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The
New Oil Minister and a New Approach
to South Pars Project |
Qatar
does not simply produce and export liquefied natural gas from the field,
but it also produces much valuable gas condensate.
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Masoud Mirkazemi, Minister of
Petroleum |
There may be few people in Iran who
have not heard of Assaluyeh yet. Perhaps, the day when natural oil reserves
were discovered 100 km off Assaluyeh, few people could imagine that the region
and projects located there would become a candidate for the world’s biggest
industrial city in less than two years. Through its detent policy with Europe,
the government of Seyed Mohammad Khatami brought powerful Western companies
like Total, ENI, and Statoil to South Pars.
High attractions of refinery and
petrochemical projects at South Pars region were such that the above-mentioned
companies started their activities before long. Since South Pars reserves are
shared with Qatar and the Qataris had started exploiting them earlier than
Iranians, there was high sensitivity over how the progress should be made. By
2004, five phases of the South Pars gas field had become operational and
uptake of gas by Iran and Qatar was almost equal. On the other side of the
Persian Gulf, our Qatari rivals work fast and hard, helped by big Western
companies like Exxon, Mobile, and Shell, to commission gas projects one after
the other. Now Qatar is known as the world’s biggest producer of liquefied
natural gas and that status in world gas markets has not been achieved unless
through coordinated and planned development of Qatar’s share of the gas field.
Qatar does not simply produce and export liquefied natural gas from the field,
but it also produces much valuable gas condensate.
Qatar Gas Company has established
joint companies in cooperation with oil majors and has increased production
from the field to a level that no country can compete with it. Today,
liquefied natural gas exports to various countries by Qatar have greatly
risen. At the same time, in spite of its great population and increasing
domestic demand as well as industrial development and ambitious plans for gas
exports, Iran has no solid plan to exploit the field. We started developing
South Pars gas field 10 years later than Qatar. Therefore, that country has
been able to produce a lot of gas in the absence of Iran. Due to that delay,
we were expected to have more intensive and regular plans for the development
of this field and this seems to be the main challenge facing the new minister
of petroleum, who should put development of South Pars gas field on the top of
the list of his ministry’s priorities. Iran has produced a daily amount of 145
million cu. m. of natural gas from South Pars last year. That gas has come
from eight phases of the field.
During the past year, phases one to
five were totally functional and phases six through 10 were functioning at
half capacity. Although those phases are producing gas, our total production
is still lower than that of Qatar. Based on figures produced by Qatari
officials, the country has been producing about 350 million cu. m. of natural
gas per day from the field. The figure shows a wide gap when compared with
Iran’s figure. South Pars gas field is one of the biggest gas fields in the
world, which is located 100 km off the Iranian coasts in the Persian Gulf and
has an area of about 9,700 square kilometers of which about 3,700 sq. km. is
on the Iranian side of the border.
The field accounts for 8 percent of
the world’s gas reserves. Although Iran owns about one-third of the field,
this is just a geographical division and actual amount of production will
depend on total investment in the joint field. While Qatar has meticulous
long-term plans to increase investment in the field and produce more gas,
foreign investors are not willing to help Iran with development of the
remaining phases of the field. Absence of a powerful management in the
Ministry of Petroleum during the past four years, on the one hand, and
sanctions imposed by Western countries, on the other hand, have made progress
on South Pars gas field quite slow. Since major European companies left Iran,
the country has had no choice, but to engage in negotiations with Chinese and
Indian companies. |
