Petroleum industry is key to economic development in every country. Some pivotal roles of petroleum industry include its contribution to the materialization of the macro-objectives of national economy in the 20-Year Vision Plan, pushing ahead Iran’s energy and economic diplomacy and contribution to guaranteeing national security through development of cooperation as well as regional and international interactions, a major share in the gross domestic product (GDP) and the country’s hard currency revenues as well as more than 95% share in supplying the country’s primary energy needs.
The petroleum industry is one of the main advantages of Iran and it provides a good platform for the country to guarantee the independence of its budget of petrodollars and facilitate sustainable economic development in the country.
Since oil revenues continue to be the main driver in the country’s economy, all-out planning in the oil, gas and petrochemical sectors are of strategic significance.
In this report, we review the most important measures undertaken by Iranian Ministry of Petroleum in the upstream oil industry in the last calendar year which ended on March 19.
An increase in crude oil and gas condensate production and exports has been materialized following the development and completion of South Pars gas field and development of planned recovery from the oil layer of the giant reservoir. This sector has seen effective results.
South Pars Development/Production
Concentrating on the development of South Pars gas field, making the necessary arrangements and benefiting from all potentialities for enhancing rich gas production from this joint gas field, full operation of Phase 12 of South Pars as the last development project in this gas field in terms of natural gas refining capacity; Iranian entities have handled 67% of the task, including construction and launch of all top-drives and offshore pipe-laying, at Phase 12 of South Pars.
Completion and inauguration of Phases 15 and 16 of South Pars gas field with more than 70% share for domestic manufacturing in this project; this figure is the highest ever share of domestic manufacturing in implementing South Pars projects.
Commencement of production from Phases 17-18 and Phase 19 of South Pars, installation of two production platforms, construction of pipelines for offshore gas transfer and gas refining units in the development of Phases 17 and 18 of South Pars are among other projects under E&P plan for this giant gas field shared with neighboring Qatar.
All-out and integrated development of the remaining phases of South Pars (Phases 11-24) with a production capacity of 537.7 mcm/d of rich gas, 425 mcm/d of sweet gas, 710 tb/d of gas condensate, 6.5 mt/y of ethane and 6.7 mt/y of liquefied petroleum gas and also the construction of Iran Gas Trunkline 6, 9 and 11 for the transfer of 110 mcm/d of gas from Assaluyeh have been already approved by Iran's Economic Council.
South Pars Rich Gas Production
Rich gas production from South Pars, which is jointly operated by Iran and Qatar, has seen significant increase under the administration of President Hassan Rouhani. When the administration of President Rouhani took office, rich gas production in Iran was 235.5 mcm/d. Last calendar year, it reached 360.3 mcm/d. Rich gas production from South Pars gas field rose to 404.6 mcm/d in March.
West Karoun E&P
As far as development of joint fields in West Karoun area is concerned, the required arrangements have been made for enhancing crude oil production.
Amendments to conditions for those contractors active in West Karoun fields (expulsion of a Chinese contractor involved in the development of South Azadegan, regulating relations and contracts with other contractors and increasing the number of operating drilling rigs from 3 to 18) and the second-phase startup of early production at Yadavaran field for a 50 tb/d crude oil output are among activities carried out in this regard.
The integrated development of West Karoun oil fields with a capacity of 550 tb/d has been enshrined in the annual budget of the calendar year 1393, which ended in March 2015.
The efforts undertaken for the development of West Karoun fields have resulted in brilliant results. Development of Yadavaran field (Phase 1) with a production target of 85 tb/d of crude oil and development of North Azadegan field (Phase 1) with a production target of 75 tb/d are ready to come on-stream.
Other activities regarding the development of West Karoun field include the startup of the first train of production and desalting in West Karoun fields with a capacity of 55 tb/d, facilitating conditions for benefiting from the resources of National Development Fund of Iran as well as other financial resources available for domestic manufacturers and contractors and targeted and optimal allocation of credit and financial resources to projects.
Other Measures in Oil/Gas Fields
In addition to the development of South Pars gas field and the joint fields located in West Karoun area, the Iranian Ministry of Petroleum has taken effective steps with regard to the development of joint oil and gas fields. One of them is the development of Azar oil field.
Shoring up the drilling rigs fleet of the Exploration Directorate of National Iranian Oil Company for further exploration and appraisal activities in border areas, optimal and target-oriented allocation of credit and financial resources to projects and removal of major obstacles on the way of development of joint fields, finalization of strategy for the development of undeveloped fields and accelerating review of proposals for the development of shared fields are among other measures undertaken in this regard.
Crude Oil/Condensate Production and Exports
The Iranian Ministry of Petroleum has also taken effective measures with regard to production and export of crude oil and gas condensate. Under the administration of President Hassan Rouhani, crude oil and gas condensate production have seen significant growth. Furthermore, the necessary arrangements have been made for developing contractual frameworks that would be attractive to foreign investors. Upon a proposal by the Iranian Ministry of Petroleum, the general conditions, the structure and the model of upstream oil and gas contracts have been approved by the government. The new model of contracts, known as Iran Petroleum Contract (IPC), has already been unveiled through two seminars. IPC is expected to replace buyback deals which are no longer effective for Iran’s rather mature fields.
Focus on crude oil exports at NIOC, transparent trading of crude oil and gas condensate, elimination of intermediaries, negotiations and follow-up on revival of Iran’s pre-sanctions crude oil buyers, following up on the revival of crude oil swap in Central Asia, entente with state-run and private agent banks for financial facilities, following up on the supply of crude oil and oil products at Iran Energy Exchange and activation of relevant markets like forward markets and planning for the development of Jask Port as Iran’s new oil export terminal (construction of oil terminal in Jask, oil pipeline stretching from Khuzestan to Jask) are among important measures by Iran’s Ministry of Petroleum in crude oil and gas condensate production and exports. These measures have had effective and significant results.
In conclusion, one can say that thanks to the foresight of Minister Bijan Zangeneh the target-oriented activities under way at the Ministry of Petroleum are in fact a reconstruction of the petroleum industry as the driver of Iran’s economy.
By courtesy of Iran Petroleum Monthly
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