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Iran Petroleum Issue No. 88 September 2019 Oil and Gas Exploration in Full Swing

Zangeneh: Iran Has Own Tools to Foil Sanctions Leaping Over

SanctionsKasra Nouri Wall Director General of Public Relations

erse 216 of chapter Al-Baqara of increased investment in the petrochemical Holy Quran says: “…though it be sector and concentration on this sector. Vhateful to you. Yet it may happen Plans to develop the petrochemical that you will hate a thing which is better for industry started in the 1990s, which you; and it may happen that you will love brought Iran’s petrochemical revenue from a thing which is worse for you; God knows, $1 billion to over $16 billion over 15 years. and you know not.” If the pressure exerted on Iran’s petroleum A clear manifestation of this verse is seen industry through sanctions is taken into in the unjust and illegitimate sanctions the consideration that would be a record. US has imposed against Iran. During the third jump in Iran’s These sanctions had been designed petrochemical industry, which started in to target Iran’s economy and industry, 2013, a comprehensive and well thought- particularly Iran’s petroleum and out plan was implemented for the growth petrochemical sector; however, the of the petrochemical chain. That would outcome has been development of the bring Iran’s petrochemical revenue to sector based on self-reliance and progress $25 billion. The unprecedented and based on domestic capabilities. sustainable growth and development of the A review of the trend of growth and petrochemical industry despite sanctions development in Iran’s petrochemical and economic pressure highlight the fact industry over recent years despite that independent nations could no longer tough sanctions would lay bare the be blocked by economic and political ineffectiveness of efforts by narrow-minded pressure. Consequently, inexperienced and politicians. incapable politicians could no longer use Abandoning crude oil sales and creating the industry and the economy as tools for a chain of high value-added industries has their illegitimate political objectives. been a major plan of Iran’s Ministry of Throughout its third jump, Iran’s Petroleum. The petrochemical sector makes petrochemical industry crossed the wall of the largest contribution to that objective. sanctions. That is an undeniable fact that Despite their short-term impact, the would turn out to be true in all economic, sanctions prepared the ground for industrial and political sectors. Ministry of Petroleum 50 Islamic Republic 16 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 Asian crude 42 Reporter: Negar Sadeqi Javad Asghari and products Translator: market Kianoush Amiri

Coordinator: Abbas Lotfi

Tel/Fax: (+98 21) 61626113 www.iranpetroleum.ir [email protected] A Century of Khaf, Gas Storage, Oil and Gas Historical US Oil Weightlifting and Ancient Reliable Exploration COVER in Petroleum City Theft Support in Full Swing Industry for Energy Security 54 28

Hassan Hosseini Photo: 58 38 06 Top story October 2019 Issue No.88 monthly Top story

facility. in revenue,” he added. He Directorate of Exploration said that the Baghoun field, New Gas Find in Fars Province showsfield. Data an API provided gravity by of the49 $40bn Revenue which had been discovered and hydrogen sulfur content Dehqan said Eram’s gas was earlier, was part of the National Iranian Oil Company (NIOC) announced the discovery of an of 800 ppm for the Kangan enough to meet Tehran’s Eram field. Dehqan said independent gas field in the southern Iranian province of Fars. The Eram and Upper Dalan reservoirs needs for 16 years. “But the available infrastructure gas field holds 19 tcf of gas in place, over 13 tcf of which is recoverable. and an API gravity of 50 and fortunately or unfortunately in Fars Province would hydrogen sulfur content of since we have the South facilitate treatment of gas at eza Dehqan, deputy long and 5 meters wide. and gas reserves in the world. 45 ppm for the Lower Dalan Pars field, which is the the Parsian refinery. CEO of NIOC for reservoir. That shows the world’s largest gas field, Dehqan underlined the Rdevelopment and gas discoveries and twenty Light and Sweet Gas high quality of gas in the other discoveries are not engineering, said: “With this percentSeventy-five of oil percentdiscoveries of Iran’s According to Dehqan, the seen as important.” “Such discovery, it can be argued have been made following exploration well which led discovery would be taken ofsignificance oil and gas of production. exploration He as that Iran has reached self- the 1979 Islamic Revolution. to the discovery of Eram Eram field. The vicinity of seriously were it made in said:the first “Fortunately, link in the notvalue only chain in Iran sits atop 159 billion had been drilled by National the Eram field to the Shanol other countries,” he added. the exploration sector but also in With this activities.” NIOC Directorate barrels of recoverable liquid Iranian Drilling Company asand well Homa as the gas existence fields near of Dehqan said Eram’s gas the development sector we are Estimates discovery, it ofsufficiency Exploration in exploration said the new hydrocarbon, standing in the (NIDC). Drilling began in properthe Parsian infrastructure gas refinery, would was sweet, adding that the self-reliant. The prime examples show that this fourth rank in the world. In summer 2018 and lasted more gas layer of this field was can be argued kilometers south of the city of terms of gas reserves, Iran than 9 months. Eram is also 400 meters thick, which implementation of enhanced oil field’s gas and that Iran has Shiraz,gas field 60 was kilometers located 200 north of comes second in the world estimated to hold 385 billion makingadd to the up significance for production of loss is high for a gas reservoir. recovery,of self-sufficiency as well as are the the Goureh- condensate Assaluyeh and 25 kilometers with 34 tcm of recoverable barrels of gas condensate, development of this field in “Estimates show that this Jask crude oil transmission reached self- south of the city of Khonj. The gas. Therefore, Iran comes or equivalent to one phase sustainable feedstock supply field’s gas and condensate project by hiring Iranian would sufficiency in gas reservoir is 50 kilometers of the giant South Pars gas toin adjacentthe Parsian fields, treatment as well as in would produce $40 billion contractors.” produce $40 exploration billion in first in terms of combined oil activities revenue

Ali Moallemi another gravimetrical and effect, we have launched many border and it will be impossible Deputy Director of Exploration, NIOC magnetometric project will activities in the Zagros and geophysical data gathering to make precise calculations Gas Find ince stratigraphical start in Bostan-Abad and Abadan Plain areas. Gravimetry isproject under is way that in for the the onshore/ first time about its reserves. Another and geological studies Sarab Plain areas following the and magnetometry studies offshore areas. Of course, project currently under way Likely in Sconducted over the past conclusion of petroleum-based have started in Abadan Plain following the discovery of is the Basht project, located couple of years show that geological studies that have since May, and we plan to start in an area of the same name West Makran is conducive been conducted to identify 3D seismic testing. Following out that the area can have a between the three provinces of Khuzestan to complementary studies, the hydrocarbon potential of the proof of existence of oil in goodthe Minoo hydrocarbon oil field, potential;it came Kohguiluyeh and Boyer Ahmad, The Exploration this project will start as a northwest. The philosophy West Karoun, and the discovery therefore, 2D and 3D geological Fars and Khuzestan. In seismic Directorate of National giant project there. We hope behind choosing these two areas and geophysical activities may operations we are seeking to Iranian Oil Company to identify the exploration is the possibility of existence of Yadavaran and Darquain, our open a new horizon to us in this access the Khami and Dehrom (NIOC) has drawn potential of this area following suitable structure. Therefore, explorationof giant fields activities like Azadegan, have vast area. layers. The important point is up extensive plans for the completion of studies. gravimetry and magnetometry shifted to the east of Karoun a stratigraphic structure and that no drilling has been made exploration in Iran’s intact Furthermore, magnetometric studies are on the agenda. We River. Due to existence of certain we have noThe possibility Minoo field to make has in the Dehrom layer anywhere areas. The Directorate has and gravimetrical operations are currently in the process of geological structures, we expect calculations there. In order to in Khuzestan Province. That is for the first time in 10 years have started in Kopet Dagh, choosing a contractor to activate to meet stratigraphic traps. obtain more data on Minoo, we while in Fars and the Persian embarked on gravimetrical covering the area extending 4,500 stations in the region. We need advanced technology have to start production from it Gulf areas, this layer has created and magnetometric studies from Dargaz to Sarakhs Plain. The Exploration Directorate is there and that is why we have in untapped areas like In parallel, a 2D seismic testing committed to discovering new so far been reluctant to start OIEC is set to handle production depth of access to this layer is Makran, planning to install plan in Dargaz is under way work there. Now, 3D seismic or use a specific seismic testing. deemedgiant gas suitable, fields. In we case can the study 12,000 magnetometric on 500 square kilometers. volume of oil reserves in place testing has started on 1,900 trial run and send the results the possibility of existence of and gravimetrical stations The contractor for this project andfields carrying in order out to increaseexploration the square kilometers of land. An from this field under a 6-month gas in Khuzestan by designing there. has been selected. Meantime, operations in new areas. To that outstanding feature of this an exploration well. to the Abadan oil refinery. 4 This field is located along the 5 Exploration October 2019 Issue No.88 monthly Exploration

n the wake of the 1979 Islamic Revolution, a total FOCUS I One Exploration per Season have been discovered in Iran. Hendi said exploration on the borders Lately,of 65 Petroleum oil and gas Minister fields had been always prioritized, adding that Bijan Zangeneh had announced NIOC had made one exploration per season since last winter. “The discovery

oil wasfind lightin Minoo and sweet.Island forSaleh Oil and Gas Hendi,the first exploration time, saying director the new at willof the soon Minoo be announced field in Minoo by PetroleumIsland and a National Iranian Oil Company gas field in Fars Province, whose details (NIOC), said 390 oil and gas discoveries,” he said. “Also in summer, we Ministry officials, are among these new Exploration in Iran, 171 of which have which would be added to recoverable reserves.” Noting that a rig was beenreservoirs developed. had been That identified indicates had significant discovery in southwest, Iran’s potential in petroleum soon start operations there. Hendi said last calendar year, the data for industry development. He said operating in a joint field in the Persian Gulf, he said two more rigs would in Full Swing during early years following the the Petroleum Ministry. He said that NIOC Exploration Directorate had 1979 Islamic Revolution, some inan recent oil field years which been Iran tasked shares with with deciding Saudi Arabia about had sedimentary been submitted basins to Official data show that Iran’s people used to say Iran would across the country. Hendi said: “In case exploration operations prove to recoverable liquid hydrocarbon be running out of oil within 20 be unsuccessful in a spot, that would be considered a positive activity to 30 years, “but now 40 years for exploration. For instance, the Azarbaijan, Makran or Jazmourian reserves have increased to more has passed and you can see we areas were always exposed to speculation about exploration potential than 160 billion barrels over the past four have still oil and gas.” He said and we had to decide on them. We came to conclusion by carrying out despite consumption and in operations in these areas.” decades even though massive recovery has light of new discoveries over the been under way. According to the United past 40 years, volume of Iran’s were ending” and “stratigraphic oil reserves have not changed had been developed. He added traps have shrunk in size”. Hendi States Geological Survey (USGC), Iran over these years. “Of course, thatHendi 45% said of 171 oil reservoirsof these fields and said over the past three years, comes third behind Iraq and Russia in terms conditions have improved in 77% of gas reservoirs remained 15 exploration well operations of exploration potential. the gas sector. The massive had been concluded despite high gas explored in South Pars has show that exploration is ahead risks. “Our rate of success during increased the amount of our gas ofundeveloped. production “Theseand are figures signs of this period of time has been on reserves eight-fold compared to development in the country,” the early years of the Revolution. he added. Hendi said that NIOC That allays our concerns for the Exploration Directorate had allaverage wells 60%.completed The figure in the jumped current future,” said Hendi. He said a total not been active enough during andsignificantly last [calendar] last year year and have almost of 390 oil and gas reservoirs had the 6th Five-Year Economic proven to be successful,” he said. Development Plan. He said that 258 oil and 132 gas reservoirs. oil exploration had become more 14 Geophysical Projects been identified in Iran, including of costly geophysical projects difficult because “structural traps hadHendi been said envisaged a significant for the number current calendar year. Despite

being effectively supported forfinancial the implementation restrictions, NIOC of is

6 7 Exploration October 2019 Issue No.88 monthly Exploration

and central sections,” he said. NIOC’s exploration commitments production of shale oil and gas University of Technology, foreign investment we decided projects, agreements have been “Our exploration will be in in the world was economical, Shahid Chamran University, to employ E&P companies in signedthe projects. and “€150 For five million of these plus eastern Kopet-Dag. We have also be covered with the Dezful “but in the current mix of NIOC Shahid Beheshti University exploration blocks.” Hendi said IRR 4,000 billion” credit has been started exploration in other areas explorationfor the 6th five-year and “allows plan us would to projects, the priority would be to and Khawrazmi University. TENCO (Negin Afagh Kish Energy allocated. like Kalat Naderi, Dargaz and focus on higher-risk drilling for produce oil at $10 a barrel and Development Company) was “With these projects we will for Sarakhs and we will have seismic some time.” He said: “For the refrain from $20 a barrel.” Hendi these agreements was done testing in Zarrineh Kuh, too.” He sedimentary areas all across the said sovereignty over oil and andHendi approximately said: “The first all phase these of MOU in this regard. He added Jazmourian and Mianeh,” he said: “Gonbadli and Khangiran country, 10-year roadmap was gas is in the hands of state and universities did their part of the thatthe first TENCO company was provided to sign an with said.the first Hendi time said: step “Last into year,Makran, after drawn up. We are moving ahead the law does not authorize the plan and useful studies were the Toudaj block data. He said drilling one exploration well already passed half of their life based on the priorities and we private sector to be involved in conducted, creating a network that the Exploration Directorate work started in east of Karoun. andare among are faced oil withfields pressure that have fall- have major plans for all these the oil and gas sector. He added: of domestic and foreign experts. would provide its viewpoint We started drilling Arman well off. That is why gas exploration in areas like Makran or Moghan or “Studies about legal aspects are The report on the conclusion soon about the possible signing in a fully intact area.” He said: Kopet-Dagh.” under way and we are trying to of agreement and start of “We are currently drilling wells apply the Mine Law to this issue. submitted to the minister.” operations. Hendi said Petroiran near Shadegan Lagoon and we Explorationthis region is Potentialsignificant.” Shale Oil/Gas Reserves Petroleum Ministry is conducting Heof these added: five “In agreements the roadmap was Development Company (PEDCO) expect an imminent exploration Asked if NIOC had started Hendi said access to shale oil consultations in this regard.” designed for each of these and Petropars had teamed up horizon.” “Also in Azadegan Plain, operations in other areas without and gas reserves was among we are operating southward any history of exploration plans ahead, adding: “Last E&P Companies in period has been envisaged for projects “and we are in the and we will have several joint projects, Hendi said: “Last year, we announced existence Exploration Blocks thecontracts, development a five to of nine-year technology stagefor several of signing field developmentcontracts”. He onshore and offshore projects. [calendar] year, we zoned the of massive shale gas reserves Hendi also touched on the joint and even commercialization.” added that Iranian Offshore The agreement on one of them country in terms of exploration in Ilam and Kermanshah and research projects conducted Hendi said talks had been held Engineering and Construction has been signed and we expect potential. It is our forecast that the minister appreciated it, but with universities, saying: “Our Company (IOEC) and Pars the tender bid for the remaining the biggest potential lies in the effort has been to refrain from for Strategic Affairs and CEO Petro Zagros had also teamed to have a winner. We expect south and southwest. But it does is not currently prioritized by individual programs from the with the Office of Vice President up to look for offshore blocks. to witness massive structural not imply that we would not be NIOCdevelopment and we areof these looking fields for the President agreed to provide “Currently, we have shared data traps there,” he added. Hendi looking for new explorations private sector’s potential.” roadmap which provided us with theof NIOC, sum toand be the paid Office by NIOC of Vice to with them,” he said. Hendi said also touched on new exploration in other areas of the country. He said that shale oil had thefirst major year. We chapters implemented required a for knowledge-based companies in in the Kopet-Dag area, saying: In the following phases we will been discovered in the Qali research.” He said the next step were engaged in exploration “This area is very far from Iran’s become active in northeast and Kuh area in Lorestan, whose was long-term joint research of oil companies’ involvement blocks.a total of He five added: Iranian “Of companies course we southern energy hub, but it northwest where there is lower complementary studies were inthe exploration, five universities. he said: On “In the light issue have not yet issued appeal to potential.” under way. He added that Ferdowsi University, Shahroud of restrictions in attracting Iranian E&P companies. We are to us. Based on the Petroleum “Of course earlier we had the project was among NIOC project with five universities – waiting for the endorsement of Minister’shas always instruction been of significance we are exploration operations with priorities. Hendi said: “Should all contractual parameters by looking for gas.” He said that higher risk in Kashan, Garmsar, legal problems in the awarding the minister and then we will seismic testing operations had Kohguiluyeh Boyer Ahmad of shale reservoirs to the private forward them to all 19 Iranian started in the current calendar and some areas of Qom and sector be resolved, such oil and E&P companies.” year. Hendi said in coming Kurdestan,” said Hendi. gas which is of high quality years, at least three exploration He said that exploration could be cost-effective for the wells would be drilled in operations began in northern private sector.” He said Kopet-Dag area. “Kopet-Dag is Dezful, whose results will be that exploration and a sedimentary area, extending soon announced. Hendi said from east of Gorgan to Sarakhs. It is divided into eastern, western

