monthly

Iran Petroleum Issue No. 87 September 2019

650 Companies at Iran Plast Zangeneh: Iran Petchem to Hit $25bn in 2021 Energy, aKasra Weapon Nouri Targeting People Director General of Public Relations

he 21st Ministerial Meeting of the transformed oil and gas into a weapon Gas Exporting Countries Forum which is threatening the security and T(GECF) was held in Moscow. welfare of not only Iranians but also all GECF member states account for 67% individuals in the world. of global gas reserves, 44% of global gas Iran considers regional cooperation and international interactions as priorities gas (LNG) trading. Sitting atop 17% of in its energy diplomacy. The country has worldproduction gas reserves and 66% and of producingliquefied natural nearly always reiterated that secure energy supply 1 bcm/d of gas, Iran is a leading member of the GECF. The main idea behind the with the interests of all nations. The establishment of the GECF, like OPEC, is to and free flow of oil must be in harmony secure energy supply through cooperation and again to let these two sectors serve and coordination between producers and peopleIslamic asideRepublic from has their told tension-creating US officials time consumers. Secure oil and gas production unilateralism. and supply are the most essential elements As noted by GECF producers in their recent to meet the world growing demand for Ministerial Meeting, unilateral economic sanctions and the trans-territorial nature sector, states and nations. Secure energy of domestic regulations posed the most supplyenergy. isIt partcovers of globalall beneficiaries cooperation in thisin serious threat to global peace and security. investment, transfer of technology and expansion of trade infrastructure. in the world, and considers resistance to US Creation of tension in the oil and pressureIran is an as influential a must. oil and gas producer gas sector by any nation would leave Tehran is determined to use every destructive impacts on global economy. approach to exercise its legitimate right Ensuing negative impacts may be also for oil and gas exports. Furthermore, the seen on industrial and social growth and energy sector needs to be depoliticized development of producers and consumers, in partnership with the international as well as public welfare and calm. One of community, while politically-motivated meddling has to give way to economic and downs in the oil and energy market and participatory logic and balance in all andthe most subsequently significant on reasons global economy leading to is ups sectors. Economic sanctions violate the political meddling by some countries in this most fundamental international principles. sector. Imposition of unlawful sanctions They are targeting all nations in the by the US and their politically-motivated world. Every nation must feel morally meddling along with the application of and humanely compelled to counter the trans-territorial rules and regulations have sanctions. Ministry of Petroleum 10 Islamic Republic 40 of Iran

Managing Editor: Kasra Nouri Director General of Public Relations

Editor in chief: Parastoo Younchi

Executive Editor: Hamid-Reza Shakeri-Rad

Graphic Designer: Saman Goodarzi

Photo Section, PR Office, MOP: Hassan Hosseini 52

Reporter: Negar Sadeqi Javad Asghari

Translator: Kianoush Amiri

Coordinator: Abbas Lotfi

Tel/Fax: (+98 21) 61626113 www.iranpetroleum.ir [email protected] NIGC Chief: Gonabad, Why Belal NIOC Palayesh Iran Gas City of Gas Field Official: Iran Naft Abadan Saffron, Development Finishes 3rd COVER Output to Hit Pistachio and Matters Known Oil 900mcm/d Silk Reserves Up among Asian Clubs 38 12 58 20 56 GCEF September 2019 Issue No.87 monthly GCEF Zangeneh: Iran Ready to Help Secure Hormuz Strait Iran’s petroleum minister, Bijan Zangeneh, travelled to Moscow early October to attend the third Russian Energy Week 2019 International Forum and also the 21st Ministerial Meeting of the Gas Exporting Countries Forum (GECF).

uring his two-day Zangeneh outlined Iran’s rather, people will be pushed regional and international concerns and counter challenges LNG.” He said all the countries stay there, Zangeneh policy for achieving natural to bottlenecks.” Zangeneh said cooperation in the energy sector. lying ahead in the gas sector.” around the Persian Gulf “should highlighted US gas capacity to meet growing the US was using oil and gas as He said that Iran was a founding Zangeneh said defending try to stabilize the region and sanctions on Iran, domestic demand and foster weapon. He said: “We believe member of GECF and the national interests of GECF to defend the peace for all in Dsaying: “The US is using oil that oil and gas are not weapon. international cooperation in this Organization of the Petroleum member states and resisting the Persian Gulf region and to and gas as a weapon, but we sector. “Depoliticization of the They are for the welfare of all Exporting Countries (OPEC). pressure from global powers secure the Hormuz Strait for the Zangeneh said believe that oil and gas are not energy sector, Iran’s readiness to people in the world, including Zangeneh said the presence was a must. “Securing the free transport of oil and other Zangeneh also the impact of weapons; rather, they are for share its rich experience in the producers and consumers.” of Iran, Russia and Qatar in supply of energy and free oil commodities’ transportation to told reporters public welfare.” He also said natural gas development sector the GECF ministerial meeting transfer have to be in line with the international market.” sanctions was Iran was “ready to help other with other nations, compliance Focus on Gas Exports was a source of pride because the interests of all nations,” he that inevitable, countries in the region to ensure with international obligations Zangeneh said the impact of they were the founders of this said. Zangeneh also said that Meeting With Russia, Qatar unilateralism adding the security of the Persian Gulf and expansion of cooperation, sanctions was inevitable, adding gas forum. “We are currently GECF was getting a bigger role and Armenia Ministers was and the Strait of Hormuz”. and relying on multilateralism that Iran would do its best to witnessing the development of in the global domain based on Zangeneh also met with that Iran The Russian Energy week are Iran’s three strategies in drive the country out of such this forum and the improvement the gas market mechanism. Russian, Qatari and Armenian threatening would do its forum provided a venue this sector,” he said. Zangeneh conditions. “Iran’s gas sector of its global status as an ministers during his stay in the world, for ministers, managers of touched on the unlawful US is currently in good conditions international body,” he added. Iran No Enemy to Region Russia. He met with Russian best to international oil and gas sanctions imposed on Iran’s and by the end of the current Russian President Vladimir Zangeneh also told reporters Minister of Energy Alexander saying drive the oil sales, saying: “The US has calendar year [March 2020], Putin also told a panel that unilateralism was Novak after the panel discussion the Europeans country out of exchange views on international used all its tools against Iran more than 70 mcm/d would be discussion on the sidelines threatening the world, saying about gas industry priorities. did not cooperationfirms and energy in the exporters energy sector. to in the past one year. Therefore, added to gas recovery rate from of the Russian Energy Week the Europeans did not favor the On the sidelines of the GECF such In his address to this forum, our plans for leaving behind the jointly owned South Pars forum that he opposed pressing US government’s behavior. “Iran ministerial meeting, he met favor theUS conditions Zangeneh mainly spoke these conditions could not be accusations against Iran in is a friend to everyone and in my with Qatar’s minister of state for government’s about the global role of the expressed and they are secret.” Iran’s focus was on gas exports, connection with the recent view we have no enemy in this energy Saad Sherida Al Kaabi gas industry and the Islamic He said the US had used every addinggas field,” that he neighboring said. Zangeneh nations said attacks on Saudi oil facilities. region,” he said.“We believe that to discuss cooperation in joint behavior Republic’s position on the tool at its disposal to “sanction were prioritized. He named all the Muslim countries, all the sanctions imposed on Iran and Iran and now it has no more Iraq, Turkey, Pakistan, Armenia GECF to Strike Energy neighboring countries, should experience and working in also regional security. The tool to pressure Iran and the and Oman as prioritized Balance have a peaceful environment favorgas fields, of peace sharing and technicalstability in minister reiterated his position Iranian nation”. Zangeneh said: destinations for Iran’s gas Addressing the GECF among themselves … Our enemy the Persian Gulf. Zangeneh also that the energy market had to “The Americans say we are exports. He expressed hope for Ministerial meeting, Zangeneh is another country out of this met with Armenian Minister of remain depoliticized. He said: friendly to people of Iran and the acceleration of Iran’s gas said the main task assigned to area,” he said. Zangeneh said: Territorial Administration and “This market has to steer clear we have problems with the exports after sanctions relief and the body was to strike a balance We believe that all the countries Infrastructure of Armenia, Suren of unilateral and unlawful government of Iran. That is de-escalation in the Middle East. into the energy sector and around the world believe that Papikyan. They exchanged meddling because this issue will while such claims are untrue “We believe that the southern ensure sustainable gas supply unilateralism doesn’t work and views about the potential and the sanctions are against the section of the Persian Gulf is one for development. Sressing their increasing pressure on presence of Iran and Armenia producers and consumers.” nation and people of Iran.” He of the best regions for exporting the necessity of cooperation Iran cannot be the solution for in the Eurasian Economic Union in the long-term benefit both added: “When there is no money Iran’s gas,” he said. among GECF member states, a stable situation and a peaceful for further development of Oil & Gas No Weapon for buying medications and food he said: “Alongside this task, environment in the region cooperation between Tehran Addressing the panel on the government will not be the International Cooperation it is necessary to take into and for the world and for the and Yerevan, particularly in the the gas industry priorities, sole to come under pressure; Zangeneh said Iran favored consideration environmental security of supply of oil, gas and energy sector. 4 5 news September 2019 Issue No.87 monthly news

National Iranian South Oil PEDCO. Mohammadi said wellhead levels. “Using this equipment he said. Mohammadi said: prioritized for reviving low- Multi-Phase Company (NISOC) and Petroiran multiphase pumps were important for low-pressure wells is more “Downhole pumps would cost pressure wells.” Mohammadi Development Company (PEDCO) equipment used in the process optimal and cost-effective higher than wellhead pumps, touched on the experience of signed a memorandum of of oil production and extraction than downhole pumps, not to due to the necessity of mounting using multiphase wellhead Pumps cooperation on using domestically- from low-pressure wells. He said mention increasing the well the drilling rig for installation, as manufactured multiphase pumps installing such pumps in the oil life, improving the production well as the short lifecycle of these Made in Iran wells with wellhead low stream process, preventing the pumps.” thispumps equipment in the Ahvaz and supportoil field, for between Ahmad Ahmadi, CEO of pressure would be instrumental He added: “Therefore, using domesticsaying: “Due manufacturing, to the significance NISOC of NISOC,in oil fields. and SepehrThe MOU Sepehri, was signed CEO of in preserving national oil output environmental protection,” wellhead pumps would be decided to manufacture them.” flaring of associated gas and Maroun Co. Output Plan Registration in Oil Iran, Syria Oil Ministers 5-PSEEZ Ready to Win Realized 105% Commodity Website Obligatory Discuss Cooperation Toehold in World Markets CEO of Karoun Oil and Gas Production Ramin Qalambor Dezfuli, manager of Iran’s Petroleum Minister Bijan Zangeneh said 9-Armenia Seeks Iran Gas-Power Swap Company Hamid Kavian said the company had commodity manufacturing and procurement he and Syrian Minister of Petroleum and Mineral Renewal realized its production target plans at 105.9% logistics at National Iranian Oil Company Resource Ali Suleiman Ghanem had discussed Armenian Prime Minister Nikol Pachinian (NIOC), said domestic companies willing to higher level of cooperation between the two has called for renewing gas-electricity He said: “We also managed to reach a good cooperate with the Ministry of Petroleum nations. “The sooner peace and stability return swap deal with Iran up to 2040. “Iran is a resultin the firstin terms half of workoverthe current and calendar development year. are required to register with the electronic to Syria, the more Iranian companies will be sustainable source of energy and gas supply of wells.” Kavian said MOS and MOT systems system of petroleum commodity supply (EP). present for reconstruction there,” said Zangeneh. to Armenia and Yerevan wants to extend had facilitated the recovery of 103,000 b/d of “Since the petroleum industry’s cooperation He added that he had discussed expansion of gas-electricity swap deal with Iran up to crude oil, which was up about 16.5% year-on- with the private sector depends on the cooperation between Iran and Syria, particularly 2040,” Pachinian said in a meeting with registration of companies in the EP system of in reconstruction. “Iran’s private sector can play Iranian President Hassan Rouhani. He said current calendar year, about 14 kilometers the Petroleum Ministry, candidate companies a role in manufacturing equipment, producing that Yerevan favored improved ties with ofyear. primary He added and thatsecondary during pipelines the first half had of the can refer to this website in order to not petrochemicals, manufacturing machinery and Iran, adding: “We are determined to increase been immunized. He said: “Among the most lose the chance of assessment and being building industrial plants in the petrochemical, the level of relations and ties between the listed among Petroleum Ministry-endorsed oil and gas sectors,” he said. Zangeneh said two nations, particularly in the economic half of the current year included designing, companies,” he said. Qalambor Dezfuli training manpower in Syria in the oil, gas and sector, as much as we can.” Rouhani said Iran important projects carried out in the first underscored the necessity of technological petrochemical sectors was another topic of was fully ready to meet Armenia’s energy of 12,000 barrels of sour gas from Industrial production, saying: “In parallel with this discussion between them. “We expressed our needs, adding: “The gas-electricity swap Plantsimulation No. 5 andof Maroun modification to No. 3of in the order transfer to objective, the Petroleum Ministry shifted readiness to share experience with the Syrian agreement between the two nations could its policy from reverse engineering to side in the gas industry, gas transmission and be also extended to the commodity and machinery. technological production.” distribution networks.” service sector, too.” avoid flaring of gas and overhaul rotary

