrochemical exports, I believe that there are European buyers for Iranian products. If sanctions are lifted, there would be a good market for investment in this sector, while Iran would be able to sell its products to Europe.

As investment is rising in renewables, how can Iran be active in this sector?

The share of clean energy in the EU will increase significantly over the next two to three decades. Germany aims to meet around 50 percent of its energy needs from clean energy between 2030 and 2035. Therefore, it is foreseeable that the consumption of fossil fuels will decrease worldwide due to the pollution they cause. Although this process will be different in the United States with Trump taking office, European countries have tried to shift their plans towards the use of new and clean energies through the measures they are taking. The above process may speed up or slow down slightly as some governments come to power in European countries, but this is the path that European countries are seeking to take to take a step towards reducing the use of GHG, global warming, and climate change that we are already witnessing. Although we can have an active presence in the renewable energy market, we must first find a way to attract foreign investment to tap our current oil and gas reserves. The world is moving towards the use of clean energy, and perhaps in the coming decades, a small number of countries will be demanding hydrocarbon energy. There is great potential for solar energy production. While moving towards the use of renewable energy, we must provide the basis for attracting investment and developing our oil and gas fields in the country. These two can complement each other. Iran’s abundant panacea in having a lot of sunshine and our country’s pristine and untouched oil and gas fields can be absorbed in the European market. To attract foreign investment or foreign exchange earnings, certain conditions are also required. We must carry out our calculations in such a way that we can attract foreign investment by selling different forms of energy and using them to modernize and rebuild energy facilities.

Siri Storage Capacity at 5mn Barrels

Siri Island lies 72 km off Iran’s coastline south of Lengeh Port and 40 km west of Abu Musa Island. This oil-rich island has an area of 18 square kilometers. The five oil fields of Nosrat, Esfand, Sivand, Dena, and Alvand lie on this island. Oil installations in this area are half a century old. The island remains a key area in oil production and export. Mohammad Reza Akbar Mousavi, acting head of the Siri zone, has said that the export jetty of this island can handle oil tankers of up to 1.5 million barrels. The current oil storage capacity in Siri Island stands at 5 million barrels, he said.

Siri Island is administered by Iranian Offshore Oil Company (IOOC). IOOC was established following the 1979 Islamic Revolution with the merger of Società Irano-Italienne des Pétroles (SIRIP), Iran Pan American Oil Company (IPAC), Lavan Petroleum Company (LAPCO), Iran Marine International Oil Company (IMINICO) and French Sofiran. 

A specific feature of this area is that oil production and export are entirely carried out on Siri Island. The value chain is completed in this sector and it is self-sufficient even in gas and electricity production.

Water Injection

Mousavi said Siri comprises Ilam and Nasr platforms, adding: “Nasr Platform is installed in the Esfand, Sivand, Dena and Alvand fields while Ilam Platform is installed in the Nosrat field. The bulk of Siri oil and somewhat gas comes from Nasr Platform which has some secondary platforms.”

“Currently, water injection into these fields is being envisaged to enhance production. In the meantime, gas supply from Ilam Platform, which is sweet, is used to feed the power plant on the island.”

“The important point is that power supply is a vital point in Siri. Although we face natural pressure fall-off in several wells in Ilam Platform that are producing oil and gas without any need for electricity, we need electricity for the equipment of platforms and for transferring oil to Siri Island, for which we have envisaged measures,” he said.

Power Plants

Mousavi said in addition to existing turbines in Siri Power Plant, there are two power plants on the island aimed to serve the NGL project and to carry gas from the Salman field.

“Under emergency conditions, we use the capacity of these power plants for power generation. Now we are trying to synchronize these power plants to experience fewer problems for power supply,” he added.

Referring to challenges to enhanced oil and gas production in Siri, he said: “To preserve and enhance oil production in this area, we need to optimize existing wells, in which case we would need offshore drilling rigs so that in addition to oil production, sweet gas supply would go on.”

“Furthermore, platform equipment and pipelines need to be repaired to avoid any disruption in oil production. A few local companies can work offshore. That along with high maintenance costs makes the job more difficult,” he said.

Mousavi said.

40 sq km Area

During our visit to Siri Island, we went to Nasr Platform. This platform lies 33 km off Siri Island. It has secondary platforms with 64 operational and 17 injection wells.

The point is that the platforms installed in Siri have a total area of 40 sq km, the biggest offshore zone in Iran.

Amir Rajabi, deputy head of Nasr Platform, said the main challenge to production in this platform resulted from decrepit equipment. “Renovation of secondary platforms is underway,” he said.

He said about 45 persons were working in various sectors including maintenance and services at each shift, adding that the main task was to protect the platform and preserve oil production.

Environmental Concerns

Rajabi said the initial pressure at wells was good without having to install downhole pumps for oil production, but due to sustained production over decades, such pumps are needed to preserve the rate of oil supply.

He touched on measures taken for environmental protection in the area, saying: “Water is 70 meters deep in Siri Island, which makes working difficult. However, our staff are doing workover in the shortest possible time.”

“We have two separators on Nasr Platform to conduct primary processing on the oil coming from secondary platforms before being transferred for the main processing and finally for export,” he said.

Production-Export Chain

The head of onshore installations operation in Siri Island said oil and gas in Siri were produced by Nasr and Ilam platforms before being piped into the processing installations.

“Separation, processing, and desalting are done on oil which is stored in storage facilities so that it would be exported based on contracts,” he said.

“Onshore production installations comprise crude oil production, water and vapor production, and loading and export and storage facilities,” he added.

Noting that service workers there had 12-hour shifts, he said onshore installations in Siri were first launched in 1975, which were all assigned to IOOC following the 1979 Islamic Revolution.

“Among oil islands, Siri Island is the farthermost,” he said, explaining about hardships.

Knowledge-Based Firms

The official also said that power supply remained a key challenge to Siri Island. “Due to our long distance from the heartland, we have to produce everything here. Currently, at Nasr Platform, most wells operate with pumps that need a sustainable energy supply. Therefore, sustainable power supply is a key priority for us,” he said.

Noting that numerous activities have been conducted about maintaining oil installations, he said: “Over recent years, knowledge-based companies have stepped into this sector. Domestic manufacturing has also fared well in spare part supply.”

He said engagement of knowledge-based companies and the private sector had partly resolved the problem of maintenance of installations. “However, due to the nature of the petroleum industry and its interconnection with the world, sanctions have in some occasions slowed down activities.”

He said knowledge-based companies and universities had somewhat resolved the problem of sanctions to guarantee the sustainability of stewardship of installations and persistent production.”

SRU Unit Launched at SP14

CEO of National Iranian Oil Company (NIOC) Hamid Bovard has said operation of the sulfur recovery unit (SRU) of Phase 14 of the massive South Pars gas field would help reduce pollution in the zone.

“The commissioning of this unit will be of help to the environment and will contribute to reducing pollution,” he said.

The SRU of SP14 is aimed at eliminating sulfur from the flares of the refinery, protecting the environment, and producing 400 tonnes of sulfur a day.

Hamid Reza Masoudi, deputy CEO of Pars Oil and Gas Company (POGC) for development projects, said the idea behind the SRU of SP14 was to remove sulfur from the flares of the refinery.

“In launching this unit, more than 183,000 cubic meters of soil was removed, more than 34,000 cubic meters of cement was poured, more than 5,500 tonnes of metal structure and more than 4,500 tonnes of equipment were installed while 303,000 inches of pipe and 500 km of cables were laid,” he said.

SP14 aims to produce 56 mcm/d of rich gas plus 75,000 b/d of condensate.

The $5.2 billion SP14 development project has been awarded by POGC to a consortium of Industrial Development and Renovation Organization (IDRO), Industrial Projects Management of Iran (IPMI), Iranian Offshore Engineering and Construction Company (IOEC), National Iranian Drilling Company (NIDC), Iran Shipbuilding & Offshore Industries Complex Co (ISOICO), MAPNA, Payandan Co., and Machine Sazi Arak.

Petchem Plants Up for AI Application    

Hossein Afshin, vice president for science, technology, and science-based economy, has said that the petrochemical industry would be able to apply artificial intelligence (AI).

He was speaking at a ceremony during which an MOU was signed for the development of AI assistance in the petrochemical industry.

Afshin referred to the Science-Based Jump Act, saying it would be a key opportunity for strong ties between universities and industries.

He said the opportunity would be up for grabs for two to five years, adding: “If universities and corporations use this opportunity effectively they would be able to make significant progress in this field.”

He touched on Articles 11 and 13 of the Production Jump Act, stating: “Under Article 133, research agreements with academics in R&D may benefit from the tax credit. We have an agreement with Iran National Tax Administration (INTA), based on which a Tax Credit Secretariat has been established at the Office of Vice President for Science.”