8 9 Contract October 2019 Issue No.88 monthly Contract

were considering tie-up. He also expressed hope that Saba Two Seismic Testing Drilling Company would be able to meet NIOC needs. OIEC is among companies Agreements Signed active both in upstream and downstream sectors, and was The National Iranian Oil Company Exploration involved in the development of Directorate has signed two seismic testing agreements with two Iranian companies. recently signed agreements The agreements, including one 2D and one 3D seismic tothe cooperate South Pars with gas Loule field. It has testing, are aimed at identifying new exploration Gostar Esfarayen and Mashin potential in Iran. Sazi Arak in the upstream aleh Hendi, NIOC structures would be examined. and petrochemical sectors. exploration chief, said Stratigraphic hydrocarbon Manouchehri said agreements Sall sedimentary basins worth IRR 20,000 billion had had to be decided upon. He The 2D seismic testing, worth been signed with the private said that due to discoveries of IRRtraps 1,400 would billion, be also would identified. sector, adding that another previous years, the Directorate cover the three provinces IRR 20,000 billion was on had fully met its exploration of Kohguiluyeh and Boyer the agenda. Asakareh said targets. The 2D Basht seismic Ahmad, Fars and Khuzestan. the Paniz project would be testing agreement was signed OIEC would operate the implemented in Khuzestan between Hendi and Ali-Reza project over 28 months. The Province, including 1,900 Behbahaninia, chairman of project is aimed at identifying square kilometers of 3D Oil Exploration Operation new exploration potential. In seismic testing and 400 the data gathering phase, the square kilometers of 2D with the Oil Industries southern Dezful sedimentary seismic testing. According to EngineeringCompany (OEOC) and Construction affiliated basin would be studied. That Asakareh, the Paniz project Company (OIEC). The 3D Paniz would allow the determination was planned for 32 months, seismic testing agreement of the precise geometry of 22 months of which would be has been signed between buildings and the depth for implementation and the Hendi and Omid Asakareh, of access to exploration circumstances [sanctions], said it was due to increased remained intact, we will be rest for data processing. He CEO of TENCO (Negin Afagh objectives. the Exploration Directorate exploration over recent years. prospecting.” referred to an MOU signed Kish Energy Development will operate such projects He said that the Exploration between TENCO and National Company). No Submission to Sanctions in partnership with Iranian Contractors, Operating Arm Iranian South Oil Company Addressing the signing companies.” He also touched obligated to decide upon of NIOC (NISOC) for developing the Largest 3D Seismic Project ceremony, Hendi highlighted on the studies conducted on prospectiveDirectorate wasmeasures officially to be Gholam-Reza Manouchehri, The Paniz project would US sanctions imposed on exploration blocks, saying: taken in all sedimentary basins CEO of OIEC, said contractors be the largest 3D offshore- Iran’s petroleum industry and “We had already signed a in the country. Hendi said: would be the operating arm TENCOShadegan priority, field, saying: I hope to“Since sign onshore seismic project in said: “In spite of all problems memorandum of cooperation “Tender bids are planned to of NIOC. “Under the present thedevelopment agreement of for this developing field is a Iran, covering 2,000 square faced with by the petroleum with an Iranian company and be launched for 14 seismic, circumstances, further kilometers of land in the industry, this sector is dynamic we are now about to sign an gravimetry and magnometry cooperation between clients due to restrictions in attracting cities of Shadegan, Abadan, and industrious. The signing of agreement.” He said that for agreements this [calendar] and contractors is expected,” this field with NISOC. However, Mahshahr and Darquain. these agreements shows that year. Seven agreements have he said. Manouchehri said implement the projects on our Estimated to last 32 months, we have not bowed under the studies were being jointly major oil and gas potentialities ownforeign by financing,relying on wedomestic plan to the project is valued at IRR pressure from sanctions.” conductedthe first time with exploration an Iranian that the remaining contracts in Iran had become practical, technical and technological 3,000 billion. In the data He said Iran did not welcome company, which proved Iran’s been finalized and we hope adding: “Exploration activities knowhow.” Asakareh said gathering phase of this project, sanctions and isolation from self-reliance in exploration. of next calendar year.” are just the beginning of this TENCO was among dozens of a vast segment of Abadan the entire world, adding: “But wouldHe said be the finalized implementation by the end road. Therefore, focusing companies recognized by Iran’s Plain’s sedimentary basin we will not raise our hands in Increased Exploration of agreements needed IRR on the development of Petroleum Ministry as E&P would undergo exploration show of submission.” Hendi Hendi said NIOC 22,000 billion, adding: exploration activities is a right companies. He added: “Given operation and the 3D seismic highlighted complications Exploration Directorate had “These agreements will be decision under the present testing of Abadan Plain would in seismic testing projects managed to reach its liquid implemented in various parts circumstances in Iran.” in this company, in addition be largely completed. like Paniz, saying: “Foreign of Iran and they are scattered Manouchehri said OEOC tothe the significance development of exploration, section, a Meanwhile, the connection companies were supposed gas and condensate) and gas had already conducted joint division has been set up to take between East Karoun’s to operate such projects, explorationhydrocarbon targets (oil, liquefied at 130% Jask, Jazmourian, Bostanabad investment with an Iranian care of exploration projects structures and adjoining but under the present and 170%, respectively. He andsufficiently. Mianeh, In which some had areas like service company, adding they and seismic testing affairs.” 10 11 news October 2019 Issue No.88 monthly news A memorandum of Arak and AzarAb Industries and trade, Gholam-Reza upstream oil projects and has manufacturing. understanding worth €60 to supply equipment to Kian Manouchehri, CEO of OIEC, and He added: “Fortunately, with €60mn MOU million was signed between Petrochemical Company a group of managers of private for domestically manufactured the formation of conceptual three Iranian companies for and Dehloran Petrochemical manufacturing companies. equipment.”filed nearly $1 He billion said extensive orders engineering chain and the for Petchem the domestic manufacturing Company. Mashin Sazi has a €40 Addressing the ceremony, support by Petroleum Minister of petrochemical industry million share and AzarAb the Manouchehri said the MOU Bijan Zangeneh and Industry potential, we are now able to Equipment equipment. The MOU was remaining €20 million share. would soon become an Minister Rahmani in line assignidentification most tasks of domestic to the private signed between Oil Industries The signing ceremony was agreement, adding: “OIEC with the policy of resilient sector.” Manufacture Engineering and Construction attended by Reza Rahmani, is currently operating the economy had prompted Iranian Company (OIEC), Mashin Sazi minister of industry, mine largest petrochemical, LNG and experts to focus on domestic

NISOC to Gather Flare Iran E&P Companies South Pars Production Key Equipment Manufactured Gas Must Sell Oil Platforms Count at 39 for Ilam Gas Refinery Ahmad Mohammadi, CEO of National Reza Dehqan, deputy CEO of National Iranian The deputy CEO of Pars Oil and Gas Company Yousef Ezzati, chief engineer at the Ilam Iranian South Oil Company (NISOC), said Oil Company (NIOC), has said Iranian E&P (POGC) for logistics, Yahya Rashidi, has said six four agreements and one memorandum of companies are expected to be able to sell their new platforms would become operational in the understanding had been signed for gas gathering own oil in the near future. He said: “This issue thegas demethanizerrefinery, said a tower. supporting He said: reboiler “In the in NISOC-run areas. He said one of the most requires these companies to work out necessary have had 39 platforms by the end of the current designhad been and developed manufacturing at the ofrefinery the reboiler for important agreements for this purpose had been mechanisms. It has to be taken into account calendarSouth Pars year gas next field. March. He said He South noted Pars that would safety of the demethanizer tower, BAHX-powered as soon as possible.” Dehqan also called for was the fundamental of gas production at convertors have been used. Such convertors further cooperation between Iranian companies South Pars, adding that compliance with safety are manufactured by a limited number of agreement’ssigned for gathering value at flare$1.1 gasbillion. at the “Within Bid-Boland the regulations would help stabilize production manufacturers in the world.” Ezzati said: frameworkrefining project of this in the agreement, Persian Gulf. according He put to the in the long term. Rashidi said South Pars gas “Although this technology is upgraded, ofto appraisalbenefit from of exploration opportunities blocks, available saying: for “The the in case of any damage resulting from the Gachsaran and in the east of Khuzestan Province resultspetroleum of appraisal industry. of He exploration touched on blocks the findings in manufacturing, it was impossible to have woulda timetable, be gathered,” about 400 he mcfadded. /d ofMohammadi flare gas in recent years indicate that the volume of oil aproduction breakthrough capacity would had not grown be achieved significantly without it repaired inside or outside the country; said a $200 million agreement had also been reserves in place and recoverable reserves in Iran observingover the past safety five obligations years to double. in the He production said such therefore, the only solution was to replace signed with the Maroun Petrochemical Company, are more than estimated.” Dehqan underlined process. He said the startup of six platforms it. That is why we had to repurchase this that Iranian companies need to be fully capable last calendar year helped South Pars increase equipment after it was damaged.” He said be gathered in Maroun and Ahvaz in Khuzestan under conditions of sanctions, saying: “We won’t its production capacity by 85 mcm/d, adding the impossibility of repairing reboilers at the Province.adding that He over said: 200 “We mcf/d have ofsigned flare twogas wouldauction welcome international sanctions, but we believe that with the installation of new platforms, the demethanizer tower would impact sustainable deals with two private companies for associated that a progressive society is a society that would production capacity from the developed phases petroleum gas sales. turn threats into opportunities. of South Pars would reach 750 mcm/d. problem had to be resolved in a way or other. production at the refinery, adding: “This

of 15 years. The investor would was witnessing a rapid gas LNG, Key Option for also produce LNG. consumption growth. “Global gas trading is forecast to be Revenue Generation S-LNG Units at Assaluyeh done in LNG form in the future. Talin Mansourian, director the framework for setting up Ali-Akbar Shabanpour, CEO Russia, the United States and of investment and business at an LNG park has been drawn of Iran LNG, said the company Qatar are currently the main National Iranian Oil Company up following several rounds would be responsible for players of the LNG market in (NIOC), said developing the of meeting held at Petroleum preparing infrastructure for the world and our country Ministry and NIOC. She added: this park. “In this project, has no place there,” he added. industry and stepping into the “Now we intend to complete or 1,910 mcf/d of gas is received Mostafavi said the reason for LNGliquefied market natural was necessarygas (LNG) for amend it by receiving the views from South Pars for the annual choosing mini LNG units at making revenue from gas. “Iran and suggestions of investors.” production of 10.5 million this park was the availability sits atop huge gas reserves. tonnes of LNG,” he said. of necessary technology in Therefore, development of companies could propose their facilities and installations which and Iran LNG would be the Shabanpour said 30 ha of land many countries, in addition to the LNG industry is a common approachesMansourian forsaid the financing purpose of would be used for launching the near SP14 was envisaged for its lower costs. He added that approach for making revenue making investment attractive LNG park. This project includes said the Petroleum Ministry as building the six S-LNG units. six S-LNG unit would provide from gas reserves. Therefore, in this project. She highlighted 6 LNG units to produce 500,000 thebeneficiary supplier party. of feedstock Mansourian would Mohammad Mostafavi, CEO of enough LNG whose export by presence in this industry is a the role of Iran LNG Co. in this tonnes a year.” She said that NIOC guarantee the quantity and Iran Oil Industry Investment oceangoing ships would be must,” he said. Mansourian said project, saying: “Iran LNG has is the investor in this project quality of sweet gas for a period Company, said the world economical. 12 13 news October 2019 Issue No.88 monthly news NIOC, PEDC Eye Condensate Refinery Cooperation Euro-5 Gasoil Output National Iranian Oil Company (NIOC) and at 20ml/d Second MOU for Bamdad Pasargad Energy Development Company The Bandar Abbas gas condensate PGPIC 2nd in ICIS Exploration Block (PEDC) have studied avenues of long-term Ranking production to 20 ml/d, CEO of the The second memorandum of understanding for refinery has raised its Euro-5 gasoil Iran’s Persian Gulf Petrochemical Industries exploration studies in the Bamdad offshore block NIOC-PEDCcooperation jointin Sepehr management and Jofair committee fields’ Company (PGPIC) came second after Germany’s along with a non-disclosure agreement has been (JMC),development. Reza Dehqan, During deputy the first CEO meeting of NIOC of refinery Mohammad Ali Dadvar said. Basef in the Independent Chemical Information signed. The MOU was signed between Saleh Hendi, for development and engineering, said: hasHe said reached that the450,000 refinery b/d. had “Now increased that Service (ICIS) 2018 ranking in terms of investment director of exploration at National Iranian Oil “The direct investment value of this its refining capacity by 90,000 b/d and volume, PGPIC CEO Jafar Rabiei said. He said Company (NIOC), and Saeed Shad, CEO of Iranian agreement stands at $2,427 million for reached 450,000 b/d of gas condensate, PGPIC came 9th in the 2017 ranking of ICIS, but Offshore Engineering and Construction Company onthe average refining between capacity 17of thisand refinery20 ml/d hasof it managed to improve its position after one year. (IOEC). Hendi said NIOC and the Petroleum production target is to reach 21,000 b/d Euro-5 gasoil and 47 ml/d of Euro-5 Rabiei also said that the latest sanctions imposed Ministry had undertaken measures to facilitate the outputa 20-year after period.” 30 months, He added: which “The would first reach on Iran’s energy sector were unprecedented. “With presence of domestic companies in exploration. 110,000 b/d ceiling. The accumulated Dadvar. He said that initially four phases the imposition of sanctions, some problems were gasoline is produced at this refinery,” said created in domestic sales and exports of chemicals, systems as well as necessary knowhow and 500 million barrels.” Dehqan said Sepehr that the activity forecast for four phases but our colleagues managed to reduce the impact technology,“Owing to their Iranian qualified companies manpower, can get equipped involved andproduction Jofair development from this field agreement is estimated was iswere now envisaged distributed for between the refinery, the threeadding of sanctions,” he said. Rabiei touched on a 53% in numerous exploration projects and present an the third IPC contract NIOC signed. “This existing phases. “Through optimization increase in PGPIC revenue in 2018 from that of acceptable performance,” he added. Hendi said: agreement has been signed with an Iranian in the existing three phases, a total of the year before, adding the company recorded a “In the past, studies on all exploration blocks were company, but the latter can have a foreign carried out by foreign companies, yielding favorable partner in the future,” he added. Mehdi results. Some of those blocks are developed and Mir-Moezzi, CEO of PEDC, said: “We had 90,000 b/d ishas to been be added added after to the receiving refining 110% growth in operating profits, 99% growth operational.” He said over the past one year, authorizationcapacity of the for refinery feedstock,” and another he added. company,in investment he said profits it held and 12% a 137% of Iran’s net profit capital in the feasibility studies for the Toudaj block had been presence in this agreement and even talks Dadvar said the fourth phase was initially market.same period. “The stockDescribing market PGPIC value as of a six “profitable” subsidiaries assigned to the Iranian company TANCO. Hendi said plans to benefit from a foreign company’s for treating another 120,000 b/d of of this holding stands at IRR 1,350 billion,” he added. the Bamdad block was the best among a group of 14 but these two companies pulled out due condensate, the plan was reconsidered Rabiei said the Lordegan petrochemical plant, Ilam envisaged for development by the NIOC Directorate towith the two US companieswithdrawal had from been the finalized,JCPOA and renamed capacity optimization and of Exploration. He said the proven oil system in (Iran’s nuclear deal). However, we are debottlenecking. “The initial investment Bamdad showed it was low-risk. He said IOEC was for phase 4 was estimated at €980 southernolefin, the oil-rich first phase regions of Bid-Boland and the Urmia gas refinery, potassium experienced enough for the development of the partner.” He said the 20-year period for the million, but with debottlenecking at €90 sulfatethe first would phase become of flare operationalgas gathering by facilities March 2020. in Bamdad block. “After signing this MOU, we also feel stillagreement determined was anto benefitadvantage from of a the foreign Iran million, about €900 has been practically He added that the startup of the Bid-Boland, Ilam compelled to show our most cooperation as the Petroleum Contract model compared saved, which could be invested in and Lordegan projects would increase PGPIC client in empowering this company,” he added. with the buyback deals. other sectors,” he added. installed capacity by about 6 million tonnes.