“In this regard, the Homa and that the second phase of Decision Due on Kangan Varavai gas compressor stations developing the Tang-e Bijar and the Tabnak separation Gas Compressor Station center are on the agenda. under way. “Hopefully, with Ramin Hatami, CEO of the accounted for feeding these gas Construction has started, aand constructive surrounding view fields held was by Iranian Central Oil Fields primary feasibility studies have the Ministry of Petroleum Company (ICOFC), has said been conducted and contract vis-à-vis development of plans were made for sustainable andrefineries. sustainable Noting production that timely underprivileged areas and supply of feedstock to requiredfeedstock comprehensive supply to refineries planning, he said: “We have talks Hatami on financing said over have the comingbeen downstream industries, this was due about the Kangan gas the Kangan gas compressor finalized.”two months, a contract would projectsupply ofhas gas been to refineries developed,” and compressorrefineries, adding station. that He decision said station under way in order to be signed for the construction he said. Hatami said National that ICOFC was the exclusive provide sustainable feedstock of the three aforesaid projects, Iranian Oil Company (NIOC) supplier of gas to the Parsian, was assigned last month, talks, we hope that the project which would mean the start had allocated IRR 4,000 billion Ilam and Shahid Hasheminejad said negotiations had been which requires the feasibility of the project. “Undoubtedly, plus $120 million in credit for concludedto the Fajr Jamfor contracts refinery.” on Hatami studies to have been done of the current [calendar] year.” the second phase development to the Fajr Jam and Sarkhoun the Kangan gas compressor over four months. With the Referringwould be finalizedto ICOFC byprojects the end for we will witness sustainable refineries, as well as contributor station, adding: “Conducting the preparation of the package of sustained feedstock supply to feedstockover the coming production five years, by the project practically started last feasibility studies of the project contract and the conclusion of year.of the Tang-e Bijar field. “The refineries. He added that 6 ICOFC-run onshore fields the Parsian refinery, he said: Parsian refinery.” He said 7 news September 2019 Issue No.87 monthly news Petchem Production OIEC Strikes Deals with Sustainable Iran Contractor Group Qodratollah Farajpour, director of production Oil Industries Engineering and Modern Pipeline Overhaul control at National Petrochemical Company Construction Company (OIEC) and Iran IOTC Equipment Repaired Technology Mastered (NPC), told a meeting of petrochemical International General Contractor Company Abbas Assadrouz, CEO of Iran Oil Terminals managers that Iran’s petrochemical (IGC) have signed memorandum of Saeed Tavakoli, CEO of Iran Gas Transmission production had increased year-on-year cooperation for purchase, manufacturing, connected to a single-point mooring was repaired Company (IGTC) has announced the development of despite restrictions. “Although we witnessed installation and pre-startup of the PC2 inCompany the country. (IOTC) He said said the that first the offshore reparation coupling was homegrown knowhow for repairing high-pressure section of NGL 3100 plant in Dehloran in done by using domestic facilities and human gas pipelines using the composite technology. “With the year, causing numerous problems for western Iran. Gholam-Reza Manouchehri, resources without spending any costs. “In order the partnership of knowledge-based companies, theunprecedented petrochemical flooding industry, at the the start issue of was CEO of OIEC, said the NGL project was to establish stability and security in the process the monopoly of foreigners in offering this modern managed effectively and the reparations were of gas condensate exports by SPMs, MBC is technology for reparation in the gas transmission carried out in the shortest possible time, and installed on the equipment lying between SPMs network was broken,” he said. Tavakoli said planning beaimed converted at gathering into gas flare that gas would from bethe fed oil into and tankers. After the activation of MBC, this piece started two years ago for achieving this success, been stopped, were back into operation,” he nationalfields around trunkline. Cheshmeh He said Khosh that completionand Azar to should be reassembled and repaired. Designing, adding: “Reparation of high-pressure gas pipes said.five 300,000-tonne He added: “Despite polyethylene a nearly unitstwo-month that had of this chain could lead to the production of manufacturing and assembling are monopolized using the composite technology was monopolized halt in the production of units connected valuable petrochemicals.Manouchehri said by an Italian and a British company. But the by American and European companies, and foreign to the Wes Ethylene Pipeline, national this project would depend on the startup of reparation work was done by IOTC engineers in companies and even their agents did not provide petrochemical production increased in the gas compressor stations. “Raw and sour gas South Pars,” he added. IGTC with this new technology and technical and will be transferred from storage tanks, and Assadrouz said besides economic advantages, engineering services under conditions of sanctions. y.”During the meeting, several petrochemical in the next phase the gas will be injected domestic reparation ended dependence on foreign Therefore, since two years ago we adopted a plantsfirst half shared of the their current experience calendar in year overhaul y-o- and into petrochemical units for conversion companies. He said IOTC had to spend IRR 10 comprehensive and integrated plan in order to startup of new units. Petrochemical Research billion on reparation of this device, while it was acquire this technical knowhow.” He said that an and Technology Company (PRTC) presented NGL project of Dehloran is for a 10-year now repaired in the country without spending eight-phase plan had been formulated for acquiring its achievements. Farajpour said that period.to olefin,” Some he said. changes Manouchehri in the quality, said: volume “The any money. He added: “This [calendar] year, knowhow to repair gas pipes using the composite domestic manufacturing was being pursued of gas and modalities of investment in this with proper planning and the instruction of the technology. He added: “In order to do reparation by the Petroleum Ministry and NPC. He said project in recent years have delayed it.” petroleum minister for using domestically made without having to deplete the pipe and waste gas, we that NPC had developed special approaches equipment and domestic startups, this issue is started thisplan in eight phases.” Tavakoli said: “In the to guarantee increased petrochemical within two years. The project has had 35% being followed upon in different sections of the production from plants across the country. progress,He said: “We but intend the main to finishissue isthis that project the company.” Assadrouz said: “Among crude oil properties of the composite materials used in the “Despite some problems and restrictions that loading, unloading and export terminals across gasfirst pipe step, reparation, we examined in the the second mechanical step, andwe examined chemical exist for the petrochemical industry in the this project for the NGL project to be the world, Iran’s export terminal in the Persian producers and domestic market of composite country, the increased production indicates olefinfruitful.” project Manouchehri should be said finished the Dehloran alongside Gulf in Kharg Island with two jetties is the best materials and in the third step, we examined the reality of prosperity of this industry,” NGL project was valued at over $2 known, the oldest and the largest oil terminal designing and simulating composite reparation.” he added. billion. ever known in the world.”

will be installed in the phase 22 years; a friendship which had China Quits SP11 Project, for a platform with 500 mcf/d outlived all the ups and downs in of gas production capacity,” Iranian-Saudi relations, and that Petropars to Work Alone Zangeneh said. Asked why the I had no trouble meeting with Iranian Minister of Petroleum 2018 and imposition of new project was not initially awarded him.” Bijan Zangeneh said China’s sanctions and restrictions for to Petropars Co., Zangeneh said: He further said that Iran had CNPC International had pulled foreign companies working “We had intended to attract not instigated any disputed with out of a contract to develop in Iran, Total pulled out of foreign capital for developing Saudi Arabia and wanted to be South Pars Phase 11, adding the contract. On Sunday, Mr. the project, besides the fact that friends with everyone in the Iran’s Petropars would develop Zangeneh told reporters that the pressure booster platform region. “They must not regard us the project alone. In 2017, CNPC International had also was very important for us and as enemy; the enemy is outside National Iranian Oil Company exited the project, meaning that Petropars was supposed to learn of the region.” Asked whether the (NIOC) signed a contract Petropars would deal with the from other companies in the Iranian Ministry of Petroleum with a consortium of France’s project alone. “The fate of the consortium.” Asked whether had prioritized development Total, CNPC International South Pars Phase 11 has been CNPC International had pulled in addition to selling oil, the and Petropars to develop the determined and Petropars out of the project, he said: “Yes. It minister said: “When we sell offshore project in Persian will continue developing the is no longer in the project.” oil, we can accelerate and boost Gulf waters. Following US’s project alone and by the end of Zangeneh said he dropped by development, too; we are an withdrawal from the Iran this [Iranian calendar] year (to his Saudi counterpart in Moscow. extrovert organization, but we nuclear deal back in May “I told him had been friends for must also be endogenous.” 8 March 20, 2020), the first jacket 9 September 2019 Issue No.87 top story monthly top story

The minister said: “At Gas Condensate Refinery, Domestic Potential in Belal the moment, there is not commonly known as the Development replacement for Pergas Persian Gulf Star refinery, Masoud Karbasian, CEO Zangeneh: and we have to wait for the was in the final steps. of National Iranian Oil National Iranian South Oil “The current capacity Company (NIOC) said Company (NISOC). However, of the refinery stands at Iranian companies would if we want to implement 420,000 b/d, which would be prioritized in the such a project we need to reach 480,000 b/d by project. Iran Eyes Maximum rely on domestic capital the end of the [current “Petropars, as the market.” Asked about the calendar] year with an general contractor of the Farzad B development investment less than $100 development project, is project, he said: “I hope that million,” he added. tasked with holding tender Oil Output we would soon start drilling Noting that there was no bids for various sections Iran’s petroleum minister, Bijan Zangeneh, has said that the appraisal/exploration wells utility and extra feedstock of the project. Relevant in this field. In case the for the Persian Gulf Star officials will be awarded to ministry would be looking for maximum production. Indians decide over coming refinery, Zangeneh said: Iranian contractors under months, we would be ready “I don’t understand why NISOC supervision,” he sked what policy the not mean sanctions relief. “Those who harmed the to work with them. If not, we when a project could be added. Petroleum Ministry Rather, a sum is allocated. I market have to fix it now.” will develop it on our own.” implemented with $100 Karbasian said: “The Belal Awould pursue in case think the logic behind this In response to the question The minister also said he million we have to spend $1 gas field is located east sanctions on Iran’s oil sector decision has been the lifting whether global oil markets had not heard anything billion for it.” of the South Pars field. are lifted, the minister said: of oil sanctions so that we would reach stability with about China’s plan to Regarding the Siraf refining Based on the agreement “Maximum production.” can export and sell oil. If not, a decline of 1.8 mcm/d, he invest $400 billion in Iran’s project, he said: “The signed between POGC and Zangeneh, who was we will be indebted in the said: “We have to test the petroleum industry. financing of this project is Petropars for development, speaking after signing future,” he said. Asked about market and its reaction.” “We have not received any in its final stages following this field would be an agreement for the a proposal for further cut in information through official instruction from the developed over a 34-month development of the Belal gas the oil production level by Pergas Not Active channels to that effect,” he President. This project is to period by relying on field, also said Europe’s plan some ministers of OPEC MCs Regarding contract with said. be financed through capital domestic potential.” to provide Iran with a $15 during the 16th meeting of Pergas, he said: “The Pergas market and necessary He said the $440 million billion credit line would be the OPEC/Non-OPEC Joint consortium has failed to Phase IV of Condensate arrangements have been agreement would be aimed useful when Iran would be Ministerial Monitoring resolve its financial issues, Refinery Nears End made with the stock market. at the production of 500 able to sell oil. Committee (JMMC) held in therefore it is not active. It Zangeneh said Phase I suppose we can soon mcf/d of gas and 15,000 b/d “In terms of oil, it does Abu Dhabi, Zangeneh said: does not mean negligence.” IV of the Bandar Abbas finalize these issues.” of condensate. Mojtaba Mohammad Qoli Photo:

10 11 interview September 2019 Issue No.87 monthly interview

After the landmark 2015 nuclear deal was signed with world powers, Iran signed more than 100 feasibility study agreements with domestic and foreign NIOC Official: companies for the development of 50 oil and gas fields. That provided National Iran Known Oil Iranian Oil Company (NIOC) experts with valuable information on the fields. After Total’s withdrawal, Reserves Up We have conducted some basic and conceptual our talks are France’s Total has pulled out of the studies with the help of foreign consultants. under way with SP11 project. China’s CNPCI has not yet We almost know what has to be done and we the Chinese decided to remain a partner. When will are ready to take necessary action when we this project start? Are you still waiting for would face pressure fall-off even if there is no company. But CNPCI’s decision on the matter? foreign company to help us. Of course, in case since SP11 is We seriously plan to start the SP11 of favorable international conditions, we would shared by Iran Reza Dehqan, development this year. As you know this hire leading companies. Otherwise, we will do it and Qatar, deputy CEO of NIOC for agreement was signed between NIOC [on one in partnership with Iranian companies. I don’t engineering and development, we don’t want side] and Total, CNPCI and Petropars. After think things will go on like this forever. I’m sure says due to such studies, Iran Total’s withdrawal, our talks are under way with there would be the possibility of international to lengthen was proven to have more known the Chinese company. But since SP11 is shared interaction and utilization of international our talks with oil reserves. In an interview with by Iran and Qatar, we don’t want to lengthen our capacities in oil projects in the future. the Chinese “Iran Petroleum”, Dehqan speaks talks with the Chinese company. Petropars is company about a wide range of issues related able to develop Phase 11 like other South Pars In addition t o to Iran’s petroleum industry. phases without foreign companies’ presence. What happened to the South Pars Oil the SP11 agr Layer (SPOL) development? eement, NIOC Last calendar, two MOUs was signed with has signed Negar Sadeqi The SP11 agreement calls for pressure one Iranian and one foreign company for However, the process of talks has booster platforms in order to avoid fall-off development of the SPOL. The foreign company thr ee IPC After the signature of the Joint slowed down, hasn’t it? in production. Pars Oil and Gas Company agreements for Comprehensive Plan of Action It may be thought that some of these activities (POGC) had separately conducted a study reviewed by NIOC Consulting Committee. the development (JCPOA), NIOC signed MOUs with oil have come to a halt following the US’s in this regard in partnership with a foreign presented its findings to NIOC. They were of the Sepehr & companies with a view to striking deals. withdrawal and NIOC is sitting idly for a new consulting firm. Have you thought of any Jofair, Aban & Did this trend stop after the US JCPOA chapter to open in the international arena. remedy to contain output decline in South At what stage is the West Karoun field withdrawal? What was achieved from the Naturally, due to the US’s pullout, the talks have Pars? development? West MOUs? been slowed down, but NIOC has signed MOUs Since the very beginning, we predicted to Iran is currently recovering about 350,000 Paydar and After signing the JCPOA, over 100 MOUs were both before and after the US quit. Those MOUs Cheshmekhosh signed between NIOC and domestic and foreign led to studies based on which we started a new coming years, which would affect production. which would reach 400,000 b/d by March & Dalpari Therefore,see output wecut needin the to South enhance Pars the gas pressure. field in b/d of crude oil from West Karoun fields, & East Paydar NIOCfirms wouldfor developing incur no about costs and50 fields. the parties Signing to withround international of talks. At present, companies. five instances of talks 2020. South Azadegan field accounts for ninety fields thethese memorandum MOUS are significant would pay for for us studies because as are under way with domestic firms and one case marketing costs. These studies have provided our experts with valuable information that At what stage are IPC contract talks did not exist before. Thanks to these studies, now? estimates of Iran’s proven oil reserves have In addition to the SP11 agreement, NIOC officially increased and registered in global has signed three IPC agreements for the data. With each study costing at least $1.5 development of the Sepehr & Jofair, Aban & million, the studies are worth between $150 West Paydar and Cheshmekhosh & Dalpari million and $200 million. Despite the US’s & East Paydar fields. The Abadan and West withdrawal, negotiations have continued, and Paydar agreement has become operational last calendar year NIOC signed 12 feasibility and is under way on schedule. The Sepehr study memorandums with domestic and foreign and Jofair agreement is being implemented. The agreement for Cheshmekhosh, Dalpari now, several development agreements are likely and East Paydar will become operational tofirms. be signed Given thethis negotiations year. we have under way this year.