He added that Article 11 of the same Act authorizes private or public corporations to benefit from tax credit equivalent to annual depreciation if they invest in R&D. He said the equipment used at universities benefits from full tax credit.

Afshin said recently IRR 2,000 billion at Yazd University and IRR 1,080 billion at Isfahan University of Technology benefited from this article.

Noting that the 14th administration was paying due attention to a national AI platform, he added that the project, handled by the Sharif University of Technology, was in progress. He said about 80 faculty members and researchers were working on it.

He emphasized the significance of investing in AI, saying: “I’m sure investors in this sector would benefit financially in the future. We’ve invested nearly IRR 100,000 billion and we predict to reach maximum output within 4 to 5 decades.”

Afshin expressed pleasure with the choice of the Maroun Petrochemical Plant for contribution to the application of AI in the petrochemical industry.

He said some specific documents were being drawn up for universities to boost scientific and research cooperation. “We’re collaborating with some universities in some specific sectors. The Office of Vice President for Science is moving behind all.”

“Each university is supported based on its strengths. Such an approach allows us to focus on the strengths of universities and provide support when needed,” said Afshin.

Tehran-Ashgabat Oil Cooperation to Expand

Iran’s Minister of Petroleum Mohsen Paknejad in a meeting with Turkmen Foreign Minister Rashid Meredov expressed hope for good cooperation between the two countries.

“In the Islamic Republic of Iran’s foreign policy, constructive interaction with neighboring nations particularly brotherly and friendly Turkmenistan is highly significant,” said the Iranian minister.

He added that under the administration of President Masoud Pezeshkian, the development of economic ties particularly in the oil and gas sector has been prioritized.

“This issue was highlighted during the 2024 talks between the president of the Islamic Republic of Iran and his Turkmen counterpart and most recently in their phone conversation,” said Paknejad.

For his part, the Turkmen minister said Iran and Turkmenistan had historically maintained good ties, expressing his country’s willingness for broader cooperation.

Referring to Iranian-Turkmen heads of state’s talks, he said: “During these talks, a host of issues were discussed on how to explore cooperation strategically, including cooperation in the electricity, gas, and transportation sector among others.”

Noting that talks can help deepen cooperation between Iran and Turkmenistan, Meredov said: “This visit was aimed at holding talks with Iranian ministers for the realization of objectives set by the two nations’ top officials.”

He gave a positive assessment of talks with Paknejad, saying: “As far as gas cooperation is concerned, I should emphasize that Iran is our second partner in gas cooperation since independence.”

He said Turkmenistan had totally exported 107 bcm of gas to Iran, indicating the depth of gas ties between the two countries.

The Turkmen minister said Iran and Turkmenistan had good experience in this sector, calling for experience sharing.

No Halt to Iran Oil Exports

Iran’s Minister of Petroleum Mohsen Paknejad has shrugged off the US’s maximum pressure policy aimed at squeezing Iranian oil exports to zero, saying it was already a bankrupt policy.

“Bringing Iranian oil exports down to zero is a wild dream that would never be realized,” he said.

In response to US President Donald Trump’s anti-Iran policy, he said: “It is a failed policy that has already been tested and not paid off.”

Paknejad said necessary arrangements had been made for countering sanctions, adding: “I give all Iranians the good news that thanks to efforts by petroleum industry staff, Iran’s 10-year oil export record was recently broken.”

Regarding the Ministry of Petroleum’s plan in countering sanctions, he said: “Whether or not sanctions are lifted, we are ready to achieve our objectives. Necessary arrangements have been made on how to counter the maximum pressure policy.”

“The further our restrictions the more complicated our arrangements would be,” he said while visiting the Parchin gas compressor station.

“When foreign technicians left Iran’s petroleum industry [in 1979], it was unbelievable for them that one day our petroleum industry staff would be able to handle this complicated industry from top to down,” he said.

“Today, we’re witnessing self-sufficiency in various sectors of the petroleum industry in terms of equipment and development of oil and gas fields. With such potential, the oil and gas industry is largely run locally,” he added.

 

Caspian Sea States Should Cooperate in Oil, Gas

Ali Mohammad Mousavi, deputy minister of petroleum for international affairs and trading, has called for Caspian Sea littoral states to broaden their cooperation in the oil and gas sector.

He said some qualified companies involved in Iran’s oil and gas industry were ready to cooperate with Caspian Sea states in big projects.

Speaking at an energy panel in the Caspian Economic Forum, Mousavi said each country off the Caspian Sea had appropriate technical and specialized potential in the oil and gas industry that they could share.

“The Caspian Sea littoral states can cooperate in the North-South Corridor and East-West Corridor while playing an effective role in upgrading international energy security. We should pursue this important objective in the oil and gas sector, as well as in connecting power networks,” he said.

Mousavi said as far as energy corridors are concerned, Iran can link the two geopolitical focal points of the world, i.e. The Persian Gulf and Gulf of Oman in the south to the Caspian Sea in the north.

Iran has the safest, most reliable, and most economical transit route and swap facilities for crude oil, natural gas, petroleum, and petrochemical products to be delivered to Afghanistan, Pakistan, Indian Subcontinent, Turkey, Iraq, and Persian Gulf states.

He said that the Iranian Ministry of Petroleum had provided the necessary infrastructure in the Caspian Sea, Persian Gulf, and the Gulf of Oman ports for activating this capacity. “For instance, an exclusive terminal for crude oil and petroleum products at the Neka oil terminal has facilitated daily imports and exports of varieties of petroleum products and LPG, loading and unloading five 5,000-7,000-tonne vessels and storing 1.5 million barrels.”

“This terminal has an equipped laboratory that can carry out various tests. It is a reference lab in the region, offering services to oil companies in neighboring countries,” he said.

Mousavi said connecting Iran’s power grid to neighboring countries can help stabilize the power network while creating numerous markets for energy exchange in electricity.

He said from the east, Iran has access to Central Asia and two emerging economies: India and China.

“On the other hand, through Western neighbors, it would have access to West Asia, North Africa, and Europe. Therefore, Iran links Central Asia with Europe,” he added. He said power connections between Central Asia, Caucasus, and even Shanghai Cooperation Organization states to the Persian Gulf littoral states crossed Iran.

He said that Khazar Exploration and Production Company (KEPCO) had suitable infrastructure for cooperation with neighboring countries in exploration, development, and production from joint fields. He added that Iran could receive crude oil from Caspian Sea littoral states for treatment at its refineries.

“By facilitating trading of petroleum products in consumer markets in the region, development of trade cooperation with Caspian Sea littoral states would be upgraded,” said Mousavi.

Power Plants Get 7bn Liters Gasoil

Power plants received more than 7.4 billion liters of gasoil during six months since the 14th administration took office, showing a 41% increase year-on-year.

The current administration intends to improve the resilience of the energy network and overcome challenges associated with fuel supply to power plants. The latest studies are indicative of a significant growth in the production and supply of fuel to power plants. Such increased fuel supply has directly impacted the performance of power plants, thereby playing a key role in the materialization of long-term objectives of sustainable energy supply in the country.

Gasoil production reached 121 ml/d at the end of the third quarter of the current calendar year, up 7% year-on-year. Gasoil production has continued due to a freezing winter. During the first month of winter, gasoil production hit a record 123 ml/d, up 14% from a year ago.

During the second month of winter, gasoil production was up 14% year-on-year. Therefore, during the six months in office of the 14th administration, gasoil production totaled 21 billion liters, up 8% year-on-year.

According to the latest statistics, by the end of the second quarter of the current calendar year, 21 ml/d of gasoil was being delivered to power plants, up from 16 ml/d registered last year during the same period. In the first month of the third quarter, gasoil supply to power plants was 28 ml/d, up 4% year-on-year. In the second month of the third quarter, gasoil supply to power plants reached a record 40 ml/d, up 135% year-on-year. The figure reached 51 ml/d during the third month of the third quarter, up 46% from the preceding year. During the first month of the fourth quarter, gasoil supply to power plants increased 32% on an annualized basis to 54 ml/d. For the second month of the last quarter of the calendar year, gasoil supply was up 35% year-on-year to 54 ml/d.

Liquid fuel consumption by power plants reached 56 ml/d during the first ten months, up 41% year-on-year. In the transportation sector, fuel consumption totaled 189 ml/d during ten months, up 6% from the year before.

Gas Flaring Down to Minimum

CEO of National Iranian South Oil Company (NISOC) Ebrahim Piramoun has said that gas flaring had dropped to its minimum.

He said NISOC-run areas accounted for a major share of the national oil and gas supply, adding that flare gas capture would reduce pollution while providing feedstock to petrochemical plants.

“Therefore, NISOC is instrumental in national economy and energy,” he added.

