31 October 2021 - 19:01
  • News Code: 325364
NISOC Reserves’ Value up $115bn

TEHRAN (Shana) -- National Iranian South Oil Company (NISOC) supplies over 80% of Iran’s crude oil and 16% of natural gas. As the largest subsidiary of National Iranian Oil Company (NIOC), NISOC runs 45 fields and 65 reservoirs covering 70,000 square kilometers stretching from Bushehr to Khuzestan provinces. Giant oil fields like Ahvaz, Gachsaran, Maroun, Aghajari, Karanj, Parsi and Bibi Hakimieh are among them.

Ahmad Mohammadi, the former CEO of NISOC, has said based on expert studies’ findings, the reserves owned by NISOC have increased $115 billion in value.

He said: “The expert studies conducted over the past two years show that Ramshir Asmari, Kupal Asmari, Kupal Bangestan, Mansouri Bangestan, Nargesi Asmari/Jahrom and Qale-Nar/Asmari are estimated to have 9 billion barrels of oil in place more than estimated before. That means 1.65 billion barrels of oil would be added to NISOC’s recoverable reserves.”

With an oil barrel hovering around $70, the newly discovered reserves are valued at $115 billion.

This volume added to NISOC’s reserves in place are not inclusive of the expected discovery of new oil fields. It is only based on identification of oil layers as well as technical studies on the data acquired from the current hydrocarbon reservoirs of NISOC.

It has to be taken into account that an oil reservoir could not be extracted entirely. The average rate of recovery from an oil reservoir stands at 28%, but new technologies and enhanced oil recovery (EOR) may increase it further.

NISOC Output Capacity Up

Mohammadi said NISOC’s production capacity had been raised despite tough sanctions, COVID-19 outbreak and unprecedentedly high inflation rate. He added that the natural pressure fall-off in production from some oil wells had also been compensated to a large extent.

He said that the latest round of sanctions against Iran’s petroleum industry, which were imposed in 2018, caused the toughest restrictions for oil production and export.

Mohammadi said the US had imposed sanctions on Iran to bring the country’s oil production down to zero. “The US failed to realize its objective due to the round-the-clock efforts made by petroleum industry staff. However, it is noteworthy that this round of sanctions is tougher than those imposed in early 2010.”

The previous round of sanctions imposed by the US were aimed at limiting Iran’s oil exports to 1 mb/d, but this time, the objective was to zero Iran’s oil exports. However, thanks to initiatives by various organs, Iran’s oil exports continued as much as possible.

Nonetheless, the current round of sanctions largely decreased Iran’s oil production and exports, thereby slashing Iran’s oil income.

As NIOC saw its budget fall sharply, the necessary financing for continued production from oil fields, household and industrial gas supply and feedstock for petrochemical and refining plants had to be provided. Therefore, some bonds were issued and sold.

Mohammadi said: “In order to maintain the status and influential role of NISOC in national economy, various initiatives and practices were employed; the most important of which were implementing EPC and EPD projects in 28 oil reservoirs that had been designed since 2017.”

Domestic Manufacturing

Due to tough sanctions, NISOC’s contractors were required to supply 80% of commodities needed for the projects from domestic manufacturing companies.

Mohammadi noted that despite the COVID-19 impact on the labor market across the globe, drilling rigs did not remain idle. Furthermore, he said, sustainable employment and local manpower hiring became a must.

Noting that the 28-reservoir project is considered a green project in the petroleum industry, he said: “In this regard, the addition of gas flares has also been prevented. The measure was seriously pursued in order to prevent the occurrence of harmful environmental impacts, and all contractors are obliged to prepare environmental impact assessment (EIA) before implementation of their projects.”

In the implementation of the 28-reservoir project, a complete chain of work has been considered with the aim of achieving a complete result, so the result of the work of the general contractor in this project is to achieve the main goal of oil production for the country. In addition, 28 reservoir contracts were awarded to E&P contractors (exploration and production companies) and consortia of companies active in the field of EPC (engineering, production, contracting) and EPD contractors (design, production and drilling). They were all Iranians who won tender bids, which led to the growth of upstream contractors and continuation of development projects in the face of tough sanctions and COVID-19 and unprecedented inflation.