12 13 interview September 2019 Issue No.87 monthly interview

percent of the relevant increased production. this year in this sector? sector and follow up on enhanced recovery Jask Port. It is under construction with a This project is on the NIOC agenda with from oil fields. Documents were drawn up and maximum share for domestic contractors the objective of maximum use of domestic submitted to the Economic Council which gave and manufacturers. This project includes conditionsThe first train of sanctions. of a mobile The processing second train unit willin capabilities. In other words, signing deals the go-ahead for 33 projects. These projects, building about 1,000km of pipeline, five becomethe South operational Azadegan fieldsoon. was This launched processing under unit with Iranian companies and prosperity in the i.e. direct and indirect investment, are totally pumping stations, gauging and mechanical has capacity to treat 50,000 b/d of oil. Iran is business of domestic manufacturers would valued at $6.2 billion. With financing costs, equipment, building storage tanks and currently recovering 180,000 b/d of oil from the figure rises to $7.2 billion. This project an export terminal. Once completed, the south Azadegan. Production in the Yadavaran the project. Of course, enhanced oil production, would also lift the oil output to 280,000 pipeline would carry 1 mb/d of crude oil empoweringconstitute the contractors most significant and spreading advantages joy of b/d, which means generating $14 million from the Goureh oil terminal in Bushehr with domestic and international companies are among domestic manufacturers are among a day in revenue. These projects would be Province to the Jask area in the coasts of Sea ongoingfield has forincreased the development to 115,000 of b/d. West Our Karoun talks launched in the seven provinces of Khuzestan, of Oman. That would make Jask the second signed for enhanced domestic output. So far, Bushehr, Fars, Hormuzgan, Kermanshah, Ilam largest crude oil terminal in Iran and Jask details. But as a general rule, I have to say that 10the packages most significant have been objectives signed withof contracts domestic and Kohguiluyeh Boyer Ahmad. Therefore, will take up strategic significance. That wefields. will Due be makingto the sanctions, maximum I can’tuse of reveal domestic any companies while 8 tenders have been launched. next calendar year we will no longer focus would also lead to decentralization in the We plan to hold signing ceremonies for these on the tender bids, rather than that we will Iranian oil export terminals, which would in welcome interaction with the global community eight contracts. One of these contracts is for concentrate on the implementation of projects turn guarantee sustained oil exports from Iran is currently becausepotential in for light developing of interaction our oil we fields. will beWe also Iran Offshore Oil Company (IOOC)-run Resalat because these projects would require two Iran. This project, which is among our major recovering witnessing transfer of technical knowhow. years, and we have no financial problems ones at NIOC, involves nearly 30 contracts In other words, we are for interaction with (NISOC)-run Siah Makan, Zilaei, Ramin, either. including consulting, EPC and supervision about 350,000 international companies while relying on Mansourabad,field and National Maroun Iranian 14, South Ahvaz Oil 14, Company Maroun 2 on pipeline construction. Most of them have b/d of crude domestic capabilities. already been signed and construction has oil from West are expected to be signed by the end of the At what stage is the Goureh-Jask started. The first phase is planned to become Karoun fields, currentand Maroun calendar 5 fields. year. The remaining packages project now? operational through exports of first cargoes Among the which would Alongside contract negotiations for the At the height of talks with international Among the major projects prioritized by March 2021. A major part of this project major projects development of oil fields, NIOC has signed companies, we decided to design enhanced by Petroleum Ministry and NIOC is is maximum use of the capability of domestic reach 400,000 prioritized by agreements with domestic contractors to recovery projects prior to the signature of construction of the Goureh-Jask pipeline, manufacturers which have agreed to supply Petroleum b/d by March increase oil production. Do you think we IPC agreements. The objective was first to as well as the crude oil export terminal in pipes, pumps and storage tanks. Ministry 2020 will witness signing more agreements in engage domestic manufacturers in another and NIOC is construction of the Goureh- Jask pipeline, as well as the crude oil export terminal in Jask Port

14 15 contract September 2019 Issue No.87 monthly contract

Iran’s petroleum industry. in 2021. “By the end of the South Pars. After unilateral withdrawal [current] administration, there He added: “One of the from the 2015 Iran nuclear objectives of the SP11 deal in 2018 and the development agreement which subsequent re-imposition of said.would be no field without clear was signed with [France’s] sanctions, the US has sought in contractorZangeneh alsoand financing,”said that he Total and the Chinese party vain to zero Iran’s oil exports. development of Farzad B gas was to avoid pressure fall-off. Zangeneh said the agreement Such thing has not been seen would be the start of added that despite sanctions, in the region and we wanted to development of the eastern Iranfield wouldwould trystart to thisgo ahead year. He learn after its implementation with the development of Phase in Iran.” minister said the agreement 11 of South Pars. Zangeneh said: “But now waspart similarof the South to Open Pars CAPEX field.The or “We are making efforts to that sanctions have not let us Iran Petroleum Contract (IPC) agreements where a tender bid development onstream” by is held for choosing general 2021,bring thehe said.first phase of SP11 designinggo ahead, Iand ask manufacturing our fiends to contractor for the project and The minister said plans for the equipment.start it and findWe shouldremedies not for give then fees are set under the development of jointly-owned up.” supervision of National Iranian Forouzan, West Karoun and He said: “We should do Oil Company (NIOC). whatever needed for Zangeneh said the agreement and West Paydar, had been upgrading the level of national Ilam fields, including Aban technology and focus on Development Fund of Iran internationally acceptable (NDFI)would be credit. financed by National finalized. design.” He said without NDFI’s contribution, Iran could not agreement was important, have been successful in South addingZangeneh that said Petropars the Belal was field the Pars and West Karoun projects. best Iranian Exploration and He added that Bank Tejarat Production (E&P) company $440bn Deal Signed for Belal Development and Bank Mellat had served as currently operating in Iran. agent banks. Zangeneh said: He added that Petropars had Zangeneh referred to US “Sanctions have not sanctions on Iran, saying: “We stopped Iran’s petroleum don’t intend to say what we fulfilledZangeneh its saidcommitments compliance in Zangeneh: industry. Should they terms of time and finance. have done, but we have shown want to stop us, we with fees and scheduling was everyone that the US could not will exhaust our creative important in assessing the zero Iran’s oil exports.” power to overcome company’s work, adding that Sanctions Fail to Stop Iran “The sanctions have not halted Petropars had shown good problems.” The investment made by Iran’s Petroleum Ministry during the past seven Iran’s petroleum industry. We performance. years in upgrading refineries has lifted Iran’s gasoline production to 110 ml/d, are active. We are alive,” he putting an end to Iran’s dependence on gasoline imports. The quantitative and said. Zangeneh said Iran was not Long-Term Solution to qualitative increase in Iranian oil products has attracted foreign buyers to bid Zangeneh said Iran was lagging behind co-owner Qatar Pressure Falloff for the gasoline sold on the floor of the Iran Energy Exchange (IRENEX). Therefore, some of seeking to interact with the in terms of gas recovery rate Mohammad Meshkinfam, CEO products sold on IRENEX floor have been destined to regional states. Iran’s private sector world, “but if they intend to from South Pars. of POGC, said a new approach hopes to be able to export more gasoline in future trading. The gasoline trading on the pin us down, they cannot stop “We are even ahead in daily international ring of IRENEX has won a prosperous market and launched a trend for the us and we will try our best to recovery. So is the case for Pars development over 25 successful export of gasoline to regional markets. overcome problems.” West Karoun. Therefore, yearshad been based defined on the for sustainable the South despite all sanctions imposed supply of at least 75% of gas $440 million CAPEX rich gas over 34 months. The said: “Sanctions have not Joint Fields Finalized on us, the train of petroleum which is needed. agreement for the stopped Iran’s petroleum Zangeneh said he had industry development has not “After full development of A development of the would be transmitted to the industry. Should they want to submitted a plan to the stopped and the Petroleum gas extracted from the field stop us, we will exhaust our Ministry’s performance is ways to preserve the output between Pars Oil and Gas giant offshore South Pars gas creative power to overcome of cases of all oil and gas a clear symbol of resilient level.South The Pars, pressure we need falloff to find has CompanyBelal gas field (POGC) was and signed refinery of Phase 12 of the problems.” parliament for the finalization economy,” he said. so far not been very tangible in Petropars. The buyback deal Addressing the signing This agreement has been with neighboring countries Zangeneh said certain would target the production ceremony,field for processing. Iran’s Minister of signed against the backdrop beforefields which the end Iran of sharesthe term of measures had been taken for would be falling 28 mcm/d of 500 mcf/d (14 mcm/d) of Petroleum Bijan Zangeneh of the US tough sanctions on the current administration countering production loss in this field, but the field’s output 16 within five years,” he said. 17 contract September 2019 Issue No.87 monthly contract

Reza Dehqan, Meshkinfam deputy CEO said South of NIOC for Pars accounts development for 8% of the and world gas engineering, reserves and said about made 70% of up about 10% equipment of Iran’s gas used in deposits. “We the Belal field have so far development extracted 10% had been of the South provided by Pars in-place Iranian Meshkinfam said long-term K1 layer, drilling 60 new wells production loss. extracted 10% of the South of sanctions, development of gas reserves, manufacturers and short-term solutions in the current block limits Geographically speaking, he Pars in-place gas reserves, the petroleum industry has which is had been envisaged for the and well workover are among Southrefinery, Pars tops Reservoir the agenda.” said, one-third of the South which is valued at $270 continued.” maintenance of production in other measures that would Pressure Falloff Pars gas field belongs to billion,” he said. valued at South Pars. help preserve output in South Meshkinfam said that long- Iran while their recovery is $270 “Carrying out acid job and Pars. “One well has been term solutions required now equal. “In other words, Sanctions, Nothing New in“Therefore, two years,” all said joint Dehqan. fields perforation, workover of worked over and four more concentration on the blocks we are recovering the same Reza Dehqan, deputy CEO Heare added:expected “Of to course, be finalized more billion. wells, drilling new wells, would be worked over by the surrounding the South Pars volume of gas as Qatar from of NIOC for development and laying out new pipelines end of the year,” he said. field. “With the signature of one-third of the field. In other and engineering, said about development.” between platforms are among Meshkinfam also said the agreement for the Belal words, our recovery has now 70% of equipment used in jointDehqan fields said: are “We currently favor under short-term solutions. For this pipelines built between gas field development, we can exceeded that of Qatar,” he cooperation with the world, purpose, 11 wells have been offshore platforms had helped say that long-term solutions said. had been provided by Iranian but should conditions go ahead acidized and 11 more would cut gas pressure falloff by have already begun,” he Meshkinfam said South manufacturers.the Belal field development differently we will handle be acidized up to the end of 50%. He said: “Based on this added. Pars accounts for 8% of the He said that sanctions everything based on domestic the current calendar year,” scenario, laying pipelines Meshkinfam said Belal gas world gas reserves and made were nothing new for Iran’s potential.” he added. Meshkinfam said between platforms and also up about 10% of Iran’s gas petroleum industry, adding: perforation of 11 wells in the from platforms to the onshore which can help compensate deposits. “We have so far “But despite the repetition field had a 500mcf/d capacity, 18 19 September 2019 Issue No.87 report monthly report

the areas lying north of transmission of gas from development under a South Pars are among fields this field to Platform 12C buyback deal. The field Why Belal Gas Field focused upon by POGC for and subsequently to South started production in 2002. It development in order to Pars refineries as the first is currently supplying about prevent a pressure fall-off in development phase of the 10,000 b/d of crude oil. Gas Development Matters South Pars in coming years. eastern part of the gas was proven to exist in the Following drilling of the first exploration well is forecast to meet 75% of field was endorsed gas layers of the Belal field in in the South Pars gas field in 1991 and once Iran’s gas needs. As the South South Pars Eastward by the Board of 2004 following the drilling the extent of the giant reservoir was known Pars development nears Development Directors of of the first gas exploration through analysis of seismic data and the drilling finalization, preserving the Given the surplus processing National Iranian well by Exploration of subsequent appraisal wells, the development of this field output level remains POGC’s and refining capacity in Oil Company Directorate of NIOC. Later got under way in 1997 by Pars Oil and Gas Company (POGC) top priority. Therefore, the Phase 12 of South Pars as (NIOC). In on, plans were made for with a view to achieving output level of 29 bcf/d of rich gas. most significant measure the easternmost reservoir parallel with the developing the gas layers To that end, the South Pars field was divided into phases. Iran in this regard has been block and the largest phase development of this field. The gas in the managed to make first gas recovery from South Pars in 2002. complementary perforation development project, POGC of the Belal gas field is rich in condensate. and acidizing of production prioritized adoption of a field, assessment Under the development plan ow 22 years on, 290 administration of Hassan wells. For instance, these comprehensive development of other for the field, the output is wells are operational Rouhani took office in 2013, operations have increased plan for the eastern section reservoir targets forecast to reach 500 mcf/d Nwhile 31 platforms Iran accelerated efforts to the sustainable production of the South Pars field in including the of gas and 15,000 b/d of have been launched at develop this field which period for one to five years. order to make optimal and Yalda structure condensate. The objective the distance of 90-110 it shares with Qatar. As Meantime, POGC has maximum use of existing is also under way of this buyback agreement kilometers off Assaluyeh a result, the South Pars embarked on other installations. by POGC. would be to produce 500 and Kangan. In order to gas production capacity measures undertaken for The reservoir structures of mcf/d (14 mcm/d) of rich carry rich gas from these has doubled since 2013. the preservation of South Yalda and Belal fields were Belal gas over 34 months. The platforms, 3,000 kilometers Accumulated production Pars output at 800 mcm/d identified as new targets Development gas extracted from Belal of offshore pipeline has been from the South Pars field and optimal use of existing with a high likelihood of The oil layers would be carried to the SP12 laid out. In parallel with the has reached 1,450 bcm potential and installations in hydrocarbon content. Given of Belal field refinery for processing. development of this offshore valued at $260 billion. In coming years. In parallel with the connection between were discovered Petropars has been field, 13 gas refineries were coming years, South Pars identifying new reservoirs Belal and South Pars and in 1967. In awarded the Belal gas field also under construction adjacent to South Pars, infill the availability of extra late 1990s, development project. Under by POGC. As wells have been drilled, more processing capacity in the oil layers the agreement, Petropars soon as the subsea pipelines have been Platform C of SP12 with were awarded would be charged with installed, areas outside the a production capacity of to France’s project leadership, contract phases have been developed, 1 bcf/d, POGC’s proposal Total for management, reservoir and gas compressors have for recovery from Belal studies, drilling design been installed. gas field and and drawing up tender Belal, Yalda and documents. Petropars has agreed to make maximum use of Iranian contractors and manufacturers in the development project. Under the agreement, Petropars is to drill eight wells, install a wellhead jacket, install a topdrive with production capacity of 500 mcf/d of rich gas and build 20 kilometers of subsea pipeline. Mohammad Meshkinfam, CEO of POGC, has said National Development Fund of Iran would be tapped for financing the Belal project. Petropars is recognized as general contractor in this project. 20 21 contract September 2019 Issue No.87 monthly contract