Piramoun touched on environmental challenges to the petroleum industry, saying: “The petroleum industry generates pollution everywhere in the world that needs to be managed correctly. With such challenges as decrepit installations, international sanctions, and outdated technology, production in these areas is underway with minimum environmental harms.”

Referring to measures undertaken for reducing flaring, he said: “Although oil production was well beyond what NIOC had instructed, we managed to reduce flaring significantly. Our gas flaring is now down 200 to 250 mcf/d when compared with last year.”

He attributed the reduced gas flaring to the supply of rotary equipment and regular overhaul of plants. “Associated gas is a national wealth that should be used most effectively.”

He said gas flaring had been caused by a variety of factors, including investment, conditions of wells and associated reservoirs, and decrepit rotary equipment like turbines and compressors.

Piramoun said significant projects were underway for reducing flaring. He said projects associated with the Maroun Petrochemical Plant and the Persian Gulf Petrochemical Industry Development Company (PGPIC) were 70% completed. Some sections like power substations and NGL 900 and NGL 1000 precompression facilities had become operational. Gas injection into the Gachsaran field had also started, which would be instrumental in optimized production and indirectly in lower gas flaring.

He expressed hope for the full operation of the flare gas capture project in Rag Sefid-1 to help save 100 mcf/d of associated gas.

NIGC Moves towards Smart Energy Consumption

The CEO of National Iranian Gas Company (NIGC), Saeed Tavakoli, said that cooperation with the private sector would offer effective solutions to overcome energy imbalance in the country.

Addressing a ceremony for signing an agreement for cooperation with the Ministry of Communications and Information Technology, he said: “As with smart management of energy consumption, it would be possible to overcome the imbalance challenge, more attention should be paid to using digital capacities in smart systems.”

“This agreement is signed to design, implement, establish, maintain, and steer the integrated platform of energy digital services to upgrade IT in the energy ecosystem,” he said.

He added that there was a good willingness on the part of the executive and legislative bodies to deal with energy imbalance in all sectors. “These developments indicate a national approach to overcome the energy imbalance challenge. Therefore, we should use this opportunity in the best possible way.”

Tavakoli said a faster and more precise application of this mechanism would help resolve energy imbalance sooner, adding: “In addition to resolving imbalance, the secondary idea of this project is to disseminate information among each member of society concerning energy consumption.”

“In light of the security of data, security organs insist on creating a fully secure platform for this plan,” he said.

He said the issue of data governance was being followed up on seriously as numerous meetings had been held at high levels in the country. “Following these meetings, it became clear that to resolve the challenge of energy imbalance, access to accurate and updated data was a must and our studies also show that correct and effective management would be possible based on such accurate and precise data.”

Tavakoli said it was possible to identify and locate crypto-miners that were behind growing power consumption in the country. 

He said NIGC was ready to help resolve the energy issue in the country, adding that expert groups had prepared this agreement to provide a platform for data management for effective energy management while boosting productivity.

“Only by using updated data, can we manage energy consumption effectively and identify problems to be resolved. Meantime, such cooperation is aimed at boosting productivity and countering unauthorized connections,” he said.

Fuel Mix Diversity Policymaking Starts

CEO of National Iranian Oil Refining and Distribution Company (NIORDC) Mohammad Sadeq Azimifar announced the start of effective policymaking for diversifying the national fuel mix.

Addressing a ceremony of operating fuel mix diversity projects, he said that 100 new CNG stations were envisaged to be built.

He added that 71% of petroleum products (about 185 million liters) would be consumed in the transportation sector by the end of the current calendar year.

Azimifar said increased consumption in the transportation sector resulted from weakness in the implementation of structural macro policies in the energy sector, adding that 53% of the motorized fleet in the country was clapped out, causing fuel consumption to grow to twice or thrice the global average.

Noting that diversity in the fuel mix had not been taken into consideration seriously, he said that a document had been adopted in 2020, requiring that the CNG share of the fuel mix reach 23% by 2041. But unfortunately, he said, the CNG share has been down from 12% to 6.5% in a year.

He said a lack of attention to CNG was behind the low consumption of compressed natural gas in the country. He added that effective policymaking and follow-up by related officials would allow for building 100 new CNG stations in the country.

He said bioethanol had been added to the national fuel mix, adding that its plant was located in Kermanshah Province in western Iran.

“Once bioethanol production by Zagros Green Co. becomes operational, 200,000 l/d of ethanol would be used instead of chemicals for increasing octane in gasoline.

“This is an environmentally friendly project that would help diversification of fuel mix, let alone would significantly impact on air quality,” he said.

Azimifar expressed hope for 500,000 clapped-out vehicles to be phased out under the 7^th National Economic Development Plan. He added that the output of locally manufactured cars should be increased.

Petchem Sector Eyes Value Chain Completion

CEO of National Petrochemical Company (NPC) Hassan Abbaszadeh has said the petrochemical industry was seeking to complete its value chain to minimize raw materials sales.

“Increasing the value-added in line with national macro policies is on the agenda, which we hope would materialize by the end of the term of the 14^th administration,”

He said the petrochemical industry was the most important link in preventing raw materials sales in the petroleum industry. “The petrochemical industry converts hydrocarbon resources to middle products on the one hand while on the other hand, semi-processed materials are completed until the last link in the value chain.”

Abbaszadeh said that $620 million would be invested in the Pad Jam polymer project, noting that more than $400 million had been invested in the first phase. The next phase of this project would be in 2026 to produce tires.

He touched on flare gas gathering by petrochemical companies and holdings to supply feedstock, adding that gas gathering was underway in West Karoun and East Karoun.

He said petrochemical companies would also engage in flare gas gathering in Assaluyeh. He said that some other petrochemical projects would come online in Assaluyeh.

Abbaszadeh referred to limitations in gas feedstock for petrochemical plants due to inefficient use, adding that petrochemical companies were involved in developing gas fields to ensure sustainable feedstock supply.

Gas Output to Grow 250 mcm/d in 5 Years

CEO of Pars Oil and Gas Company (POGC) Touraj Dehqani has stressed the need for gas compression in the giant South Pars gas field.

“Within the framework of the 7^th National Economic Development Plan, there is a need for 250 mcm/d of fresh gas production over five years. POGC would account for the bulk of this responsibility,” he said.

“About $90 billion has been invested in the upstream sector of South Pars over the past two decades to bring gas production capacity above 7000 mcm/d. Revenue from this sector is at $100 billion per annum, showing the strategic status of this zone in the economy,” he added.

Dehqani highlighted the big share of South Pars in the national energy supply, saying: “South Pars accounts for 70% of national gas supply, 40% of gasoline supply, 50% of petrochemical feedstock and 50% of gas delivery to power plants. These figures show the vital role of this zone in national energy security.”

He touched on enhanced gas production capacity under the 14^th administration, saying 7 mcm/d in new gas production capacity has been created to bring the capacity to 716 mcm/d, up 10 mcm/d from the year before.

Dehqani gave assurances for at least 150 mcm/d of additional gas production over five years.

He also touched on the development of other gas fields like Kish, North Pars, and Belal; saying national gas production capacity increase had been envisaged in the 7^th plan.

“South Pars, which supplies 70% of national gas supply, is now in the second half of its life and is normally facing pressure fall-off. That can affect production. Therefore preventive and technical measures are needed to preserve the production capacity,” he said.

Regarding rivalry between Iran and Qatar in gas recovery from South Pars, Dehqani said: “Although two-thirds of this field belongs to Qatar where foreign companies can freely work, Iran has managed to overcome restrictions to outdo Qatar by 50 mcm/d.”

He said that compression was a key solution to preserve gas output levels. “This project involves building seven compression hubs, which require $17 billion in investment which would prevent production decline while bringing economic value.”

An Eight-Year Success Story

OPEC+ Market Stabilization Efforts

By Afshin Javan

Energy Economist

The dawning of the year 2025 marked a significant anniversary in the history of the global oil industry, for it was eight years ago, in January 2017, that the ‘Declaration of Cooperation’ (DoC), signed between OPEC and 10 non-OPEC oil-producing countries became operational.

The DoC originated from the situation witnessed between 2014 and 2016 when the global oil market was confronted by one of the most severe downturns in its history. This had negative implications for the global economy. The Participating Countries that eventually formed OPEC+ recognized that the only way to deal with a challenge on this scale was to join hands and work together. The seed of this desire to cooperate gestated into the ‘170th OPEC Conference Decision’ of 28 September 2016, metamorphosing into the ‘171st OPEC Conference Decision’ of 30 November 2016 and blossoming into the historic ‘Declaration of Cooperation’ of 10 December 2016.

Originally effective for six months, the DoC’s voluntary adjustments in production have been extended many times and have become an indispensable tool in addressing market challenges and responding to developments that may impact the oil industry. Not only did this endeavor yield historical results, but it was also clear that there was a tremendous appetite among Participating Countries for further cooperation across a broad range of energy fronts. This includes knowledge exchange on long-term oil and energy perspectives, technological innovation aimed at enhancing efficiency, and cooperation to improve the environmental credentials of oil, among other areas.