province of Yazd on Sunday, Dr. New Oil Find in Khuzestan Rouhani announced discovery which were explored after Iranian Minister of Petroleum place and there is a possibility theof Iran’s 1979 oil Islamic and gas Revolution fields Bijan Zangeneh said that the of its southward continuation. “My good news is that the was unveiled by the National According to Zangeneh, staffof the of field the Nationalfor the first Iranian time. Oil Iranian Oil Company (NIOC)’s in Khuzesan was named exploration activities began in Company in the exploration exploration department. newly-discovered oilfield 2016 and given that 31 b barrels section, after years of efforts, NIOC Exploration Activities had an oil in place estimate of were previously discovered, 22 especially in 2016, have Hot since 1979 Revolution 53Namavaran, billion barrels. adding Addressing the field billion barrels were added to During the ceremony, Seyed reporters on Monday, the previous estimations. Assuming Iranian President in an address Saleh Hendi, director of the todiscovered the people a field,” of Yazd. said the NIOC exploration department, had added 22 billion barrels of 2.2 billion barrels of crude said his company had made crudeofficial oil said to previousthe new discovery estimates oil10% have recovery been added rate in to the the field, from Bostan to Omidiyeh a new discovery every year country’s crude oil production CountyHe said in the Khuzestan field straddled measuring since the revolution, with the had attended a ceremony capacity, he said. This is nearly 2,400 km and 80 exception of six years which toof theunveil field. the Zangeneh, Atlas of oil who and were contemporary with the gas discoveries in Iran since discovered in Iran following will generate 320 trillion Iran-Iraq war. He said the atlas the 1979 resolution, said the Asmarithe second Oil Layerlargest in oilfield Gachsaran inmeters revenue in thickness. for Iran with The 10 field entailed all the oil and gas with 54 billion barrels of oil in percent recovery rate, he discoveries in Iran over the past billion barrels of crude oil in place. Speaking in the southern added. Moreover, the Atlas four decades. field was estimated to hold 53 14 15 Petchem October 2019 Issue No.88 monthly Petchem

tonnes a year in the third sector, in light of the current foreign investors. jump. The country would need circumstances.” He added: “As He added: “Our ability to to invest $17 billion for the you know our negotiations attract foreign investment Iran Learns from second jump and $23 billion with famous European under conditions of sanctions for the third jump. Asked if petrochemical companies have depends on investors. But foreign investment would be been affected by the sanctions, we will continue our activity needed for the second and but in order to acquire under the conditions of Previous Sanctions third jumps to materialize necessary technology for the sanctions and direct and After the United States moved to tighten sanctions against Iran’s its goals, Alimorad said: “In third jump, there are other unilateral pressure from petrochemical industry last July, experts said those sanctions the second jump, we have options. Backed by Petroleum the US.” Alimorad said made necessary projections Ministry and NPC, our foreign investors’ interest were merely symbolic. Five months have now passed since the US investors are working on these in Iran’s petrochemical made that decision, while Iran’s petrochemicals sales continue despite the We have presented a suitable options in order to gauge their industry resulted from Iran’s mechanismfor financing to the the projects. Petroleum feasibility so that we would advantages in this sector. imposition of those sanctions. Ministry, which would He added: “Our market is not empower us to use foreign jump and achieve necessary limited to Iran’s 80-million- Negar Sadeqi pace. He noted that over 95% reason for the ineffectiveness technology.”provide financing for the third strong population. We have of petrochemical companies of US sanctions against Iran’s 13 neighboring countries, i.e. ossein Alimorad, had brought back home the petrochemical industry was Challengingfinancing.” but Not No Halt in Talks a 400-million-strong market. director of investment foreign currency achieved the previous experience of Worrying Alimorad said NPC’s Another issue is permanent, Hat National from selling products. So, it sanctions. He added: “We Alimorad said there was negotiations with foreign reliable and stable access Petrochemical Company (NPC), implies that the US sanctions had the experience of the nothing to worry about investors were under way. He to feedstock in Iran, which told “Iran Petroleum”: “We targeting Iran’s petrochemical previous round of sanctions, added: “You need to take into would encourage investment had the experience of previous industry had no impact on mechanisms. He said: “We account that our previous talks in the petrochemical industry.” round of sanctions and we petrochemical products solutions for countering the havewith regardnothing to to financing worry with foreign investors were Alimorad said: “As the previous had experimented ways of exports. Even Jafar Rabiei, sanctions.”which helped He us said find investors various about with regard to continuing without any halt.” sanctions strengthened our countering the sanctions.” CEO of the Persian Gulf and customers were both He said: “We will also try to position in the industry and He added: “Through Petrochemical Industries looking for options to invest in jump. In fact, in light of pursue our negotiations so as we managed to develop good interaction with investors and Company, said the sanctions Iran without being affected by financinggovernment’s the second support to cause no problem to foreign interactions with neighboring our customers we managed against Iran’s the sanctions. and coordination with investor and company.” countries, we will leave behind petrochemical the Central Bank, Alimorad said sanctions the sanctions, too.” He said investment for industrial sector had failed. More Anti-Sanctions Ministry of Economy were haunting Iran’s that NPC had drawn up six development.to find ways of It attracting was tough, but Alimorad Options and Finance and petroleum industry and the development plans, the last we managed to afford it.” said the most Alimorad refused to reveal Petroleum Ministry, US was making every effort of which would be based on Alimorad said despite US ways of bypassing the we can provide the to block attraction of foreign economic resilience and using threats, NPC’s negotiations sanctions, but said: “The investment for this industry. homegrown technical savvy. were under way, noting that significant sanctions have had no impact He; however, “Therefore, it seems that Iran “That is why I suggest that NPC preferred to push ahead because we tested various necessarysaid: “We mayfinancing.” would face a big challenge in foreign companies willing to with its talks in total silence. ways and they proved to face challenges in this sector and fail to achieve invest in Iran reconsider the be effective. We are now attracting foreign its objectives,” he added. domestic technical knowhow,” First Round Experience expanding these options, and investment for the Alimorad said despite he said. Alimorad added: “In Iran’s Minister of Petroleum we are following them.” third jump in the all sanctions faced case foreign investors prove Bijan Zangeneh NPC has announced that it petrochemical with by the their real intention and their recently said would continue making efforts petrochemical technical capability, the the country towards the second and third industry, this Petroleum Ministry and NPC was exporting jumps in the petrochemical sector remains will cooperate with them.” petrochemicals sector. Iran hopes to bring its attractive to at a petrochemical production satisfactory volume to 150 million

16 17 Petchem October 2019 Issue No.88 monthly Petchem

or not the ethane produced throughout this process gained over previous years, Iran’s petrochemical Iran Petchem to See would reach maximum, he said: “As far as excess industry has not been much affected by sanctions. methane is concerned we would think about combined feedstock and move towards polymers sector would provide investors with a good chance. Two Output Jumps AbundantFurthermore, manpower the accelerated and low-cost profitability feedstock of this for Some may say petrochemical production would mean making money. But it faced high demand for ethane. He said: “Moreover, petrochemical projects in Iran, when compared may be expressed by those who live in a country rich in hydrocarbon reserves. theyand aromatics.” have to move He towards added olefin combined projects feedstock. have with neighboring states, would allay the concerns Petrochemical production is by nature a value- generating industry. Throughout In addition to ethylene and polyethylene, we need of actors of this sector. Furthermore, the prevailing energy production, it generates value via specific and complicated procedures. Sitting atop to embrace propane and aromatic production.” security and access to petrochemical tools would huge oil and gas reserves, Iran is among nations that has switched to the development of the Mohammadi said in addition to ethane, gas make investment in the petrochemical sector more petrochemical industry and benefited from its advantages very soon. Iran’s petrochemical condensate, propane and butane would be also and more economical. revenue currently stands at $17 billion, which is expected to make two significant jumps in given to applicants. 2021 and 2025. That would mean an enhanced role for the petrochemical sector in Iran’s Diverse Downstream Products macro-economy. Iran’s Petroleum Minister Bijan Zangeneh has said the petrochemical Ethane Surplus Ali Mohammad Bosaqzadeh, director of NPC sector is among few industries to have not been much affected by US sanctions. Rather, this Mohammadi said implementation of the Kangan projects, told “Iran Petroleum” the ground industry has spared Iran’s economy harms from big crises amid sanctions. Farzin Savadkoohi product diversity. Until recently we intended to Pars projects, would strike a balance in the ethane petrochemical products in the downstream make maximum use of our ethane production. That consumptionand Parsian petrorefineries, by 2023. He said in thataddition from to 2019 South to sector.had been He pavedsaid over for furtherrecent years, diversification polymer andof Petchem Output at 150mt/y is why we designed numerous plants for methanol 2023, the country would see “golden excess”. He compounding manufacturing companies had made Zangeneh told “Iran Petroleum” reporter: “After and urea fertilizer production in order to use liquid said from that time onward, Iran would have no the second jump, we are now about to make a third feedstock combined with gas in order to reach our ethane surplus. “Of course, up to that time this jump in the petrochemical industry, under which required propylene and diversify the value chain of excess production would reach 5 million tones. onsignificant the potential progress, of Iranian which companies, facilitated diversity saying: in we will bring Iran’s petrochemical production this industry in the downstream sector.” However, we have made plans to develop the “Givenpetrochemical the capability production. of domestic The official companies, touched the capacity to 150 million tones a year.” He said that petrochemical industry smartly based on our government is expected to provide more support Iran’s petrochemical production was valued at Quality Products feedstock,” he said. Regarding feedstock supply for for domestic manufacturers, while imports of $1 billion in 1997. “With NIOC’s cooperation, we Behzad Mohammadi, CEO of National this excess ethane production, Mohammadi said: products whose similar prototypes exist in Iran managed to start major projects, some of which Petrochemical Company (NPC), told “Iran “There is nothing to worry about, because we hold should be kept in check.” According to regulations, became operational by 2005. The rest also came Petroleum” $17 billion was envisaged to be invested an extensive look at the supply of feedstock and we state support should be limited to the removal of online and our revenue reached $15 billion to $16 in the second jump and $23 billion in the third have six projects to feed the petrochemical industry, obstacles to business. The government is barred billion.” The minister said efforts were made for jump. Asked what horizon would be envisaged three of which is related to NGL 3100 in the from direct involvement in this market, paving for downstream industries in the second and Dehloran area, NGL 3200 in West Karoun and NGL the way for the private sector to operate based third jumps and how diverse the products would Kharg. Upstream NGL projects in the Bidboland gas on free interactions. Downstream petrochemical afinishing major part. incomplete He added: projects, “In 2013, which the are ethane mainly be, he said: “That is not possible overnight and industrialists are currently pushing ahead with productionfocused on plasticstood at and 4.2 olefin million with tons feedstock in 2013. having It we undoubtedly need comprehensive planning. of these six projects would bring feedstock supply their production with minimum concern, and reached 7.3 million tons in 2018 and 16 million What we would achieve in 2021 would be capacityrefinery areto 15 under million way.” tons, He whilesaid that the commissioningpetrochemical no crisis could stop this industry. It would be no tons in 2021.” Zangeneh said petrochemical increased production capacity and we can work industry feedstock would increase from the current exaggeration to say that Iran is currently a haven production would reach $25 billion after the third more effectively on quality in the third jump. 650,000 barrels to 1.35 million barrels by 2025. for the petrochemical industry. In case some jump, adding: “By 2021, in the run-up to the second Therefore, we would not be able to fully realize Therefore, with the horizon unfolding in Iran’s regulations and semi-bureaucratic obstacles jump in the petrochemical industry, about 27 new quality standards in our 27 projects; however, we petrochemical industry, this economic activity in projects would become operational, while we are are looking for the development of a new method Iran can soon meet the expectations of domestic still under sanctions.” He said: “We have a number of thinking in order to move towards quality and foreign investors. Relying on the homegrown remaining from previous years are modified, Iran’s of considerations now, including feedstock and production.” In response to a question on whether knowledge in this sector and owing to experience petrochemical industry would become an influential sector with significant role in Iran’s economic 18 growth and profitability. 19 IPEC October 2019 Issue No.88 monthly IPEC

could not and they were not willing to stay with us. They said they could not work and they Zangeneh: Iran quit.” The minister said: “The offshore sector of the 27 phases of South Has Own Tools to Pars would come on stream by SP14 would be completed by Foil Sanctions 2021.”March 2020 and the refinery of Iran’s Minister of Petroleum Bijan Zangeneh told Supporting Startups the opening ceremony of the 5th annual “Iran Zangeneh said IPEC members, Petroleum and Energy Club” (IPEC) Congress that who initially came together the country would use its own initiatives to overpower US to share their experience, were good consultants for sanctions. He said: “Although sanctions deal the biggest accelerators, startups and blows at the petroleum industry and downgrade our global knowledge-based companies. standing, we will resist and use our own initiatives under “We need to put this issue such tough conditions.” Zangeneh said Iran’s oil sector was being dealt “deadly blows” from time to time. from the capabilities of IPEC andon the its agenda,members,” and he benefit said. So far we have survived industry would not be interested role in the prospective business Large-Scale Financing these blows and resolved the in small-sized projects. Zangeneh of the petroleum industry. Even Zangeneh touched on the big time this year, we have become of Deputy Minister of Petroleum “problem,” he added. said oil preservation operations under the present conditions of dimensions of the petroleum anindustry, exporter saying: of gasoline, “For the thanks first to forZangeneh Engineering has tasked Affairs the with Office The minister said: “We have were mainly a job assigned to sanctions, these companies can industry, saying: “The presence increased gasoline production.” pursuing the issue of startups learnt to live and work under several contractors to work have good activity.” of the private sector depends on He added: “Euro-4 gasoline for oil activities. The minister tough conditions and that is why together. “But now, a single the three factors of ‘capability and sulfur-free gasoil is being has even visited accelerators and we have survived. We have learnt contractor handles the entire Geopolitical Changes and suitable management distributed in mega cities. startups in the past one month to resist under tough conditions job from beginning to end, and Zangeneh went on to structure’, ‘technology and Furthermore, the whole excess and has allotted land to such and not let a bunch [of nations] payments depend on production underscore changes in the oil interaction potential’, and companies. Addressing the IPEC encroach upon the rights of rate,” he said. Zangeneh also geopolitics, saying: “Over the Zangeneh said completing the Congress, he said the Petroleum the Iranian nation and exert said that the systems needed past ten years, nobody forecast refined products are exported.” Ministry would continue to pressure upon us.” Zangeneh in the petroleum industry like the US to become the largest monetary‘sufficient capitaland capital and capabilitymarkets’.” a capacity of treating 360,000 support startups. highlighted high revenue from skid-mounted production and producer of oil in the world. for providing financing through b/dSiraf of condensate condensate refineries was a priority. with Other topics highlighted by oil sales, saying: “The price of the desalination units or pressure The US was the largest importer was a major requirement for the He said: “This project is a chain Zangeneh in his opening speech smallest oil cargo is $50 million compressors should be built of oil, but now it is the largest privateHe said sectorlarge-scale to get financing involved in were as follows: the 2nd and and the Petroleum Ministry in Iran. Touching on direct oil producer. Moreover, it has upstream oil projects, as well as Under the Siraf project, we 3rd jumps in the petrochemical could not trust just any buyer. investment in the petroleum started exporting oil, gas and in oil trading. “So far, everyone mustof refineries set up petrochemicaland petrorefineries. units industry and an increase in Therefore, we have to be careful industry, more precisely in condensate.” The minister said has been after the National because the main product of the the petrochemical production with selling oil cargoes.” Development Fund of Iran capacity to 150 million tonnes He said that conditions were gas liquefaction as well as in the Persian Gulf states and (NDFI). It’s no longer possible. a year, negotiations with the downstreampetrochemical, oil, refining, gas and traditionalthere was significant producers potential for Total,Siraf refineries CNPCI Friendlyis naphtha.” Exit domestic and foreign companies petroleum products like gasoil, petrochemical chain, he said: development and dynamism. He Zangeneh referred to Phase for Iran Petroleum Contract gasoline,conducive fuel to exportingoil and even refined gas added that oil could still be the WeZangeneh have to saidfind heoptions was aware for of 11 of development of the (IPC)-based projects, signing condensate. valuable feedstock in which driver of Iran’s economy. thefinancing,” challenges he said. contractors are giant offshore South Pars gas agreements with Iranian we“There can isinvest sufficient with agroup view andto Zangeneh also referred faced with. He added: “However, contractors for enhancing oil and Private Sector in Oil completing the value chain and to the petroleum industry we cannot merely rely on the implement the project with gas production, implementing Contracts avoiding raw materials sales as outlook, adopted in 2004, as thefield, French saying: company “We wanted Total to associated gas gathering projects, Zangeneh, an advocate much as possible.” Zangeneh well as the country’s 20-year Petroleum Ministry would help because of the need for using of the private sector, said also referred to Exploration and Vision. He said: “The macro contractorsgovernment only for financing. if they also The have offshore pressure compression private contractors would be Production (E&P) companies, objectives of that vision their own equity.” technology, but unfortunately, agreementfinalizing the for case the ofdevelopment jointly instrumental in oil projects. saying: “The Petroleum Ministry were realistic and accessible. due to the re-imposition of owned oil and gas fields, signing He said that EPC contractors has named 15 to 16 companies All aspects of oil had been Iran, Gasoline Exporter sanctions, both Total and China’s months, development of West were being granted dominant envisaged in it. Now we can The minister touched on CNPCI quit. All this was friendly. of the Farzad-A field in coming role in the petroleum industry. and production work. These update it in order to make the quantitative and qualitative We had no dispute with each of national gas distribution He added that the petroleum companiesas qualified can ones play for a exploration decisive objectives materialize.” other. Due to the sanctions, they network.Karoun fields and expansion 20 achievements of the refining 21 IPEC October 2019 Issue No.88 monthly IPEC

RenewablesOn the first day of the 5th annual congress of “Iran Petroleum Set and Energy Club” to (IPEC), keynote Replace speakers expounded on the fact that fossilFossil energies were being replaced Energies by renewable energies. Forecasts show that global demand for oil would be on the decline up to 2040, while more gas and other renewable energies would be consumed. Therefore, oil companies are changing their policy to shift towards a greener future. The following are excerpts from keynote speakers at the conference:

