3 September 2022 - 09:37
  • News Code: 461486
Petropars Key in Iran Oil Industry 

TEHRAN (Shana) -- Petropars has a major share in developing Iran’s joint oil and gas fields. The company’s CEO has been outspoken in explaining the company’s status in developing phase 11 of South Pars gas field, Bilal, Farzad B, Forouzan, and South Azadegan fields and cooperation with Latin American firms. So far, the Iranian major has implemented around $27 billion worth of projects.

On January 13, 2022, Seyyed Shamsuddin Mousavi was appointed as the CEO of Petropars Group by an order from the CEO of the National Iranian Oil Company (NIOC). A PhD holder in the field of strategic management from Japan, he enjoys over 25 years of experience in the oil industry, a significant part of which spent in Khatam Al-Anbiya (PBUH) Construction Headquarters. Explaining whether his company, which currently has several projects at hand, has the capacity to implement more projects in the near future, he stated: “Petropars' brain-ware capacity is high enough to generate capacity in accordance with new projects, although we are not currently operating with full capacity and have a lot of untapped capacity to run projects.

The following is the exclusive interview of Shana and Iran Petroleum with Mr. Mousavi:

During the Iranian Minister of Petroleum Javad Owji’s visit to Latin America earlier this year, Petropars is said to be tasked to cooperate with Venezuelans and Cubans. In what areas are you planning to cooperate with their companies?

Following the petroleum minister's trip to Latin America, Petropars was nominated to operate in Venezuela and Cuba. Petropars has the experience of operating in Venezuela and has studied several fields from 2005 to 2012. Asdrúbal Chávez, the CEO of the Venezuelan National Oil Company (PDVSA), during his stay in Tehran and in a meeting with Petropars executives in the past months, announced that the studies conducted by Petropars are in a world-class level and are very comparable with those of other international heavyweights. That is, the work we did in Venezuela was completely in an international level; this is very good, and on the other hand, it makes it difficult for us, because the expectations of foreign clients from Petropars have increased a lot, and our work will be more demanding because we have to raise the quality of our work.

We’ve had continuous meetings with the directors of PDVSA and the Union Cuba-Petroleo (CUPET), and have received from Venezuela a report on investment capacities in the upstream and downstream areas and the development of refineries. The Petropars team studied it and prepared a proposal with the approach of developing onshore fields and producing light to semi-heavy oil and submitted it to them. Of course, they wanted to update a number of their refineries, and we also provided the relevant proposals.

According to the protocol we have with Venezuela, after we exchange the initial proposals, we must finalize two documents: the non-disclosure agreement and the general agreement. Two documents were presented to us by Venezuela, and we also gave our views, and then a steering committee will be formed, with three people from Venezuela and three from Petropars.

Venezuela's contract party is NIOC or Petropars?

The Venezuelan party to the contract is Petropars, but we have the support of the Ministry of Petroleum and NIOC. It means that in practice we represent NIOC and Iranian Ministry of Petroleum. Venezuela is a very rich country, its sanctions are almost lifted and it even exports crude oil to Europe. We also have a strategic partnership with Venezuela.

What is the nature of your cooperation with the Cubans?

Regarding Cuba, we had three meetings at Petropars with the Deputy Director of the Union Cuba-Petroleo (CUPET); we had two expert and specialized videoconference meetings. Regarding Cuba, I must say that the level of knowledge and expertise in Cuba in the oil sector is lower than that in Venezuela; that is why they are very interested that we hold training courses for them. Likewise, we have made our proposal in this regard.

The difference between Cuba and Venezuela is that Cuba's proposal is carrying out studies to identify their fields, while in Venezuela, the fields have been identified and should be developed. In fact, our cooperation with the Cubans is studies to identify fields for development, while studies have been done with the Venezuelans and we are in the development phase.

According to the $40 billion memorandum signed between NIOC and Russia’s Gazprom, are you going to cooperate with the Russians in this field?

NIOC is in charge of cooperation with the Russians, naturally, Petropars will be involved in these projects as one of the executive arms of NIOC. The company’s tactfulness in signing such a historic memorandum of understanding with the Russian side is commendable as it has provided a suitable opportunity to use the capacity of foreign companies in providing financing and their technical savvy, as well as the transfer of technology. In order to turn the memorandum into a contract, appropriate and professional measures have been adopted by NIOC.