This desire for further and broader cooperation has been institutionalized under the ‘Charter of Cooperation,’ which was signed by Participating Countries at the 6th OPEC and non-OPEC Ministerial Meeting on 2 July 2019. It is a high-level document to facilitate dialogue among Participating Countries aimed at promoting oil market stability and cooperation in technology and other areas for the benefit of oil producers, consumers, investors, and the global economy. It is a means of enabling the long-term use of oil as a key component in the evolving global energy mix while exploring efforts to improve the environmental and efficiency credentials of oil and strategies and technologies to advance the global oil industry.

The “Charter” promotes the principles of transparency, equity, and fairness. It also has, at its core, the concept of multi-stakeholders. This concept reflects OPEC’s desire to promote and participate in a wide and broad dialogue with all stakeholders in the energy industry, including oil producers, consumers, investors, analysts, and others. The Charter offers both a forum for dialogue among Participating Countries and between Participating Countries and other stakeholders.

Challenges Navigated 2017-2024

The challenges the oil market has faced over the last eight years have been multivarious and, at times, unprecedented. They include the severe oil market downturn of 2014-2016; technological innovation and disruption; geopolitical crises that have led to conflict in some regions; the COVID-19 pandemic and its subsequent impact on the market; macroeconomic uncertainty; historic levels of government stimulus packages; and a host of other factors and issues. When we reflect on the magnitude of all these changes, some of which occur only once in a century, we can appreciate the extent of the challenges the oil market faces. The DoC played an indispensable role in allowing the oil industry to survive all this turmoil and, indeed, thrive.

One of the most vivid demonstrations of this was how the DoC responded to the severe market disruptions caused by the apex of the COVID-19 pandemic in 2020. During those days, market supply and demand fundamentals were continually out of sync. Global oil demand plummeted, some companies were filing for bankruptcy, and there was the prospect of massive job losses.

In the following graphs, the way oil market risk changes after the DOC is illustrated in the following figures:

When comparing the aforementioned graphs, we observe that the standard deviation (or volatility) in the oil market decreased after the implementation of the DoC. This indicates that the DoC has contributed to relatively controlled oil market risk since 2017. A reduction in standard deviation suggests that the variability of returns has decreased, which is often associated with lower market risk.

In the second figure, the risk reduction is clearly illustrated. The dashed orange curve represents the market risk before the DoC, while the solid blue curve represents the market risk assessment after the DoC. The shift from the orange to the blue curve demonstrates a decrease in variance, which corresponds to a reduction in market risk.

Talks among major producers eventually culminated in three ‘Extraordinary’ meetings, two OPEC and non-OPEC Ministerial Meetings, and one from the G20, chaired by Saudi Arabia in 2020. At the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020, OPEC+ decided on its largest-ever production adjustment in history and the longest in duration, as it was then valid until 30 April 2022. The clarity and assurance this provided the market was instrumental in allowing the industry to survive.

OPEC+ played a vital role in balancing the global oil market through voluntary production adjustments aimed at contributing to market stability. Over the subsequent five years, the DoC has modified production adjustments based on a thorough analysis of the world oil market. To accomplish this task, the DoC Ministerial Meetings are supported by the Joint Ministerial Monitoring Committee (JMMC), tasked with overseeing voluntary production adjustments, assessing market conditions, and proposing recommendations to the DoC Ministerial Meeting. Regular meetings of the JMMC have imbued the enterprise with flexibility and agility. Press releases stemming from OPEC and non-OPEC Ministerial Meetings (ONOM) usually give “the JMMC the authority to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting at any time to address market developments, whenever deemed necessary.”

OPEC and OPEC + have an important role to play, given the significance of Participating Countries as leading producers. This influence has helped them navigate market disruption caused by potential global political tensions that could impact the oil supply.

Looking Ahead: 2025

There is an array of uncertainties that the market will face in 2025. In the realm of geopolitics, the return of Donald Trump to the White House raises several potential issues. As the IMF has warned, trade tensions could lower investment and cause problems for supply chains around the world. Additionally, the Trump administration’s commitment to supporting production growth from the US oil and gas industry will have implications for non-DoC supply growth.

According to OPEC’s January edition of the Monthly Oil Market Report (MOMR), global economic growth is forecast to grow by 3.1% in 2025. This positive performance is underpinned by anticipated inflation normalization and corresponding adjustments to monetary policies in major economies. Global oil demand is forecast to grow by 1.4 mb/d. Non-DoC liquids supply is forecast to grow by 1.1 mb/d.

Whatever may come in 2025, the DoC has proven its credentials as an indispensable, volatility-fighting toolkit. As the OPEC+ Participating Countries have repeatedly emphasized, they remain unwavering in their commitment to achieve and sustain a stable oil market and to provide long-term guidance and transparency for the market, in line with the approach of being precautious, proactive, and pre-emptive.

Given the potential uncertainty in the oil market in 2025, OPEC+ will play a more prominent role in stabilizing the market. For this reason, OPEC+ will need to be flexible in its approach. However, what is certain is that despite the pressure of sanctions on some Members, the existence and continuity of cooperation among OPEC and OPEC+ participating countries in 2025 is vital for maintaining relative stability in the oil market.

It is important to note the impact of narratives on the energy industry. The OPEC Secretariat, deploying the same diligence it has throughout the DoC process, will continue to use all the necessary tools to proactively engage with the media through its ongoing communications strategy. Such engagement will render the DoC even more effective in its market stabilization efforts.

I would like to categorize oil market uncertainty as the following:

• Global Policy Risks such as US tariffs;
• Non-OPEC supply;
• Role of narratives;
• FED, ECB, and BOJ Monetary and financial policies;
• Possible shifting of global demand; and
• The escalation of geopolitical tension.

Remarkable Achievement

The world has undergone remarkable changes and seen historic events in the last eight years. These have had major implications for the oil market. The DoC Participating Countries deserve an enormous amount of praise for their deft handling of these many challenges. Undoubtedly, this formula for success, honed by experience, will continue in the years ahead.

There are many uncertainties for the oil market in 20205, including the interplay of US energy policies, global geopolitical shifts, and monetary decisions. OPEC and OPEC+ will continue to be vital players in 2025. While challenges like fluctuating demand and future energy pathways will require careful navigation, OPEC+ efforts will be essential in maintaining market stability.

Compression Contract for Jafurah Gas Field

Saudi Aramco contractor Tecnicas Reunidas has signed a contract with Baker Hughes for six gas compression trains and six propane compressors for the third expansion phase of Aramco’s Jafurah gas field in the Kingdom of Saudi Arabia.

Baker Hughes will supply electric motor-driven compression solutions. This order adds to Baker Hughes's supply of compression solutions for the Haradh and Hawiyah gas plants, the first phase of the Jafurah gas plant and gas compression facilities, and, more recently, equipment for the third phase of Saudi Arabia’s Master Gas System project.

The Jafurah unconventional gas field in the Kingdom’s Eastern Province is the largest unconventional non-associated gas field in Saudi Arabia, extending 170 km in length and 100 km in width.

Aramco has booked 15 tcf of raw gas and 2 bbl stb of condensate as proven reserves at the field and estimates that Jafurah contains a total resource of 229 tcf of raw gas alongside an estimated 75 bbl stb of condensate. Initial start-up is expected in 3Q 2025 and will reach a sustainable sales gas rate of 2 bcfd by 2030, in addition to volumes of ethane, NGL, and condensate.

Renewable Energy Growth Reshapes Global Power in 2024

2024 marked a milestone in the global shift toward renewable energy, with significant developments in clean technologies and policy-driven initiatives. The European Union expanded its REPowerEU initiative, which aimed to reduce reliance on fossil fuels. Solar and wind energy experienced unprecedented growth in the EU, with capacity expansion exceeding annual targets. Germany and Spain led this transformation, increasing their renewable energy output.

In the United States, renewable energy growth followed a similar trajectory, fueled by rising electricity demands. Sectors like artificial intelligence and cryptocurrency mining drove the need for efficient, high-capacity energy solutions, bolstering investments in solar, wind, and hydropower.

Globally, other countries made progress. Japan focused on offshore wind projects, commissioning large-scale wind farms as part of its decarbonization strategy. Across Asia, renewable energy innovations aligned with climate goals, further signaling a worldwide shift toward clean power.

Despite the momentum of renewable energy, oil and gas remained critical to energy security in 2024. National Oil Companies (NOCs), responsible for nearly half of global oil and gas production, ramped up their operations. These companies integrated sustainability into their strategies, embracing emissions reduction and carbon capture technologies while addressing robust energy demands.