Norway Ambassador: GECF Former Secretary OIEC CEO, Gholam-Reza NIGC CEO, Hassan Montazer General, Mohammad Manouchehri: Torbati: No Oil Policy Hossein Adeli: Like Iran, 21st Century, Age Gas Regulatory Norway owes its Geopolitical of Renewables Body Draft development to oil. Changes and The world is about to experience The exploration major changes in the energy Suggested of oil completely Renewables sector. All this has occurred over The presence of private changed Norway’s Until 2000, gas was mainly used the past ten years. If we can identify conditions. We for domestic purposes. Even today, these changes we would be able position of regulatory bodies moved from a poor 68% of Iran’s gas production is used to regain our status for maximizing in thesector process and ofthe revision significant of European country to one domestically. But this domestic product national interests in the energy sector. Of gas industry structure is important of the richest in the continent. However, has become instrumental as a strategically important and effective. The gas industry, as a networking we have adopted a cautious oil policy. international commodity. In other words, in the second concerns, and obligation of nations to reduce CO2 sector, enjoys special features. The long time spent Oil reserves belong to the entire people half of the 20th century, the role of oil as a strategic emissions,course, such the factors Middle as East price crisis fluctuations, and regional environmental hostilities, on manufacturing and the high level of private and we decided in 1990 to establish a commodity has been overshadowed, while gas is taking up as well as the US-China trade war have impacted global investment, the long time spent on return, the reserve fund, where oil revenues would limited number of suppliers and the necessity of be accumulated rather than being injected based on pipeline, has totally changed. Gas has become Focusing on climate change has reduced oil and coal coordination among various sectors of the value into national budget. That is how we have theadded topic significance. of international The gas rivalry market and structure, tension between which was top consumption,energy developments leading toand increased made forecasts gas use. difficult. Demand for chain are among them. The vertical integrated invested our oil revenue all across the gas producers and consumers like Russia, China and the renewable energies and electric vehicles has increased. model, individual purchaser model with regional globe in order to prevent any increase in US. Data released by international economic institutes distributors, rivalry in production and retail show that the global economic growth rate was down share up to 2005, is now enjoying a 29% share. Guarded sales with regional distributors, production and no policy. Everything must be based on in 2019, but it will be up in 2020. However, such growth forecastsElectrification indicate of transport the increased industry, share which of investment had a 19% in retail with regional transmitters and distributors the inflation rate. Our oil policy is to have will not materialize due to the US-China trade war, the the electricity generation sector and renewables. That are among the gas industry business models. considerations in oil supply. In that case, European Union and the Brexit issue, US sanctions against is much higher than investment made in the upstream wetrade would benefits. be able We to should be an ignoreexporter. political We are other nations and increased geopolitical risks. Nations and oil and gas sector. Therefore, we see that the geopolitical of regulatory bodies in the process of structural currently supplying 25% of Europe’s gas companies are exposed to unforeseeable risk conditions. and energy map of the world is changing. Over the past revision.Meantime, To I thatwould end, like commercialization, to stress the significant regulation, role needs. Diversity in suppliers is a key point In case the US-China trade war stops, we will witness decade, the costs of producing solar and wind have been competition, liberalization and privatization are for European Union member states. Over economic growth in 2020. Policy changes vis-à-vis gas the most important steps. Protecting consumers recent years, we have seen how energy hydrocarbon production. If we name the 19th century and investors are among key regulatory tasks. suppliers have declined their oil and gas power plants in some European nations in coming years, assignificantly the century cut, of andcoal they and theare beginningless inexpensive of industrial than We (NIGC) have studied the activities of various climateproduction conditions and consumption, and low gas shutdown prices among of coal-fired other factors period, and the 20th century as the century of oil and the regulators in the world and achieved interesting level of power against customers. We have caused the global demand for gas to grow. That is start of geopolitical developments, the 2nd half of the results. For instance, the regulatory agency in haveflow foralso political invested motivations in renewable to useenergies. their why the gas structure saw a 5% growth in 2018 from the 20th century and the 21st century would be the period the US is the Federal Energy Commission whose Norway’s oil and gas companies have to average 2.5% growth rate recorded for the 2000-2017 of renewable energies, geopolitical changes and shift in spending is secured through annual payments by adapt themselves with a greener future. period. Of course, over recent years, gas production has the balance of power. According to forecasts, by 2040, That is based on such policy that Norway’s oil and coal consumption will keep falling while gas with the Council of Competition. The government Statoil has been renamed Equinor, and in the US, Russia and Australia. In 2018, the LNG market consumption mainly LNG, as well as the consumption isaffiliated obligated industries. to take necessary In Iran, this legal task action partly for rests the shifted its investment from fossil energy to increased significantly due to increased gas production of renewables will keep rising. Gas and renewables will establishment of the aforesaid body within three renewable energy. We are so lucky that oil second, respectively. The European and Asian markets have a 20% share in the global energy mix by 2040. By months from the receipt of the Council’s proposal. and gas was discovered in our country and havegrew become10% with a place Asia andfor US-Russia Europe ranking rivalry the in LNGfirst exports.and the 2035, demand for oil will decline in the transport sector, we are moving ahead by relying on this That is why from October 2018 onward, gas prices have but it will maintain its position in the petrochemical and relations created between components which are wealth. been in free fall due to the US-Russia rivalry. industrial sectors. The financial resources are provided through

affiliated with no organ. 22 23 IPEC October 2019 Issue No.88 monthly IPEC Can Iran State-Oil Reach Financial 8mb/d Relations Oil Financial relations between the state and the oil sector Output? have long been discussed. Iran is currently under US oil Touching on the decline in a decline in the oil share of emphasis on the necessity the investor, lack of a proper the government and the NOC,” sanctions. Some OPEC and even renewable energy production the energy mix does not mean ofOil amending experts and these officials relations; lay modelfinancial for relationship monitoring forthe costs heprofit said, will noting be divided that it betweenwas non-OPEC oil producers are costs, he said: “Statistical data any reduction in oil demand in however, there are buts and ifs determined to take Iran’s share shows that production costs for coming years.” due to the Iranian economy’s other challenges faced with to implement this model. of the oil market. Is it possible once-expensive solar energy intertwinement with oil and byand NIOC financial under shortcomings the current are Kasiricurrently said, difficult at present for Iran NIOC for Iran to bring its oil output to have declined somewhat. 8mb/d Output, a Dream? the budget’s dependence on circumstances,” he added. is following a revenue-based 8 mb/d? Is the ground prepared Estimates also show that by Dehqan said: “Given the oil. One of the panels held Kasiri said NIOC’s share of model. “Under this model, for such production levels? 2040, electric cars would conditions prevailing in global during the 5th annual congress total oil and gas revenue stood A panel at the 5th annual Iran constitute half of light vehicle markets now, would it be of “Iran Petroleum and Energy at 14.5%, taking into account its own share of production Petroleum and Energy Club sales.” realistic to move towards 8mb/d Club” (IPEC) was focused on development, production, withoutthe government interfering first with takes the (IPEC) Congress was focused on oil output. If the answer is this issue. preservation and exploration details of costs. Currently the issue of “8 mb/d oil output: a Oil Off the Line? positive, is it achievable?” costs. He added that under 85.5% of [Iran’s] oil revenue must, dream or reality?” Ali Kardor, former CEO of Profit-Based Relation the current circumstances, the is given to the National by Dehqan at the panel, there National Iranian Oil Company Mohammad-Reza Kasiri, share must be increased to Development Fund of Iran Oil Peak Uncertainty wasBased speculation on figures about provided a halt (NIOC), said an 8mb/d oil director of oil and gas 26%. (NDFI) and the government.” Reza Dehqan, deputy minister in oil supply in coming years, output seemed unrealistic governance plan at the “It means that NIOC lacks He said access to sources of of petroleum for engineering and in which case oil producers under the current status of Governance Think-Tank development, said the 8mb/d would no longer be able to Iran’s petroleum industry. of Sharif University of development, and many transparency is requirements generate wealth from their fossil “However, given Iran’s oil projectssufficient have resources been restricted for forfinancial the commercialization and income, as well of as to let discussions start. energies. Dehqan dismissed such relationship between the an NOC. “After the adoption of figureHe said was uncertainty just symbolic revolved in order speculation, saying: “I don’t say would not be an unrealizable governmentTechnology, saidand theNational financial said Kasiri. He said: “If we Article 12 of Law on Removing around future oil peaks, adding: that oil supply is forecast to stop, dream,”production he said. capacity, Saleh this Hendi, figure Iranian Oil Company (NIOC) wantdue to to financial preserve shortcomings,” the current Obstacles to Competitive “Numerous statistical data is but its supply rate will decline. director of exploration at NIOC, was a conceptual design trend, NIOC would need at Production and Upgrading available in this regard and some Therefore, many international said in order to estimate Iran’s comprised of four dimensions. least 26% of oil revenue. Of forecasts show that an oil peak companies involved in the achievable oil production He said: “The regime of course, it does not mean that burden on NIOC has been will materialize between 2030 petroleum industry have already capacity, depending on the this sum must be the budget of partiallyFinancial relieved System, becausethe financial and 2050.” Dehqan said oil peak embarked on their serious move number of reservoirs, economic government and NIOC, NIOC’s NIOC; rather it is necessary to NIOC would not support such was once determined based on towards renewable energies and policymaking and other items; financial contract between the maintain the current trend.” investment with a 14.5% the countries’ oil production it seems that by 2050, the world a variety of targets may be governance, the transparency share,” said Kasiri. capacity, adding: “Today, the will see a shift in demand from considered. “However, what is andfinancial accountability management of the and relation between 25 national criterion for oil peak is demand fossil energies, particularly oil, certain is that maximizing the oil oilKasiri companies referred (NOCs) to the andfinancial National Missions for oil. In light of developments to renewable energies because production would be a must, and governments across the world, Mehdi Mir-Moezzi, CEO of transpiring the world in recent there is nothing to worry about moving towards such objective relationshipfinancial regime constitute and the the legal four saying they are generally Pasargad Energy Development years and climate change, global in terms of limited supply of must become possible,” he said. dimensions.”framework of Kasiri this financial said one of Company, gave his nod to the demand for oil has declined.” renewables.” Ali Akbar Vahidi Mahmoud Mohaddes, director the major problems currently model suggested by Kasiri. Al-Aqa, who currently chairs of exploration and production faced with by NIOC was the lightclassified of the under motivation revenue-based of NOCs He said: “Commercial activity lower petrochemical output of at Dana Energy, said speaking government’s interference forand investment, profit-based containing categories in plasticEnhanced materials, energy replacement efficiency of international companies’ shift about such output levels would with industrial affairs through costs and enhancing world and it is taxed. That’s fossil fuels with solar and wind toan renewableenergy consulting energies firm, indicated said require a realistic analysis of a complicated mechanism. technology. ais principle. profitable That everywhere is while inwe the the commercial nature of these oil. He said: “I personally favor He added that a more want to forget about these constitute the most important companies. He said: “They increased production, but the transparent mechanism would suits Iran better. Based on this issues and apply our own self- factorsenergy thatand electrificationhave lowered globalof cars take into consideration their facilitate NIOC’s task. “Non- model,“The profit-based the NOCs’ costs model are made methods, which would demand for oil, said Dehqan. studied. attractiveness of the current deducted and the remaining get nowhere.” 8mb/d figure has not been 24 maximum profits. Therefore, 25 IPEC October 2019 Issue No.88 monthly IPEC Startup Panel at IPEC 2019 Startup actors attended in large Mohammadzadeh said major Zangeneh Welcomes numbers in a panel dedicated oil companies had been among Innovation to startups and innovation in top companies over the past 10 Ali Sadeqi Mojarrad, CEO of the petroleum industry at the years, but they are now being Samatech accelerator company, 5th annual Iran Petroleum and replaced by new companies. said Petroleum Minister Bijan Energy Club (IPEC) congress. Zangeneh had recently met with From Fuel Quality to The main reason for the strong 4,600 Knowledge-Based startups and accelerators. He presence at this panel was the Companies said: “I realized that Mr. Zangeneh novelty of the issue of startups Mohammad Sahebkar, director was looking for an approach Business Ecosystem Changes in the petroleum industry and of Center for Knowledge-Based towards development of new Environmental challenges and in mega cities. However, in light did not stem merely from fuel, the special attention paid by Companies and Institutes at ideas and innovation in the compliance with environmental of global issues and growing Petroleum Ministry to this petroleum industry.” He added: standards in the petroleum anxiety with environmental prove his conclusion. issue this year. IPEC 2019 was Science and Technology, said “Furthermore, it has to be taken industry were another topic to pollution and life threats, tough adding“It is not that acceptable he had figures for me to to knowledge-basedthe Office of Vice President companies for into consideration that startups be discussed at the 5th annual laws have been enforced on claim that the fuel we produce focus on oil startups. Saeed were being assessed based on and oil elites have long been Iran Petroleum and Energy Club fossil fuel production. That is is the main cause of pollution. Mohammadzadeh,the first event to specifically deputy their technological potential. He focusing on some issues which (IPEC) Congress. Within a panel why over recent years, activity Currently, the sulfur content minister of petroleum for said: “So far, 4,600 knowledge- may not be important today, but on this issue, Ali-Reza Sadeq- in the renewable energy sector of fuel variations produced engineering, research and based companies have been would become key issues in the Abadi, CEO of National Iranian has been widely welcomed. in the country has been cut technology, said Iran needed oil sector in the future. That can However, the Petroleum Ministry to boost its knowledge and various sectors of industry and introduce a new approach for Company (NIORDC), said the global standards and has no innovative services under technology.confirmed to Every be active two toin three the entry of new ideas into the fuelOil Refining produced and in DistributionIran was in concentrated on upgrading the problem,”significantly. he Oursaid. fuel Sadeq- meets the present circumstances years, the criteria for evaluation petroleum industry.” compliance with standards. has over the past five years Abadi said the Bandar Abbas amid complicated market of these companies become Meantime, the head of to upgrade the quality of fuel conditions. He said: “67% of tougher.” Sahebkar said necessary Overcoming Challenges Center for Knowledge-Based producedquality of refineriesand distributed in a bid in producing about 45 ml/d of our academic work in Iran is conditions had to be provided Rashid Qanei, chairman of Companies and Institutes mega cities. Euro-5gas condensate gasoline, refinery whose pollutant was related to the petroleum and for a more prominent presence Aban accelerator company, Another cause of concern that particles are 0.5 ppm. That is energy industry, while only 1.2% of knowledge-based companies said startups had gained a Vice-President for Science and was discussed at the panel was while global standards accept up of investment funds are active and startups in the oil and energy new meaning. “Startups are Technologyaffiliated with said the the Office criteria of for to 10 ppm, he added. in the oil and energy sector.” sector. incorporated with a creativity assessing knowledge-based Sediqi, director of incorporate He said: “We are producing 17 Mohammadzadeh said in modern that would overcome many companies had been toughened. planningflaring gas. at Mohammad-RezaNational Iranian ml/d of clean gasoline at the work, development projects New Ideas to Enhance Value- of existing challenges, while He added that the government Gas Company (NIGC), said in are accelerated by innovation, Added creating new business in pays special attention to the 2014, in Assaluyeh about 3 bcm adding that in Iran’s petroleum Mohammad Mostafavi, CEO parallel. Even though they development of startups and Arak refinery, 12 ml/d at the industry, hiring elites and of Oil Industry Investment need no big investment, they knowledge-based companies. which has been lashed to 800 totallyIsfahan producing refinery and 79 3ml/d ml/d of experts along with application Company, said startups started can generate big revenue,” he mcmof associated now. At gasthe samewas flared, time, he cleanat the gasoline.”Tabriz refinery. Sadeq-Abadi We are of innovation ecosystem would up in the United States and said. Qanei said the future of Standard Fuel added, more units are coming Western Europe in the 1990s. startups was bright, adding Experts participating at the online on a daily basis. Sediqi process clears Euro-grade “Iran possesses a high global “Oil actors changed technologies that biomethods were being panel entitled “Environmental said: “Currently, IRR 200 billion standards.said: “That Sois while how can the werefining say rankingproduce in significant creative outputs, results. used across the globe for oil challenges; step forward or worth of gas is being produced sulfur, benzene and aromatics knowhow and technology, he said. Mostafavi said new ideals exploration. “Over recent years, backward?” exchanged views in the country. That amounts are not removed from this development of knowledge, developedwhen they bystepped the youth into couldthis field,” a petrochemical company on fuel consumption and to about $50 billion (4 mb/d) gasoline? Undoubtedly, we intangible assets, impact of create high value-added. has relied on startups and relevant pollution. In Iran, a year. Without such gas, liquid have to look for the problem in knowledge, public infrastructure, “Startups do not appear like developed a new inexpensive experts remain divided about fuel would have to be used.” the substandard combustion academic education, human corporate business, but they are the real cause of air pollution Sadeq-Abadi said air pollution systems of cars.” capital and research,” he added. very effective,” he added. he added. product, and made big profits,” 26 27 interview October 2019 Issue No.88 monthly interview

