the opening ceremony, Iran's Minister of Petroleum Bijan Zangeneh said a $5
billion package had been drawn up to enhance production from operating oil
fields in Iran.
order to preserve and enhance production from operating fields in Iran, we are
preparing a $5bn package over two years," he said.
package is exclusively for Iranian companies; however, they can choose foreign
partners for financing," the minister said.
added that the billion-dollar package was complementary to Iran's new model of
oil contracts – Iran Petroleum Contract (IPC) – which require foreign companies
to have an Iranian partner for operating oil projects in Iran.
of this package and implementation of these projects would be apart from
projects that would be implemented" under IPC framework, Zangeneh said.
package, he added, would mainly be spent on workover of oil wells, drilling new
wells, surface debottlenecking, and operation. A variety of fields run by the
National Iranian South Oil Company (NISOC), the Iranian Central Oil Fields
Company (ICOFC) and the Iranian Offshore Oil Company (IOOC) would be covered by
$5bn package will be divided into smaller packages which would worth $300
million at most," said the minister.
added that these projects would be implemented in two years' time with
reimbursements to be made from project revenues in less than three years.
referred to financing, usance, bonds, domestic financing and getting loans from
the National Development Fund of Iran (NDFI) as some methods of financing.
Talks in Good Stage
gave a positive and acceptable assessment of negotiations under way for the
development of oil fields within the framework of IPC contracts.
policy pursued by the government and the Ministry of Petroleum is to finalize
the case of all jointly owned fields within four years and determine
contractors for their development. That's a big stride," he said.
expressed hope for the signature of contracts with leading foreign companies to
develop jointly owned fields. He noted that foreign companies would have to
work with Iranian partners.
minister said development of oil fields in the West Karoun area in western Iran
and enhanced recovery from operating fields were among priorities of Iran's
petrochemical sector was also highlighted by Minister Zangeneh. He said the
Ministry of Petroleum called for enhanced production capacity at petrochemical
plants and paying further attention to mid-stream and downstream sectors of
need to activate these industries in cooperation with the Ministry of Industry,
Mine and Trade," he said.
construction of oil refineries, he said: "We don’t need oil refineries for
domestic consumption. Any new refinery must be used for exporting petroleum
products. Of course, the existing refineries need optimization in order to see
convergence between the quality of products and new standards,"
also highlighted the significance of no flaring, expressing hope that flaring
associated petroleum gas would have been minimized by 2021, when his
ministerial term ends.
referred to NGL 3100, NGL 3200, NGL Kharg and Bidboland 2 as plans under way by
the Ministry of Petroleum for no flaring.
projects are not sufficient. We have to adopt successful methods in order to
prevent flaring of associated gas," he said.
also said the first FLNG (floating liquefied natural gas) contract would be
signed in the near future.
capacity of this FLNG is 500,000 tonnes a year, whose required gas we will be supplied
by us," he added.
also described IPEC as an influential non-governmental body, saying it was
finding its right direction.
club is continuing its life and will reach growth and blossoming," he
said the idea of IPEC establishment was raised in 2011 for the purpose of
setting up a think tank for oil and energy without any dependence on
always seek to develop thoughts. I hope that more youth would join this club
which has less than 200 members now," he said.
Rhetoric Not Worrying
second speaker was Ali Kardor, CEO of National Iranian Oil Company (NIOC).
said that US President Donald Trump's anti-Iran rhetoric was not worrying.
is nothing worrying about Trump's remarks. A good path has been traced in Iran
which I hope would continue in full strength," he said.
said 10 contracts were to be finalized in the current calendar year to March
also referred to the conclusion of studies conducted by foreign companies,
saying: "Hopefully these companies have understood our message of the
significance of enhanced recovery and they have taken into consideration EOR
and IOR methods in all their studies."
this stage, only technical proposals would be examined. In case technical
aspects are reviewed and endorsed at the three layers of technical committee,
reservoir consultants and reservoir supreme consultants, economic and
contractual negotiations will be put on agenda," he said.
said Iranian exploration and production (E&P) companies had still time to
establish bonds with foreign companies for future cooperation in the
development of fields in Iran.
foreign companies have yet to choose their domestic partners and we hope that
Iranian E&P companies would boost their standards to become further
influential in this regard," he said.
said that $300 million packages were being drawn up for different projects.