Geopolitical tensions further emphasized the importance of oil and gas in stabilizing global economies. The United Kingdom greenlit five new oil and gas projects to secure energy independence amidst international disruptions. Similarly, the United States expanded offshore drilling, highlighting fossil fuels’ enduring relevance in global energy dynamics.

While sustainability was a growing focus, fossil fuel companies faced pressure to innovate. Investments in hybrid energy models and low-carbon initiatives became vital for remaining competitive in an era of leaning toward cleaner alternatives.

Despite progress, the transition to renewable energy faced significant challenges in 2024. Policy uncertainty, particularly in the United States, remained a barrier. The re-election of President Donald Trump brought renewed focus on fossil fuels, raising concerns over the future of federal renewable subsidies.

Economic pressures also slowed progress. Supply chain disruptions, inflation, and rising material costs complicated renewable energy deployment. In Europe, energy leaders expressed concerns about inconsistent regulations, which delayed critical projects. The United Kingdom echoed these challenges with calls for cohesive government strategies to sustain renewable energy investments.

Balancing public and private interests also proved difficult. While private companies drove innovation, misaligned policies hindered large-scale adoption.

Strategic investments transformed the global energy landscape in 2024. The International Energy Agency (IEA) reported $2 trillion in clean energy investments since 2020, driven by the need to combat climate change and bolster energy security. Solar power, wind energy, and battery storage attracted the most funding, fueling infrastructure growth and efficiency improvements.

In Asia, Japan made strides in offshore wind energy, committing to major projects that reduced its dependence on imported fossil fuels. South Korea and Taiwan followed suit, highlighting a regional pivot toward renewables.

In the Middle East, traditional energy leaders embraced diversification. Saudi Arabia and the United Arab Emirates invested in solar power, leveraging their geographical advantages to support sustainability goals. These efforts underscored the adaptability of oil-dominant nations in a shifting energy landscape.

As 2025 begins, the energy sector faces a defining moment. The interplay between technological innovation, policy frameworks, and market dynamics will shape the global transition to a sustainable future.

Power Outage Shuts massive Sverdrup Oilfield

Norway’s Equinor halted all output from its Johan Sverdrup oilfield in the North Sea, western Europe’s largest producing field, due to an outage in the offshore power system, a company spokesperson said.

"Repair work has been initiated, and we are working on a restart plan," the spokesperson said, without elaborating.

The outage could provide some support to oil prices, which were under pressure amid concerns about global demand as U.S. tariffs on China took effect.

Sverdrup pumped up to 755,000 barrels of oil per day in 2024. The company said last year that the field's output was expected to come off this peak level in the early part of 2025 without elaborating.

Previous power outages affecting Sverdrup have also resulted in shutdowns of oil production.

Equinor is the operator and owns 42.63% of the Sverdrup license, while Aker BP holds 31.57%, Norwegian state-owned oil firm Petoro holds 17.36%, and TotalEnergies holds the remaining 8.44%.

France in Focus as Europe Needs Power

Growing tension across Europe's electricity markets has sharpened the focus on the region’s most dependable and integrated exporter of clean power: France.

France is the largest supplier of clean electricity to Europe’s top electricity importers and has played a critical role in helping to cap regional electricity costs in recent years by exporting record volumes of clean power.

France’s status as a key electricity supplier may now become even more important after the government of Norway - another major electricity exporter - lost a key coalition partner last week in a dispute over European Union (EU) energy policies.

Both France & Norway lifted electricity exports to record highs in 2024

Norway’s Eurosceptic Centre Party, which held eight of Norway’s 20 cabinet positions, quit the government over disagreements on the adoption of EU energy directives tied to greater output and use of renewable power.

The coalition breakdown leaves Norway's Labour Party to rule alone until planned elections in September and raises questions about whether Norway will remain a major clean power exporter.

Labor trails in polls to more conservative parties that are against adopting strict energy export targets.

That potential decline in Norway’s power exports means that Europe’s largest electricity importers - which include Germany, Italy, and the United Kingdom - look set to become even more reliant on France for supplies.

Electricity import needs across Europe had surged since 2022, when Russia’s full-scale invasion of Ukraine snarled natural gas flows across the region and forced power firms to increase imports to replace lost local power output.

Scores of households and offices across Europe have switched from gas boilers to electric heating systems, while the regional transportation fleet and industry are becoming increasingly electrified.

Italy, Germany & the United Kingdom are among the largest electricity importers in Europe.

Within the European mainland, Germany has become particularly dependent on electricity imports, and in 2024 imported nearly six times more electricity than it averaged annually from 2015 to 2021, according to data portal energy-charts.info.

Italy, which has been Europe's top power importer for years, increased electricity imports by around 20% from the 2015-2021 average to new highs in 2024.

The United Kingdom also posted record electricity imports in 2024, which were roughly 100% above the 2015 to 2021 average.

In 2024, France was the single largest electricity supplier to the United Kingdom and Germany and the second-largest supplier to Italy after Switzerland.

Norway was the second-largest electricity supplier to the UK last year and the fourth-largest supplier to Germany.

If Norway’s power flows start to decline going forward, major importers will be forced to rely more on France and other suppliers.

The key risk for Europe’s top electricity importers is the potential downturn in output in France and in other large electricity exporters, including Switzerland and Denmark.

France started 2025 with the largest monthly power output total in more than three years, at 75,577 gigawatt hours (GWh), according to LSEG.

That total was roughly 5% above January 2024 and 37% above the average monthly output from 2022 to 2024.

The key driver behind this output surge has been France's nuclear network, which bumped production by 8% from January 2024 to the highest since at least the start of 2022.

France's power output hit multi-year highs in early 2025

The completion of key plant maintenance and the start-up of a new reactor have been key factors behind the nuclear output gains and should allow France’s nuclear power stations to sustain relatively high production rates going forward.

However, ongoing issues with corrosion at older plants mean that drops in overall production cannot be ruled out later in 2025, especially if the availability of cooling water from rivers is impeded by warm weather in the summer.

Europe’s total electricity supplies could also be affected by any downturn in hydropower output in Switzerland and Austria.

Regional hydro output scaled record levels in 2024 following floods during the summer and allowed Switzerland and Austria to boost electricity exports from the year before.

However, snow coverage across Europe's main alpine regions remains below the long-term average so far in 2025 and may limit hydro production later in the year.

An extension to the current spell of below-normal wind speeds is another threat to regional electricity supplies.

Germany, Europe's top wind power producer, is in the midst of a multi-month stretch of low wind speeds, while wind output in Denmark - one of Europe’s top power exporters - dropped by 20% in January 2025 from January 2024 levels, LSEG data shows.

Any further below-par wind output in northern Europe may not only reduce exportable supplies from Denmark but also increase the import needs of Germany and place even greater pressure on France to sustain its high levels of electricity exports.

LPG Export Terminal Planned in Texas

Pipeline operator ONEOK and midstream company MPLX LP entered into a joint venture to construct a 400,000-barrel per day (b/d) liquefied petroleum gas (LPG) export terminal in Texas at a total investment of $1.4 billion.

The two companies will pump in an equal amount and jointly own the Texas City Logistics (TCX) export terminal, which is expected to be completed in early 2028. MPLX will build and operate the facility.

The agreement also includes ONEOK building and operating a 24-inch pipeline from its storage facility in Mont Belvieu, Texas, to the new export terminal. ONEOK will have 80% ownership of the pipeline.

Energy infrastructure firms, including midstream companies, have seen increased investor interest as they wager on long-term demand, fueled by the growing need for electricity as more EVs are sold and the rise of power-guzzling technologies such as generative AI.

"Given our high expectations for future growth and demand for more energy infrastructure, including export capacity, these projects with MPLX complement our disciplined capital allocation strategy," ONEOK said in a statement.

Kazakhstan Daily Oil Output at Record High

Oil production in Kazakhstan reached a daily record high of 278,499 metric tons just after it embarked on an expansion of its largest oilfield, Chevron-led Tengiz, according to official data.

Kazakhstan - which relies on Tengiz and two other major fields, Karachaganak and Kashagan, for most of its production - is subject to output targets as a member of OPEC+, an alliance of OPEC and other top producers led by Russia.

OPEC+ has named the top 10 global oil producer Kazakhstan, along with Iraq and Russia, as countries that have repeatedly failed to comply with pledges to curb oil production.

The record-high Kazakh output equates to around 2 million barrels per day (b/d) if a barrels per ton ratio of 7.5 is applied.

According to the Situational and Analytical Center for the Fuel and Energy Complex, this was 10.5% more than on the same day of 2024.

The expansion at Tengiz is expected to reach full capacity of 260,000 b/d by June, lifting overall production at the project to around 1 million barrels of oil equivalent per day.

