CEO of NIOC Ali Kardor, in response to what would be the best news for NIOC in the current calendar year, said removal of financial bottlenecks would be the most important concern of this company. He added that the best news would be signature of oil contracts throughout the year based on the Iran Petroleum Contract (IPC) model in order to allay concerns about financing in the upstream oil industry.

In addition to highlighting the necessity of financing, Kardor refers to other requirements including renovation and replacement of decrepit installations.

He said that the petroleum industry, which is now century-old, is suffering decrepit facilities in many sectors "which would cause irreparable damage".

"We hope to be able to deal more seriously with this issue pursuant to instructions from Petroleum Minister [Bijan Zangeneh]," he said.

Kardor also underlined the need for empowering Iranian companies engaged in the petroleum industry. He said that favorable and long-term effect on national economic indices, particularly gross domestic product (GDP) growth, would not materialize just through increasing oil and gas production. Rather, he added, deepening on domestic capabilities and potentialities must be taken into consideration, an issue which would be an obligation for NIOC in the current calendar year.

Kardor also speaks about financial shortages in an industry which is a main source of income for Iran. The oil sector is thirsty for capital and any shortcomings in this regard would challenge the NIOC workflow and bring about unfavorable consequences.

Although Iran's landmark nuclear deal with six world powers, dubbed the Joint Comprehensive Plan of Action (JCPOA), was implemented to allow for the removal of nuclear-related sanctions imposed on Iran and to facilitate international communications, domestic potentialities were not neglected. On the contrary, good work was done with regard to establishment and empowerment of Iranian E&P companies, supply of commodity and equipment by domestic manufacturers, and benefiting from the scientific and academic potentialities of Iranian universities. Such efforts have turned into strong support for Iran's petroleum industry.

Increased Output by Reliance on Manpower

NIOC is instrumental in Iran's and regional energy supply thanks to its production capacity of 4 mb/d of oil and 800 mcm/d of gas. Undoubtedly, maintaining and increasing this level of production, either based on the requirement for presence in international markets or based on national macropolicies, is a must and inevitable.

Mohsen Paknejad, deputy CEO of NIOC, said a priority for the current calendar year was to increase production.

He added: "Human assets are the main pillar of production. Therefore, if we insist on production we have to make efforts to upgrade motivational factors of our colleagues particularly in operating sectors. I hope that we would see our efforts come to fruition this year."

Referring to other priorities of NIOC in the current calendar year, Paknejad said reducing repetition and intensity of accidents in order to safeguard the health of service works and keeping installations safe from damage would be taken into consideration.

Hope for Business Prosperity in Oil Sector; From EPC to IPC

Deputy CEO of NIOC Gholam-Reza Manouchehri had earlier said the current calendar year would be key for the petroleum industry.

Reza Dehqan, chief coordinator of upstream oil and gas contracts at NIOC, said: "Regardless of how Iran's political transactions would change in the future negotiations on oil agreements are making good progress, we expect to sign several oil contracts this year."

In the last calendar year, NIOC saw signature of three upstream contracts for the development of Phase 11 of South Pars gas field, development of Aban and West Paydar oil fields, as well as development of Sepehr and Jofair fields. NIOC hopes to sign more such agreements in the current calendar year.

It is evident that deciding the fate of undeveloped oil and gas fields and enhancing the output of producing fields with the focus on jointly owned reservoirs would top the agenda of NIOC.

Asked about the priorities for the current year, Manouchehri expressed hope for prosperity based on domestic capabilities, capital work and rapid development of all oil and gas fields.

He touched on the engineering, procurement, construction (EPC) agreements set to be signed for enhanced oil recovery and oil output preservation, saying they would top the agenda of the Office of Deputy CEO of NIOC for Development and Engineering.

Manouchehri's focus on "prosperity based on domestic potential" stems from the fact that oil production and preservation projects are set to be assigned to Iranian companies. Furthermore, in the upstream contracts, Iranian E&P companies are expected to serve as project leader or development partner.

Benefiting from post-JCPOA overtures to improve its international relations, NIOC has received the results of studies carried out by Iranian and foreign companies on some oil and gas fields to update its data. That has been done without paying any extra costs and only based on memorandums of understanding signed with Iranian and foreign parties.

Three agreements were signed based on the newly developed model of Iran Petroleum Contract (IPC) which is replacing buyback framework. In case political conditions do not turn sour, NIOC would hope to sign more such contracts in the current calendar year.

In addition to upstream contracts, production preservation and enhancement are on the table. Relevant licensing rounds have already started, which would create a good labor market for Iranian contractors.

Karim Zobeidi, NIOC director of incorporate planning, expressed hope that during the current calendar year upstream contracts would be signed particularly for such large fields as Mansouri, Azadegan and Cheshmeh-Khosh.