“We are largely Zangeneh importing said:“Domestic rotary manufacturers machinery and could not make we have 5MW pumps. to work on the That is why we manufacturing decided to of this halve this machinery in “Domestic manufacturers was to assign operation or 10 items widely needed by the capacity so that Iran,”Zangeneh could not make 5MW pumps. repair work to manufacturing petroleum industry. domestic Iranian Firms to Make Electropumps That is why we decided to companies. “That would have a He added: “In the new said halve this capacity so that positive impact on the quality agreements signed it has been manufacturers domestic manufacturers of manufacturing, future expressly referred to the type would be able for Goureh-Jask Pipeline would be able to handle the costs and the availability of commodities that should be to handle the affair. It was decided that they installations,” he said. supplied domestically.” Three agreements, worth €48 million, for manufacturing 50 pumps to be technologically design such The minister stressed the affair used in the Goureh-Jask pipeline have been signed between Iran’s Petroleum equipment so that they would Ministry of Petroleum’s Supporting Domestic Engineering and Development Company (PEDEC) on one side, and the Iran be manufactured domestically support for domestic Manufacturers Industrial Pumps Company, Pumpiran and PETCO on the other. These agreements are and domestic companies manufacturers, saying rotary Massoud Karbasian, CEO of part of a project for carrying crude oil from Goureh to Jask Port. would receive money,” he said. machinery was one of the National Iranian Oil Company The minister said: “In major equipment in the (NIOC) said the agreements these agreements, pump petroleum industry. signed in Iran contained nce this pipeline terminal. and industry, adding: “These manufacturing companies “We are largely importing a clause expressing to the becomes operational, Iran’s Minister of Petroleum pumps are the largest would be operating pumping rotary machinery and we have necessity of utilizing the OIran would be able Bijan Zangeneh, addressing the manufactured in Iran.” to work on the manufacturing domestic manufacturers’ to carry 1 mb/d of crude oil signing ceremony, said these Zangeneh said the initial and the companies will be of this machinery in Iran,” he potential. He said: “The pumps were domestically capacity of these pumps was remuneratedstations for at based least fiveon each years said. petroleum industry’s support southeastern coasts in order 5MW, adding that even now barrel of oil they would Zangeneh said his ministry for domestic potential is not tofrom facilitate oil fields crude in southwest oil exports to time. He said it would lead that the capacity has been transfer.” Zangeneh said the was seriously following up on stoppable.” from the prospective Jask tomanufactured prosperity in for production the first Petroleum Ministry’s policy the domestic manufacturing of He added that the Goureh-Jask 22 halved, the figure is good. 23 September 2019 Issue No.87 monthly contract

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IRANPLASTe x v i c s l u

Mehdi 650 Farajpour, CEO of IIPC, project would improve the Goureh to Jask. “Once, foreign companies Companies said Iran’s downstream sector and help He said: “I hope that domestic were competing in Iran petroleum develop the Makran area. companies involved in this to receive order for “This project has various project would respond to manufacturing pump,” industry the petroleum industry’s he said. “But today the at Iran Plast had reached pumping stations with a trust in the best possible way conditions have improved. The 13th edition of Iran Plast opened contractsections includingworth €143 five million, taking into account the three However, the number of pump self-sufficiency construction of 1,000 km of principles of quality, cost and manufacturers in Iran is low on 22 September 2019 in Tehran with under the pipeline, 20 500,000-barrel time.” and requires more players in 605 Iranian and foreign companies aegis of storage tanks for storing this sector.” in attendance. That was against the oil, and building a big oil Pump Market Potential Mohammad Hossein Heyhat, backdrop of tough US sanctions against support by terminal in Jask. All will be Mehdi Farajpour, CEO of IIPC, CEO of Pumpiran, said officials, accomplished using domestic said Iran’s petroleum industry the company had started Iran’s petroleum industry, re-imposed capabilities,” said Karbasian. preparatory work for following Washington’s withdrawal from particularly He said that domestic under the aegis of support by designing pumps. the 2015 Iran nuclear accord. Addressing Minister manufacturing of slabs in had reached self-sufficiency “As the Petroleum Ministry the inaugural ceremony, Iran’s Zangeneh. Iran had saved the country Zangeneh. has trusted us, we promise €300 million. Karbasian officials,He said thatparticularly Iranian engineersMinister Petroleum Minister Bijan Zangeneh said said Mobarakeh Steel Mill and technicians were able quality,” he said. Based on the petrochemical products would be worth was producing 30,000 to handle each and every agreementsto fill the order signed at perfect for pump $25 billion by 2021. tonnes a month of slabs to part of the job - designing, manufacturing, IIPC would be converted into sheets engineering, modeling, provide 20 electropumps for for pipe building. He said assembling, delivery and €19 million, Pumpiran would 20 kilometers of pipes had operation- with regard to the provide 20 electropumps for been delivered to Petroleum pumps required in the oil, €19 million and PETCO would Ministry. gas, petrochemical and power provide 10 electropumps for Touraj Dehqani, CEO of plant projects. Massoud Baqer €10 million. PEDEC, said contractors were Tajrishi, CEO of PETCO, said The Goureh-Jask project is involved in 50 sectors for global pump trade was worth forecast to become operational the transfer of crude oil from more than $30 billion. by March 2021. 24 25 September 2019 Issue No.87 monthly

which is 1 million boe/d. “The feedstock receipt capacity of Zangeneh: petrochemical plants would be 74 million tons, 1.7 mboe/d, by 2025,” he said. Mohammadi said gas constituted 77% Iran Petchem to of petrochemical plants’ feedstock, while the remaining Hit $25bn in 2021 23% was liquid feedstock. 86% of gas and 14% of liquid The 13th edition of Iran Plast opened on 22 September feedstockThe figures by would 2025. reach Regarding 2019 in Tehran with 605 Iranian and foreign companies diversity in petrochemical in attendance. That was against the backdrop of tough US feedstock, he said natural sanctions against Iran’s petroleum industry, re-imposed gas had a 27% share, ethane following Washington’s withdrawal from the 2015 Iran 14%, rich gas 17%, gas liquids nuclear accord. Addressing the inaugural ceremony, Iran’s 23%, kerosene 1%, NGL 10%, Petroleum Minister Bijan Zangeneh said petrochemical naphtha 7% and platformate products would be worth $25 billion by 2021. He said that 1%. Mohammadi said Iran’s petrochemical industry was on the frontline of an exporting more natural gas economic war launched against Iran. Zangeneh said the was impossible, adding that petrochemical sector is instrumental in bringing back with petrochemical industry revenue from exports into Iran’s economic cycle. The minister prosperity, natural gas may be highlighted development of the petrochemical industry in $5 billion in feedstock to zero and will turn into the petrochemical industry converted to generate value. recent years, saying Iran’s petrochemical revenue stood at $1 downstream petrochemical national wealth without development. The more we He said that despite diversity billion in 1997, and the figure has now increased to over $16 units, $2 billion of which causing any environmental diversify products in the in products, the petrochemical billion. He said: “In fact, the endeavor by the government, the having gone to petrochemical pollution.” He said one reason upstream sector, the more plants fed on liquid feedstock Petroleum Ministry and National Petrochemical Company plants. diverse products we will had a weaker economy. He (NPC) helped implement such projects with international projects was international have in the downstream added that the solution to this cooperation.” He added that efforts were now under way for No-Flaring Policy sanctions.for the delay “These in no-flaring sanctions sector.” Mohammadi said problem was to use combined the completion of half-finished projects. Zangeneh said South Pars are anti-human and anti- the petrochemical industry feedstock. He said 2004 saw projects, NGL 3100, NGL 3200, environmental. They do not development involved the the biggest investment in the NGL Kharg and the Bid-Boland let us import the machinery four sectors of feedstock, petrochemical sector, adding: Petchem Output Capacity downstream chain and required for prevention of investment, technology “For each 1 million tonnes of to Hit 130mt diversifying feedstock and in providing feedstock for the burning of sulfur or the and market. He added: petrochemical production, Zangeneh touched on products like propylene. petrochemicalgas refinery were plants. instrumental The Bid- apparatuses which we need “Development will materialize $800 million was invested.” the Petroleum Ministry’s Furthermore, in this jump, the when apart from production, Mohammadi said that plan for the third jump in production capacity will go will be producing 3.4 million gas,” he said. “That is while market conditions are taken catalysts were a major petrochemical production, the beyond 130 million tonnes, tonnesBoland agas year, refinery NGL 3200 project 8 wefor refininghave purchased substandard all these into consideration.” pillar of production in the worth $37 billion.” million tons a year, NGL 3100 apparatuses and paid for Mohammadi said $53 billion petrochemical industry. He “The second jump started in Zangeneh said since 2013 900,000 tons a year, NGL them. Some of them have been had been invested in 56 added: “The country needs 2013first of and which will started be complete in 1997. Kharg 2.4 million tons a year, manufactured, but we are not petrochemical plants, adding: $450 million of catalysts and by 2021. Therefore, Iran’s of President Hassan Rouhani authorized to import them.” 40% of catalysts in the country petrochemical production when the first administration million tons a year and Kangan billion with 83 new projects are used in the petrochemical capacity will exceed 100 $5.2 billion had become PetrochemicalParsian Sepehr Plant refinery 3.6 million3.3 $ 93bn Investment in becoming“This figure operational will reach $70by 2021 industry.” million tons, while products operational.took office, 15 He projects added that worth 27 tons a year. The minister Petchem Sector and $93 billion by 2025.” Iran Plast is hosting 570 would be worth more than projects would also become Behzad Mohammadi, CEO He said Iran’s petrochemical Iranian and 35 foreign $25 billion based on the 2013 operational by March 2022. under way by the Persian of National Petrochemical industry received 33 million companies from Iraq, prices,” he said. The minister said one key Gulfsaid Petrochemicalflare gas gathering Industries was Company (NPC) said Iran tons of feedstock from oil and Afghanistan, Turkey, Zangeneh said the third policy of the Petroleum Company (PGPIC) and Maroun Plast was the most important Azerbaijan, Pakistan, Vietnam, jump is set to materialize Ministry was to quit selling Petrochemical Plant. Zangeneh plastic industry event in which is 650,000 boe/d. Armenia, Kenya, India and by March 2026, adding: “In raw materials and instead to said: “After the implementation Iran and the Middle East. gasAccording refineries to Mohammadi,and NGL plants, Tunisia, as well as individual the third jump, the Ministry increase the petrochemical of NGL projects, startup of He said: “Development of the feedstock receipt capacity businesspeople from Italy, of Petroleum insists on production capacity. He said Bid-Boland and gas gathering the downstream industry of 83 petrochemical plants Ukraine, China, Romania, his ministry had allocated is directly proportionate to would reach 62 million tonnes, Russia, Syria and Lebanon.

the diversification of the projects, flaring will reach 26 27 September 2019 Issue No.87 monthly

of feedstock supply should be $40bn Investment also taken into consideration in parallel with development. He added that six projects for petrochemical feedstock were under operation, three of which are LNG. These six feedstock supply projects would come online by 2023 to increase the petrochemical Eyed in feedstock by 15 million Petchem Sector tonnes. Bijan Zangeneh, Iran’s petroleum minister, recently said Iran 350 Products would soon see its petrochemical output cross 100 million Touching on the diversity tonnes a year and then 140 mt/yr. of petrochemical products in Iran, Mohammadi said: “Currently, 44 chemicals, ehzad Mohammadi, 18 polymer products with CEO of National in production capacity that 300 various grades, totaling Petrochemical iswitnessed why Iran’s a significant petrochemical jump 350, are produced in the Company (NPC), said production reached 57 million petrochemical industry, which BIran would need $23 billion tonnes a year in 2013. Iran shows the resilience of the for its petrochemical sector is currently producing 31 petrochemical industry and to experience a third jump prosperity in the downstream in production. Iran’s relative petrochemical plants, 22.5 respectively need $17 billion and qualitative development industry.” He said the focus advantage in hydrocarbon mtmt/yr of which of final is products exported. at The 56 petrochemical plants in Iran and $23 billion in investment. of the industry. We have been of activities were on the resources and the Islamic rest is consumed domestically. wouldis fulfilled, rise thefrom number 56 to 83. of He added that currently $40 moving in this direction with acquisition of technical Republic of Iran’s policy of Mohammadi said Iran Completing petrochemical billion was being invested more sensitivity and we would knowhow to produce widely- not selling crude oil and started the second jump in projects for the second jump in the petrochemical sector, develop the industry more used products and catalysts. converting it to products of petrochemical production in in the petrochemical sector up $13 billion of which has been intelligently based on the “Of a total 40 catalyst higher value-added have led 2013, adding it would continue to 2021 would need about $5 provided by domestic and availability of feedstock.” groups, 16 groups have the Petroleum Ministry to up to 2021. “In the second billion in investment. been produced domestically focus on the development of jump, the petrochemical planning for boosting the 33mt Feedstock while 9 others are in the petrochemical industry and production capacity would Petchem Output to Earn petrochemicalforeign finance. production Alongside Iran’s petrochemical manufacturing process up activate the downstream reach 100 million tonnes to $37bn capacity in Iran, 40 licenses industry is currently receiving to 2021. We hope that we sector with a view to earn Iran $25 billion,” he said. Mohammadi said the third have been issued for about 33 million tonnes of would have manufactured increasing the petrochemical The Petroleum Ministry would jump in the petrochemical petrochemical projects, feedstock from oil and gas 25 groups by that time,” said share of Iran’s economy. At need to bring 27 petrochemical sector would materialize which are currently in the Mohammadi. He stressed the projects into operation by between 2022 and 2025. He stage of providing capital Of this, 25 million tonnes is need for the qualitative and of Iran’s non-oil exports 2021 in order to realize the said: “Twenty-six projects and technology. In case these suppliedrefineries directly, and NGL while units. the quantitative development of comespresent, from a significant petrochemical share second jump. During next with various levels of progress projects come on-stream by rest pertains to fuel. That is the petrochemical industry exports. There are currently calendar year, the Kaveh would come online during that 2025, Iran’s petrochemical 650,000 boe/d. Mohammadi in parallel, saying: “We 54 petrochemical production time and Iran’s petrochemical production capacity would said petrochemical products should know global markets plants and two service- methanol and Takht-e Jamshid production capacity would go beyond projections for the are used in the industry, and move in such a way providing plans operating in PVRmethanol, projects Ilam would olefin, come Bushehr reach 133 million tonnes with second jump. Mohammadi adding: “Currently, 31 million to make good progress in Iran with a total production online. The calendar year 1399 a total value of $37 billion by said NPC would be tough exports and prosperity in capacity of 65.8 million (starting March 2021) would early 2026. Mohammadi has with issuing licenses for manufactured to be supplied the downstream industry.” tonnes, which have earned be key for Iran’s petrochemical said that realization of this petrochemical projects. He ontonnes domestic of final and products foreign are Mohammadi said balanced Iran $17 billion. Iran’s industry as 16 projects would objective would make the added: “Only projects in markets. About 22.5 million development would not petroleum minister recently come online. The year after, petrochemical industry one the value chain would be tonnes is exported and 8.5 happen overnight i.e. it would spoke about a third jump seven more petrochemical of Iran’s key economic sectors granted license. In fact, the million tonnes is used in require planning, adding: in the petrochemical sector. projects come online. behind oil. He said the second petrochemical industry is domestic markets, 5 million “Sustainable development of Between 1996 and 2006, Therefore, as the second jump and the third jump in the tasked with drawing up a tonnes of which on the stock the petrochemical industry is Iran’s petrochemical sector in the petrochemical sector petrochemical sector would roadmap for the quantitative market.” He said that the issue eyed in the third jump.” 28 29 news September 2019 Issue No.87 monthly news