Tengiz is one of the world's deepest and most complex fields due to high levels of sulfur and harsh weather conditions.

Kazakhstan plans to boost its oil and gas condensate production this year to 96.2 million tons from 87.56 million tons in 2024.

Namibia Petroleum System Confirmed

Reconnaissance Energy Africa Ltd. confirmed a working petroleum system with the Naingopo exploration well in the Damara Fold Belt in PEL 73, onshore Namibia, and further drilling is planned to delineate the full extent of the Damara Fold Belt play.

The well is the first of several to test the potential resource of the Damara Fold Belt, targeting large anticlinal structures with the goal of achieving commercial levels of oil and natural gas production.

The well reached a total depth of 4,184 m on Nov. 26, 2024. Due to seismic uncertainties, the primary objective in the Otavi above the main fault was not penetrated; however, the Otavi was penetrated at the predicted depth below the main fault.

The well proved the occurrence of both the Mulden and Otavi stratigraphy and encountered 52 m of net reservoir in the Otavi Group, with the Mulden reservoirs being tighter than expected.

The Naingopo vertical seismic profile (VSP) correlated well results to the Otavi seismic event, derisking the Otavi presence in future Damara Fold Belt prospects. Additionally, the indication of oil via rock fluorescence was pervasive within the Otavi Group. This interval of fluorescence was associated with oil being recovered at the surface in the drilling mud system.  Oil shows will be confirmed with side wall cores, isotubes, cuttings, and fluid samples.

With the acquisition and processing of the vertical seismic profile from Naingopo, the company plans to drill the Prospect I well before the previously-announced Kambundu prospect well, with an expected July 2025 spud date.

In addition to Prospect I, Reconnaissance plans a second-half 2025 3D seismic acquisition program expected to include both Rift Basin and Damara Fold Belt locations.

PEL 073 is in northeast Namibia and covers an area of about 25,341 sq km.

ReconAfrica is the operator (70%), with partners BW Energy Ltd. (20%) and NAMCOR (10%).

Serbia Oil Co. Demands US Sanctions Waiver

Serbian oil company NIS, which is majority-owned by Russia's Gazprom Neft and Gazprom, has submitted a formal request to the U.S. Treasury Department for a waiver of sanctions for 90 days, Serbia’s energy ministry said.

In a statement, the ministry said that the NIS request has the backing of the Serbian and Hungarian governments.

"We urgently request that OFAC (Office of Foreign Assets Control) consider immediate assistance, in the form of a suspension of sanctions for a minimum of 90 days, while a sustainable solution that would lead to the lifting of sanctions is considered," the statement said.

It also said that NIS's request concerns obtaining licenses that would allow it to continue operating while a solution to the ownership structure and management is sought.

"The (Serbian) government supports the request because sanctions would impair the company’s ability to supply Serbian citizens with oil and oil derivatives," the ministry said.

Gazprom Neft and Gazprom have 50% and 6.15% stakes, respectively, in the company, which operates the sole oil refinery in Serbia.

The Serbian government holds a further 29.87%, with small shareholders accounting for the remainder.

On Jan. 10, Serbia's President Aleksandar Vucic said Russian companies were given 45 days to 45 days to exit their ownership in NIS and that any deal would have to be approved by OFAC.

On Jan. 14, Russian Foreign Minister Sergei Lavrov said that Moscow was in contact with Belgrade about NIS.

Serbia receives most of its crude oil through Croatia's pipeline operator Janaf, through which Hungary also imports some of its oil.

NIS, one of the biggest contributors to Serbia's state budget, had signed a contract with Janaf for the transport of 10 million tons of oil through Croatia from Jan. 1, 2024, until Dec. 31, 2026.

US Grid Investments Take Off

Investors are scrambling to build transmission infrastructure to meet surging power demand from data centers and accommodate a vast array of clean power projects waiting in grid connection queues.

Demand for clean power hiked on the back of falling costs, federal tax credits, and ambitious renewable energy targets, leading to over 2.5 TW of solar, wind, and storage projects in U.S. grid connection queues at the end of 2023.

On top of this, forecast demand from data centers has soared as tech groups chase growing AI capacity, putting further pressure on grid capacity. Demand from data centers is forecast to double within five years, rising from 176 TWh in 2023 to between 325 and 580 TWh in 2028, government data shows. U.S. electricity demand is expected to increase by 3% annually for the rest of the decade – a rate of growth not seen since the 1990s.

Grid projects require years of planning, permitting, and construction, and the rapid increase in data center demand has emphasized the need for faster buildout.

Any U.S. regions that fail to expand transmission capacity will see their power systems “significantly constrained,” said Dan Gunderson, VP of Transmission and Distribution at utility Minnesota Power.

The administration of former President Joe Biden sought to modernize the grid through new policies and $8 billion in funding to over 100 transmission projects.

“Those federal funds are just a bit of seed money to get some key projects ahead, but there is enough capital willing to invest on transmission,” Hannes Pfeifenberger, a principal at Brattle Group consultancy, told Reuters Events.

President Trump has sparked uncertainty in the clean power sector by issuing a flurry of executive orders after entering office on January 20 that aim to roll back to Biden’s climate agenda and boost fossil fuel production. Trump called for a review of energy sector funding issued under Biden’s 2022 Inflation Reduction Act and the 2021 Bipartisan Infrastructure Law, but he also vowed to ease permitting hurdles for power transmission and pipeline projects and has supported massive buildout of infrastructure for AI data centers.

“We see a significant demand for long-term transmission investment. If anything, recent announcements from the new administration, which are supportive of generative AI, continue to affirm the long-term case for power-demand growth and the associated need for transmission investment,” said Jon Treitel, a Senior Director at CBRE Investment Management.

Most transmission investments are guaranteed a rate of return by federal regulators, but margins can be higher for so-called merchant projects that provide returns based on power prices.

The need for new transmission investments fuelled by load growth has attracted private equity firms to the sector. In May 2024, Canada Pension Fund and Global Infrastructure Partners agreed to buy Allete, which controls Minnesota Power, for $6.3 billion.

Strong government support for large transmission projects will likely continue under President Trump, Pfeifenberger said.

“Transmission is a bipartisan issue. Blue states may seek to increase transmission because of their clean energy goals, while red states could prioritize policies to attract data centers,” he said.

Renewable Power Purchase Deals in Europe

Petrochemicals manufacturer LyondellBasell said it has signed power purchase agreements in Europe for wind energy to support its commitment to reducing greenhouse gas emissions.

Chemical companies are entering deals to purchase renewable electricity to help them reach their carbon dioxide emissions reduction targets.

Under the 15-year agreement with European energy firm Vattenfall, LyondellBasell will secure 450 gigawatt-hours (GWh) annually of offshore wind energy to support its circular and low-carbon solutions in Germany, the company said.

Additionally, the company signed a 10-year agreement with renewable energy company WPD, securing 79 GWh annually of onshore wind power from the Licata project in Sicily, Italy, set to begin in 2026.

The chemicals maker had previously signed long-term renewable power purchase agreements with energy companies Buckeye Partners and Engie North America in 2022.

Energy Market Outlook in New Syria

Shuaib Bahman

Since the early 2000s, the Syrian energy market has experienced significant development with some turning points in 2011 and afterwards. Primarily characterized by relative self-sufficiency and export capabilities, the market is now known for its sharp decline, dependence on foreign countries, and paralyzing sanctions. Examining the structure, challenges, and implications of Syria’s energy sector is particularly important given the political changes in it and the new rulers who have taken power there.

From Self-Sufficiency to Dependence

Before the outbreak of the 2011 crisis, Syria was largely self-sufficient in energy. The country had significant oil reserves and its natural gas sector was under development and produced about 383,000 b/d and contributed significantly to government revenues. Oil and gas sales accounted for approximately 20% of Syria’s revenue, providing a key financial pillar for the Assad government, enabling it to consolidate its control over political and military spheres. The natural gas sector was also growing, with its production increasing to 8.7 bcm. Before 2011, two key oil refineries in Homs and Banias were operational, meeting domestic demand and supplying sufficient refined products.

However, post-2011 conditions got worse rapidly. International sanctions, imposed mainly by the United States and the European Union on the pretext of violent repression of protestors by the Assad government, largely restricted Syria’s ability to export oil and attract foreign investment. Therefore, Syria’s oil production fell from 383,000 b/d to 10,000 b/d.  In this way, a country that was once self-sufficient in energy production became largely dependent on fuel imports.

 The sanctions reduced production capacity, which caused widespread power shortages. In some areas, access to electricity was down to several hours a day. Energy supply challenges gave rise to deep consequences for the Syrian government, causing public discontent and resorting to unofficial and illegal fuel imports.