In this memorandum, the Russians are expected to invest in a number of joint gas and oil fields, which can create a strategic and long-term partnership that guarantees more production and creates value and entrepreneurship in the country.

How much are Petropars projects worth in terms of hard currency and Iranian Rials?

Currently, Petropars' ongoing contracts are about $10 billion and the remaining commitment is about $7 billion. If we consider all the contracts that exist in Petropars, and some of them are for years, we have implemented about $27 billion worth of projects.

Please tell us about the latest status of phase 11 of South Pars and whether the promise of producing 500 million cubic feet from this phase will be realized by October?

As you know, implementation of this project was initially awarded to the consortium of TotalEnergies (then Total), CNPCI and Petropars, and due to the withdrawal of two partners from the consortium, the entire project was ultimately entrusted to Petropars. The most important strategy of Total in the development of phase 11 was the use of pressure boosting platforms to prevent production drop in the field, therefore it was supposed to take two to three years to study, design and implement this important process. For production from phase 11, we had to wait at least two to three years until production took place, this was also normal, because pressure boosting requires high technology for study, construction and implementation.

In the new approach of Petropars, it was decided to ensure early production from phase 11 and to achieve this goal, four wells should be drilled. Considering that the main time-consuming factor in the development of the fields is construction and commissioning of the platform, in order to expedite the design process, Platform 12C, which was near the 11B wells, was considered for installation in the desired offshore spot. Currently, drilling of all four wells has reached the beginning of the reservoir and the reservoir of Well No. 8 has also been drilled and completed.

The only difference between Well No. 8 and the other three wells is that upon entering this reservoir, the condition of this part of the well is measured, so the completion time of this well will be longer than the other three.

How is the relocation of the 12C platform done and how is the pipe-laying operation progressing?

To relocate the 12C platform, the entire platform must be shut down and removed from the production circuit. After that, all the equipment in topside will be inspected and set free of any gas, gas condensate, etc. All these activities have already been carried out and now we are about 15% ahead of the schedule in this phase. In addition, on August 12 this year, the operation of laying pipes in the sea bed was also completed. Naturally, for this work, the existing 32-inch pipeline must be drained of gas and free from pressure and water. Regarding the 12C platform, the work is being done with speed, precision and full safety. Regarding the existing 32-inch and 4-inch pipelines, all the activities have been carried out, and fortunately, on August 12, 2022, seabed piping was completed.

What is the status of financing phase 11 now?

The phase 11 development contract has been signed under the new model of oil contracts, and we are working as the operator of the project, so we have to finance the project ourselves; the main shareholder of Petropars is Naftiran Intertrade Company limited (NICO), which bankrolls Petropars projects. Due to the fact that this is a national project, direct negotiations have been held with NIOC. I must also add that NIOC and the Iranian Ministry of Petroleum are diligently cooperating and helping us so that phase 11 is not delayed due to financial problems.

What measures have you taken regarding pressure boosting?

Petropars is the developer of the phase 11 project and Pars Oil and Gas Company develops South Pars gas field. As Petropars, we have included pressure boosting on our agenda, but I must say that the history of pressure boosting in South Pars started exactly from phase 12. When we were implementing phase 12, the wells of Platform 12C did not reach the intended production capacity and we incurred a pressure drop; there, we started working on the issue of pressure boosting to recover gas from phase 12. At that time, we resorted to a French consultancy group to study pressure boosting in South Pars. After examining 26 options for pressure boosting, including onshore, offshore, platforms, etc., this company suggested the use of pressure boosting platforms.

When Total joined the phase 11 project, it examined the four options of onshore, offshore, electrocompressors and LP and MP compressors, and finally its approach was to use an electrocompressor at sea, which runs compressors. When I entered the Petropars group in February 2022, I was told that we were waiting for a foreign consultant regarding pressure boosting, and the foreign consultant never showed up due to the embargoes.

Then, I issued a directive that this issue should be studied and implemented in the country by tapping the capacity of knowledge-based companies and university forces. A working group was formed under my chairmanship; we examined various scenarios and the issue was raised with the employer. Finally, by screening universities and scientific and technology centers, we reached Sharif University of Technology and Shahid Beheshti University.

Did you also use the studies that were done previously about pressure boosting?