The storage industry is more than century-old. Some countries like the US have over 400 natural Gas Storage, gas underground storage facilities. Iran is the world’s second largest gas reserves, and has one of the most expanded gas transmission networks. However, it is at the beginning of road with Reliable Support regard to underground natural gas storage. Iran has about 1% of world gas storage capacity. for Energy are located far from production spots. In case Could you update us on gas storage in Khangiran reservoir, which covers the main needs central Iran? Security of consumers in that area, faces any fall-off in the long-term, gas supply to Khorasan and the mega available for this purpose in central Iran. Our studies city of Mashhad will be faced with problems. In In fact, except Sarajeh, there is no other field order to prevent any problem with gas supply, In fact, we This strategic we will have two options: First, we need to build bear proof to such conclusion. Sarajeh was the first a new pipeline, which would impose exorbitant store gas in industry would be hydrocarbonfield that came storage on-stream facility in butIran. Sarajeh, The second the Kashan phase costs upon us. Second, we can develop storage sites saltof this dome field is is being under developed way. Due forto the storage. lack of The any gas other huge quantities profitable and serve as are around the cities, in which case we can recover gas storage project in Kashan’s Nasrabad (a salt dome) liable support in energy supply in the winter which is stored in the summer. It is in underground is now in the phase of development with drilling and exports. Mahmoud Nemati, noteworthy that sometimes pipes may be damaged facilities, director of gas storage projects, operation under way. The Yurthsha aquifer is also which are located in central Iran and we have to make decision speaks about achievements in this or earthquake. Under such conditions we can sit about it. totally different sector in an interview with” Iran due to acts of God and natural disasters like floods Currently, the Mehdi Mehrabi idly and cut gas supply to cities until the problem is from surface Petroleum”. resolved. The gas storage sites built around mega bulk of feedstock cities are of great help during times of crisis. By Talking about northwest, could you tell us facilities Where does gas storage stand in the world and technology with regard to equipment and storage for the Ilam dipping into these reservoirs we can supply gas to about fields envisaged for storage in that area? today? in aquifers and salt domes. To that effect, we have refinery is cities for a short period of time as long as damage Primary studies have been conducted on the The United Nations Economic Committee releases obligated contractors to hire foreign technologically- is repaired. supplied from an annual report about storage across the globe. capable partners. Tang-e Bijar, Some data is surprising. There are more than 400 Bankul and Baba Qir fields, and we are currently in In addition to the depleted hydrocarbon and due to the storage sites in the US and even its tropical areas. The Underground gas storage to ensure energy isthe supplied process from of planning Tang-e forBijar, drilling and due in those to the fields. necessity reservoirs, what other options are there for supply during consumption peak is a major Currently, the bulk of feedstock for the Ilam refinery necessity of underground gas storage? century ago. The issue of gas storage takes up added advantage of the storage industry. Could you gradual fall-off Our top priority in storage is depleted oil and gas first gas storage site was built in Canada more than a elaborate on that? inof gradualthe shortest fall-off possible from this time field, to enable it is necessary us to supply that from this field, import natural gas. Some nations like Russia rely In the winter when household consumption is the Bankul and Baba Qir fields become operational available we will go towards aquifers, i.e. reservoirs it is necessary onsignificance their numerous for European storage countries sites to supply which domestic mainly multiplied, we would need resources in addition whichfields. Ifhave in some the properties areas, hydrocarbon of reservoirs reserves but they are not that the Bankul needs, while gaining revenue from exports. to what we have at our disposal in order to meet offeedstock pre-feasibility for the study.refinery. In the Yasuj area, we have contain water instead of hydrocarbon. In such cases, the consumers’ needs during consumption peak. the Mokhtar field under study. It is now in the phase and Baba Qir we deplete the water and store gas instead. The third When was the issue of storage taken into Furthermore, in order to produce oil from the priority for storage is using underground salt domes. Anything else you would like to add? fields become consideration in Iran? reservoirs with pressure fall-off, we would have These structures are in fact thick salt layers with big Gas storage would create a strategic advantage for operational Up to 2007 the issue of storage was discussed to inject gas. Should injection come to a halt in the volume. We wash and solve the salt layers and use the the country due to its economic advantages, safety in the shortest sporadically. But after a cold spell struck in that year, winter due to the priority of domestic needs, oil created space for storage. In Iran, we are using the and accessibility. Achieving this important objective causing accidents in the north, decision-makers recovery will decline. Therefore, storage facilities possible time three types of hydrocarbon storage tanks, aquifers would be a must for our country due to the necessity realized that sitting atop huge gas reserves could not would be a blessing under such circumstances. to enable us to and salt domes. of supplying this clean energy at home. Compared on its own guarantee national energy security. Since with gas transmission through pipeline, gas storage supply feedstock then, the issue of storage with the objective of energy How can storage support exports? projects are more cost-effective and they would Given the significance of energy supply for the refinery security stability and avoiding possible problems We have currently gas export deals with neighboring guarantee the security of energy supply to people and became serious. countries. Such agreements take up added security for northern and northeastern areas, industries. It is noteworthy that the authority for all which areas are envisaged for that purpose? What complications are storage projects stored gas in the winter in response to growing The Shourijeh gas storage project is over now and it means that our organization is now stepping faced with in terms of extent and technology? domesticsignificance consumption, in the winter. we Should will have we tofail cut to gasuse our those fields has been delegated from NIOC to NIGC, Generally speaking, storage is an underground will start soon. In that area, there is also the Qezel but some others are still able to produce. They would operation which is carried out on a large scale. In Such losses will even surpass gas export revenue and the second phase of development of this field beinto used the upstreamas storage sector.sites after Some depletion. fields are The depleted, 6th fact, we store gas in huge quantities in underground achievedexports, in in which several case years. we will be imposed heavy fines. Five-Year Economic Development Plan requires us to facilities, which are totally different from surface Tappeh gas field which we have under study. As supply 13% of gas needs from storage sites and we far as the significance of development of storage facilities. Currently, we are enjoying technological What are the strategic advantages of implementation of these projects would make NIGC are determined to develop underground facilities all fields is concerned, it would be sufficient to say that capacities for wells and storage in hydrocarbon storage? independent of new pipes, and would put an end to across the country, particularly in cold areas in order reservoirs. But we would need to acquire knowhow As you know, some areas like northeastern Iran dependence on gas imports from Turkmenistan. 28 to use them when gas flow is cut. 29 Storage October 2019 Issue No.88 monthly Storage

IP-88/14 Latest Iran Gas Storage Projects

the most important underground natural gas storage projects in Iran. The following is a review of Nasrabad salt structuretheNasrabad latestLatest status saltin Kashan,structure of the above in Shourijeh Kashan, projects. Shourijeh field, field, Bankul, IranBankul, Baba Baba QirQir and and Qezel Qezel Tappeh Gas Tappeh are among are among theStorage most important underground natural Projects gas storage projects in Iran. The following is a review of the latest status of the above projects.

Nasrabad Salt Structure 28 Wells Drilled project will be a BOT one. After the Bankul, Baba Qir Project Due in 2023 Ali Teimouri, director of underground natural gas storage projects, technical assessment of contractors Mehdi Yousefi, head of construction and installation for said: “Given the exploration activities conducted in Kashan’s for Shourijeh and the conclusion of tender bid, the underground storage projects and manager of the Bankul Nasrabad salt dome, our analyses brought us to a structure which Development successful bidder would be named. and Baba Qir project, said: “Initial assessment of exploration could be worked upon.” “Following implementation of geological Mohammad Zaman Jokar, director The successful bidder (investor) will drilling operations on the Bankul and Baba Qir fields was studies, we went step by step until we were assured about the of natural gas storage development agree to supply treatment facilities done in 1973 in order to estimate volume of oil reserves. potential for developing this structure. As the project had been project at Shourijeh site, said: “One and gas injection compressors, drill After one well was spudded in Bankul and two wells in of the plans envisaged to make up for 28 wells, lay out gas gathering and Baba Qir, the wells were declared mothballed due to the reservoir development in the country, we hired an internationally gas shortages in the northeast is to transmission lines and build necessary gas deposits of the reservoirs.” Yousefi said that Natural recognizeddefined in five company phases with and theregood experiencewas no previous in salt experience structure of salt develop gas storage in the Shourijeh utilities over three years and bring the Gas Storage Company conducted pre-feasibility studies in development,” he said. Teimouri said that in the next phase, the project into operation. Based on the 2017 and it was decided that an appraisal well be drilled to drilling of a 2,000-meter-deep well was started in Kashan’s Nasrabad tender documents, the investor will study the possibility of gas storage in the Bankul field. He salt structure. Coring is currently under way at the depth of 1,400 offield.” the HeShourijeh said that gas following storage project,the have control over the facilities for 20 added: “Also, an appraisal well should be drilled to assess the meters. “By analyzing the chemical and geo-mechanical properties thepositive second feedback phase isfrom under the way, first whichphase years, during which the contractor will possibility of gas and condensate recovery in the Baba Qir and the purity of salt we can assess whether or not the structure is would require the drilling of 28 wells recover costs. After the startup of the field. NIGC approved budget allocation suitable for natural gas storage. and construction of gas gathering, project, during the first eight months for this operation in March 2019 after as well as injection and treatment of the year, 4.5 bcm of follow-up by the Iran Gas Engineering we are following up on phases 4 and 5,” he said. gas would be injected and Development Company.” Yousefi Having finished three phases of this project, phase, which was done through EPC to the Shourijeh said gas storage feasibility studies under way would be announced in coming andfacilities. was handled Jokar said in unlikeupstream the byfirst storage facility to had begun in the Bankul field, which Teimourimonths, said the adding findings they of would the studies be decisive currently National Iranian Oil Company (NIOC) be recovered would be concluded by 2023. And for for the project. He expressed hope that and in downstream by National and consumed the Baba Qir field, seismic testing the Nasrabad structure would have a Iranian Gas Company (NIGC), in during peak data is being provided and the the second phase, full authority has shaving in cold feasibility study would be over storage in Iran. been delegated to NIGC, and the months. by early 2024. significant share in the future of gas

very special conditions of the appraisal well. We are hire foreign consultants so that the project would Qezel Tappeh Storage faced with complicated conditions in this project, come online at high quality, optimal cost and on Hossein Sheikhzadeh, director of feasibility study for offeasibility Exploration of storage of NIOC in andthis Khazarfield. The Exploration upstream anddata including depth, high temperature and pressure. schedule.” Sheikhzadeh said: “We are hiring a Productionfrom the fields Company was received (KEPCO), from and the the Directorate prefeasibility Drilling here is totally different from drilling in other “The concentration of Iranian hydrocarbon reservoirs study was carried out by the University of Tehran. exploration and extraction.” innatural the tropic gas storage zones ofin thethe southernQezel Tappeh half and field, the said: lack knowledge add to the drilling and prospective qualifiedHe said: “Weconsulting should company not forget with experience in oil of gas storage facilities to support populated and underground natural gas storage. Sheikhzadeh said developmentwells, and input problems.” data shortages In terms and of insufficientlogistics and that Gorgan Plain where cold areas in the north and northeast of Iran, GSC Finally, this field was proposed as the option for operation, displacing drilling rigs and equipment was prompted to carry out technical and economic and completed so that analyzing the output data located is an exploration- assessment and screen structures for natural gas includingin the first geological step, one appraisaldata, petrophysical well was being logs, coresdrilled well as concerns over the supply of commodities and extractionthe Qezel Tappeh objective field for is and well tests would be used for the development of equipmentfrom north wouldto south add and to the complications, difficulty of heservices, said. He as NIOC. Project data could storage, mainly in the northeast and Gorgan Plain.” added: “We will try to overcome these obstacles by be of great help for both Hestorage said thewith outcome a view to of finding these comprehensive a suitable place studies for gas would provide two scenarios to decision-makers. “In using facilities available and requesting commodities the NIOC Directorate the field. He said that the output from these studies from other oil companies. Special technological of Exploration Qezel Tappeh and Gonbad Kavous, for underground the reservoir, planning would be made for production complexities and the depth of engineering, knowhow and KEPCO that naturalwas identifying gas storage. and Accordingchoosing several to Sheikhzadeh, fields, including the andthe first recovery stage from and inQezel case Tappeh. of production In the eventpotential of in and commodity supply issues in this project are looking for next step would require acquisition of necessary negative production, the feasibility of storage would become more serious in light of uncertainties and hydrocarbon permits and delegating authority to NIGC over this be put on the agenda,” he said. “What matters in the the changing behavior of the reservoir. In order to exploration potential reservoir. He said a plan was adopted to study the stage of well drilling and reservoir assessment is the resolve this problem, we have forced contractors to in the north.” 30 31 Investment October 2019 Issue No.88 monthly Investment

capacity of 75,000 b/d, a desalination unit with a rated thefirst completion phase of development of a production of capacity of 35,000 b/d and (MER)fields are and not the producing reservoirs oil are Bangestan, Strategic andthe Mansouri desalination field plant pertains with to a gas compressor station likelyat maximum to suffer efficient damage. rate In the a capacity of 75,000 b/d. with the installed capacity 1940s, the average production Another objective sought of 30 mcf/d. The reservoir is in this development project estimated to hold 15 billion ranOil hopes to exceed Reservoir 5 is to increase oil recovery barrels of oil in place. So far, hasfrom fallen Iranian to 2,000 oil fields b/d. stood at mb/d oil production under studied at the Committee of to 150,000 b/d. The high a total of 347 million barrels 18,000 b/d. Today the figure Iits 20-Year Vision Plan. To Consultantsthe Mansouri in oil the field Directorate was recovery rate has created of oil has been extracted from second half of their life, they that end, it hopes to invest of Reservoirs at National a special status for the the Bangestan reservoir and experienceAs oil fields an get annual close declineto the in enhanced recovery from Iranian Oil Company (NIOC). there is potential for enhanced of 330,000 to 350,000 b/d of According to the Corporate recovery by up to 79,000 b/d. oil in offshore wells. Therefore, operational. Most of Iranian Planning Directorate of NIOC, estimatesMansouri fieldindicate and that added the to in order to realize production the fields that have long been the scenarios envisaged averageits significance. rate of recovery The latest from average recovery rate of oil in objectives in the vision plan, over 300,000 b/d are in the Official data shows the enhanced recovery from old secondoil fields half whose of their output life. is That include natural depletion, gas 28%. That is while the rate is 48-65% in other countries. reservoirs like Bangestan is while less than 30% of andfor recovery water injection from this to fieldstudy ofoil recovery fields in Iranfrom is the about Asmari OfIran course, is 24% Iranian now. This Petroleum figure should be envisaged. their oil reserves has been various parameters including extracted and they would need is 47%, indicating the high of recovery for modern technologies in order reservoir of the Mansouri field IranianMinistry oil officials say the rate to increase their production. goodoutput potential flow and for downhole prospective An interesting point to know productionpressure. This and field development. enjoys 60potential kilometers of this south oil field. of from 7% is that through utilizing these Studying the Bangestan Ahvaz,The Mansouri 50 kilometers field is west located tofields 35%. varies technologies it would be reservoir of the Mansouri of Mahshahr Port and 40 NISOC- possible to raise the enhanced kilometers east of the Ab run oil activities in the future. Such more than 80%. activitiesfield requires have more already research started. recovery from oil fields to Some of them pertain to startedTeimour production field. in 1973. count on for enhancing its Discovered in 1963, the field productionOne of the fieldsin the Iranlong-term can fracturing and enhanced recoveryartificial lifting,methods. hydraulic isOil currently flow from under the Bangestan way in the Over recent years, Iran’s areareservoir run by of Karounthe Mansouri Oil and field oilis the reservoir. Mansouri oil field and petroleum industry, Gas Production Company moreThe Bangestan specifically reservoir its Bangestan was particularly National Iranian (KOGPC). offered for foreign investment South Oil Company (NISOC) KOGPC is the largest during a conference held in has been trying to enhance subsidiary of NISOC with Tehran a couple of years ago crude oil production and an output of over 1 mb/d. on introducing opportunities processing in the Mansouri The Bangestan for investment in Iran’s oil and reservoir of the gas sector. 100,000 b/d. The project has Over recent years, the hadfield 97.5% from 60,000 progress. b/d to a production unit project for production from The only remaining part of the withMansouri a nominal field has

32 33 Investment October 2019 Issue No.88 monthly Investment

is concerned, until recently European and Asian companies 13 new wells would be it was assumed that in the expressed readiness to develop drilled while infrastructure Anaran block, the only shared facilities, a production unit Changuleh, Iran’s Oil their studies to NIOC. and pipelines would be built was long considered as an itThe and Reservoir offered the Consultants findings of to add another 35,000 b/d to field was Azar. Changuleh Committee, citing studies National Iranian Oil Company conducted by various Investment Priority (NIOC)independent decided field. to removeTherefore, the companies, has taken action 50,000the field’s b/d. output. That would of jointly-owned reservoirs, to determine the priority of bringChanguleh output is from estimated this field to to Iran shares with neighboring border with Iran, while Iran has reconsidered The results of seismic testing reservoirs. hold 1.5 billion barrels of oil in IraqOne is of Changuleh. the oil fields This which offshorefields are reservoirs located along are locatedthe its development plans to inpriority 2015 byof theNIOC Changuleh Directorate field. Changuleh is set to undergo place with an API gravity of 22. in the Persian Gulf and the concentrate on development of Exploration showed that development through drilling Three wells have so far been hearts of foreign companies Sea of Oman. However, the Changuleh was structurally 19 wells. To that end, two spudded in Changuleh. The onuntapped many occasions. field has won Three the problem with these jointly- order to increase Iran’s share connected with Iran’s Azar development phases are major Russian companies of productionthe jointly-owned from the fields current in the second one was drilled in of development operations 7%. That was when development which would last 36 months, 1997first one while dates the from latest 1974, one was inowned neighboring fields is countriesthe conclusion and In parallel with the policy of field, and Iraq’s al-Badra field. wouldenvisaged. be carried The first out phase, with an spudded in 2006. inand western a Croatian Iran, firm but offereddue to incomplete development accelerating jointly-owned once more on the agenda. investment of $200 million According to a report from theto develop US’s withdrawal this field locatedfrom the operations in Iran’s part. ofIn the July Changuleh 2016, Changuleh field was put to $250 million for an output the Oil Engineering and 2015 Iran nuclear deal and Neighboring countries will Petroleum Bijan Zangeneh was agreed to be offered for of 15,000 b/d of oil from six Development Company, the ensuing re-imposition of hasfields, ordered Iran’s theMinister transfer of of development through Iranian- wells. This phase would also early development sanctions against the Islamic development of its own sector drilling equipment from the foreign partnership. Several include a 130-km pipeline of the Changuleh Republic, development of this beforenot wait starting for Iran recovery. to finish Every to carry 15,000 b/d of oil to day, the reserves in place Dehloran. hydrocarbon potential Now, Iranian E&P companies of jointly-owned reservoirs theindependent realizing ofoil industrial fields to Full development of wouldfield and allow assessing for the its havefield wasbeen exposed added to to the changes. list of decline without Iran having objectives.the joint fields, indicating Changuleh would last 44 recovery of 65,000 b/d of candidates willing to develop made any extraction. months. Under this plan, crude oil. In light of the limited lifecycle According to the Petroleum As far as the Changuleh field Ministrythis field. data, Iran has more

