sent representatives to Tehran workshop on September 13-14 to lay out terms and
conditions for companies willing to join the South Pars project. The landmark
$4.8bn contract was signed in July between National Iranian Oil Company (NIOC)
and a Total-led consortium which also includes China's CNPCI and Iran's
and legal experts of Total said in the workshop that the French giant was
determined to launch the project in 2018 or early 2019. That means that gas will
be extracted from Phase 11 in 2020 or early 2021.
are needed to be signed with local companies. The terms and conditions of these
subcontracts were discussed in the Tehran workshop, which was attended by
representatives of Total, NIOC, Pars Oil and Gas Company as well as Iranian
equipment manufacturers and service contractors.
South Pars contract stipulates that at least 51% of equipment needed in the
project must be provided by Iranian manufacturers and contractors. Therefore,
Total must take this issue into consideration. But Iranian companies are
required to comply with terms of international contracts. Since Iranian
companies had no idea about the requirements, the Iranian Ministry of Petroleum
suggested that Total send representatives to Tehran to explain its
requirements, regulations and standards for Iranian manufacturers and
Total delegate said the signature of the agreement showed the “continuity” of
cooperation between Iran and Total, which had been present in Iran since the
said Total was satisfied with the Iran deal as it had been forced to leave Iran
under international sanctions.
project is coming true and is a cause of great satisfaction,” he said. “This
new contract is for 20 years, i.e. we will be working in Iran for at least 20
years. So we have to learn to live together.”
expressed hope that the Phase 11 deal would provide a “great incentive” for
international oil companies (IOCs) to step in and sign contracts with Iran.
said that the SP11 deal would help “attract new foreign investment and trigger
new projects” in Iran.
delegates laid out legal requirements for partnership, noting the qualification
process in use by Total to find a partner for working in Iran was similar to
processes applied by IOCs everywhere else.
said international requirements and regulations need to be observed in any
partnership for the South Pars gas project.
Total legal expert highlighted "anti-corruption" regulations, saying
it was an important element in the process of vetting Iranian companies.
Khayamian, chairman of Board of Directors at the Society of Iranian Petroleum
Industry Equipment Manufacturers (SIPIEM), said holding such workshop was of
great help to Iranian manufacturers, as we got to know about Total's criteria.
Fallahnejad, SP11 project manager at POGC, said the workshop let Iranian
companies prepare to bid for subcontracts.
helped them know the procedures for qualification," he said, adding that
their ambiguities were removed.
said Iranian manufacturers need to improve their level and capability to the
level required by Total.
my talks with a manager of Total, we were told that in case Iranian companies
are placed on Total's vendor list, they will be easily able to be placed on the
vendor list of companies like [Royal Dutch] Shell," he said.
other words, Iranian companies deemed qualified by Total will be able to
compete in tender bids that Total will hold in other countries.
Dehqan, chief coordinator for upstream oil and gas contracts at the Office of
NIOC Deputy CEO for Development and Engineering, said the project operator
would be tasked with the management of reservoir and financing as set forth in
said subcontractors would be chosen from among engineering, procurement and
construction (EPC) firms, General Contractors and oil service companies.
noted that transfer of technology to Iranian exploration and production
(E&P) companies would be another advantage of upstream oil contracts.
noted that Iranian companies would have the chance to be empowered for enhanced
oil recovery (EOR) and improved oil recovery (IOR) projects at international
said contractors whose proposals grant a higher share to Iranian manufacturers
would be privileged.
that end, he added, transfer of technology to the Iranian client, contractors,
consultants and manufacturers and maximum participation of Iranian companies
should be taken into consideration.
warned that subcontractors who fail to fulfill their obligations regarding
supply of commodities and services would be imposed with pecuniary penalties.
said: "Some members of the Society enjoy potential to cooperate with
Total, but some others do not meet the Total requirements. Therefore, we are
trying to work out a mechanism to facilitate a more helpful and more active
presence of Iranian manufacturers in the SP11 development project and other
said one solution was to push Iranian companies to tie up, adding: "By
consolidating manufacturing companies we will be empowered to meet the Total
requirements in the development projects."
Iranian contractors hope to win big shares in the subcontracts envisaged for
the Phase 11 development such as offshore and onshore projects including
pipe-laying, technical services, well completion and construction of jackups.
case Iranian companies manage to provide the bulk of required equipment, the
proposed prices will be affected. Of course, Iran's Ministry of Petroleum will
pay this balance amount to Total under the title of supporting domestic
expressed hope that Iranian companies would bid for the subcontracts after
having full knowledge of the terms and conditions set out by Total.
companies willing to become partner with Total would be required to fill out a
questionnaire in order to provide the details of their activities for final
decision-making on their work.
S.A. is French multinational integrated oil and gas company and one of the
seven "Supermajor" oil companies in the world. Its businesses cover
the entire oil and gas chain, from crude oil and natural gas exploration and
production to power generation, transportation, refining, petroleum product
marketing, and international crude oil and product trading.
Iranian firms attended the two-day workshop, but Fallahnejad noted that
presence in the workshop would not create any privilege for the participants.
Courtesy of Iran Petroleum