Mohammad Mostafavi, NIOC director of business and investment, maintains that signing upstream oil contracts and deciding for the development of fields under IPC format would be a valuable event for NIOC and a beginning for the implementation of widespread development procedures within NIOC.

Saleh Hendi, NIOC director of exploration, said: "Signing new oil contracts for exploration blocks was envisaged from the very beginning. To that end, the NIOC Board of Directors has instructed the NIOC Directorate of Exploration to hold licensing rounds for 14 exploration blocks and we have established a working committee. These bidding rounds will be launched by the Directorate of Exploration in the current [calendar] year."

Production and Development Companies Priorities

Ramin Hatami, CEO of Iranian Central Oil Fields Company (ICOFC), said oil needed more than ever to overcome financial challenges. He expressed hope that the petroleum industry would make decisions with a view to strengthening motivation of manpower particularly in operating areas.

Hamid Bovard, CEO of Iranian Offshore Oil Company (IOOC), referred to the projects drawn up for oil production enhancement and preservation at NIOC. He expressed hope that implementation of these projects would make arrangements for a 100,000 b/d increase in the company's output.

Bijan Alipour, CEO of National Iranian South Oil Company (NISOC), said one of important measures envisaged for the current calendar year was to outsource reparation and maintenance of new processing facilities by engaging the private sector and qualified companies.

"Since in this project, all affairs related to reparation, maintenance, logistics and safety at processing units are assigned to the private sector that would doubtlessly be instrumental in creating jobs and business prosperity in the surrounding areas of installations," he said.

Pirouz Mousavi, CEO of the Iran Oil Terminals Company (IOTC), said inspection and decommissioning of offshore pipelines leading to single-point moorings (SPM) in which oil has remained since 1983, would be part of activities for the current calendar year.

"This complicated operation is high-risk and highly sensitive, and based on our negotiations with state-run companies in this regard, we hope to implement this action in the current year," he added.

Sepehr Sepehri, CEO of National Iranian Drilling Company (NIDC), hopes his company would be able to operate drilling projects outside Iran through good marketing. He said that Iraq would be the first target.

As far as the NIOC development projects are concerned, the 11^th administration has so far focused on West Karoun oil fields and the giant offshore South Pars gas field.

Mohammad Meshkinfam, CEO of Pars Oil and Gas Company (POGC), said in the current calendar year, Phases 13, Phases 22-24 as well as all platforms of Phase 14 would become fully operational while all pipelines destined to carry South Pars gas, except for Phase 11, would be completed.

Nouroddin Shahnazizadeh, CEO of Petroleum and Engineering Development Company (PEDEC), said completion of projects and implementation of development contracts for the West Karoun oil fields and Azar field would constitute PEDEC priorities this year. He also cited pushing the project for crude oil delivery from Goureh to Jask for export, completing West Karoun and Omidiyeh pumping stations and related oil pipelines with a view to increasing ultra-heavy crude oil exports from West Karoun via Kharg and Bahregan terminals as secondary priorities.

The persistence of increased oil production from South Azadegan field, finalizing the development of South Azadegan, signature of contracts for developing Azar and Yaran oil fields and start of activities for the second phase development of Yadavaran are among events of the current year.

Mohsen Delaviz, CEO of Khazar Exploration and Production Company (KEPCO), said the company is very busy in the Republic of Azerbaijan.

Touching on a document of cooperation signed between Iran and Azerbaijan, Delaviz said: "Pushing the objectives of this document of cooperation aimed at joint recovery from the Caspian Sea hydrocarbon reserves, tops the agenda and priorities of KEPCO."

KEPCO, which has rarely been talked about in news in recent years, hopes to become more active in the current year following positive talks between Iranian and Azeri presidents, as well as between Iranian petroleum minister and Azeri minister of energy.

Delaviz said: "The Ministry of Petroleum has so far done and will continue to do its utmost; however, everything needs to be clarified with regard to attracting foreign investment and cooperating with international companies."

Oil and Support for Iranian Commodities

Ramin Qalambor, NIOC director of commodity manufacturing and supply logistics, said the process of domestic manufacturing of turbines which are largely needed for the petroleum industry would be followed up through holding licensing rounds which would obligate transfer of technology."

What was said included objectives, priorities and plans which are likely to change in the process, and some of them are even likely to get off the agenda.

When backed by senior Iranian officials against the backdrop of politically calm atmosphere, oil service workers' efforts would help NIOC sign more agreements in the upstream sector, take preliminary steps for enhanced and improved recovery, follow up on its plans for the renovation of installations while being able to receive money for oil sales and strengthen its foothold in growing Asian markets.

by Hanieh Movahed

Courtesy of Iran Petroleum