28 of them with neighboring states.than 102 Jointly-owned oil fields, sharing onshore

34 35 OPEC October 2019 Issue No.88 monthly OPEC

use their own reserves of oil. its signatories collectively China has recently released a And while hopefully waiting for cut production by 1.2 mb/d. report on its economic growth reduction in shipments cost, Oil prices rose to $ 62 and that raised global concerns. OPEC/non-OPEC Likely to they just make new orders for 48 cents after OPEC Plus According to the statistics, the medium term. It is not just announced the continuation China’s economic growth rate confined to the United States of the deal. Despite the 200% for the 3Q 2019 was much Extend Production Cut Deal that has reduced its oil exports, compliance of the signatories lower than that of the same Ehsan Jenabi Secretary General Mohammed cooperation of OPEC/non- the other producing countries of the deal, oil prices ended period last year. The figure, Sanusi Barkindo has recently OPEC. Various issues such are on the same boat, as well. the week below $ 60 in which was 6%, has been s OPEC is increasingly said the Organization will do as the release of figures and Due to this, oil trade trend has September. This led to some unprecedented in the last requested to further cut whatever necessary to prevent statistics on world economic been recently so slow. speculation about further three decades. This shows that Acrude oil production, market recession, and OPEC growth rates in 2019 and 2020, cuts in oil production at the China’s share of oil demand new speculation, based on MCs have tendency toward US inventories and oil freight Even though the index of upcoming OPEC Conference will constantly decline, unless statements by senior officials of exploring all options. In this rates caused changes in oil shipping rates for oil shipments in Vienna on 5 December. China and the US reach a trade OPEC MCs, suggests that OPEC regard, newly-appointed Saudi prices. The figures indicate from the Persian Gulf to Far It is speculated that while agreement. The impacts of will consider preventive supply Energy Minister Abdulaziz bin that the oil market is more Asia reached $ 300,000; oil many experts believe that if the trade war and the rise of cut at its 177th Ministerial Salman has also said that his unpredictable than ever, and tankers transportation cost, signs of continued economic skepticism and uncertainty Conference due to be held on task is to examine the surplus will jump in parallel with every raising US reserves and the weakness and stagnation about the future have led many 5 December 2019 in in the market. Even Russian uncertainty and speculation. likelihood of further decline in emerge in some major forward-looking analysts Vienna. OPEC President Vladimir Putin, who oil production by OPEC were countries such as Germany, to take into consideration is OPEC’s most important ally, Recently, we have witnessed not the only factors affecting China, the United Kingdom, oil demand reduction in has said he acknowledges signs indicating that OPEC and oil prices. Over recent months, and so on, OPEC will cut its oil the 2020 horizon in their the need for further its allies were agreeing upon rising international tensions production by 500,000 barrels analyses, as they believe that continuing to cut production, in the Strait of Hormuz, and to raise the price. “Most of due to structural problems and because of this oil prices increasing insecurity in the the oil-producing countries such as inflation, inaccurate have jumped 1 % to reach$ Red Sea on one hand, as well are concerned about falling fiscal and monetary policies, 59.5. According to data as halt in the activities of demand and the uncertain the probability of budget released by the International Casco China with regard to oil future of the economy,” said deficit increase in the world’s Monetary Fund (IMF), the transportation, the world’s Thomas Weimel, head of the top economies, and rising world economy is ending largest shipping company, Commerce Department at international and commercial 2019 with declining economic are among the other factors Total. He continued as saying tensions; the conditions will growth rates. This situation contributing to oil price “In fact, the concern about certainly worsen the financial emanating from rising regional volatility. In an unprecedented slowing economic growth crisis even worse than the one tensions and trade wars, may event, China’s economic and increasing trade conflicts in 2008. affect many countries for a long growth, the world’s second- more influence oil prices than An instance of this claim is time. The IMF report, which largest economy reached 6 sanctions and drone strikes.” that China’s economic growth is indeed an outlook on the percent in the third quarter Although experts believe that is slower than expected and future of the world economy in of 2019.The figure was 0.2 slowing economic growth is the US budget deficit is rising. the short term, confirms that at percent lower than projected the most important factor However, there are some least in the next three months and it is the country’s lowest affecting the decline in oil analysts who believe that conditions would not improve seasonally-adjusted growth prices in the market, OPEC areas of the globe such as Asia and demand for oil would not rate since 1993. It seems that members are of the opinion Pacific by the time horizon of increase. Therefore, it will the consequences of a trade that the drop in oil prices is a 2025 are in dire need of oil and strengthen the willingness of war with the United States is result of oversupplied market. products, and thus demand in OPEC and its allies for further emerging more than ever in the Saudi Arabia’s Minister of them are not affected by the cuts. Chinese economy, and some Energy Abdul Aziz bin Salman trade war. The need for oil in economists have warned that said: “Our task is to review the above-mentioned areas for Despite the decline in oil the continuation of the current the surplus. We are trying to the next six years is in a way prices and the increase in trend could push China’s eliminate the surplus supply to that most probably they would the refiners’ motivation to economic growth to below 6%. raise prices. “ Concerns about face a serious problem to meet continue their production the future of world economic their routine needs. In other activities, the high rate of oil In July this year, OPEC and its growth is the most important words, although all countries shipment did not necessarily allies came to an agreement factor impacting oil prices, are affected by the trade war lead to US oil exports increase. to continue complying with especially if demand for energy and therefore the demand for Due to the high rate of oil the OPEC Plus reduction deal. declines by China - the second oil has decreased, by 2025 the shipments from the US Gulf to According to the deal, which is largest energy-demanding region along with China will Asia, many buyers prefer to valid by the end of March 2020, country in the world declines. face a deficit of about 6 mb/d.” 36 37 Analysis October 2019 Issue No.88 monthly Analysis US Oil Theft Ehsan Jenabi for enhanced oil recovery and for domestic electricity Introduction generation. It can be argued The present article, while that due to its strategic role attempting to thoroughly in regional security and review oil industry prospective energy transit conditions in Syria, aims at routes, Syria is severely eyed shading some more light by super powers. Regional on the US vain attempts integration in the energy to secure its interests, to sector is expected to increase prevent the decline of its as a result of ongoing plans hegemony on one hand, and for the expansion of the smuggling Syrian oil amid regional oil and gas pipeline tensions in Syria, on the networks connecting Syria other. Moreover, through with neighboring countries: providing instances, the Turkey, Iraq, and Iran. article seeks to prove that In mid-March 2011, Syria American intervention in the faced problems emanated Middle East is mainly driven from ominous plots of the by oil to a large extent, but in US, and led to unrest in the different ways. country. This was followed by the Background imposition of sanctions on out the ISIS rather than 2010, but the point is that production levels. The US The terminals are connected Syria, among crude oil Syria by the United States eliminating subsidies. heavy oil accounts for about sanctions had excluded producing countries in the and the European Union, 60 percent of Syria’s oil U.S. companies from domestic pipeline network. Eastern Mediterranean and by additional sanctions Syria’s Oil Reserves production. participating, and Syria Syria’sto refineries net petroleum through theexports region, is the only country imposed by the U.S. on Syria’s According to The Oil and Gas The largest and most mature worked with Chinese, were estimated to be 109,000 that produces relatively energy sector in August 2011. Journal, Syria’s petroleum Indian, as well as European b/d in 2010, down slightly Having a glance at the reserves stood at 2.5 billion companies. from 117,000 b/d in 2009. oil. The countries in this history of Syria’s oil barrels as of 1 January 2011. reportedlyfields are Al-Furat’s had production Omar Syria exported two crude regionsignificant include amount Jordan, of crude production and exports Majority of its proven oil capacitiesand the Jbessa of 100,000 fields, whichand Exports oil blends, Syrian Light and Lebanon, Zionist Regime, reserves are mainly located 200,000 b/d, respectively, in Syria has three Souedieh (or Syrian heavy); the West Bank, and Gaza. that it has had a falling trend in the eastern part of the 2010. Mediterranean oil through its state marketing According to the statistics sincefigures, the it mid-1990s.can be noticed Syria near its border with export/import terminals, company Sytrol. available, Syria produced In order to increase its Iraq and along the Euphrates such as Oudeh, Gbeibe, and all managed by the Heavy crude oil accounts about crude oil exports, Syria River; however, a number Other smaller mature fields, Syrian Company for Oil for about three-fourths of 400,000 b/d of crude and had to reduce domestic rehabilitation contracts to Transportation (SCOT). Syria’s oil exports. Souedieh, other petroleum liquids consumption through in the center of the country. China’sTishrine, CNPC were and under Sinopec, field Baniyas (7 berths) and heavy, very high-sulfur oil, in 2010.Prior to being phasing out subsidies. Sinceof smaller peaking fields at are582,000 located and prior to the unrests Tartous (2 berths) are larger was produced by SPC from invaded by the ISIS, almost However, getting involved b/d in 1996, Syrian crude in Syria their production ports from which Syria’s two Soueidieh and Jebeisseh, two all of its oil was exported in war with ISIS in 2011, oil production (including capacity was on the rise. main export crude oil grades of the country’s oldest oil to Europe. Syria’s natural the Syrian government was lease condensate) declined Foreign investment has are exported. Latakia handles gas was used in reinjection forced to prioritize kicking to around 387,000 b/d in been vital for improving smaller cargoes. only light crude stream, and fields. Syrian Light is Syria’s 38 39 Analysis October 2019 Issue No.88 monthly Analysis

is a blend of production from pipeline, as well as building oil smugglers who make the Royal Dutch Shell-led new ones. In June 2011, Syria more than $30 million a AFPC venture, and smaller and Iraq signed yet another month, the statement said. amounts from Total’s Deir ez- MOU to repair the existing Russia, which backs Syrian Zor venture. Syrian crude oil 800,000 b/d pipeline system, President Bashar Assad and exports went almost entirely and to build two new ones, has helped him turn the tide to OECD European countries, including a 1.5 million b/d of a bloody civil war, has long in particular Germany, pipeline to carry heavy insisted that the U.S. military Italy, and France, and the Iraqi crude oil, as well as a presence in Syria is illegal. Netherlands. 1.25 million b/d pipeline to Conclusion transport light crude oil from Presence of superpowers Pipelines Iraq. in Syria and other civil Syria has a developed war-stricken countries is in domestic pipeline system Refining line with the competition for transporting crude and with Russia to bolster their petroleum products managed capacity was approximately hegemony in the world and by SCOT. Pipelines include 2Syria’s 40,000 total b/d refining as of January preventing power imbalance. the 250,000-b/d, 347-mileTel 2011, according to The Oil To that effect, the super Adas-Tartous crude line and Gas Journal. Syria’s powers seek pretext to dispatch military troops to to the port at Tartous with are located at Baniyas and regions across the world, linking SPC and other fields Homs,two state-owned which have refineries 133,000 where the ground is paved, at Homs, and oil products b/d and 107,000 b/d, to maximize their political pipelinesa connection linking to the the refinery Homs capacity. Syria faced claiming they are to restore cities. Two trans-national shortagesrespectively, of gasof refining oil and and maintainfinancial interests,global peace pipelinesrefinery to across Syria’s Syria major had diesel, and needs additional and tranquility. For instance, been built to transport The U.S. presence in Syria oil from Saudi Arabia and meet these needs. However, indicates the centrality of oil Iraq to terminals on the domesticforeign oil refining companies capacity have to and economic interests of Mediterranean. The 500 ,000 been reluctant to invest to U.S. b/d Tapline was built during analysts are of the opinion question of whether or not armored vehicles and troops oil corporations to the without more support from that the threat of “resource American intervention in 1940’s to transport Saudi thebuild government. new refineries In December in Syria wars” over possession for possession of oil reserves; order to prevent them from the Third World, e.g. Syria. crude oil to an export 2010, Venezuela signed of oil reserves is often butthe Unitedthey did States not seek was afighting fallingto the Syrianinto the oil hands fields of in ISIS Recalling President Trump’s terminal in Lebanon, but an MOU to construct the exaggerated, it seems that broader understanding militants. statements about not being was closed during the oil and its impacts have of how oil shaped the In a statement, Russia’s eager anymore to spend 1970’s because it had a project which had been been constantly a leading preconditions for war. defense ministry said money on guaranteeing become uneconomical. stalled140,000 since b/d anFroklos agreement refinery, cause of war, at least in oil Oil fuels international Washington had no mandate security of Arab countries Proposals have been made to to establish it was signed in rich regions. Between 25% under international or U.S. in the Persian Gulf, and rehabilitate the Tapline, but and 50% of interstate wars, distinct mechanisms; for law to increase its military explicitly asking them to the pipeline remains closed. had also discussed a long- since 1973, were connected conflict through various presence in Syria, and said spend petrodollars and The second pipeline was March 2008. Chinese officials to one or more oil-related by the prospect of oil-market its plan was not motivated pay the U.S. for protecting built during the 1950’s to project in Deir al-Zor, where causal mechanisms. This domination,instance conflicts such astriggered the by genuine security concerns them while highlighting Iran transport oil from Kirkuk in constructiondelayed 70,000 was b/d supposed refinery strategic commodity has United States’ war with Iraq in the region. “Therefore, phobia; one may conclude northern Iraq to the Banias to have begun in 2008. had such an undeniable over Kuwait in 1991 , clashes Washington’s current actions that the U.S. is smuggling terminal in Syria and to Having access to a brief impact on global energy over control of oil transit - capturing and maintaining Syrian oil to offset the high Tripoli in Lebanon. This account of Syria petroleum security. routes, such as shipping military control over oil expenditure of its military approximately 800 kilometer industry, one can realize lanes and pipelines. All these troops’ presence in the (500 mile) pipeline system how important the mechanisms may contribute major Syrian oil reserves are areas where major Syrian oil had been re-habilitated in strategic position of Syria understood.The influence Public of oil thought on in locatedfields in , easternis international Syria where state reserves are located.Thus, it 2000, but closed in 2003 is .Moreover, the question U.S.conflict debates is not about thoroughly the main combination. banditry,” it said. can be argued that American during the war in Iraq. Syrian here is :” Why does U.S. try reason of 1991 and 2003 toU.S. conflict Defense individually Secretary orMark in U.S. troops and private intervention is thus driven and Iraqi ministers have to maintain its presence Iraq wars. Many observers Esper has recently said that security companies in by oil to a large extent, but in discussed rehabilitating this in Syria ?”Although some focus excessively on the Washington would send eastern Syria are protecting different ways. 40 41 Analysis October 2019 Issue No.88 monthly Analysis