companies, they were happy with their presence in Iran. The sales manager of a B2B Talks at Chinese company said Iran’s downstream petrochemical sector was well- developed, adding that necessary raw materials existed in Iran for a variety of products. Iran Plast “However, manufacturing needs advanced equipment, One of the key issues at Iran Plast was the holding of Business and we can provide Iranian 2 Business (B2B) meetings between Iranian polymer manufacturers with companies and foreign delegates. Throughout the exhibition, necessary equipment,” he meetings were held between Iranian companies on one side said. and delegates from commercial companies from Vietnam, Regarding further the Republic of Azerbaijan, Afghanistan, Armenia, China, the cooperation with Iranian Kurdistan Regional Government (KRG), Iraq, and Kenya. manufacturers, he said: “Prior to presence at Iran Plast, three agreements trade delegation request for cooperation. were signed between from Azerbaijan, this company and Iranian A specializing in PP Raw Materials companies for the purchase the manufacturing of The Iraqi business of machinery producing pipes and doors and delegation with 13 protective covers.” windows for buying raw businesspeople from the “That is why with the materials and supply of cities of Najaf, Karbala, objective of attracting more factory equipment, held Divaniya and Ammara was Iranian manufacturers and eight rounds of talks with among the largest business products was lower.” material from European signing agreements for Iranian companies. A KRG delegations attending B2B He touched on the head of the Union of KRG companies and today I was sales and cooperation, I 22-member delegation held talks. The main need of this Exporters and Importers, shocked to see progress attended the 13th Iran Plast talks with seven Iranian delegation comprised raw for Iranian products in on the second day of Iran in Iran’s petrochemical exhibition,” he said. companies on foodstuff, materials for polypropylene, Iraq,insufficient saying: advertisement “Iranian Plast. Mohammadi stressed industry,” he said. He added: “Although agriculture products and granule and masterbatch polymer products are rarely the Iranian petrochemical Favazi said Iran’s household appliances. One and petrochemical advertised in Iraqi media. sector’s readiness to expand petrochemical industry are attending Iran Plast round of these talks made equipment in the upstream Therefore, I suggest that cooperation with KRG was advanced, adding: exhibition,it is the first the time clear we point industry, sacks, garbage a permanent exhibition companies. Touching on “We have had good talks is the development of The representative of plastic bags, water storage of polymer products be deep-seated ties between at this exhibition with the downstream petrochemical Vietnamsignificant held progress. seven rounds tanks, disposable tablecloth established along the Iran and KRG, he said: companies involved in PVC industry and the diversity of of talks with Iranian and plastic baskets in the Iran-Iraq border in order “Iran’s petrochemical pipe manufacturing. We products in Iran.” polymer industry actors to downstream products. to allow for more trade industry is growing and will sign agreement after launch a factory involved Ali Helal Kazem Mandil, exchanges and facilitate our development at a high considering the situation.” in the manufacturing of director of international access to Iranian plastic pace. We are ready for Vietnam for Trade Ties downstream petrochemical relations at the Iraqi products.” cooperation and assistance.” Agreement with Chinese products. Chamber of Commerce, He said: “Iran needs Iraq’s Abdurrahman also gave Sanctions have caused The project manager of a The delegates from said nearly 30 rounds of market and Iraq prefers a positive assessment of restrictions to the presence Vietnamese company was Afghanistan, involved in talks were held during the purchasing plastic products favorable trade between of foreign companies at attending the Iran Plast producing mineral water business forum. “This is the from Iran, rather than Iran and KRG, stressing Iran Plast. Some of them bottles, held 11 rounds third time that I am heading Turkey and Saudi Arabia.” broader ties between preferred to continue their “We are gathering of talks with Iranian the Iraqi business delegation Iranian and KRG companies. cooperation with Iran in necessaryexhibition informationfor the first time. companies. They gave an at Iran Plast. Compared with Iran-KRG Cooperation Khaled al-Favazi, CEO of a secret. However, there were to launch the production upbeat assessment of their previous rounds, our focus Behzad Mohammadi, CEO water treatment company some others that preferred line in the downstream talks. Kenya’s delegates also has been mainly on raw of National Petrochemical from Iraq, said it was his to attend Iran Plast for petrochemical sector,” he held talks with four Iranian materials, but the diversity Company (NPC), met with said. He said his objective companies raising the Mostafa Abdurrahman, “I used to purchase their talks with Iranian was to use the capability first visit to Iran Plast. the first time. Based on of upstream and final 30 31 news September 2019 Issue No.87 monthly news

exporting the machinery to neighboring countries including Armenia and Iraq.” “In addition to Iran, we have sought to cover neighboring countries and invite them for cooperation,” he said. He noted that Iranian and European products were comparable in terms of price and quality. “At this exhibition, two agreements were signed with Armenia and three others with Iraq, valued totally at IRR 8,000 million,” he said. “Talks have been also held with Pakistan, and we have different views on only on terms of payment. We have also held talks with Turkmenistan and Kazakhstan.”

Agreement for Export to Iraq Sanaz Baygani, chairman of Kian Polymer Engineering Company, said the company had reached agreement with an Iraqi businessman. “Every year, we witnessed normal visitors who demanded our products, and experience of Iranian companies in this sector in but this time we held talks manufacturers. “We intend the future,” he said. with Afghan and Azeri to pave the ground for businesspeople and we also future trade ties with Iran Iranian Products, Best managed to sign an MOU and to get to know Iranian Choice with an Iraqi businessman products by attending Iran Mohammad Nassim for selling products,” she Plast,” he said. He added Ahmad Zehi, manufacturer bottle producers,” he said. Ahmad Zehi also the previous editions. A said. She added: “Of course that establishing relations of mineral water in Ahmad Zehi touched on highlighted the high quality number of these companies, the agreement would set with Iranian manufacturers Afghanistan, said his the production capacity of Iranian products, saying: while not denying the the precedent for our would be for more company needed PET of his own factory, saying: “I believe that purchasing impact of sanctions on future cooperation. Given “Our production capacity is Iranian products would their economic activities, the participants’ strong “That is why after time that for making PET 12,000 half-liter bottles and be the best choice for the said they continued to presence at this exhibition, assessingprofitability. circumstances, bottlesbottles. for “This mineral is the water; first I 6,000 1.5-liter bottles a day. buyers of plastic industry.” export products to Iran’s we hope that export to Iraq we will make up our mind. plan to use Iranian bottles. We have always bought our neighboring countries. would continue.” However, given the high So far, 11 rounds of talks bottles from Iran through PET Machinery Export to They said they had struck Baygani said: “Our products potential of actors of the have been held with the dealers, which affected the Armenia &Iraq good deals for exporting were distributed only in petrochemical industry in Iranian manufacturers of cost price of the product. The number of Iranian their products. The Iraq’s Erbil in the past, but Iran and the accessibility bottle and one round of But now we intend to companies involved in manager of one of these this time this agreement of raw materials, I hope to these talks is expected to directly enter into talks with the plastic industry was companies said: “In addition would lead to the see cooperation between lead to a memorandum of the manufacturers of bottle higher at this latest round to supplying domestic distribution of our products Iranian and Vietnamese cooperation with Iranian and embark on imports.” of Iran Plast than that of needs, we have started in entire Iraq.” 32 33 news September 2019 Issue No.87 monthly news Diverse Markets

Petchemfor Iran Products The diversity in Iran’s petrochemical products market and investment made in this sector over the past 20 years have minimized the impact of US sanctions on Iran’s petrochemical exports. According to data collected during Iran Plast exhibition, petrochemical plants across Iran have not seen any halt in their exports, rather than that they have seen diverse markets for their products.

IBC Tank Grade Made in of the product in Iran stood Iran at 50,000 tonnes. Amir-Hossein Bahreini, Bahreini underlined its CEO of Arya Sasol Polymer high attractiveness in global Company, on the sidelines markets, adding: “With the of the 13th annual Iran Plast supply of this product, the unveiled a new grade of IBC exported products mix will tank production, known as become more diverse.” HBM4261A. He said Arya Sasol earned He said: “The specialized more than IRR 32,000 billion and new high-density of a new polyethylene products and markets is to develop the market in Saeedi said the Jam polyethylene grade with a 58,000 billion of products unit with a $300 billion was a major strategy for order to develop new grades new catalyst was produced lastin net calendar profit after year. selling IRR investment for a capacity of upgrading the company. and markets,” he said. domestic potentialities. at Arya Sasol Polymer Co., Arya Sasol has a nominal 300,000 tonnes a year,” he He said the company was Saeedi said that one of “Wecompany primarily had benefited depend on from and the country no longer capacity of 1 million tonnes said, adding that the project effectively present in global the strategies pursued by the Jam Petrochemical depends on imports of this of ethylene, 600,000 tonnes was expected to become markets. He said that Jam the Jam Petrochemical capabilities and in the next product.” of low-density and high- operational by February company had recorded Plant was development of phase we will focus on He added that Arya Sasol density polyethylene and 2022. According to good domestic sales and products in the market. “We domestic partners.” He said about 100,000 tonnes of C3. Bahreini, once this project exports, adding: “Although seek to increase our market sanctions targeting Iran’s company to have produced Bahreini said over the past has become operational, we saw some uncontrollable share and production petrochemical industry thiswas productthe first inIranian compliance three years the company had Arya Sasol’s production developments like capacity and upgrade the were not welcome, but with international standards run at full capacity. capacity would hit 2 million quality of products.” they could also be of help on the industrial scale. Regarding future projects tonnes. Arya Sasol with a of polymer products and He said the Jam in the development of Regarding the features of by Arya Sasol, he said production capacity of 1.7 afluctuations decline in the in the price price of Petrochemical Plant was domestic plants. He said the product, Bahreini said: arrangements were under million tonnes of ethylene, these products in global manufacturing new projects since downstream sector “The new high-density C3 and polyethylene is markets, production plans to meet the needs of new customers were faced with polyethylene is used in planned 10% increase in the known as Iran’s polymer materialized in terms of customers. “Identifying new restrictions and challenges, manufacturing fuel tank for ethyleneway for the production final phase with of aan giant. amount and quality.” markets is another strategy efforts were under way to cars, high-quality plastic investment of $50 million by Saeedi said the company adopted the company.” resolve their problems. barrels and IBC tanks for Germany’s Linde. Diversity in Products and was exporting 35% to “Simultaneous Saeedi said: “based on carrying maximum one “In parallel with generating Market 40% of its products, our plans we intend to tonne of chemicals. All these more value-added and Mohammad Reza Saeedi, adding it was looking for and markets is planned to upgrade the status of the products have the same completing the value chain CEO of Jam Petrochemical development in the future. helpdiversification complete theof products value Jam petrochemical in the of products, operations have Company, also said that “One of the strategies in the chain in the downstream capital market and business He said that consumption started for the construction in our view diversity in Jam Petrochemical Plant and upstream sectors.” activities.” specifications as BASEL’s.” 34 35 news September 2019 Issue No.87 monthly news MOUs and Agreements Signed at Iran Plast On the sidelines of the 13th edition of Iran Plast, four memorandums and agreements were signed by participant companies for development of polyethylene terephthalate (PET) technology, manufacturing of polymer products, domestic production of raw materials used in industries and building a desulfurization unit at Ilam Petrochemical Plant.

