Where do the NIOC subsidiaries currently stand in terms of production?
After the intensification of sanctions and concomitant reduction in crude oil
exports, we had to make arrangements for reducing production from some oil
fields. Of course, this was carried out so as to leave minimum impact on
downstream units particularly oil refineries and petrochemical plants. After
[Iran's] nuclear deal [with six world powers] was achieved and oil exports
restrictions were eased, National Iranian Oil Company (NIOC) brought production
from oil fields back to the presanctions levels. For instance, in the National
Iranian South Oil Company (NISOC), crude oil production rose from around 2.1
mmb/d in the 2013 to 2.9 mmb/d in the first quarter of the current year.
Meanwhile, in the Iranian Central Oil Fields Company (ICOFC), production soared
from around 90,000 b/d to around 200,000 b/d.
course, along with planning for a return to the presanctions production level,
special focus was put on the completion and operation of oil and gas projects
in cross border fields. To this effect, planned production from South Pars gas
field and its oil layer, West Karoun area, Azar oil field and the gas layer of
Salman field has materialized.
What are NIOC plans for fields which are faced with production decline?
At present, the most important measures taken to prevent production decline in
some fields are water/gas injection, infill drilling and artificial lift.
However, since preventing production decline in the fields requires precise and
comprehensive studies to get to know the performance of the reservoir and
reasons of decline before taking action to prevent or make up for the decline
in production, numerous MOUs have been signed with international companies to
study methods of enhanced oil recovery (EOR) and improved oil recovery (IOR)
from oil fields. For that purpose, benefiting from the experience of companies
which possess technology and reservoir engineering knowhow would be a top
priority of NIOC in its studies on reservoirs in the country. In the current
year, the framework for EPCF and EPDF contracts have been drawn up by the NIOC
and notified to subsidiaries in order to facilitate execution of activities and
projects related to enhanced recovery, which I hope that implementation of
these contracts as well as upstream petroleum contracts would accelerate the
enhanced production process.
addition to these measures, planning is envisaged to make new exploration as
part of the process to make up for the production decline in other fields. The
NIOC has designed exploration, development and production contracts within the
framework of upstream oil contracts to pave the ground for moving in that
direction. In this regard, conducting reservoir studies and defining master
development plan (MDP) using the state-of-the-art technologies and attracting
foreign investment are of high importance to NIOC.
What are the NIOC plans to enhance oil recovery from fields run by the NISOC
and Iranian Offshore Oil Company (IOOC)?
Most NISOC-run oil fields are in their declining period; therefore, a new model
of development contracts has been designed for them. Development of Shadgan,
Parsi, Rag Sefid and Karanj fields within such a framework and with focus on
EOR/IOR methods is on the agenda. NISOC has presented the first operation-based
package of its proposed model of contract with the objective of increasing or
stabilizing production from the fields. Production decline from these fields is
expected to be stopped once hydraulic fracturing, under-balanced drilling
(UBD), desalting plant construction, etc. are forfeited.
the offshore sector, such projects as laying out pipelines, drilling, well
workover and completion, as well as installation of wellhead platforms in
Salman, Forouzan, Doroud and Abuzar fields are highly considered. Continued
water injection into Doroud, Salman, Balal, Sivand, Dena and Esfand fields is
another attempt for enhancing output from these fields.
Technology transfer is a very important issue in Iran's petroleum industry,
which has been highlighted in the Iran Petroleum Contract (IPC) model. What
technology do you think Iran's petroleum industry currently needs to enhance
Since most ageing oil fields in the country are in their production decline
period and this level of production has been generally made by natural
depletion, it is necessary to apply the latest scientific methods of enhanced
recovery. Thermal recovery, chemical drives, etc. for enhanced recovery
requires cutting edge technologies and investment. As mentioned earlier, the
NIOC plans to benefit from the services of leading international companies.
Transfer of technology and technical knowhow are expected to be realized under
the aegis of contribution of exploration and production (E&P) companies in
The NIOC's pro-environment plans include flare gas recovery. What has been done
in this regard?
Establishment of natural gas liquefaction plant (NGL) is one of the top
priorities of the NIOC for gathering associated gas. For this purpose, numerous
measures have been undertaken to relegate the construction of these plants to
the private sector including petrochemical companies receiving feedstock.
Meantime, auctioning off flare gas is on the agenda as a short-term solution
until gas liquefaction plants have been constructed. Iran's petroleum minister
has signed off new instructions for the NIOC to embark on transactions. Selling
flare gas is set to be auctioned off soon. The preliminary agreement for
investment by petrochemical companies has been done to optimize and renovate
existing facilities of associated gas gathering. In case these projects are
implemented we will witness a sharp decline in the volume of flare gas.
How do you assess oil production management in the 11th administration?
I can answer this question in three parts: First, I highlight the increase in
the level of production and exports after the removal of sanctions; the
country's average oil production which had slashed by restrictions and
sanctions from 3.9 mmb/d in 2011 to 2.8 mmb/d in 2013 soared past 3.8 mmb/d
within months into the implementation of the JCPOA (Iran's nuclear agreement
with world powers) and ensuing improvement in international conditions. As far
as crude oil exports is concerned, the NIOC managed to regain its lost share in
global market in six months, increase crude oil exports and bring it from 1
mmb/d to more than 2 mmb/d. We also witnessed a significant increase in the gas
condensate exports; that is to say the average gas condensate export in the
current year is 430,000 b/d.
crude oil production from cross border fields increased; Yadavaran, North
Azadegan and North Yaran fields became operational and the processing unit of
West Karoun came online. In the ICOFC-run fields, output of Azar field was
added to Iran's production since the start of 2017.
natural gas and gas condensate production from gas fields in the country
increased; natural gas and gas condensate production from South Pars gas field
increased significantly in the 11th administration. This field's
production has nearly doubled following the development and launch of new
phases of South Pars by the end of 2016 and planned launch of remaining phases
by the end of 2018.
Courtesy of Iran Petroleum