Infiltration Bid

Following the fall of the Assad government and the power void created in the Syrian energy market, which was mainly handled by Iran and Russia, various foreign actors sought to use the current situation to their advantage. Countries such as Turkey and Qatar, the most important regional supporters of Syria's new rulers, have expressed interest in participating in the country's energy sector, offering plans to supply fuel and facilitate the reconstruction of Syria’s energy infrastructure. Saudi Arabia has also expressed its readiness to address Syria's energy needs.

Meanwhile, Turkey seeks to establish economic and trade agreements with the new Syrian government and intends to play an effective role in Syria's economic growth by investing in its energy infrastructure and reconstruction. The Qatar-Syria-Turkey gas pipeline project, which failed to materialize during the Assad era, has been brought back into focus. Turkey intends to act as a regional energy hub. The project could provide an opportunity to transmit natural gas to Europe. Turkish companies are also expected to play a major role in the exploration and development of Syria’s oil and gas fields, mainly in the Kurdish-controlled eastern regions.

However, competition between foreign powers to control these resources, as well as the complexities of Syria’s geopolitical landscape, do not provide easy conditions for foreign actors. Turkey faces a major problem i.e. Kurds when it comes to the exploration and development of oil and gas fields. At the same time, the US has dominated Syrian oil fields in the eastern Euphrates region in recent years and has illegally exploited the oil in this region. The Americans will not simply disregard this great advantage in Syria and will not cede it to Turkey or any other foreign actors.

Future Outlooks and Challenges

Despite the dark scenarios that currently exist in the Syrian energy sector, there is also potential for improvement and even growth in production in the future. For example, in case Syria becomes stable again and sanctions are eased, it could significantly enhance its oil and natural gas production. At the same time, Syria could act as a transit country for natural gas in the Eastern Mediterranean, connecting it to European markets. Moreover, with the emergence of a new government, foreign investment in the country’s energy sector may be facilitated.

However, an optimistic outlook for the Syrian energy market requires domestic political stability, resolution of disputes over ownership of oil fields, and the lifting of paralyzing sanctions. Although there are attractive opportunities in Syria’s energy sector, there are still significant challenges ahead, including the need to reconstruct infrastructure, build political consensus, and ease or lift sanctions. As things stand, Syria is undoubtedly still far from achieving such objectives.

Modern Technologies, Driver of Oil Industry in Digitalized Era

The third Petrotech Conference was held on 23-24 February under the aegis of contribution by all technological ecosystem organs involved in the Iranian petroleum industry. Many senior Petroleum Ministry officials, as well as top officials from the main four subsidiaries of the Ministry, were in attendance. Panel discussions on the following topics were held: Knowledge-Based Oil and Gas Output Hike, Energy Economics and Smart Management of Supply Chain of Petroleum Products, Intelligent System and Digital Development in NIGC, Research Achievements in Petrochemical Industry, Ecosystem and Hydrogen Organs Performance Report; Future Clean Fuel, Challenges and Opportunities.

Omid Shakeri, deputy minister of petroleum for engineering, research, and technology, said the development of technology and innovation in the petroleum industry in addition to supporting the private sector and knowledge-based companies were the two key objectives of the event.

Hamid Bovard, CEO of National Iranian Oil Company (NIOC), said the state-run oil company was envisaging the use of artificial intelligence (AI) in managing oil reservoirs, which he said, would help enhance oil recovery.

AI in the Iran Oil Sector

The issue of increased consumption of energy carriers and subsequently the possibility of an energy crisis has long been raised in the energy sector. Protecting the environment and guaranteeing energy security and economics are prioritized in this regard. The main solution in dealing with these concerns is to use modern technologies and apply AI to the energy sector. The significance of this issue is such that Shakeri told the “Ecosystem and Hydrogen Organs Performance Report; Future Clean Fuel, Challenges and Opportunities” panel that universities, research institutes, and the petroleum industry should cooperate to build stronger and more cohesive bonds within this ecosystem so that technological projects would effectively go from the R&D phase to the construction phase. Iran’s petroleum industry has long taken steps towards developing smart technologies. Mehdi Mohammadi, head of the Iranian Society of Technology and Innovation Management, said the Iranian petroleum industry was the 6^th user of AI.

Knowledge-Based Firms

Speaking at the inauguration, Bovard said the application of advanced technologies would be a shortcut to go through economic challenges Iran is faced with. He said that more than 15 forums had been held with technologists and the elite during the first half of the current calendar year.

He said that as far as technology was concerned, NIOC was pursuing two main strategies. First and foremost, improving organizational performance by relying on modern technologies would save time and costs, while boosting quality. Second, technological surprises should be avoided. That means that in light of the fast pace of technological growth in the world, should Iran have no appropriate planning, severe challenges would come up.  

Bovard said one of the most important projects was to use AI in managing oil reservoirs, adding that NIOC was poised to launch its digitalization plan using AI technologies.

“I invite all technology specialists to submit their proposals and ideas,” he said, adding that knowledge-based companies would be officially invited for cooperation soon.

Sustainable and Smart Future

Mahdia Motahari, director of research and technology at NIOC, referred to AI projects underway, saying agreements would have been signed for most of these projects by early next calendar year.

Last calendar year, he said, NIOC signed seven research agreements with as many research centers to guarantee gas supply security and compensate for pressure fall-off.

At NIOC, three digital systems are being implemented in eight fields. Online monitoring, data management, and backup system projects are underway with AI assistance.

Motahari told the “Knowledge-Based Oil and Gas Output Hike” panel that six technologies had been developed in production and four technologies in reservoir management. At Pars Oil and Gas Company (POGC) which is developing the South Pars gas field, innovative proposals are under consideration as compression projects are envisaged. South Pars entered the second half of its life in 2020, requiring more optimal maintenance and production. That would be pursued in light of modern technologies.

The world is moving fast towards advanced methods and technologies with the impact of novel technologies visible in the oil, gas, and petrochemical industry. Iran’s petrochemical industry is focused on self-sufficiency in know-how, equipment, catalysts, and novel methods. Using state-of-the-art technologies in this sector is indicative of the knowledge-based nature of Iran’s petrochemical industry. Hassan Abbaszadeh, CEO of National Petrochemical Company (NPC), told the “Future of Petrochemical Industry” forum that new technologies were key to development. He said that the 7^th National Development Plan had laid out various aspects of the path towards progress.

Energy Chain

Nematollah Najafi, director of operations of National Iranian Oil Products Distribution Company (NIOPDC), told the “Energy Economics and Smart Management of Petroleum Products Supply Chain” forum that consumption management in the transport sector was a major cause of concern for the petroleum industry. He emphasized the necessity of logical communication between increased consumption and petroleum product supply through smart systems.

Mehdi Dej-Hosseini, director of R&D at

National Iranian Oil Refining and Distribution Company (NIORDC), said significant developments had occurred in research and technology under the 14^th administration to push Iran closer to global standards.

Another sign of moving on this modern global approach would be energy efficiency. A forum was held on “Energy Efficiency in Petroleum Industry Energy Chain”. Ali Asghar Rajabi, director of energy and carbon at National Iranian Gas Company (NIGC), said the company had launched comprehensive plans in the technical, management, and cultural domains to combat energy loss and reduce pollution.

Sanctions-induced obstacles and crises are no secret to anyone. Such a challenge could be overcome only through incessant efforts and updating know-how. Mehdi Eliasi, vice president for scientific, technological, and knowledge-based economy development and policymaking, said the development would be possible only by embracing new technologies. Over the past 12 years, the Knowledge-Based Companies Support Act has prepared the ground for the development of such companies, leading to the employment of 100,000 persons in this sector.

On the day of the inauguration, he referred to the adoption of the Knowledge-Based Production Jump Act two years ago, adding that new instruments had been developed for cooperation between knowledge-based companies and big industries like NIOC and petrochemical plants.

Technology Deals

The vice president’s remarks are verified by seven agreements signed between state companies and knowledge-based firms on technology for the petroleum industry. These agreements were signed on the first day of the event by senior petroleum industry managers. Mohammad Chahardoli, chancellor of the Petroleum University of Technology, and Ali Jamali, CEO of Techno Energy Sepehr Kish Company (TESCO), signed four agreements on “student scholarship” and “research cooperation”. National Iranian Drilling Company (NIDC) signed two agreements with Dorna Tire Co., a knowledge-based entity, on building “Element 7 Packing Manufacturing” and “Variable Packer Manufacturing” for rotary preventers. NIDC also signed a flange brake research agreement with knowledge-based Karoon Eamen Gheteh Engineering Service Group.

A research agreement pertained to Arvandan Oil and Gas Production Company (AOGPC) used modern technologies in its drilling agreements in 2022. AOGPC has purchased the only skid-mounted processing system available in the country, which has brought the processing capacity in one of West Karoun fields from 55,000 b/d to 58,000 b/d. Such a processing capacity hike has been achieved thanks to technology and new designs. Another case with AOGPC is that the company is investing in solar power plants in West Karoun with 15-20 MW capacity. Furthermore, making the Darquain oil field smart with a view to boosting productivity, reducing costs, improving safety, and protecting the environment are among AOGPC’s priorities. That was why a forum was held on digitalization of the Darquain field during the conference.

