Esmail Habibi-Shirehjini, speaking Wednesday, Jan. 28, at a meeting reviewing progress on flare gas recovery projects at the National Iranian South Oilfields Company, praised oil industry workers for their efforts and described the initiative as a major step toward addressing one of the energy sector’s most persistent productivity challenges.

Habibi-Shirehjini said productivity operates as a “domino effect” across the energy supply chain, from production to distribution and consumption, with weaknesses in one area amplifying problems in others.

He pointed to underused capacity in energy productivity, particularly in upstream production. Two major challenges, he said, are flare gas emissions — where effective corrective measures are now underway — and low oil recovery rates, which lag global averages. Failing to improve recovery rates, he warned, amounts to using future resources to meet today’s demand.

Beyond production, Habibi-Shirehjini said energy conversion also faces inefficiencies. Power plant efficiency in Iran remains below 40%, compared with 55% or higher in many countries, indicating significant room for improvement. He added that losses in electricity transmission and distribution exceed 10% — a figure he described as optimistic — while Iran’s energy intensity remains more than three times the global average per unit of gross domestic product.

Citing the Seventh National Development Plan, Habibi-Shirehjini said Article 111 sets four sector-specific productivity indicators for the Oil Ministry. The first targets an additional 16 billion cubic meters of recovered flare gas annually during the plan period. The second aims to raise the oil recovery factor by 1% under Article 42, equivalent to about 6 billion barrels of oil. The third focuses on reducing losses in oil and gas transmission and distribution networks, and the fourth seeks to complete the value chain by increasing the share of processed products in refining and petrochemicals.

Habibi-Shirehjini said flare gas recovery delivers multiple economic benefits, including added value creation and activation of idle industrial capacity, particularly in petrochemicals constrained by feedstock shortages. He added that the project also brings environmental gains by cutting emissions and improving green development indicators.

Calling flare gas recovery a national project and a source of pride, Habibi-Shirehjini thanked oil industry workers on behalf of the National Iranian Productivity Organization for their efforts in advancing the strategic initiative.