PET Technology Tondguyan Petchem Co. Agreement The PET technology in Iran’s petrochemical development agreement industrywas of high due significance to the supply was signed between of special products. He said Petrochemical Research and the products of thecompany available at PRTC, adding: “We need to learn about underlined the high capacity Persian Gulf Holding’s policy Technology Company (PRTC) were unique. He said “The license for high-density the downstream industry’s of petrochemical industries of maximum utilization of and Shahid Tondguyan that Tondguyan Petchem polyethylene with a capacity needs and identify polymer in completing the value local knowhow and Iranian Petrochemical Co., while Co. sold all its products of 310,000 tonnes a year grades matching this chain, saying: “The MOU has licenses, this technology the agreement for the on domestic markets last was agreed upon after industry prior to activating been signed in order to help would be used in other development of technical calendar year, adding it negotiations with Tabriz the corresponding research NPC deepen the movement units, too.” He said that knowhow for high-density was planning for export. He Petrochemical Co.” Derafshi and technology system,” of domestic manufacturing.” implementation of the polyethylene production was touched on the necessity he said. Mohammadi said project saved €10 million in signed between Ali Pajoohan, of increasing diversity polymer product was being one objective sought at Desulfurization Plant addition to the development CEO of PRTC and Siavash in production, boosting manufacturedsaid it was the withfirst timelocal a Iran Plast was to establish The MOU on designing, of Iranian knowhow and job Derafshi, CEO of Tabriz quality and enhancing knowhow in Iran. He added: a communications channel engineering and equipment creation. Shapour Taqipour, Petrochemical Company. output, saying: “Cutting edge “Tabriz Petrochemical Co. between producers procurement, commodity CEO of Ilam Petrochemical Pajoohan referring technologies must be used plans to double its output of petrochemicals in and manufacturing, Co., said this project was to the PET technology for the optimization of the over four years.” the upstream sector installation and launch of agreement said: “Based on Tondguyan Petchem Co’s and consumers in the granulated sulfur recovery, “By implementing this the agreement, necessary units, and that is why this Raw Materials downstream sector. with a capacity of 8,815 project,environmentally the H2S which significant. was data has been extracted agreement was signed.” NPC also signed an MOU “Petrochemical upstream tonnes a year was signed expected to be carried to the while conditions have been with Iran’s Industrial and downstream industries between Ilam Petrochemical prepared for production Polymer Product Development and Renovation must have close ties and Co. and Nourhan Industries pipeline, will be eliminated in the demo unit of PRTC Agreement Organization (IDRO). The know each other’s needs,” based on the Claus process fromrefinery this with cycle, a 14-km-longwhich would and then the industrial Pajoohan said PRTC had agreement was signed by he added. Mohammadi and by using the technical be of great help to the plant of the product would worked for 15 years on CEOs of the companies for said about 15,000 savvy of Research Institute environment of the region,” be supplied.” He said that the technical knowhow for the purpose of domestic enterprises were active in of Petroleum Industry he said. Taqipour said: “By PRTC had the required heavy polyethylene, adding: supply of raw materials used the downstream sector. He (RIPI). Rasoul Ashrafzadeh, implementing this project, hardware and knowhow “This plant is now able to in various industries. Behzad added that the enterprises CEO of Iranian Investment for PET production. Ali- present technical savvy for Mohammadi, CEO of NPC, were receiving about 5 Petrochemical Group (IIPG) and sold. In addition to Mohammad Bosaqzadeh, this technology at different said the MOU was aimed million tonnes a year of said the technology was eliminatingthe H2S will a be threat solidified to the director of projects at capacities.” at enhancing downstream feedstock, which has created owned by RIPI. He added: environment, it would be a National Petrochemical He said all the required industry and giant industries 880,000 job opportunities. “After the implementation Company (NPC), said hardware and software was like car manufacturing. Baqer Ali, CEO of IDRO, of this project, in light of plant.” profitable product for the 36 37 interview September 2019 Issue No.87 monthly interview Ever since the first administration of President Hassan Rouhani took office until now, 11 phases of the giant offshore South Pars gas field have become operational. Iran’s gas production is forecast to increase 70 mcm/d in the current calendar year. Hassan Due to the Montazer Torbati, CEO of National Iranian Gas Company (NIGC), says Iran’s gas NIGC Chief: production would reach 900 mcm/d by 20 March 2020 (the end of Iran’s calendar year). approach which has been taken Iran Gas Output vis-à-vis the As new gas industry in to Hit 900mcm/d needed in the gas industry. I reiterate that we Iran’s technical and engineering capabilities South Pars recent years, don’t worry a lot for the sanctions and we are development Iran’s technical mainly seeking to develop technologies for development of gas networks and commodity phases become have significantly grown in terms of design, and engineering the gas industry. We have started talks in this supply. Iran is currently enjoying a good operational in regard, and we will soon start building such position in the region. However, I believe that capabilities the current year, have equipment. not only should the private sector be more engaged in gas trading, but also we have to we forecast significantly In an interview Iran’s share of global gas trade is think twice about government approaches for to have an grown in terms with “Iran Petroleum”, meager and NIGC also announced it exporting technical and engineering services extra 70 mcm/d he said US sanctions of design, had detailed plans for boosting Iran’s share and increasing our share of global gas trade. production in development of against Iran’s petroleum of gas trade. To what extent will sanctions Enjoying good potential for development industry, albeit effective, our production gas networks be effective? of technical, engineering and consulting had failed to bring Iran’s gas The sanctions might create problems for us knowledge, Iran’s private sector would be able capacity. and commodity flow to a halt. to break into some markets; however, it is to implement acceptable projects outside the Iran’s gas supply The full text of the interview is noteworthy that Iran sits atop 18% of total country. I believe that Iran’s private sector can production as follows: world gas. Nevertheless, global gas consumption build power plants and distribution network would reach is increasing. Iran’s neighboring countries overseas. The government had better sell gas 900 mcm/d. Negar Sadeqi provide the strategic commodities which are not have great potential to receive gas from Iran. to the private sector rather than selling gas domestically manufactured. Therefore, we have Therefore, we are lucky enough to develop to governments, and the private sector Iran has one of the largest gas asked knowledge-based companies to do so. our gas trade among our neighbors. Despite would break into markets in Iran’s transmission networks in the Middle Fortunately, we have made good breakthroughs all restrictions we are faced with, the Ministry neighboring countries. Diversity in East. The country’s gas production over this time. Therefore, in the commodity of Petroleum has taken effective steps in this the export market and seriousness in capacity has significantly increased as new supply and gas network equipment sector, I dare exporting technical and engineering development phases of the giant South exports. We have still great opportunities for services through the private sector Pars gas field have become operational. by the sanctions and the restrictions have not developingregard and weIran’s have gas recorded exports. goodYou must figures know in gas top NIGC agenda in coming years. We That is why 98% of Iran is connected to hinderedto firmly saythe thatgas industrywe were activity.not deeply affected that gas export talks are time-consuming due to have already started planning for that gas grid. Now, will the US sanctions affect their sensitivity. But in light of our neighbors’ purpose. Iran’s gas production in coming years? We are moving towards nationalization dependence on gas, we are not anxious about It would not be true to say that the sanctions of gas industry technologies. In light gas exports in the future. Naturally, gas export How much will Iran’s have not had any impact on Iran’s gas industry. of the fact that foreign companies spare processes would naturally hit some obstacles, gas output increase in The sanctions have caused some problems Iran their services, to what extent is that but the sanctions will not throw any obstacle to the current Iranian calendar for us, but they have not been deterrent. It possible? the continuation of our negotiations. year? is visible in the gas sector because Iran’s gas It’s tough. However, during the past years As new South Pars industry has long taken steps towards self- Iranian manufacturers have enhanced their To what extent the gas industry development phases become potential in the gas industry. For instance, development depends on foreign operational in the current sanctions prepared ourselves to deal with these last year, injection substances used for gas investment? year, we forecast to circumstances.sufficiency and Wewe havemainly in pushedparallel thewith issue the by odorization or many catalysts used in the gas We may need foreign investment in upstream have an extra 70 mcm/d relying on the domestic sector. As you know, industry were produced in Iran. Therefore, development because upstream projects production in our at NIGC we mainly need commodities and you can see that despite all restrictions are capital-intensive and they also need production capacity. caused by the sanctions for us the technical technology. But in the downstream sector we Iran’s gas production network and gas trunklines. In certain cases, and engineering capabilities of Iranian may not need too much foreign investment and would reach 900 mcm/d. theequipment necessary for equipment gas refineries, was gas not distribution manufactured specialists have grown. At present I can say In parallel with this domestically and we had to import it. In some with certainty that Iranian manufacturers downstream projects. output hike, it would be other cases, domestic manufacturing of some have seen their potentialities increase in there is sufficient capital and technology for possible to transmit gas supplying necessary products. The important How do you assess Iran’s potential in from southern Iran to to its high technology. However, as sanctions issue is now to learn how to communicate exporting technical and engineering northern Iran due to the wereequipment toughened was not and economically Iran’s gas transmission justified due with domestic manufacturers and knowledge- services to neighboring states? completion of the Iran network, gas distribution and processing based companies and introduce our products. Due to the approach which has been taken Gas Trunkline 6 (IGAT 6) In Iran we can manufacture most equipment vis-à-vis the gas industry in recent years, and part of IGAT 9. 38 at refineries were expanded, we decided to 39 Investment September 2019 Issue No.87 monthly Investment

of Dey and Sefid Zakhour mcm/d of gas from Dey and approval, the planned gas fields need acquisition of Sefid Zakhour gas fields delivery from Sefid Zakhour Dey, Sefid Zakhour Offer land for the construction with a budget allocation of to this refinery, more than of pipelines and drilling of IRR 1,645 billion plus $159 IRR 822 billion will be wells, completion of two million. In the light of change required for the upstream wells, drilling and completion in flow from 13.2 mcm/d to development of this field. Investment Opportunity of 11 new wells, purchase 15.1 mcm/d and changes in After the start of drilling he objective behind drilled in this area 30 mcf/d Company (NISOC), Iran plans of wellhead commodities the nature of fluid produced operations in the second the development of will be recovered from this to recover 15.1 mcm/d of and installations, building by Sefid Zakhour field, the half of the Iranian calendar TDey and Sefid Zakhour field. Development of these gas from these fields after wellhead pipelines, NIOC Board of Directors has year 1384(2005), the first gas fields is to produce 5.1 fields needs investment and drilling seven new wells and establishing gas and given its nod to a budget exploration well was drilled mcm/d and 10 mcm/d of state-of-the-art technology workover of two wells in Seif condensate separation allocation of IRR 1,572 billion up to the depth of 5,271 gas respectively, and the and that is why these two Zakhour and drilling four units in Sefid Zakhour, plus $272.65 million.Given meters. The Exploration delivery of gas processed at reservoirs were introduced as new wells and workover of installation of two pumps for the decline in the feedstock Directorate of NIOC managed Farashband refinery to Iran opportunities for investment one well in Dey. According the delivery of condensate supplied to Fajr Jam refinery to explore sweet gas in Gas Trunkline (IGAT) 2 and 3 during a conference held to surveys, delivery of gas from Sefid Zakhour, purchase and the plan for supplying different layers of Kangan for supplying national needs. earlier this year on Iran’s and gas liquids from Sefid and installation of pigs feedstock to this refinery and Dalan. As a result, the Dey is located 60 kilometers new model of oil contracts. Zakhour field to Farrashband and installation of double from adjacent fields, gas reserves in this field were south of Firouzabad and 140 Sefid Zakhour which is refinery will be done trough butterfly valves. The Board delivery from Sefid Zakhour increased to 4.11 tcf. Sefid kilometers south of Shiraz in 40 kilometers long and 8 two pipelines of 20 and 6 of Directors of National to Fajr Jam refinery with Zakhour is estimated to the southern Fars province. kilometers wide is situated inches in diameter. Once the Iranian Oil Company has the objective of making up hold 205 million barrels Dey which is estimated to 150 kilometers southeast of gas produced at Dey field is given the go-ahead for the for feedstock shortages of of gas condensate. Its gas contain 2.6 tcf of gas is close Shiraz. According to studies collected, it will be delivered initial production of 13.2 the refinery is currently recovery rate is 75% and its to Aghar and Dalan gas conducted by the Reservoir to Farrashband refinery. under review. In case of final condensate recovery rate is fields. Sefid Zakhour which is Engineering Studies Office Upstream development estimated at 35%. located near the city of Qir in of National Iranian South Oil Fars Province holds 5.6 tcf of gas in place, 8.5 bcf of which is recoverable. If 17 wells are

40 41 Investment September 2019 Issue No.87 monthly Investment

Jofair field has also several gas layers, which phases; early production with production can produce a significant amount of natural capacity of 6,000 b/d, Phase 1 with 15,000 b/d gas. output, Phase 2 with 25,000 b/d output and Jofair is administered by Arvandan Oil and Gas Phase 3 with 50,000 b/d output. Jofair High Potential Analysis of 3D seismic data, comprehensive has been awarded to an Iranian company. That reservoir studies, drilling and completion of meansProduction foreign Company. companies Development willing to ofwork this in field this two wells and workover of two wells, as well as construction of 40 kilometers of pipeline partner. From 1975 to 1978, four exploration and installation of crude oil gauge systems are for Development field are required under IPC to hire an Iranian among major activities for early production Jofair oil field is located in the West Karoun area in southwestern Iran. The field the discovery of three reservoirs known as Ilam, is estimated to contain 2.1 billion barrels of oil in place. It was among oil fields Sarvakwells were and drilledGadvan. in the Jofair field, leading to The Iranian company tasked with developing offered for development under the Iran Petroleum Contract (IPC) model, the from Jofair field. restructured model of oil contract in Iran. Once fully developed, Jofair could plan and repair wells with the help of downhole produce 50,000 b/d of oil. PreliminaryJofair field is development located near operations the Azadegan, are pumps.this field That will wouldformulate help the increase master production development underYadavaran way and Abearly Teymour production oil fields. has become est Karoun covers a vast area of land jointly owned by Iran and Iraq, but fortunately operational. along Iran-Iraq border. West Karoun Jofair is independent and belongs to Iran. Heavy crude makes up 96% of Jofair’s content from this field without having to drill any Wlies in Khuzestan Province, but due to Several years ago, National Iranian Oil Company with the remaining 5% being light crude oil. The anew $500 wells. million Jofair buyback field had deal previously in September given to the 1980s imposed war and post-war demining (NIOC) devised a development plan for the oil API gravity of Jofair’s oil is 23, which is relatively 2007.Belarus’s But state the agreement oil firm for was development cancelled dueunder operations, oil exploration and production had high. to the Belarusian company’s failure to honor not been possible. boost oil output. According to NIOC, more than its obligations; oil recovery from Jofair was The area is proven to contain huge oil $500field as million part of in the investment country’s is strategic needed toplan increase to expected to reach 3,500 b/d, but after four years reserves. Thanks to relentless efforts by Iranian The field is planned to be developed in three it had managed only to extract 2,800 b/d of oil. Over the past years, further attention has been all mines dating from the Baathists invasion oil recovery from the Jofair field. Belarus. The Belarusian company was expelled havepetroleum been cleared.industry experts and Iranian firms, Jofair by 2021 under the country’s long-term The contract was fifty-fifty between Iran and petroleumpaid to this industry field. Iran development intends to have plan. developed of Jofair on its own. and the Iranian firm continued the development Most oil fields located in West Karoun are

42 43 analysis September 2019 Issue No.87 monthly analysis

or would it have to suffer the are able to increase their they were. Such installations Aramco; Fire Set Ablaze by Saudis consequences of these attacks production they will not use that have been attacked once in coming months? Can a such capacity in order to keep and remain vulnerable are The surprise attacks by the Yemeni Houthis on the oil giant Aramco-owned Abqaiq sudden increase in oil prices prices high. susceptible to be targeted oil processing facilities and Khurais oil field in eastern Saudi Arabia left significant be managed by increased again. Investors and stock political and economic impacts at the regional and global levels. That caused a 5mb/d decline in Aramco’s oil output. The unprecedented attacks were interpreted production from other What Next? buyers are less willing to invest as Yemen’s retaliation against the Saudi-led coalition’s war on Yemenis since 2015. The Saudi- nations or isn’t there any such In light of conditions in an insecure area which may led collation has been targeting Yemeni people. The attacks on the Aramco facilities showed capacity? Are oil producers prevailing over global be attacked at any time. That that many equations have changed. willing to increase production markets, predicting future means lower investment in to keep prices low or do they developments would require one of the most important oil Shuaib Bahman action in attacking the Saudi Therefore, merely buying prefer to see oil prices rising? taking into account several facilities in the world. That oil facilities proved that small advanced arms and enjoying Over recent months, major issues as follows: is likely to also affect energy Aramco Attack Messages actors could deal striking super powers support could international energy markets First, due to inaccurate and prices in the future. Aramco, a state-owned Saudi and telling blows. Second, not ensure security for a have been dealing with oil unreal information provided Third, if Saudi Arabia does company, started out in 1933. unilateral aggression against country. production surplus. Despite not halt its attacks on Yemen, It owns the world’s largest a country with no defense all measures undertaken by time of Aramco’s return to the Aramco incident is likely proven oil reserves. In terms forces would not end in a Impact on Global Markets OPEC+ to freeze oil prices, theby Saudi pre-attack officials, levels the remains exact to repeat itself. That would of crude oil and natural gas predetermined result. Third, Economically speaking, what the energy price has been cut Saudi oil output and cause reserve ownership, Aramco in the current international transpired Aramco was a following a steady state. inaccurate information would a new shock in the global is one of the most valued system, the US is no longer rare event in energy exports. However, the attack on addunclear. to ambiguities Saudi officials’ in global markets. companies in the world. able to provide full support With a single attack, oil-rich Aramco sent shockwaves markets and subsequently oil Fourth, US policies in the Aramco is protected by the for its traditional allies. Saudi Arabia’s oil exports through international energy prices. region would bring about more most advanced defense and Fourth, it would be impossible were cut to half. What adds markets. The impact of this Second, Saudi Arabia has insecurity and therefore oil military systems due to its to exert pressure on other shock went beyond market already announced the total prices would be affected. Any key role in global oil supply; countries without expecting event is that rebuilding the oil shortages, raising fears of value of Aramco’s assets at mistake by the US to trigger a however, Yemeni forces any response. Fifth, buying and damagedto the significance oil facilities of such would an an all-out war in the Persian $2,000 billion, intending to managed to strike a heavy accumulating military assets take time. Even under suitable Gulf region. In fact, fearing earn $100 billion in revenue the entire region in a war. That blow at the Saudi oil facilities. could not guarantee national conditions, it would take similar attacks on oil facilities wouldconflict result with Iranin a reductionwould engulf or This blow was so effective security. months. company’s shares on stock full halt to oil exports from the that it halved the Saudi oil Saudi Arabia, spending $67.6 The question here is to pushed up oil prices. That markets.from floating 5% of the Persian Gulf to global markets, production, forcing the country million on weapons purchase, know of the fate that would isin whileother manycountries oil producers significantly Now even if the Saudis in which case energy prices to become an importer of is the third largest buyer of befall energy markets. Will are happy with high prices in manage to restore the pre- will increase sharply. petroleum products. weapons in the world. Despite the market recover from the global markets and show no attacks production levels, Therefore, should Saudi Politically speaking, what such military spending, the shock caused by a 5mb/d inclination for any decline. Aramco’s assets would no Arabia continue to attempt for happened in Aramco carried country is highly vulnerable. decline in Saudi oil output Therefore, even if petrostates longer become as valuable as engaging the US and Iran in a important message. First and war and the White House make foremost, the Yemeni army’s such a calculation mistake, global energy markets will see a new shock. In general, global energy markets mainly depend on Saudi policies in the region. In case the Saudi government continues its belligerence it will be stuck in a widespread war which would destroy itself. Now, everyone is waiting to see whether or not Aramco would manage to get out of the unwanted conditions imposed on it by Saudi politicians. The response to this question lies in the hand of Saudi leaders. 44 45 Ireland Halting Offshore Exploration Irish leader (An Taoiseach) Leo future gas licenses. IPF Varadkar says his government intends It also understands all of the options, to phase out the award of new offshore licences, and leases already in place exploration licenses in the future. will be allowed to progress for their full Brazil to Open Up Presalt He made his announcement at the UN duration. Europa has a large exploration Region Climate Action Summit in New York. position offshore western Ireland, which Brazil’s Agência Nacional do Petróleo, Irish independent Europa Oil & Gas includes the potentially large Inishkea Gás Natural e Biocombustíveis (ANP) commented that as far as it was aware, gas prospect close to the producing hopes three forthcoming licensing phasing out of oil exploration only Corrib field in the Slyne basin off rounds will increase the diversity of relates to future oil licenses and not northwest Ireland. upstream oil and gas operators present in Brazil, according to GlobalData. The consultant’s analysis suggests the 6th PSA Round and the Transfer of Rights Round will likely boost the number of IOCs designated as an Rosneft operator in the presalt region, which Expands Links With remains the country’s key growth area. Mozambique In 2016, Congress voted for private oil Rosneft has signed a cooperation companies to be the operator in the agreement with Mozambique’s National presalt, although Petrobras retains the Petroleum Institute (Instituto Nacional right of first refusal for operatorship de Petróleo, INP), and memorandum on Neptune Acquiring and to take a share of 30% or more in expansion of cooperation with the national Interests Offshore Indonesia license awards. hydrocarbon company Empresa Nacional de Neptune Energy has agreed to