Mohammadi said that new capacity building to make up for production fall-off was a key achievement of these strategic projects.

Feeding 90% of Refineries

A number of NIOC reservoirs provide feedstock of refineries that have been constantly operating. Sustainability of oil production required by the refineries (after the tightening of sanctions) required new capacity building. The daily production capacity of NISOC enhanced compared to pre-sanctions level.

If the production plan is implemented and the production hike license is issued, it is predicted that the production level will enhance by over 220,000 b/d in the future.

This increase in the production capacity came at a time when unjust sanctions, unprecedented inflation and the COVID-19 outbreak have affected the entire world economy; nevertheless, NISOC has added to its production capacity.

470 Workover Operations

Due to the lack of credit and foreign exchange resources for extensive drilling of development wells, NISOC focused on enhancing the efficiency of mature wells by resorting to workover. To that effect, 470 workover operations were carried out last calendar year. These measures, which cost much less than the cost of drilling development wells or repairing existing wells with rigs, prevented a sharp drop in production and, in some cases, enhanced production. Furthermore, any extra drilling was avoided. In the current calendar year, about 1,000 workover operations are envisaged.

Overhauls Done 84%

Mohammadi said: “The implementation of facilities’ reconstruction and renovation plan has not been possible yet due to the difficult conditions of sanctions and the lack of investors and sufficient credit, so a special program was developed for the overhaul of the facilities and equipment.”

Last calendar year, the necessary planning for the overhaul of 1,023 different types of equipment, including factories, desalination plants and gas and liquefied gas plants, rotary machinery and pumps and diesel generators, was done in proportionate with the amount of allocated credit.

Flaring Falls Below 20%

Residents of areas close to oil installations demanded that gas flaring decline as much as possible. Owing to measures taken over the past two decades, NISOC has saw gas flaring at its facilities drop below 20%.

Under the present circumstances, oil facilities are required to reduce their gas flaring by 8 percent.

Around Ahvaz, gas flaring has fallen to below 2%, said Mohammadi.

In the meantime, two important agreements have been signed for flare gas gathering. Based on these agreements signed with the Persian Gulf Petrochemical Industries Company (PGPIC) and Maroun Petrochemical Plant, 95% of associated gas in NISOC-run areas, amounting to 800 mcf/d, would be captured.

Four gas sale projects were also defined. Three are over and the last one is under way with 90% completion.

Noting that flare gas gathering would help reduce environmental pollution, Mohammadi said: “Furthermore, associated gas would be used as feedstock for petrochemical plants, which would generate high value-added for the country.”

1,200 Items Built

Mohammadi said that the 1,200 items needed by the petroleum industry had been domestically manufactured after 54 agreements were signed between NISOC and domestic manufacturers.

He highlighted the significance of upgrading the capability of domestic manufacturers of equipment for the petroleum industry, adding that due to sanctions, this principle is pursued severely by NISOC.  

To that effect, under a cooperation agreement between NISOC and Iran National Steel Industrial Group, the production line of seamless pipes, which are widely used in the petroleum industry, has become operational. Before that, Iran imported seamless pipes from abroad. 

NISOC has signed IRR 500 billion agreement with INSIG and a contractor for seamless pipe manufacturing.

Synthetic Oil for Refineries

Another measure taken at NISOC has been the delivery of over 28 million barrels of synthetic oil to refineries by a pipeline network and pumping stations over 14 months. The delivery of synthetic oil to refineries started in June 2020 for an optimal use of surplus condensate production at the giant South Pars gas field.

NISOC receives synthetic oil from the Iran Offshore Oil Company (IOOC) and finally delivers over 20 million barrels of oil to the Abadan and Isfahan refineries and sends the remainder to Petro Omid Asia and Kharg installations.

Courtesy of Iran Petroleum

News Code 325364

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