Smart; From Exploration to Production

Extraction is another key part of the petroleum industry that requires cutting-edge technology. Without such technologies, prospecting would be difficult and time-consuming. One key reason for using modern technologies in oil extraction pertains to exploration. Advanced technologies like 3D seismic imaging and electromagnetic surveys would allow geologists and geophysicists to identify potential oil and gas reserves deep underground. Such technologies empower oil companies to consciously make decisions about the location of drilling without wasting time and costs. NIOC has long invested in using modern technologies. Mohioddin Jafari, NIOC’s director of exploration, said at the “Knowledge-Based Oil and Gas Output Hike” that using AI would accelerate the accuracy and pace of exploration. He said collaboration with knowledge-based companies and universities would continue to boost both the pace and quality of exploration.

Innovation-Based Localization

Iran has been always recognized as a key and influential player in the oil, gas, and petrochemical sectors worldwide. The step following the development and presentation of these products should be sharing engineering know-how. Iran has potential capacity in this sector, which would enable it to export technical and engineering services to other nations and earn significant income, not to mention create new job opportunities in the petroleum industry. Mohammad Esmail Kefayati, head of Petroleum Industry Innotech Park, made the remarks at a forum on technological ecosystems in the petroleum industry. Meantime, an integrally geared processing compressor developed by the knowledge-based Irsa Machine Development Company was unveiled. That places Iran among the few nations endowed with technology for the design and manufacturing of gearbox centrifuge compressors. Localization of this technology has cleared the way for the development of local capacity and reduction of dependence on foreign suppliers by saving more than $1 million, specifically at a time when Iran’s petroleum industry is grappling with numerous challenges including sanctions. Erfan Riahi, director-general of technology affairs of the Ministry of Petroleum, said moving towards a knowledge-based economy for upgrading infrastructure and developing local technologies is important. Iran’s petroleum industry has taken steps towards knowledge-based development to enhance productivity, accelerate projects, save hard currency, neutralize sanctions, and boost economic growth. Touraj Amraei, a senior official with the Office of Vice President for Science and Technology, said the Ministry of Petroleum had taken key steps towards local development of strategic technologies and bolstering innovation ecosystems in the country.

During the three-day event, 44 knowledge-based companies were present. Fifteen panel discussions and three workshops were held and 20 MOUs and agreements were signed.

Palayesh Naft Crowned Women Futsal Premier League Champions

The Palayesh Naft Abadan won the 2024/25 Iran Women’s Futsal Premier League, claiming the title for the third time, having previously finished in first place in 2017 and 2020. This team scored 10 points against Sepahan Esfahan to get 36 points and become the champion. Naft Omidieh came second with 33 points, followed by Saipa with 33 points.

Iran Futsal

The success of the futsal team of Palayesh Naft Abadan is not limited to the championship. This team also managed to win 16 games without any defeat to set the record for the most games in succession without loss and record 5 successive matches and set a trend in this round of the Premier League.  These victories made the championship empowered Palayesh Naft Abadan to dream of a championship because in Iranian futsal, winning is a big job. Teams are very close to each other and competition is often tight. However, Abadan Oil Refining Company (AORC)’s support for women’s sport and recruitment of talented players has helped the team perform brilliantly in domestic and international games. Beforehand, Palayesh Naft Abadan had participated in the women’s international futsal championship as the representative of Iran and returned home with acceptable results. By competing in leading international tournaments, this team has pushed Iran to bold relief at the international level. This team did not stop at this point but intends to bring Iran still more fame by taking part in more competitions.

Competent Coach

The presence of Parisa Emami, the head coach of the Women’s Futsal team of Palayesh Naft Abadan should not be disregarded. Originally from Izeh, she has 15 years of experience in playing futsal and 7 years of experience in serving as a coach. She has already served the technical director and head coach in this discipline. She started her professional career with the Deihim team, and played for some different teams, but she was mainly with Melli Haffari and Palayesh Naft Abadan teams. She started her career as a coach with Melli Haffari, with which she stayed for four years. She was then technical director of Palayesh Naft Abadan for two years. She won the championship title in the very first year and it was among the top four in the second year. After such experience, she is serving as the head coach for the third season in a row. The team under her leadership is still shining. In the first season, the women’s futsal team of Palayesh Naft Abadan finished third in the Super League. It won the championship title in the second and third season in 2023 and 2024, respectively.

Top Futsal Team

The Futsal Planet website introduces the top coaches and clubs every year. Whereas the women’s futsal team of Palayesh Naft Abadan had finished as champion in this round, it managed to be known among the top 10 clubs in the world. Therefore, Emami was among the best 10 candidates for the top coach in futsal. It is the second time Palayesh Naft Abadan is winning such a title. Such success is still ongoing. Palayesh Naft Abadan gave five futsal players to the national team in 2023 and four in 2024. This team is focused upon the championship of Palayesh Naft Abadan.

Palayesh Naft Abadan has the highest number of scored goals, a record belonging to three persons. All such success is the result of solidarity among team members. That is what Emami firmly believes in. She notes that the success of a team does not belong to a single person; it belongs to every member of the team.

Oil Nationalization, a Beginning for Modern Iran

Reza Vosouqi

As public protests against the Iran-Britain Oil Concession gathered steam and Mohammad Mossadeq led a parliamentary campaign relying on popular support, the Iranian petroleum industry was nationalized in March 1951, immediately after which Anglo-Iranian Oil Company (AIOC) was expropriated.

It began a difficult period for Iran in oil sales and international cooperation, coinciding with a legal war at international tribunals over the cancellation of the concession deal. Iran, under Prime Minister Mohammad Mossadeq’s government, went through two challenging years. In the summer of 1953, the Mossadeq government was toppled due to large-scale internal differences.

In the wake of the downfall of the Mossadeq government, speculation was rife that Iran would return to the age of concessions, a legacy of the 19^th-century colonialism era. However, it did not occur, and the governments that came after recognized the national oil industry as an unchangeable law.

In the mid-1950s, amid growing global demand for oil, Iran was becoming ready to play a bigger role than before in the world oil market. A consortium of big oil firms, including British Petroleum, Royal Dutch Shell, Texaco, Standard Oil, and French oil company, was formed to extract and sell Iranian oil. The consortium was authorized to prospect for oil only onshore. 

In the mid-1960s, Iran made a historic step towards cooperation with smaller oil companies, including Italy’s Agip, Pan American Petroleum, Murphy Union, Dutch Philipps, France’s Elf, and India’s oil company, which marked the start of offshore oil production in Iran through oil recovery in the Persian Gulf.

Iran saw its oil revenue from cooperation with the consortium and oil exports growing. Such big revenue facilitated financing infrastructure for national development for governments, although economic decision-makers made big mistakes. Iran’s oil revenue financed national modernization to a large extent. The wave of modernism and industrial development in Iran in the 1960s and 1970s took shape in light of economic prosperity achieved thanks to oil income. Iran’s significant oil revenue empowered governments to establish a modern and well-equipped army, lead the agriculture sector towards industrialization, and build thousands of kilometers of road and railway across vast Iran. It could even be argued that fateful social developments, including the development of a new social system and ownership in Iranian villages and the end of feudalism in rural areas, occurred thanks to the funneling of big oil income to the development of national infrastructure. Oil and access to oil revenue developed a new and different image of Iranian society.

On a larger scale, thanks to the significant growth in Iran’s oil production due to international cooperation, Iran has grown into a regulating factor in the global oil market, an advantage that pushed Iran towards a “new world oil market order” through contribution to the establishment of the Organization of the Petroleum Exporting Countries (OPEC) in 1960.

Iran’s status as a founding member of OPEC was a result of the nationalization of Iran’s oil industry. That, along with Iranian foreign policy backed by oil supply, painted a new image of Iran in regional and international relations. This new image was also a result of the nationalization of Iran’s petroleum industry.

In Iran’s political literature, trends leading to the nationalization of the petroleum industry are celebrated. National and popular combats that ended British dominance of Iran’s petroleum industry still hold a memory of a big victory for Iran. However, the results of the nationalization movement are often ignored, particularly because this historical development had been overshadowed after the fall of the Mossadeq government due to its close cooperation with Western governments. But the truth could not be denied. The nationalization of the petroleum industry left long-term and permanent impacts on Iranian society. They still could be reviewed. The nationalization of oil and its economic outcome made Iran much more modern than its neighbors in the region. That is why nationalization remains an identity-producing factor: devotion to an event that marked the start of a new period for Iran.