Hidrocarbonetos (ENH). The arrangement Ireland acquire interests from Eni in the Kutei will give Rosneft the right to study available basin production sharing contracts (PSC) geological data on numerous offshore and offshore Indonesia. onshore blocks in Mozambique and Neptune will acquire a 20% working allow the company to potentially interest in the East Sepinggan PSC and a 30% enter projects on those blocks working interest in the East Ganal PSC. The in the future. East Sepinggan PSC includes the fasttracked Merakes development and the recent Merakes East discovery. Merakes is being developed as a subsea tieback to the Eni-operated VIEW Jangkrik FPU in the Maura Bakau PSC, in which Neptune has a 33.3% working interest. Brazil Indonesia Tap Withdrawing From Offshore Australia E&P Tap Oil has agreed to sell most Mozambique of its E&P interests in Australasia to Kensington Energy, a privately- VIEW VIEW owned Australian oil and gas investment company. The package Australia comprises a 20% interest in the BHP-operated WA-72-R permit offshore Western Australia, containing the Tallaganda gas discovery; 15% in the Eni-operated WA-25-L including the shut- in Woollybutt oil field (where abandonment is due to start during 2020-21) and a 5% oil, gas and condensate overriding royalty interest over 66.67% of NZ PMP 38748, which includes the producing Sidewinder oil and gas field. News September 2019 Issue No.87 monthly News Bangladesh Shortlists Companies for Spot LNG COSCO Sanctions Drive Global Oil Freight Rates Up Bangladesh has shortlisted 17 Key oil freight rates from the companies for its spot tender Middle East to Asia jumped process as it plans to buy around shipping market spooked by natural gas (LNG) next year to freshnearly United a fifth, States with the sanctions global oilon capitalize1 million tonnes on lower of liquefiedprices for the units of Chinese giant COSCO for super-chilled fuel, two company alleged involvement in ferrying crude out of Iran. In what the charge of LNG imports into the State Department called “one of Southofficials Asian said. country, Petrobangla, plans in to sign the largest sanctions actions the sales and purchase agreements U.S. has taken” since curbs were with the shortlisted companies re-imposed on Iran in November after it receives cabinet last year, two units of COSCO were named alongside other companies knowledge of the matter said. in claims of involvement in “Weapproval, are moving the officials ahead with with direct sanctions-busting shipments of plans to import LNG through the Iranian oil. [ The surprise move, spot market by shortlisting 17 affecting one of the world’s largest companies out of a total of 43,” energy shippers, operating more than 50 supertankers, comes as said. The companies shortlisted 1 President Donald Trump seeks to areone Mitsui, of the Petrobangla Marubeni, Osaka officials supply entering the market authorized to talk to exert maximum pressure on Iran to calculate freight charges. But with legal teams to better 2 Gas, AOT Energy, Diamond from the United States, and the media. to drop nuclear programmes. there was also uncertainty over understand the impact of Gas, Summit Oil & Shipping, as demand growth slows in As some Asian oil buyers rushed how the sanctions on the COSCO the sanctions. “The market is Excelerate Energy, Jera, Gazprom, major economies. Traders who state-owned company could to the shipping market to secure units - COSCO Shipping Tanker sign the sales and purchase buyOne about of the 1 officials million saidtonnes the next vessels, rates for chartering (Dalian) Co, Ltd and its subsidiary taking some preventive measures. Petroleum, Eni, Petronas, CNOOC, agreements will then be able year through the spot market. supertankers, or Very Large COSCO Shipping Tanker (Dalian) We’llfearful have of sanctions to see how so widelyrefiners are CheniereVitol, Trafigura, and Chevron, Woodside the to participate in spot tenders The nation of 160 million Crude Carriers (VLCCs), to bring Seaman & Ship Management implemented the sanctions will Petrobangla will issue when people is expected to become crude oil from the Middle East to Co, Ltd - will be implemented. be,” said KY Lin, spokesman Asian spot LNG prices LNG- cargoes are needed, said the a major LNG importer in Asia, Asia surged nearly 19% overnight Industry sources said some oil ASofficial are currentlysaid. at their alongside Pakistan and India, as to about 75-76 points on buyers were holding off hiring Petrochemical, a major crude oil lowest in years due to new domestic gas supplies fall. Worldscale, an industry tool used COSCO tankers while they check buyerfor Taiwanese in Asia. refiner Formosa officials, who declined to be identified because they are not NEWS NEWS NEWS NEWS Malaysia May List Hungarian Polyol Plant to Bosnia Region to Issue India Iraq Oil Imports Hit Petronas’ Exploration Arm Hit Full Capacity in 2023 Exploration Tender Record Malaysia is considering listing the Hungarian energy company MOL’s polyol plant The government of Bosnia’s autonomous India’s oil imports from Iraq surged to a record exploration and production arm of state in the east of the country will be operational by Bosniak-Croat Federation plans to issue a tender energy company Petronas, the world’s third- mid-2021 and running at full annual capacity by in October to award oil and gas exploration and imports with cheaper Basra crude, tanker arrival biggest exporter of liquefied natural gas, 2023, boosting its petrochemicals business in a exploitation licences. datahigh obtainedin August from as refiners industry replaced and shipping costly African sources state news agency Bernama reported citing fast-growing market, it said. The Federation, which makes up Bosnia showed. The world’s third biggest crude oil Prime Minister Mahathir Mohamad. Mahathir The plant, built by Germany’s ThyssenKrupp, alongside the Serb Republic, is offering investors importer shipped in about 1.32 million barrels has previously said that the government was will make MOL the only integrated producer the opportunity to search for hydrocarbon per day (bpd) of Iraqi oil last month, about a third looking to sell or list some state assets to of polyether polyols in Central and Eastern deposits in four blocks in the Dinaridi and more than July and 29% higher than August 2018, reduce debt. Europe. Panonian basin regions covering an area of the data showed. African crude imports fell 18.3% There has been speculation this could include The compounds are needed for products in 4,591 square kilometres. to 764,500 bpd as prices for heavy sweet crudes selling a portion of Petronas. “At the moment, the automotive, construction, packaging and The exploration area has been estimated to from Angola, Cameroon and Chad - sought by we feel that selling Petronas shares is not going furniture industries. worth up to $700 million. to be good for the government,” Mahathir The project will cost about 1.2 billion euros Experts say that southern deposits, located at said in a dialogue session in New York, ($1.3 billion), with the Hungarian a depth of 4,000 to 8,000 metres, could cutsChina’s by theso-called Organization teapots of(small the Petroleum refiners) and major according to Bernama. The government government contributing 131 million contain up to 500 million tonnes of Exportingrefiners ahead Countries of IMO and 2020 U.S. - sanctionsrose. Production on may consider listing Petronas at a later euros in the form of corporate tax reserves, while northern deposits are 5 Iran and Venezuela tightened heavy sour stage, he said. 3 allowances and cash. 4 estimated at around 70 million tonnes. crude supplies, also enabling Iraq, OPEC’s No. 6 2 producer, to gain market share in India. 48 49 News September 2019 Issue No.87 monthly News Floating LNG Terminal in Philippines Canada Ships Solid Oil Sands Bitumen to China A Canadian company has company Excelerate Energy loaded a test cargo of solid U.S. liquefied natural gas (LNG) bitumen onto a vessel destined LNG import terminal project, Luzonwill proceed LNG, after with receiving its floating the latest effort by the energy go ahead from the Philippines. industryfor a refinery to avoid in China, congested the “Excelerate will develop, design, new ways to export more oil and operate the terminal,” the sandsexport crude. pipelines Calgary, and findAlberta- companypermit, construct, said after finance, reporting based Melius Energy loaded a notice to proceed from the 130 barrels of neat bitumen, Philippines government. It will similar in consistency to also arrange the supply of LNG to a hockey puck, onto a 20- the terminal. The facility, which foot shipping container in will have a storage capacity of Edmonton, Alberta, and 150,000 cubic meters, will be set transported it by rail to the up in the Bay of Batangas on the Port of Prince Rupert in main island of Luzon, near power northern British Columbia. plants running on Malampaya The cargo is now on its way to natural gas, the Philippines’ Department of Energy (DOE) reserves, but development logistics and supply 8 said. “As proposed, by the expected to be depleted within to June 2021, the 7 aCN Chinese Rail have refinery. been working on has been slowed by a lack chain at private third quarter of 2021 we are the next decade. DOE said. At least processesA number to of solidify firms including diluted of new export pipelines. company Melius, said he expecting that Excelerate’s FSRU Within six months from the three other Philippine LNG oil sands crude so it can move Environmental opposition and believed its cargo was the LNG facility will commercially issuance of the notice to proceed, projects are currently in the regulatory delays have held operate,” Philippine Energy Excelerate has to comply with pipeline: First Gen Corp’s rail and ship. Solid bitumen is up new projects including the bitumen to China. He declined Secretary Alfonso Cusi said in a permit requirements and submit venture with Tokyo Gas Co Ltd, alsomore considered cheaply and less efficiently hazardous by Canadian government-owned tofirst-ever name the export buyer. of solid“The most statement. The Southeast Asian Australia-listed Energy World than liquid crude because it Trans Mountain expansion, exciting part is once you put it country will rely on imported to the DOE. The completion of Corp’s LNG hub project in is not combustible and would resulting in declining capital in a container, you can ship it natural gas to feed some of its constructionthe proof of financial and commissioning closing Pagbilao province, and Phoenix investment and weak Canadian anywhere in the world,” Butler power plants currently running of the facility will take around Petroleum Philippines Inc’s LNG Canada’s oil sands hold the crude prices. told Reuters. “It opens up new on its Malampaya gas, which is two years, from October 2019 hub proposal. world’sfloat on third-largestwater. crude Yuri Butler, manager of markets for Alberta.”

NEWS NEWS IEA May Cut Oil Demand Growth Estimates Exxon to Sell Norway Assets to Eni The International Energy 2008. slowed to 6.2% in the second Exxon Mobil Corp has agreed the country, said the sale was of 1.9 billion barrels of Agency (IEA) may cut its “It will depend on the quarter, its weakest pace in to sell its Norwegian oil and expected to close in the last oil equivalent (boe). Total growth estimates for global oil global economy. If the global at least 27 years, dragged gas assets to Var Energi AS quarter of this year. production is expected to demand for 2019 and 2020, economy weakens, for which down by weaker demand amid for $4.5 billion, ending its The transaction is part of be around 300,000 boe per should the global economy there are already some signs heightened trade tensions with production in a country where the U.S. major’s plans to day in 2019 and will grow to weaken further, its chief said. we may lower oil demand the United States. it started operations more divest about $15 billion in more than 350,000 in 2023 The Paris-based agency expectations,” Fatih Birol told “But at the same time, we than a century ago. The deal nonstrategic assets by 2021. as it invests some $7 billion in trimmed in August its global Reuters on the sidelines of the shouldn’t forget low oil prices includes ownership interests Reuters had exclusively development projects. oil demand growth estimates World Knowledge Forum in also (put) upward pressure on in more than 20 producing reported earlier this month “The acquired assets for 2019 and 2020 to 1.1 Seoul. the demand,” the IEA chief said. that Exxon had agreed to sell complement and strengthen million and 1.3 million barrels He said China’s economic Global crude benchmark local producer Equinor with its Norwegian assets. Var Energi in core areas ... and per day (bpd), respectively, as growth, which has fallen to the Brent is hovering around $62 afields combined mostly production operated by of In a separate statement, open up new opportunities trade woes weighed on global lowest in nearly three decades, a barrel, while U.S. West Texas about 150,000 barrels of oil Var Energi, 69.6% owned by for growth,” said Eni Chief oil consumption, could also mean there would Intermediate is sitting around equivalent per day in Italian major Eni SpA, said Executive Claudio Descalzi. making demand be some revisions, as Beijing $56, weighed down by worries 2019. ExxonMobil, the acquisition would make Eni set up the unit, which is grow at its slowest is “an engine of the demand over slowing global economic which will hang on to it the No. 2 exploration and 30.4% owned by Norwegian 9 pace since the growth.” growth that could dent oil 10 production company in the private equity HitecVision, at China’s economic growth demand. and retail network in area with overall resources the end of 2018. its refining operations 50 financial crisis of 51 Market September 2019 Issue No.87 monthly Market