We reviewed all the available reports and studies from the past about pressure boosting; of course, due to the interactions we had with Pars Oil and Gas Company, we also accessed the studies of their consulting company. The consultant of Pars Oil and Gas Company had announced that due to the sanctions, it is not possible to supply equipment related to pressure boosting inside the country, so they had chosen the onshore option. The company had also announced in their report that the offshore option would yield gas two times more than the onshore option. Our approach regarding the use of pressure boosting technology in the Phase 11 development plan in Petropars is currently limited to studies and more detailed studies should be done. However, our option is the sea and compressor option. The compressor fuel also has a special discussion that cannot be discussed at the moment due to the fact that the issue has not been finalized.

How much of the initial plan of Total has been used in the development of phase 11 of South Pars?

Total’s strategy was based on studies of the comprehensive reservoir plan and with a pressure-boosting approach. Due to gas supply problems, we had opted for early production, but to say that we abandoned studies by Total, this did not happen naturally. They had conducted studies and we also used more domestic capacities in our approach to study and design and implement this project.

There is a lot of talk about gas escaping from Iran to Qatar, how serious is this concern?

According to analysts and experts, part of the movement of gas is towards our own reservoirs, because our block formation is much denser than the Qatari wells and the positioning of phases is very close to each other. But in total, our production amount is less than the total production of Qatar, although in recent years, Iran's daily gas recovery has surpassed that of Qatar.

The development of Belal Field has been awarded to Petropars. Considering the recent events and the contracts signed by the Qataris for gas recovery and LNG production in the North Dome, it is very important to make this field productive to increase the pressure of South Pars. Please explain what activities Petropars is currently doing in this field?

Belal field is on the eastern edge of the South Pars gas field and the studies of this field have not yet been determined and finalized: whether it is an oil or gas field, whether it is joint or not, or for example whether its gas section is independent or its oil section is. In order to answer such questions, we had to drill to know the characteristics of this field after digging the appraisal and exploratory well.

The contract for developing Belal Field was signed with Petropars several years ago and we were working out a way to provide a rig for drilling for almost 12 months. Fortunately, in July of this year, the rig contract was concluded and drilling operations started; Belal Field seems to be is a combination of gas and oil field, probably the gas part is shared and the oil part is independent. In any case, until the appraisal well drilling is finished, it is not possible to give a definitive opinion on it. We need to reach the K1 and K4 layers of the reservoir to be able to have an estimation; the first phase of the field’s contract concerns drilling the first well and identification of the existing reservoir and preparation of the MDP.

The development of Farzad B joint field has also been awarded to Petropars. This field is one of the most complex gas fields. What is the state of the preliminary studies of the field now?

I can boldly say that the Farzad field is one of the most challenging gas fields in the Persian Gulf in terms of pressure, H2S level and bed geotechnics. It means that any problem and challenge that exists in this area is in Farzad field. Even for the geotechnical discussion of the bed, the initial boreholes have been drilled to determine the bearing capacity of the bed soil which indicate a serious challenge for the drilling piles that should hold the corresponding jacket. What I’m trying to say is that this field is a very complex project.

Petropars is in charge of initial drilling of this field for concluding MDP studies. In the past years, an international tender was held to select a consultant for conceptual design, but unfortunately, due to sanctions, foreign consultants did not participate, and we sought out chances with an Iranian consultant for the onshore sector of the project, and it was instructed to them that a qualified foreign consultant must be used for the offshore sector, but Farzad B project has been delayed due to several reasons; one of the problems was that a several bodies showed up saying that they would bankroll the project. First it was Farzad A and then Farzad B; a jacket contract was signed for Farzad A and the corresponding contractor built the jacket and kept it in its own yard for several years with no use.

Petropars made several correspondences due to the joint nature of the field and its sensitivity, stating that we should definitely do the Farzad B project. NIOC issued another directive for using the Farzad A jacket in Farzad B, but due to the major differences between the two locations in terms of water depth, bed conditions, the amount of risers, etc., we had to modify the Farzad A jacket to match the specifications of the jacket that was supposed to drill in Farzad B, but doing so will be pretty time consuming and will cost a lot.

How long does it take and how much does it cost?

