Iran Oil Industry in for Big Year amid US Threats
Iran’s oil industry may be heading for choppy waters from a possible US
re-enactment of sanctions, but the country’s officials foresee a thriving
year during which as many as 17 upstream contracts are expected to be
Last year marked the National Iranian Oil Company (NIOC) signing three major
oil deals for the first time since the lifting of sanctions in early 2016.
The company expects to finalize seven more upstream contracts worth around
$40 billion with foreign investors by October, NIOC deputy head Gholamreza
Moreover, negotiations are underway to develop 10 more oil fields and
finalize their contracts before the year-end.
“I have to emphasize that negotiations on the fields are being done with the
current challenging situation being included in our projections,”
Manouchehri told reporters on the sidelines of an international
petroleum exhibition in Tehran.
The new contracts are signed under the new Iran Petroleum Contract (IPC)
which is offering better incentives than the buy-back agreements Iran
offered in the past.
Oil Recovery and Exploration Projects:
NIOC further plans a $6 billion package to maintain production and increase
the recovery rate of oil fields in the form of 35 projects.
“Given that tenders of the plan have already begun, we hope to sign most of
the contracts for these projects by September,” Manouchehri said, explaining
that they would be awarded to domestic companies.
“We expect to see a boom in business and activity in the oil industry due to
the fact that domestic companies will implement this plan,” he added.
In the exploration sector, 14 blocks covering over 80,000 km in six
sedimentary areas are scheduled to be tendered in July, NIOC director for
exploration Saleh Hendi said.
“Of the 14 exploration blocks, six blocks are expected to be attractive to
foreign investors and development agreements for them to be signed,” he
The official said Austria’s OMV, Russia’s Lukoil and China National
Petroleum Company (CNPC) have announced their interest in the exploration
blocks which include both known, highly-potential blocks and new ones.
Four blocks are in the Zagros sedimentary area, including Zahab in Lorestan,
Tudej in Fars, Timab in Dezful and Abadan in the Abadan plain. The Bamdad,
Mahan and Parsa blocks are in the Persian Gulf Basin.
Three other blocks in the Kopeh Dagh Basin are in northeast Iran, straddling
its border with Turkmenistan. They are the Sarakhs, Dousti and Raz blocks.
Another block is the Moghan Basin in northwest Iran, with a proven
hydrocarbon system, while Kavir is located in the central basin.
Two new sedimentary blocks are Taybad bordering Afghanistan and Sistan near
the border with Pakistan.
Record Oil Rig Count:
The operations will see a record rise in rig count where 100 rigs will be
engaged simultaneously. “The activity of this number of rigs is almost
equivalent to the entire operational rigs in the oil industry,” Manouchehri
Iranian contractors are expected to get a strong boost from the operations
because all the equipment and articles needed in the projects will be
sourced from domestic suppliers unless they are unable to manufacture them.
“This policy will also create tens of thousands of jobs in the Iranian oil
industry and remove any sluggishness among Iranian companies and
manufacturers, creating a dynamic environment in the Iranian oil industry,”
the official said.
“Of course, the work will peak in the next year. Based on estimates, these
projects are planned for two years, meaning it will take two years for the
contract to be implemented from the time it is concluded.”
In the gas sector, five new phases of the giant South Pars field will come
on stream, adding 200,000 barrels per day to Iran’s condensate production
Manouchehri also said he expected the contract with the Indians to develop
Farzad-B gas field in the Persian Gulf to be signed in the next five months.
India’s ONGC Videsh Ltd (OVL) discovered Farzad-B in the Farsi block about
10 years ago and asked Iran to grant it the right to develop the field.
Iran’s Minister of Petroleum Bijan Namdar Zangeneh said recently he hoped
India and Iran could finalize the main issue on the development of the gas
field in the next few months.
Manouchehri also touched on Iran’s plans to develop South Azadegan oil
field, including a 300,000 barrel-per-day processing unit and $3 billion of
investment in Jask in the Gulf of Oman to build a new oil terminal.
“All in all, they include 80 projects which the National Iranian Oil Company
is dealing with and we hope to see an upsurge in the oil industry this
year,” he said.
Iranian President Hassan Rouhani paid a visit (May 8) to the 23rd Iran
International Oil, Gas, Refining & Petrochemical Exhibition (Iran Oil Show
While visiting various stands showcasing domestic products of Iranian
companies, President Rouhani was informed about the latest achievements and
the modern technologies employed by Iranian experts in the oil and gas
The Iran International Oil, Gas, Refining & Petrochemical Exhibition, the
largest oil expo in the Middle East, is held annually in Tehran with
participation of top-tier Iranian and foreign companies.
This year, over 1,000 Iranian companies and 811 foreign companies from 37
world countries, including Germany, France, Russia, Japan, China, The
Netherlands, Austria, Italy and South Korea, took part in the event.
The oil show is organized by the NIOC, which is one of the world’s largest
oil companies with a vast amount of oil and gas resources. Currently, it is
estimated that the company holds 156.53 billion barrels of liquid
hydrocarbons and 33.79 trillion cubic meters of natural gas.