"Necessary tender bids will be held and we hope that would provide
potential for domestic companies and subsequently domestic manufacturers to
boost their activities," he added.
said Iran was standing in a top position in terms of hydrocarbon reserves. He
said Iran had brought its oil output to 6 mb/d before the 1979 Islamic
the past two years, by reliance on enhanced recovery we have concluded that
reaching that level of production capacity is possible through practicing
optimal management, enjoyment of foreign investment and state-of-the-art
technologies," said Kardor.
said the 6mb/d target would be achieved under Iran's 7th Five-Year
Economic Development Plan.
said plans were under way for raising Iran's oil output to 4.5 to 5 mb/d by the
end of the 6th Five-Year Economic Development Plan.
said the cost price of oil production in Iran was acceptable, saying: "The
cost price of oil production in Iran in foreign currency puts Iran among
countries with lowest production costs. As we regularly monitor the economic
model of international companies, Iran is among the best countries in the world
in terms of profitability in this sector."
referred to field-oriented project implementation and said: "The resultant
of outputs and specifically regulation of portfolio are among features of
field-oriented performance. New oil contracts and other contractual frameworks
for field development lie within such a framework."
said that NIOC was planning to hire Iranian production companies to work in the
West Karoun fields. "We had better establish companies for this purpose to
work specifically in this sector. So far, some companies have become active in
said that international oil companies (IOC) had focused on reservoir and
project management, as well as financing. "That is while Iranian E&P
companies are still stuck in engineering, procurement and construction (EPC).
They need to change their conditions."
voiced support for assigning NGL projects to petrochemical companies, saying:
"We are ready to cooperate with these companies in the development of
fields and we have so far assigned studies on two gas fields."
said Iran needed no more gas for domestic consumption. "Therefore, the gas
produced in the fields must be converted to petrochemical products in the value
said Iran was set to sign its first FLNG contract, with a capacity of 500,000
tonnes, with a Norwegian company soon. The contract will be for 20 years and
the pricing formula will be set and communicated by the Ministry of Petroleum.
said that NIOC was in favor of private companies in building water desalination
plants and power plants.
are required to give realistic prices in the tender bids, because NIOC studies
the commerciality of projects and will shun projects with insufficient
commerciality," he added.
said NIOC had to cancel a project due to unrealistic price. "We hope that
companies would offer realistic prices in order to help the NIOC in its policy
of further cooperation with the private sector. If not, we will have to
implement these projects through our own direct investment."
welcomed build-operate-transfer (BOT), build-operate -own (BOO) and
public-private partnership (PPP) models for projects.
and India are among countries that pursued PPP model and they achieved positive
results," said Kardor.
also spoke about methods of financing of projects, saying bonds in Iranian
currency were to be issued for the first time on a foreign currency basis. He
noted that NIOC would hedge risks of these bonds.
said that necessary arrangements had been made with the Iran Energy Exchange.
Best Option to Cut Pollution
Hossein Adeli, Secretary General of the Gas Exporting Countries Forum, (GECF),
said natural gas market was being influenced by political and technological
conditions, economic expansion mainly in Asia (China, India), competitive
prices and environmental concerns are expected to boost natural gas consumption
towards 2018," Adeli said, estimating a 2.1% to 2.3% increase in gas
said that world energy demand is projected to grow by 1.1% a year between 2017
and 2040 mainly for a population growth, global economic prosperity due to the
emergence of new economies and higher living standards.
gas will grow by 1.8% per annum and will be the fastest growing fossil fuel in
2040," he said.
fuels are expected to meet 75% of the world's energy demand," Adeli said,
adding that coal would be replaced increasingly by natural gas, renewables and
nuclear power in power generation.
share of gas in the overall energy mix will increase from 22% in 2016 to 26% in
2040," he said.
prices of gas compared to renewables, ample global natural gas reserves and gas
oversupply" were among factors enumerated by Adeli to support his idea.
said that power generation will remain the largest natural gas consumer among
all sectors, hitting 2,317 bcm in 2040.
share of gas in power generation increased from 18% to 23% between 2000 and
2016, and will continue to rise" to reach 28% by 2040, he said, adding:
"That represents the largest market share of any fuel."
share of renewables in the global energy mix was only 8% in 2016 and would
reach 20% in 2040.
has a good competitive position against renewables, and also coal, especially
if environmental externalities are integrated," Adeli said.
market is now very competitive and is passing through a changing and challenging
transition," he said.
is a momentum for CO2 mitigation, and in spite of the US withdrawal China and
EU are leading the world for this cause," added Adeli.
and renewables are two fuels that can effectively address the global concerns
on the climate change," he noted.
provides a global solution for all, while renewables will remain an EU centric
solution for long period of time to come. Electrification of vehicles will not
be overwhelming; on the contrary, it is again an opportunity for gas to grow as
there is a need for more electricity generation," he said in conclusion.
Courtesy of Iran Petroleum