companies from investing in international markets. Normally, manipulation of international shale oil projects. Under such in case the Americans take no energy markets, President Trump circumstances, the US will have political measures to increase and Republicans may face public US Oil Production Growth; two options. oil prices, world markets anger, playing well into the hands First, US politicians must try will not experience any such of Democrats. to increase oil prices in global consequence and therefore shale Under such circumstances, markets at any price. The logical oil extraction could not prove Trump will have to make a PersistenceRussian Energy Minister Alexander Novak hasor That isHalt while there are no result of choosing this option economical enough to survive. strategic choice. More shale estimates about any possible would be either imposing oil oil extraction can be of great forecast US oil production growth to come to jump in the shale oil production. sanctions against oil producing Trump Calamity help to him in the run-up to a halt in coming years. To prove his forecasts, For instance, the US Energy nations or triggering chaos in President Trump is currently presidential election rather than he says ongoing oil prices would contain the pace of Information Administration oil producer countries and oil following up on increasing shale public anger over oil price hikes production growth in the United States. (EIA) has estimated shale oil transit lanes. In fact, oil prices oil production; however, he fears and subsequently gasoline price production in this country to hit would increase on global markets that high energy prices in the US hikes. Shuaib Bahman a bright perspective to global 2.8 mb/d by 2020 before going when various oil-rich regions particularly in the run-up to the In addition to domestic markets in the future. on a downward trend to stabilize and nations plunge into chaos 2020 election would lead to the challenges, shale oil production or Novak, despite the at 2 mb/d. Although shale oil and challenge. Therefore, the public dissatisfaction and affect has never been welcomed fact that the US has Shale Oil production in Eagle Ford and consequence of choosing this the outcome of the vote. by traditional oil producers Fbeen increasing its oil Over recent years, shale oil Bakken has contributed to the US option would be the imposition Having imposed sanctions on including US ally, Saudi Arabia. production in recent years, the was forecast to create a big oil output hike, extracting such of economic pressure and major oil producers- Iran and The Saudis have made efforts pace of growth has been on the wave in the global market. unilateral sanctions by the US Venezuela- Trump has sought on many occasions in their talks decline every year. Therefore, However, despite forecasts about against oil producing nations. to restrict oil supply in a bid to with major producers like Russia Novak maintains that in the near shale oil, the US supply of this USoil from Options other fields is not easy. This option may also trigger push prices up slightly. But he is to maintain oil production at future the world would see a halt unconventional hydrocarbon on In most estimates about shale security threats and riots in fully aware that in case oil prices price levels to phase out shale oil in the US oil production growth. the global markets has failed to oil production, the technological oil producing nations or oil increase more than thought, he extraction. Consequently, shale The Russian energy minister’s prevent a supply shock. costs of extracting this category shipment lanes. will be at the receiving end of the oil production in the US requires forecasts come at a time the US International Energy Agency of oil stand between $60 and consequences and risks losing a strategic choice and may even has been pursuing a new policy (IEA) estimates show that such $80 a barrel. Therefore, shale oil will have to make no effort to the presidency for a second term. lead to revision in the US foreign in the energy sector since Donald thing could happen only when and gas production in the future In thedrive second oil prices option, up, USbecause officials oil The Trump administration policy, particularly with regard all actors start producing shale will be economically viable just price hike could be directly may not know that every to a traditional ally like Saudi Trump’s insistence on enhanced oil and that shale oil production in case oil prices exceed $100 a linked with political development could not happen Arabia. oilTrump production took office. in his country and would not be limited to the US. barrel. equations in the US and under US management. For focus on exports would not go For instance, should Canada Since oil prices in global even affect presidential instance, creation of tensions in hike, unwillingness of major ahead smoothly without paying markets have not experienced and Congress elections. the Persian Gulf, including oil oilIn companieslight of no significant to invest in oil shale price attention to shale oil. Therefore, production new developments Therefore, factional tanker attacks as well as attacks oil, upcoming US presidential studying the possibility of wouldsignificantly transpire increase the oil its supply shale oil shale oil production economical, and political rivalries on Saudi Aramco oil facilities election and dissatisfaction of realization of Novak’s forecasts sector. Therefore, the US alone continuationany significant of increase ongoing to make in the US have always were totally beyond the control some of Washington’s traditional about the US government’s cannot be a game changer in the trend about oil prices prevented presidents of the United States. allies; Novak’s forecasts about US energy policy could present energy developments. would dissuade from manipulating Therefore, the US is faced oil production are likely to come with a fundamental problem true and the US will fail to push and it will face challenges in ahead with its accelerated oil the face of any choice. If the US production in coming years. government is willing to increase Of course, it does not mean the shale oil extraction, it will have US oil production has dropped; to manipulate the current rather the US oil output would prices through political and security measures. Meantime, in case the US government recovery,remain at but a specific will not level. agree It maywith moves towards intentional Trump’slead to US hope self-sufficiency to make the in US oil a game changer in oil trading.

42 43 Norway Offshore License Round Thirty-three oil companies submitted with applications for the previous APA IPF applications for Norway’s Awards in rounds. Minister Kjell Børge Freiberg Majors Detail Offshore Brazil Predefined Areas (APA) 2019, according said: “Predictable and stable framework- Block Awards to the Norwegian Ministry of Petroleum conditions and an active licensing policy are and Energy. The APA process is staged two of the main pillars in the government’s Brazil’s 16th bid round concluded annually over mature or known areas petroleum policy. We have continued to with the award of 12 of the 36 offshore on the Norwegian continental shelf. expand the APA-area considerably based blocks offered, according to the National It includes large parts of all available on professional advice.” This year the Agency of Petroleum, Natural Gas and exploration acreage. According to the predefined area was enlarged in both the Biofuels (ANP). The bid round collected Ministry, this year’s response was in line Norwegian Sea and the Barents Sea. a record R$8.9 billion ($2.2 billion) in signature bonuses. In all, 11 companies from nine countries made offers, 10 of which acquired blocks. Petrobras will operate block C-M-477 in the Campos basin, with partner BP Energy (30%). Total will operate block C-M-541 in the Clontarf Eyes Campos basin, with partners Petronas Ghana License Positions (20%) and Qatar Petroleum (40%). Clontarf Energy is more optimistic Norway According to ANP, this block had the about its license offshore Ghana largest signature bonus ever offered, following talks with the country’s new R$4,029,302,001 ($976,897,854.83). NPP government. The administration is pro- development, Clontarf said in a statement, and is CNOOC Set to Co- reviewing historic petroleum agreements, with a Fund Deepwater Well focus on early exploration, discoveries, and output. FAR has approved Svenska During 2018 and 2019 the Ghanaian Ministry of Petroleum Exploration GB’s request Energy and the Ghanaian National Petroleum for a farm-out to CNOOC offshore Guinea- Commission have considered a re-application Bissau. Svenska plans to transfer 55.55% by Pan Andean Resources (owned 60% of its share of the Sinapa and Esperanca by Clontarf and 30% by another Irish petroleum licenses to CNOOC and retain company, Petrel Resources) for the China operatorship with a 23.03% interest. FAR Tano 2A license block acreage holds the remaining 21.42% in each of the in the Tano basin. concessions. Under the arrangement, the Chinese major will fund 55.55% of all expenditures incurred under the VIEW joint venture participation and joint operating agreements. Brazil Ghana Equinor Awarded Permit Offshore Western Australia Equinor has secured a new exploration permit in the Northern Carnarvon basin offshore Western VIEW VIEW Australia. The company will operate WA-542-P with a 100% interest. The Australia concession covers 4,815 sq km (1,859 sq mi), 100 km (62 mi) offshore, in water depths ranging from 80-350 m (262-1,148 ft). It is also west of the Santos-operated Dorado oil discovery. Paul McCafferty, Equinor’s senior vice president for international offshore exploration, said: “An interesting new liquids play has emerged in this part of Australia’s northwest shelf and we are looking forward to assessing the potential in our new permit.” News October 2019 Issue No.88 monthly News Aramco Delays Planned IPO DTE Energy Expands Pipeline Unit Saudi Aramco has delayed DTE Energy’s midstream the planned launch of its business said it would buy a initial public offering in hopes natural gas gathering system that pending third-quarter and pipeline in Louisiana’s results will bolster investor Haynesville shale formation for confidence in the world’s $2.25 billion in cash, expanding largest oil firm, two sources the unit’s operations to the familiar with the matter said. Gulf coast. DTE Midstream, Aramco had been expected to which currently focuses on announce plans next week to the Midwest and Northeast of float a 1% to 2% stake on the the United States, will acquire kingdom’s Tadawul market, M5 Louisiana Holdings from in what would have been Momentum Midstream and one of the largest ever public Indigo Natural Resources, which offerings, worth upwards is the main producer which of $20 billion. However, feeds gas into the network. after a Sept. 14 attack on its The deal, which also includes Abqaiq and Khurais plants a $400 million payment upon temporarily knocked out completion of a 150-mile half its crude output, the gathering pipeline, currently world’s top exporter wants 1 under construction and due to reassure investors by first second source confirmed the readiness activities. to enter service in the second analysts on a call to discuss unit between 2019 and 2 presenting results covering offering had been postponed, The company is half of 2020, will immediately the acquisition. DTE Energy’s 2023, the statement the period, the two sources and there was currently no ready and timing will depend add 15 cents to the company’s shares closed 1.7% lower. The said. DTE Energy has looked said, speaking on condition of new date set for the listing. on market conditions and be operating earnings per share company said the acquisition to expand into natural gas anonymity as the information Neither source knew when at a time of the shareholders’ in 2020, a company statement would be paid for using an pipelines and storage, which is not public. “They want to third quarter results were choosing.” The news comes said. “The assets are located in a equal split of senior unsecured do all that they can to hit the likely to come out. after Reuters, citing sources great demand area, the quickly debt and mandatory convertible during energy price swings, at valuation target. Solid results In a statement to Reuters, familiar with the IPO, reported growing Gulf Coast natural gas bonds. The purchase forms aprovides time when steady advanced cash flows energy even after the attack will put Saudi Aramco said: “The on Sept. 24 that the offering market, with excellent access part of DTE Energy’s plan to them in a stronger position,” company continues to engage was unlikely to happen this to other pipeline systems,” DTE invest between $4 billion and the provision of electricity less said one of the sources. The with the shareholders on IPO year in light of the attacks. Energy CEO Jerry Norcia told $5 billion into its midstream lucrative.efficiency measures have made

NEWS NEWS NEWS NEWS Total: 2mb/d Crude Germany Awards Brazil Awards Power PetroChina to Supply Supply Off Market Onshore Wind Power, Project Contracts Zhoushan Bunker Oil markets have lost 2 million barrels per day The Brazilian government awarded contracts A PetroChina unit has won a license to supply (bpd) of crude supply this year due to security Solar Licences for companies to build new power generation marine bunker fuel in Zhoushan on China’s and political issues but are more concerned Germany’s power network agency said it had installations with combined capacity of 2.98 east coast, as the city’s free trade zone looks about slowing demand, a senior executive at awarded licences to build onshore wind turbines gigawatts, that will cost about 11.16 billion reais to challenge Singapore as a regional shipping French oil and energy group Total said. with the capacity to produce 204 megawatts ($2.71 billion) to be built. According to the power fuel hub, according to a company executive and The political issues that led to the lost crude (MW), after its Oct. 1 auction, aiming for a possible trading chamber CCEE, the new plants, which will supply include U.S. sanctions on Venezuela maximum of 675 MW, was again undersubscribed. need to be operational in six years, will sell energy Co. Ltd, a subsidiary of state oil and gas giant and Iran, and disruptions in Saudi Arabia and The Bundesnetzagentur energy markets regulator for an average price of 176 reais per megawatt, a PetroChina,local government will join official. half a PetroChina dozen other Fuel domestic Oil Libya, Thomas Waymel, Total’s president of also said in its statement that it had awarded 33% discount over the initial price at the auction. trading and shipping, said at the International 153 MW of solar power capacity out of a tender marine fuel from bonded storage, with the Petroleum and Natural Gas Enterprises volume of 648 MW, with nearly all permits going had projected total awards of around 800 MW at the permitindependent coming and just state-run months firmsbefore supplying new global Conference in Zhoushan, China. Saudi Arabia’s to Bavarian bidders. The authority has warned auction.The final France’s result was Voltalia, much Norway’s above expected. Statkraft Analysts and rules on cleaner bunker fuel come into force. crude supply in September fell by 770,000 bpd that a sharp fall in applications for green power Brazil’s Eneva are among the winning bidders. “We Zhoushan, in Zhejiang province, is relying on to 9.02 million bpd, the lowest since 2011, projects threatens the country’s energy have to celebrate. We managed to achieve an its proximity to major Chinese ports and following attacks on state oil giant Saudi transformation. The economy ministry amount of projects almost three times what support from Beijing to give it an edge Aramco’s facilities on Sept. 14, according this month presented a schedule to was expected,” said Reive Barros, planning 5 over its larger Southeast Asian rival in the to the International Energy Agency. 3 reverse the lull. 4 secretary at Brazil’s Energy Ministry. multi-billion dollar marine fuel industry. 6 46 47 News October 2019 Issue No.88 monthly News Russia Sells Crude at Record Premiums to Asia Canada LNG Export Plans Progress Russia, the world’s No. 2 Pieridae Energy moved closer oil producer, has become an gas (LNG) export terminal on sanctions after an embargo on Canada’sto building East a liquefied Coast after natural taking Chineseunintended ships beneficiary drove up tankerof U.S. freight rates, spurring record Dutch Shell which will feed gas premiums for Russian crude intoownership the plant, of fields the company from Royal said. that takes just days to arrive The Goldboro LNG terminal in North Asia. Demand for key Russian oil grades sold in Asia East Coast and compete with the has been strong in the past growingwould be number the first of on plants Canada’s on the month after an attack on key U.S. Gulf Coast, hoping its shorter oil processing facilities in Saudi distance to Europe and further Arabia drove up prices for spot west will help sell its LNG by cutting shipping costs. Pieridae processing more low-sulphur said in a statement it had closed gradescrude while to meet Asian shippers’ refiners are a C$190 million ($145 million) demand for cleaner fuels from acquisition of Shell’s gas assets in 2020. Soaring freight rates in Alberta’s Foothills region, giving it the past two weeks prompted most of the gas needed to supply Asian buyers to bid up for has been slower than its U.S. easier for LNG projects 8 cargoes that ship over shorter Sokol crude also jumped to a placed off limits 7 Goldboro terminal. “We will now counterpart to take advantage of there, which tend to buy distances such as oil from as companies fear completethe first of our two negotiations plants at the with soaring gas demand around the gas rather than own gas assets. Russia. These factors pushed barrel to Dubai quotes as oil violating U.S. sanctions against Kellogg Brown & Root Limited for world and build export plants, in Five large LNG export terminals spot premiums for December majorfive-year-high Exxon Mobil of about Corp $9 sold a Iran and Venezuela. “Russia’s part due to securing feedstock operate in the United States ESPO Blend crude ESPO- a December-loading cargo Urals (crude) has been doing the Goldboro LNG facility so supplies for the terminals. This including the 25 million tonne a DUB, loading from Russia’s at that level in a spot tender, thata fixed we price can then contract proceed to construct to contrasts to the U.S. Gulf Coast, year (mtpa) Sabine Pass, operated traders said. Freight rates to sanctions against Iran and where there is so much gas being by Cheniere Energy. By contrast, an all-time high of about $9 a soared to new highs over the Venezuelafine this year and mostly now ESPO thanks has produced thanks to the shale there are no operating LNG export barrelPacific toport Dubai of Kozmino, quotes in to two past couple of weeks after complete the project financing revolution, some producers facilities in Canada although Shell Surgutneftegaz spot tenders. nearly 300 oil tankers, or really do Russian oil grades Pieridaeand final CEOequity Alfred raise Sorensen and make a have had to pay buyers to take has begun constructing a massive The spot premium for Russian good,”clearly a benefited. Western traderU.S. sanctions said. said.final investmentThe Canadian decision LNG industry (FID),” it off their hands. This makes it one on the West Coast.

3% of the global fleet, were NEWS NEWS EU, China, to Coordinate “Green” Investment Carlyle Group Quits $1bn US Oil Export Project The European Union, China, but to harmonise rules on also have to tap into private Carlyle Group said it had on why it dropped out of the with projects in the same area India and several other countries what is sustainable, or “green” capital to raise the trillions dropped out as a stakeholder project, which it said continues proposed by commodities trader teamed up to coordinate rules investment, across the world so needed,” he said. in Lone Star Ports LLC, which to be actively developed. and standards for trillions of “No national budget can pay proposed a $1 billion crude oil 66. “Interest in Harbor Island dollars of private and public it more freely. for that on its own. Nor should export terminal near Corpus a lawsuit against Carlyle in a remainsTrafigura at AG an and all-time refiner high,” Phillips “green” investment needed over that“To privatedeal with capital climate can change flow into it. Countries should link their Christi, Texas. Sean Strawbridge, TexasLone Star state in court, September alleging filed the Strawbridge said. The port will decades to prevent irreversible Europe can only do so much, chief executive of the Port of continue dredging in the area climate change. The initiative, because Europe generates Corpus Christi, said Carlyle contract to jointly pursue the to make it more attractive to called the International Platform only around 9% of emissions,” upsustainable green investment financing at needs the level to projectprivate equityand asking firm thebreached court to its export crude, he said. Lone Star on Sustainable Finance (IPSF), European Commission Vice thatglobal the financial world needs,” markets he to said. scale it would no longer proceed award it full ownership. The and Berry did not immediately also involves Argentina, Chile, President Valdis Dombrovskis The European Union’s executive withnotified its investment.the port on Oct.That 8 left respond to requests for Canada, Kenya and Morocco - a told Reuters on the sidelines of arm, the European Commission, construction company Berry damages. The project was comment. group responsible for 44% of International Monetary Fund in June sought to boost the Group as the sole backer. onelawsuit of at also least sought nine crudeunspecified oil The U.S. shale boom has the world’s GDP and meetings in Washington where Carlyle said in a export terminals proposed for prompted a surge in oil exports, the same amount the initiative was launched. climate change by publishing statement Berry Group the U.S. Gulf Coast to load U.S. which last week hit 3.25 million of carbon dioxide “While public funding will be flow of private money to tackle was “now the sole shale oil onto supertankers that barrels per day (bpd) and 9 emissions. Its aim is vital for the transition, it cannot as environmentally friendly 10 owner of Lone Star,” carry around 2 million barrels continued to fuel a race to build not to raise money, pay the massive bill alone. We investment.guidelines on what qualifies but did not comment apiece. Carlyle was competing new export terminals. 48 49 Market October 2019 Issue No.88 monthly Market

the sulphur content of a transportation fuel How about light products? They should be undertaken at one time. To this end, market strong as the market is moving to demand players started to be prepared to supply more light crude grades aiming to produce Asian Crude lower sulphur bunker grades or be able to less fuel oil and more gasoil. Gasoline and consume the higher sulphur ones. This is not naphtha are now passing their boom days. However, as simple as it seems. Singapore, They are both highly demanded. Strong and Products Market the largest bunkering hub, appears not to be petrochemical demand on easing steam aving the news of attacks on Saudi heavy grades of crude oil is expected to go capable of supplying lower sulphur bunker cracker turnarounds may also added more oil facilities and then recovering wider in 2020. grade in 2020 as it did normally around 45 support to naphtha market. Despite the Hits oil production to normal level, mmt per year. By the virtue of the fact that healthy demand of gasoline and naphtha, indeed brings an obvious view to have a Products Market Margins have also come under pressure downside price trend in October compared to On the products side, though natural, fuel oil, gasoil producers are in comparative from soaring freight rates that now make it September. situation is misty. As we are going closer to advantageAsia will face to offerinsufficiency more gasoil of low as bunkering.sulphur Crude oil price reduced by around $ 3 per the year 2020, there are still the uncertainties Asian gasoil producers ready themselves to Asia. barrel in October, correcting the tensions how the market would be shaped on the make IMO compliant bunker fuel. considerablyIn spite of all more above expensive rational response to fix cargos of to was occurred after September 14th attacks bottom and middle of the barrel. China is one of the substantial gasoil market players ahead of IMO 2020, there are on Saudi Aramco’s oil facilities. This sounds The International Maritime Organisation producers in Asia. It started to make mixed feelings on the coming situation. almost simple, but light grades of crude oil (IMO) has ruled that from 1 January 2020, Zhoushan Island equipped and accessible which Saudi Aramco claimed to recover marine sector emissions in international to supply bunkers to the ship-owners, the production, is still tight and would be waters be slashed. The marine sector will likely the case as we go closer to 2020. 2020 have to reduce sulphur emissions by over advantage. is expected to be challenging as IMO new 80% by switching to lower sulphur fuels. The collectingTaking all the above profits mentioned of its comparative into account, regulation would be applied. Considering current maximum fuel oil sulphur limit of 3.5 market is in favor of Middle products IMO and looking forward, the gap of light and weight percent (wt%) will fall to 0.5 wt%. and against heavy products. IMO 2020 regulations will see the largest reduction in