It will take about a year for the modification to be carried out under the existing conditions and to be installed in the Farzad B location. Its cost will amount to around 5 to 7 million dollars. We have suggested using Farzad A jacket for drilling in Arash field because the gas pressure of Arash field is much lower and even its H2S is lower than the South Pars and the water depth there is close to the water depth in Farzad A field. We have also informed NIOC that if we are going to make improvements on the Farzad A jacket for transfer to Farzad B, it will cost a lot both in terms of time and expenses, but with a small improvement we can prepare this jacket for Arash Field at a much lower cost and in a matter of 4 to 6 months. We consider ourselves warriors of the Islamic establishment, that's why we made this proposal.

What are you currently doing in Farzad B?

Currently, we are in the process of conceptual studies, preparation of necessary engineering documents and matters related to the coordination of Farzad A jacket for Farzad B location, but I must say that Farzad B field has been delayed especially in the study phase.

Your commitment in the joint Forouzan field, which is shared with Saudi Arabia, was to increase production of 12,000 barrels from this field; at what stage is the project now?

This field is one of the 28 fields that NIOC held a tender for and the Petropars and Mobinsazeh Consortium won the tender. This field is the only offshore oil field where two rigs are currently operating. After four years of no production, in April this year, we managed to bring one well on stream and hand it over to the Iranian Offshore Oil Company (IOOC). If there are no problems, another well will be operational in the near future.

Regarding the development of South Azadegan field, given that Petropars is currently the general contractor (GC) of this field in the southern part, what measures have you taken so far?

The main work that we are engaged in right now is drilling a well, which is being done by Tadbir and Dana contractors. By February 2022, four rigs were active in the area, and by March, we added three more, thus now seven drilling rigs have been deployed in South Azadegan field and are drilling wells. The initial plan was to produce oil from 35 wells by September. According to the plan, we will drill and produce oil from these wells by March 2023.

Apart from drilling of the wells, the pipelines should also be laid and the related network completed, as well as access roads of these wells to the pads on which the rigs should be placed. The contractors of this sector had problems in their contracts, which have been resolved, and they are operating with the necessary speed and quality.

Construction of CETP is also up to Petropars. This project should proceed simultaneously with the completion and production of the wells so that the oil produced in South Azadegan can be processed. At what stage is the construction of this center now?

The 320,000-barrel processing center of South Azadegan is one of the huge processing centers in the region. This project was supposed to be completed in 30 months, but on the 25th month, i.e. in January, projects faced a huge delay. About 75% of the project concerns purchase of goods, which has 140 work packages; some items and goods take a long time to construct and deliver, such as compressors and control systems, etc. When you order these goods, it takes a long time to build them. The plan we finalized with NIOC is to complete the project by September 2023.

Considering that the wells of Azadegan field will be completed and productive by March 2022, how are you going to process the oil?

Three options are under consideration for the 6 months of production, the first is to use the empty processing capacity in the oil-rich areas of the south. Second, the use of skid mounted processing equipment available in Azadegan, and third, we have been tasked by NIOC to identify the capacity of skid mounted processing equipment in the country and in the Middle East region, and after reviewing and evaluating them, we will start working with them as soon as possible.

As a final question, does Petropars, which currently has several projects under way, have the capacity to implement more projects in the near future?

Petropars’s brain-ware capabilities are so high that it creates capacity to fit new projects, even though we are not working with all our capacity right now and we have empty capacity to implement new projects. One of the six strategies that I developed for the company was the development of strategic partnerships for the development of the portfolio of projects. Now we have signed an agreement with the Persian Gulf Petrochemical Industries Company (PGPIC) for the development of gas fields. PGPIC needs gas to feed its subsidiaries. They have no experience in developing gas fields, but Petropars does, so we can create a complementary partnership. For example, for the Maroon (Khami) fields, which are one of our most stressed fields, we have signed an agreement for its development, and we are going to give it to the PGPIC to produce a mix of downstream products to complete the value chain, which means a development management approach of partnerships for industry development.

Project-oriented companies build capacity according to the projects they take on, and when a project ends, they use the capacity elsewhere or shrink. The nature of these companies is contractionary and expansionary. We are not always supposed to have 10,000 peope as our workforce, sometimes we have 2,000 people and sometimes we have 20,000 people. Recently, with the addition of projects, especially with their implementation and operationalization, we have had a lot of recruitment.

News Code 461486

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