Shocks emanated from the rising crude prices and multi-month record highs recorded the previous Asian Crude and fears of the continued rising trend of oil prices, led month, pressured by a rise in product output crack spread against Dubai moved slightly higher, to hike in the price of products and refining margin supporteddue to finishing by healthy overhaul. exports The despite Asian gasoline a rise in 92 across all refineries. Over the past two years, the growth in refining margin in Asian market has been ProductOn 14 September 2019, Markets the air attack by the Yemeni Houthis damaged the averaged $ 7.50 per barrel, the highest since Septemberunprecedented. 2017. Asian Given refining the situation margin in in Abqaiq September oil Singaporeproduct output, gasoline as crackrefineries spread ramped against up Oman operations Saudi Aramco Abqaiq oil processing facility and the Khurais oil field in following peak refinery maintenance season. The eastern Saudi Arabia declined Saudi production by 5.7 mb/d and the global processing facility, Saudi Arabia to meet its domestic averaged $7.67 /b in August, down by 23 cents m - needs rushed to the market to buy products, o-m and by minus $2.30 y- o- y. Singapore naphtha market witnessed a 5% drop in crude oil production level. especially gasoline to offset any shortage, and it crack spreads declined for the second consecutive Brent oil prices surged by nearly 15 percent close to $70 following month as lackluster demand witnessed the previous the incident but have since recovered close to pre-attack crack. Besides, on the eve of the implementation month was exacerbated, and ample petrochemical levels following statements by US President and the newly ofresulted the new in IMOa significant regulations rise comingin naphtha into and effect gasoline on appointed Minister of Energy of Saudi on strategic stock 1 January 2020 demand for LSFO (0.5 %) and low runs in the region, following the end of peak releases and recovery times. sulfur content gasoil has increased. Therefore, we scheduledfeedstock supplies turnarounds. were Thelinked Singapore to higher naphtha refinery will witness further reductions in fuel oil supplies crack spread against Oman averaged minus $8.18/b, with a tightening market possibly supporting having declined by 65 cents m - o-m, and $7.47 prices. And low sulfur content gasoil market has y- o- y. In the middle of the barrel, jet/kerosene crack spreads in Asia trended slightly upward on in recent weeks. Following the implementation of restrictionsonce again witnessed on bunker significant sulfur content, growth demand in demand for consumption remained well sustained. However, as gasoil would rise to between 1.4 and 2 mb/d. On 17 the summerback of firm vacations fundamentals, in Europe as comes regional to jetan end;fuel September 2019, when the price of Dubai crude oil a narrowing of the arbitrage window to Europe reached $ 67.55 per barrel; the price of naphtha and is probable, which could exert pressure on Asian gasoline 95 Octane on the Asian market stood at $ jet/kerosene markets in the near term. A rise 63.31 and $ 84.57 per barrel, respectively. Asian product markets lost ground, pressured by weaker from peak maintenance season in Asia, eliminated fundamentals and a deterioration in high-sulfur thein refinery market fueltightness oil output, recorded as refineries in the recent returned past, fuel oil (HSFO)markets, as buying interest from which weighed on Asian fuel oil cracks. HSFO prices the bunker sector declined and weighed on August, losing $11.64/b to average $54.44/b. The negativein Singapore performance saw a hard in fall fuel in oil the first week of HSFO prices,declined and eventually, from refining cracks was further exacerbated margins. Asian refinery margins by a reduction in crude prices during the same time period.

52 53 September 2019 Issue No.87 history monthly history

the elephants would overpower horses. Relying on oil, Nader Shah had intimidated the Indian army of elephants to the extent that this army was overcome and collapsed very quickly. Nader Shah occupied land as far away as Delhi and he reinstated his empire with war spoils. However, this weakened empire did not last long under Nader Shah and Britons established the East Indian company to establish their sovereignty over it. A narrative of the Karnal Battle is as follows:

which many war historians have ignored. They haveThis spokenwar is marked about war by specificelephants, conditions but they have not said how they were used. These horrible animals had been equipped for war and been placed at the head of the Indian army. War elephants were always used in Eastern nations for striking fear in the enemy camp. Historians and poets have widely spoken about the big size of these animals. Nader knew quite well

veryone has heard the story of D’Arcy he ordered his camel riders to accumulate and oil exploration in Iran. Everyone how the Indians were fighting. That is why Eknows big revenue he gained from oil exploration and extraction in Iran. However, oil firewood on the back of the camels and set did not enter into Iran’s nomenclature only after Therefore,them afire withIndian oil. elephants Everyone instead knows ofhow attacking these D’Arcy stepped into Iran. More than one century giant animals were terrorized to see this fire. before D’Arcy came to Iran, people were using caused big chaos in the Indian camp. A total of oil and gas. Here, we review the history of oil 2,000Iranians Indian fled aselephants the camels were approached killed in this and war. they and gas in Iran’s contemporary history. Nader Shah was not content with this use of oil. Apart from that, in ancient time, Persian people He also ordered Iranian naval forces to use tar had used oil and natural tar for religious and for making warships and become more effective medical purposes. After the occupation of in sea battles. A Qajar statesman writes: “One of Isfahan by Mahmud Hotak and the downfall of the entry gates into this city is Naft (oil) and the the Safavid dynasty, there has been news about other one is Khorasan. There is so much oil on oil and gas. That shows Iranians were curious to the ground.” Iran and know about using oil. Oil in Travelogue Oil vs. Indian Elephants Following the downfall of the Zand dynasty Pre-D’Arcy In the wake of the downfall of the Safavid that had taken over from the Afsharids, the Dynasty, Nader Shah sought military and Qajar dynasty came to power. Lotfali Khan intellectually to restore Iran’s lost credit. Zand was defeated heavily by the Qajar. But Nader Shah’s reign was spent on war and the Qajar dynasty signed the embarrassing Golestan and Turkmenchai treaties on the who had succeeded Mahmud Hotak, of Iran, in Nader’s military career, as well as a tactical detachment of some parts of Iran’s territory. spellingconflicts. an In end 1108, to sevenhe drove years out of Ashraf Afghan Afghan, riots. masterpiece. The battle took place near That was when kings and princes started Nader Shah led many wars, but one of his Karnal, 110 kilometers north of Delhi, India. traveling to the West and become enchanted main military campaigns was the Battle of This battle changed the fate of the Indian by those nations. Such persons used to write 1 Karnal. The battle was a decisive victory Subcontinent very soon and reshaped the travelogues, and they were mainly surprised for Nader Shah, the founder of the Afsharid Middle East region. However, the sensitive and by gas lamps in the streets of cities. The William Knox D’Arcy is a name dynasty of Persia, during his invasion of the decisive role of oil in this war is interesting authors of travelogues have mainly described intertwined with Iran’s oil and Mughal dynasty. Nader’s troops defeated the to study. The Mughal Empire always used big the lighting systems in the streets of Paris, contemporary history. The day army of Muhammad Shah within three hours, elephants in their wars on enemies. The idea London and Saint Petersburg. That coincided when oil gushed out of Well No. 1, a page despite being heavily outnumbered, paving behind using elephants in the wars was to with the time Iran saw dark nights. People Oil the way for the Persian sack of Delhi. The strike fear into the enemy camp and military used candles and firewood for lighting, but was turned in Iran’s contemporary history. engagement is considered the crowning jewel assets. Moreover, were it for direct conflict, gas lamp was totally different. 54 55 September 2019 Issue No.87 Sports monthly Sports

However, in their fourth year ofthan its inpresence, the first theyleague. managed Palayesh Naft to enter Iran’s premier league. Everyone was surprised at Abadan Finishes the Palayesh Naft Abadan team’s brilliant presence. This team made gradual progress, 3rd among showing in the pro league it was great and deserved Asian Clubs respect. Arash Jafari this tournament, Palayesh Naft presences in the Iranian clubs Abadan came third. basketballDuring five pro consecutive league, the he Palayesh Naft Abadan It was initially drawn into a Palayesh Naft Abadan team has basketball team has group with teams from Bahrain, T China Taipei, and Thailand. twice and third once. Asia Champions Cup 2019. Coached by Hamad Sameri, finishedHamad Sameritop once, has runners-up been This positionfinished was third achieved in the FIBA the Palayesh Naft Abadan coaching the Palayesh Naft basketballers made a strong Abadan team for the past of Palayesh Naft Abadan in the start and topped the group. team faced the Japanese side Background 11 years. He has been with Championsduring the first-ever Cup matches. presence That third in Asia. The Palayesh The Palayesh Naft Abadan this team ever since it played sounds good for a team which Bahraini side 85-64, which was brilliant performance in the Naft Abadan team wonfinished 30-25 team has made progress ever in the second league. The was formed 11 years ago. It was aThey powerful first overpowered start. Then, they the in the semi-finals. Despite its since it was formed. This team Palayesh Naft Abadan team promoted in Iran’s basketball defeated the China Taipei team defeated 73-80 by Japan and defeated 23-20 in the second made its debut in the second is experiencing its sixth wasfirst barredtwo quarters, from going it was into finally quarter.in the first They quarter, made but up wasfor their league of Iran’s basketball. Two season presence in the Iranian The Palayesh Naft Abadan the host team, which gave them In its last match, the failures in the third and fourth years later, it was promoted to basketball pro league, so it basketballsector five yearsteam wasago. a68-66, 71-62 while victory. they That finally was fought how Palayesh Naft Abadan team faced quarters 17-12 and 14-9. Saeed should preserve its previous representing Iran in the FIBA the Palayesh Naft Abadan team thesemi-finals. Bahraini team, leading to Davarpanah was recognized The Palayesh Naft Abadan season championship title. Asia Champions Cup 2019 in made its way into the semi- an 81-69 victory for the Iranian as the best basketballer after teamthe first experienced league category. a longer Thailand. In its last match in side. That was how the Palayesh scoring 31 scores. presence in the second league

finals. The PalayeshDid Naft everyone Abadan expect you to be champion? Interview with Palayesh Naft Abadan to third, experienced one defeat each. It shows We have to benefit from this We overpowered powerful rivals in the group that the teams were approximately at same experience in the pro league Coach: stage and stepped into the semi-finals with good levels. Although in the semi-finals, we had an matches. The Palayesh Naft team spirit. We had made plans for championship. acceptable performance vis-à-vis the Japanese will be in rest until next week Ranking Third Is However, in the semi-finals, we hit a powerful team, we were defeated out of bad luck. when it will start its exercises rival. The Japanese team that had finished for a strong presence in the pro Good Achievement runners-up in last year’s Asian matches had You had apparently hired auxiliary players too, league matches. prepared itself to become champion this year. hadn’t you? I would also like to Hamad Sameri, the head coach of We were lucky enough to win the championship We went to Thailand to achieve the best result. see this team become Palayesh Naft Abadan basketball title among Asian clubs, but we were defeated by It was not just Palayesh Naft Abadan, rather, we champion again. But team, says the level of Asian games the Japanese team because of bad luck. I always had to defend Iran. That is why we had auxiliary it is very difficult to make efforts to improve and my objective is players, too. Furthermore, many of our players preserve the title was very high. He told “Iran Petroleum” the championship. But due to special conditions we left the team at the end of the season. Were particularly because third position was significant. Here is the full were in, I think that we achieved a good result. we able to preserve the previous structure, we we are faced with text of the interview with Sameri. would not hire this number of auxiliary players. a budget squeeze Would you please explain further? In any case, I offer my special gratitude to the this year. We have Let’s start with the third position in Asian Look! We always try to reach the best place. In Iranian national players who agreed to join to cut our costs. games. How do you see the level of matches? Thailand, we competed to win championship the Palayesh Naft Abadan team despite fatigue But other teams The Asian clubs matches are the highest-level ones title. But in Iran we had only five training caused because of their presence in the World like Mahram across the continent. We were through tough stages to sessions for presence in these matches. Cup. Tehran are rich reach this level. First, we need to become champion at Meantime, all other teams in the competition and they are the national level. Then, we had to be among the top had high quality foreign players, but we could Can Palayesh Naft Abadan become champion building up a strong four teams in West Asia in order to berth a place in the not hire any foreign players. Therefore, we went again? team, which makes Asian matches. That is why I reiterate that the matches into the matches with our top Iranian players. It First and foremost, I have to say that these it difficult for us to were held at a very high level. is noteworthy that all Asian teams coming first matches were a very good experience for us. compete with. 56 57 Tourism September 2019 Issue No.87 monthly Tourism

Qasabeh Qanat The Qasabe Qanats of Gonabadis is one of the world’s oldest and largest networks of qanats (underground aqueducts). Built between 700 and 500 BC by the Achaemenid Empire in what is now Gonabad, the complex contains 427 water wells with a total length Gonabad, of 33,113 meters. The site was first added to UNESCO’s list of tentative World Heritage Sites in 2007, and then officially inscribed in 2016, collectively with several other qanats, as “The City of Saffron, Persian Qanat”.

PistachioIn this issue, we further introduce some tourist and attractions in Silkthe city of Gonbad in the northeastern Khorasan Province.

58 59 Tourism September 2019 Issue No.87 monthly Tourism

Saffron Saffron, which is known to be the oldest ever plant in the world, is mainly raised in Khorasan Razavi Province. The saffron produced in Gonabad is exported across the globe. The UN’s Food and Agriculture Organization (FAO) has registered saffron as an Iranian product.

60 61 Tourism September 2019 Issue No.87 monthly Tourism

Sheikh Bohloul Gonabadi House Friday Mosque A house there is attributed to Sheikh Mohammad Taqi Bohloul Gonabadi, a Qajar-era Gonabad’s Friday Mosque is a monument dating from the Khawrazmshahian period. The scholar. The building has two sections, one for summer and one for winter. There is also a mosque has two verandas and a decorative façade. The mosque’s architecture shows that it wind catcher on top of the eastern wing of the house. was built on an older mosque. During the Ilkhanid dynasty, the mosque was expanded.

62 63 news September 2019 Issue No.87 monthly Tourism

IranPetroleum

If you have any comments NIOPDC Activity in regarding the articles in this magazine, please feel free to contact us through e-mail. Torbat Heydarieh Your views are appreciated ne of the 37 zones of stages of the implementation National Iranian Oil of the project with proper OProducts Distribution infrastructure in storage Company (NIODPC) is located in Torbat Heydarieh. This capacity, saying: “The Torbat distribution point is located in Heydariehand the transportation region enjoys fleet northeastern Iran and on the potential for exporting south-north transit line. products from Torbat About 235 million liters of Heydarieh.” petroleum products could Bolandi said about 1.3 billion Bolandi said more than be stored in storage facilities liters of fuel including gasoline, 462.5 mcm of CNG had been provided for the Torbat gasoil, kerosene and fuel distributed in 32 stations Heydarieh zone of NIOPDC in oil were being distributed order to supply products to annually. Furthermore, more current calendar year. He nine cities. than 70 mcm of CNG was being addedduring thatthe firstCNG halfconsumption of the This fuel distribution center distributed across the region. saved gasoline. is responsible for Khorasan “There are 62 gas stations, 32 He also spoke about Razavi Province, as well as part CNG stations, as well as 120 of South Khorasan Province. local oil products’ retailers implementation of technical Javad Bolandi, manager of across Torbat Heydarieh zone,” projectsself-sufficiency relying in upon the the the Torbat Heydarieh zone of he said. experience and expertise of y NIOPDC, said this area is the local manpower. PetroleumMinistr -PublicRelations largest producer of saffron half of the current calendar “Signing memorandums of in Iran, the top producer year,Bolandi more said than during 352 millionthe first cooperation with universities of pistachio and raisin in liters of fuel had been and implementing research- Khorasan, the top producer of distributed incessantly, up 5% oriented projects through a Thank you for reading silk in Iran and the owner of year-on-year. local research committee has 42 mining companies. He said He touched on the produced favorable results,” Iran Petroleum such potential underscored the construction of railroad he said. Bolandi said the local linking Torbat Heydarieh [email protected] in Torbat Heydarieh. tankers including 118 trailers. high significance of fuel supply transportation fleet had 185 64 to Afghanistan and the final 65 Gonabad, Kakhak Waterfalls