50 51 R&D October 2019 Issue No.88 monthly R&D

new commodities would be introduced and our mission would be to provide a market for manufacturers to equip National themselves.” He said that over 100 subjects had been introduced to the Ministry of Science, Capabilities in Research and Technology and several professors had already volunteered to conduct studies on the subjects. “At the start Field-Oriented of new term, we will witness the presence of professors at the petroleum industry to Contracts discuss the envisaged issues. ne of the major concerns development of technological That could be a turning point of the petroleum industry infrastructure, logistic and for communications between Oin recent years has been structural support as well as the self-reliance of domestic culture-building for production get closer together,” he said. industry in supplying domestic prosperity were among the main scientificTaleqani andsaid research in the new centers to needs. This issue has taken up topics. “The measures we have projects, universities and taken over years with regard industries needed reference in the past couple of years and to projects and infrastructure laboratories. “A bottleneck in followingadded significance the US’s imposition particularly have been in parallel with those the domestically manufactured of sanctions on Iran’s oil sector. objectives,” he said. Taleqani universities and industries become active in this sector by knowledge-based companies equipment is meeting standards In line with this objective, many added that major issues related presenting targeted projects,” were being widely supported, set by reference labs and many sectors of the petroleum industry to resilient economy, science and and the necessary infrastructure he said. Taleqani stressed that adding: “Part of this support is manufacturers say they do not have sought to overcome legal technology and energy policy hasscientifically been created.” and technologically the projects implemented in primary and we can only provide meet requirements for the safety and infrastructure obstacles to were also on the agenda. As far recent years had to reach the infrastructure for them.” of domestically manufactured facilitate the activity of domestic as improvement in quality is Exploration Contracts New market, adding that was why the He added: “The important commodities,” he added. sectors. What has been reported concerned, he said, the operation Package issue is to provide commercial Taleqani said in many cases of apparatuses and equipment established. He added: “If this ground for them so that commodities need to be tested achievements, as well as sales as well as application of modern packages have been envisaged for objectiveOffice of Commercialization becomes operational, was they would continue their in operating zones and in wells, andas scientific exports andand researchinauguration of technologies were important. Taleqani said five working one of our missions, i.e. activity independently and imposing heavy costs. new projects indicate the special He added: “Nationalization of expressed hope that the number following up on the application “That is why we have several attention paid to the issue of technology must materialize each field-oriented contract. He of research achievements or without having to rely on agreements for starting up and prosperity of production in the particularly with regard to increase this year and more commercialization, would governmentconduct financial support.” transactions He said: completing these laboratories petroleum industry. Ebrahim optimization, documentation universitiesof these fields, would currently be engaged. 9, would have been accomplished.” “In “In this regard, we need to this year,” he said. Taleqani, director of research and sharing documents, in our view, all of domestically use international experience and technology at National which case, we can be hopeful manufactured equipment may and we suggest that these Incentive for Universities Iranian Oil Company (NIOC), that our commodities would He said: “Under the first MOU, be commercialized. Regarding companies import cutting said: “In the R&D sector, we were be of high quality. Meantime, yet.20 fields We hope were to envisaged, increase the but we the 10 items ordered to domestic edge technology and try to initially set to be assigned to nine looking for indexes and criteria quality improvement would have not reached figure in mind manufacturers, upgrading indigenize it.” Taleqani said universitiesTaleqani said for 20 development. fields were in favor of production prosperity, be accompanied by market He added: “Furthermore, technology and developing Department of Research and “At the time of signing contracts, and we regulated programs guarantee, which would in thenumber initial of shortcomings fields.” were technological manufacturing have Technology had envisaged 25 to that effect.” He added that turn, result in prosperity in removed and the ground is been emphasized. That could projects under the 6th Five- for each university and research some of these programs were production.” Taleqani said prepared for the development of result in prosperity in domestic Year Economic Development after the activation of one field implemented in 2019, while “quantity upgrade” was a key cooperation between research production,” he added. Taleqani Plan. “Furthermore, the to them,” he added. Noting that some others would continue in element in enhanced recovery and industrial centers.” Taleqani said: “Meantime, sanctions could second stage of identifying universitiescenter, we will had assign in the more past twofields coming years. “Of course, we serve as motivation for more and commercializing widely years upgraded themselves at have started some cases in recent started technological studies had been signed based on the trust in domestic companies. Our consumed commodities was different levels for this project, years that would continue,” said forfrom enhanced oil fields. recovery He added: in 2017“We samesaid five exploration exploration technology contracts companies will also try to meet on the agenda, and we hope Taleqani. roadmap. “We hope that the next quality standards.” that they would be introduced to them could be an incentive He said that quality exploration technologies working as a new working item to forhe said:the universities “Assigning athat second have field improvement, quantity growth, nineand the universities first package is almost of the over. packages would be approved Knowledge-Based manufacturers,” he said. field-oriented contracts with and we would be able to engage Companies Taleqani said: “It might not their obligations and engaged in the petroleum industry, has been created between Taleqani said startups and be more than 10 items, but universitiesdone networking in the and projects.” fulfilled scientific support for production Besides, mutual confidence 52 five more universities that have 53 History October 2019 Issue No.88 monthly History

arranged in a way that their images were

Hutzerreflected and in the Reuters water. D’Arcy is known for his toughness with regard to the discovery and extraction of oil in Iran. But before him, other Western groups had made attempts to extract oil in Iran.

Concession. This company started work in Bushehr,The first butagreement it stopped was exploration the 1884 Hutzer very soon and abandoned the project. According to some narratives, Hutzer owned by Dutch national Albert Houston was a commercial company involved in imports and exports in the Persian Gulf region. The company was based in Bushehr. Hutzer had received permit from the Government of Persia to drill in Dalaki and Qeshm Island for oil. But the company failed very soon and dropped the project. Hutzer had to cede its concession to “Iran Bank Mineral Rights” that had been established for activity ’Arcy’s name is strangely intertwined in mining. The bank suffered the same fate as Hutzer. The company was dissolved and had to Dwell was struck, Iran’s contemporary step out of the drilling industry. history withtook Iran’sa new oil turn. history. Everyone When knows the first the oil A second case up to D’Arcy is Reuter. Everyone story of D’Arcy and particularly his perseverance has heard about the Reuters news agency. This agency derives its name from Baron Julius But it may be interesting to know that oil did notto find enter oil thein Iran thoughts and pocket and literature profits. of Iranians from Iran’s oil. with D’Arcy. Several centuries before D’Arcy ReuterFollowing who the made death an ofattempt Amir Kabir, in 1889 the to king, benefit came to Iran, Iranians had learnt about oil and princes and ministers abandon the country to gas. its own fate and the country is heavily indebted. In continuation of what we read in the previous They traveled abroad under any pretext and issue, we will turn the pages of contemporary imposed heavy costs on the country. history to learn more about the petroleum As Iran was undeveloped under the Qajar industry in Iran. dynasty, the only option for the rulers to pay for their foreign travels was to grant lucrative Iranians to travel to London owing to the concessions to Western governments. Mirza Abu Talib Khan was among the first Reuters was born under such cultural and In his travelogue, Talib Khan refers to lights economic atmosphere. He kept an envious eye illuminatingfinancing of theLondon’s East India streets Company and corners. (EIA). on Iran’s mines and underground resources He describes how lights were decorated and including oil. Based on a historical document installed on walls and at stores. describing the Reuters Concession, Article 11 Talib Khan also notes that colorful light bulbs show the image of humans, as well as the form Mosa Khan Afshar, who had travelled to Russia Thanks to efforts made by some patriotist and name of king and queen and their crowns. in the company of Qajar Prince Khosro Mirza, specifically refers to oil. He says the lights are too beautiful to be refers to diamond lanterns. described in writing. He writes in his travelogue that lanterns had prooffigures of inside foreign Iran, governments’ the Reuters covetous Concession eye was on Mirza Saleh Shirazi is another traveler who had been installed at intervals of 30 steps from each Iran’sfinally oil. scrapped. But it provided evidence and other. According to the Reuters Concession, the Oil the lights, he writes in his travelogue that lights He describes how lanterns had illuminated Government of Persia had granted the exclusive before hadseen been gas lamps installed in London. at very closeLargely distance influenced from by the streets and alleys, so that passers-by did authority and privilege to the other party to ’ each other. not have to carry any lantern. He notes that in extract iron, copper, lead, oil and every other 2 Lights are not limited to London for Iranian Moscow, 7,000 lanterns were alight every night mineral substance it may deem suitable. The DArcy travelers. Saint-Petersburg had its own while in Saint-Petersburg it was much higher. mines with private ownership were exempted attractions. Along Niva River, he writes, lanterns had been in this agreement. 54 55 October 2019 Issue No.88 Sports monthly Sports

service workers would be lifting and international champion, Just look at the body of the weights. national team. Several athletes A Century of Weightlifting weightlifting. Many cities and from southern Iran and from First Club provincesare all famous always figures envied in such petroleum industry teams are Everything was happening athletes. Either they were among members. For example, Reza in Petroleum Industry very quickly. The growing oil staff or they were born into Dehdar was awarded global Morteza Rezaei weightlifting has been popular. trend of athletic exercises in families with background in medal. Where is he from? He’s It is set to mark its centenary the petroleum industry had the oil sector. Of course, many from southern Iran, born into a ver since oil was extracted soon. Like many other things, reached such a climax that its years have passed since then. family with background in the in Masjed Soleiman Britons were behind it. It may be echo was heard as far away as The petroleum industry has petroleum industry. Investment Ein 1899, many sport hard to believe, but everything the capital. That is why when made every effort to maintain on local athletes, particularly disciplines entered Iran alongside started in an old district, known oil club activities reached their its status. Compared with other young ones, has always been the black gold. Chief among them as workshop, where weightlifting sport teams, weightlifting does a priority for National Iranian were football, baseball, golf and discs were being produced. sport club in lieu of the Indians not require huge costs, nor does Oil Company (NIOC) and it tennis. It might be interesting Several years later, US-made Clubpeak, for APOC public officials use. Meantime, set up a it impose any unusual costs has so far produced positive to know that weightlifting was discs entered Iran and mass in light of growing cultural upon administrators. Any honor results. However, over the past production of weightlifting sets activities and the establishment achieved from these matches couple of years, due to unjust was introduced into Iran in 1917, started for national distribution. of schools equipped with sport would be traced back into such among these firsts. Weightlifting Simultaneously and may be terrains, one team from Sabzabad companies as National Iranian by Petroleum Ministry are faced matches was held in 1939. A sooner, a weightlifting club had High School had become so South Oil Company (NISOC) withsanctions, numerous the teams challenges. financed In this teambut the from first the round Anglo-Persian of league Oil been set up in Tabriz. But it was professional that took part in the or National Iranian Drilling year’s pro league, NIDC is ranked Company (APOC) took part in the totally different from what we competitions. History is marked Company (NIDC). These two the second with 747 scores. competition. Therefore, it may be may imagine today. Ten years with the names of petroleum teams have gained fame in NISOC is at the bottom of the concluded that would be needed for weightlifters industry athletes, particularly weightlifting. Describing them table, but its score is not much to come together from various weightlifters. The oil company’s and their merits would be different from the top teams to cities and compete. To be teams have long participated impossible in let us call it failure. Petroleum precise, it was in 1933. In that in weightlifting matches and this article. industry teams are like beacons year, weightlifting competitions won the Iranian and Asian in weightlifting. They have championship titles. Mehran and been illuminating for they could not be described as Bahman Motlaq, Amir Mangashti, years. And even leaguewere held matches for the because first time, the but the Asian champion and record- if new lights setter of his time in weightlifting, emerge, they started in 1939. In the same Shamsi, the champion of seven will continue to weightliftingyear, three APOCleague workers officially rounds of global matches, Navab illuminate. proved to be competent Nasir Shahal, the 2012 weightlifters. By then, nobody Olympic could imagine that APOC

56 57 Tourism October 2019 Issue No.88 monthly Tourism

Nashtifan Windmills These mills needed strong, continuous and long wind to run. The wind that ran these mills is known as 120-day-long winds of Sistan. These strong winds cover the provinces of Khorasan, particularly from Khaf to Nehbandan. Windmills are made from adobe and have two units including the main hall located in the Khaf, Historical ground floor and a wheel and rotor chamber located on the rooftop. The entrance to the ground floor is located opposite the wind direction. It is in fact a room where rotors and large and round stones are located. In another spot, there is a grains warehouse. Rotors are built in various areas of Khaf from wood, but in Nehbandan and tropical areas, palm tree branches are used as rotors. Windmills and Ancient City are often interconnected in order to resist Sistan’s winds. Khaf is a historical and highly visited city in Khorasan Razavi Province in northeastern Iran. Sharing border with Afghanistan, Khaf is located 262 kilometers southeast of the holy city of Mashhad. In the pre Islam era, Khaf was in the territory of the Arsacid Empire. Historians say Khaf was a developed city under the Arsacid and Sassanid empires. The following is a review of some tourist attractions of Khaf.

58 59 news October 2019 Issue No.88 monthly news

Malek Zuzan Mosque Malek Zuzan Mosque is the last brick structure left from the remnants of the historical city of Zuzan. The mosque is named after Malek Moazzam Abu Bakr bin Ali Zuzani, the most prominent governor of that area. It is the second mosque dated during the Khawrazmian period. According to inscriptions dating from 615 AH, the mosque was still under construction for one year following that. What remains from the structure is one small and one large veranda located face to face on the eastern and western sides. It is the core of a major edifice built as a school-mosque. Due to the invasion of Moghuls in 617 AH, the construction was left incomplete.

60 61 Tourism October 2019 Issue No.88 monthly Tourism

Ghiasieh Khargerd School Ghiasieh Khargerd School is in the vicinity of the village of Khargerd and 5 kilometers from Khaf, more precisely on the Taibad road. This historical school is among four brick buildings constructed under Shahrokh Teimouri by two architects known as Qavamuddin Shirazi and Ghiasoddin Shirazi in 848 AH. The two-storey building comprises 32 rooms, eight square-shaped halls in the corners and two big halls on the sides of the archway.

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IranPetroleum

If you have any comments regarding the articles in this magazine, please feel free to contact us through e-mail. Your views are appreciated Fuel Supply to Mideast Largest Iron Ore Mine he city of Khaf, covering to Khaf in terms of economic has 20,000 ha of farmlands more than 9,797 prosperity. and 60 broilers units and one Tsquare kilometers The Khaf iron ore mine is egg-laying hens unit. That is and being home to 180,000 one of the largest iron mines instrumental in the economy inhabitants, shares borders in Iran. In terms of quality, of Khaf. with Afghanistan. It is one it can rival global products. of the four branches of the It is known to be the biggest Torbat Heydarieh Torbat Heydarieh Zone of iron ore mine in the Middle The Torbat Heydarieh zone National Iranian Oil Products East. of NIOPDC is located on the Distribution Company south-north transit route. (NIOPDC). A total of 41 iron Silk Road It covers nine cities (Torbat ore mining companies are In ancient time, Khaf Heydarieh, Meh Valat, y was a main Silk Road Rashtkhar, Kashmar, Khalil PetroleumMinistr -PublicRelations million liters per month of fuel route, linking Azerbaijan, Abad, Gonabad, Bajestan bysupplied this company with more in the than Khaf five Neyshabour, Qayenat and and Khaf). With a storage area. Zuzan to Herat. Now, thanks capacity of about 235 million Residents of Khaf have long to railroads, it is possible liters, it distributes petroleum Thank you for reading been living on farmland, to carry out cross-border products. This zone of NIOPDC animal breeding, livestock export a variety of products, also serves the southern areas Iran Petroleum trading and workmanship. particularly oil. of Khorasan Razavi Province, Today, iron ore mines have NIOPDC is supplying fuel to as well as parts of South [email protected] Khaf’s agriculture sector. Khaf Khorasan Province. 64 given a special significance 65 Khaf Nashtifan Windmills