11 March 2018 - 11:42
  • News Code: 281819
Nioc Industry Yearly Review

TEHRAN, (Shana) -- The National Iranian Oil Company (NIOC) has witnessed many events over the past 11 months and shown satisfactory performance. Chief among them are crude oil production and export growth, natural gas production hike, equalizing its South Pars production with Qatar's production rate, outperforming Iraq in the West Karoun area, signature of a first IPC-style contract and signature of a contract for petroleum industry commodity manufacturing.


On 16 April 2017 President Hassan Rouhani inaugurated Phases 17, 18, 19 and 20&21 of South Pars gas field plus the South Pars Oil Layer. That increased Iran's recovery from South Pars, which is shared with Qatar, by more than 150 mcm/d. Such development put Iran on par with Qatar in extracting gas from the giant offshore field.

Furthermore, the oil layer of South Pars became operational and Iran started producing oil from this layer for the first time.

Completion of Phases 11, 13, 14, 22, 23 & 24 are under way. Iran's Minister of Petroleum Bijan Zangeneh has said that except for Phase 11 whose development contract was signed in July and Phase 14, the remaining phases would come online next calendar year which starts in March.

Last spring, which falls on the current Iranian calendar year, oil production from South Azadegan oil field exceeded 80,000 b/d, while the production capacity of Azar oil field crossed 30,000 b/d.

Other positive developments recorded for NIOC in the first quarter of the current Persian year included pre-commissioning of Haftkal desalting unit, domestic manufacturing of BB3 multiphase processing pumps in collaboration with the National Iranian South Oil Company (NISOC), designing and manufacturing RTD Tester as an item used in electrical protection systems of the Iranian Central Oil Fields Company (ICOFC), signing several MOUs for studies on oil and gas fields during Iran Oil and Gas Show 2017.

In the last month of the first quarter, the largest petroleum industry manufacturing contract was signed between NIOC and an Iranian-Spanish consortium for 556 million euros for the manufacturing of corrosion-resistant alloy (CRA) pipes. This agreement was a first step for the domestic manufacturing of this strategic commodity in Iran.

Meantime, OPEC and non-OPEC oil producers agreed to shore up oil prices by curbing market glut. That came against the backdrop of the 172nd OPEC ministerial meeting and an agreement to keep output ceiling unchanged for nine months.


The signing of a contract for the development of Phase 11 of South Pars was a first step towards implementation of the Iran Petroleum Contract (IPC), the newly developed model of oil contract. On July 3, 2017, NIOC struck a deal with a Total-led consortium which also comprises China's CNPCI and Iran's Petropars for $5 billion investment in the gas project. The agreement sent such messages as the ineffectiveness of international sanctions, investment security and Iran's successful oil diplomacy.

The Iranian Ministry of Petroleum and the NIOC had to spend time and energy to shed light on different aspects of this agreement and deal with an organized campaign of defamation; however, the agreement went ahead as planned. Despite US obstructionism on one hand, and domestic unfair criticisms on the other, the executive process of this contract is under way on schedule.

In the summer, the NIOC also signed a 500-million-euro deal with a consortium comprising France's Sofregaz and Sanat SazeSamin for the recovery of flare gas produced at the second refinery of South Pars (Phases II and III).

Pre-commissioning of Hengam gas processing plant, export of the first consignment of butane from Phases 17&18 of South Pars, formation of a financing committee at NIOC, formation of investment committee at Khazar Exploration and Production Company (KEPCO), trial run of Gachsaran 3 desalting unit, installation of an advanced controlling system at Forouzan oil platform, start of construction of gas condensate sweetening unit in South Pars, start of retrofitting of the subsea section of R4 Platform of Reshadat oil field and installation of a new jacket in Platform 13A of South Pars were among other achievements of the NIOC in the second quarter of the current calendar year.

In August, the Iranian parliament gave its vote of confidence to Bijan Zangeneh to renew his term in office for four years. After taking office for the second time, Zangeneh promised to determine the fate of all jointly owned hydrocarbon fields in the country before the end of this tenure. In the meantime, he instructed NIOC with development plans and maximum efficient recovery from oil and gas fields in addition to plans for the renovation and reconstruction of surface installations.


On October 8, 2017, the agreement for completing Kharg NGL plant, sweetening and separating associated gas in Kharg and Bahregan and selling products which are heavier than ethane was signed between the Iranian Offshore Oil Company (IOOC) and Saff Offshore Industries Company.

Two days later, Minister Zangeneh announced the compilation of a $5 billion package for enhanced oil recovery projects. Tender bids for this package are expected to be held next calendar year.

South Yaran oil field, shared by Iran and Iraq, came on-stream with an output of 10,000 b/d from six wells.

The startup of a new desalting unit in Gachsaran, formulation of a renovation plan for decrepit installations in oil-rich areas in southern Iran, successful installation of the jacket of Platform 18F of Forouzan field, the start of flares in Phases 22-24 of South Pars, and the operation of the first boiler in the refinery of Phase 13 of South Pars are among other important events of the third quarter of the current calendar year.

In addition to MOUs often signed by NIOC for studies on oil and gas fields, a number of NIOC subsidiaries singed an MOU with Italy's Ansaldo for the gathering of associated gas to be used for generating power. NISOC signed five research agreements on enhanced and improved oil recovery with scientific and academic centers in Iran. Of course, the first agreement for selling liquefied natural gas (LNG) was signed between NIOC and IFLNG, owned by Kharg Gas Refining Company, and Norway's Helma. But this agreement was finally not endorsed.

MOUs were also signed between NIOC and Russian companies Lukoil, Gazprom and Rosneft on conducting studies on oil and gas fields, strategic energy cooperation, research cooperation and Iran LNG project studies.

But the event that marked last autumn was the blowout at Well 147 of Rag Sefid. NISOC and National Iranian Drilling Company (NIDC) were busy putting out the fire which started in November and continued for two months. Two NIDC service workers died in the accident. Top kill and bottom kill methods were combined to help put the blaze out and cap the blowout.


In early winter, the successful well kill operation in Rag Sefid brought joy to the petroleum industry. Drilling operations continued in this region and a relief well was drilled to replace the previous well for production.

Registering a new record in the berthing of tankers and loading of condensate from single point moorings at South Pars gas condensate terminal, increased gas production capacity at South Zagros Oil and Gas Production Company, enhanced oil output from Reshadat field and installation of Platform 14A of South Pars were among other marking events in winter.


Courtesy of Iran Petroleum

By: Hanieh Movahed

News Code 281819

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