In an interview with “Iran Petroleum”, she said that once all development projects operated by ICOFC come online, Iran would see its gas output grow 100-140 mcm/d. ICOFC administers more than 85 fields scattered in 18 provinces. Its subsidiaries are South Zagros Oil and Gas Production Company (SZOGPC), East Oil and Gas Production Company (EOGPC), West Oil and Gas Production Company (WOGPC), and Sarajeh Operational Area in Qom. ICOFC currently accounts for about 25% of national gas production, which is stored at the Sarajeh and Shourijeh gas storage sites. In the Khangiran area, which is the only gas field in northeast Iran, 65 mcm/d of gas is produced, i.e., 8% of national output, supplying demand from the six provinces of Khorasan Razavi, North Khorasan, South Khorasan, Golestan, Mazandaran, and partly Semnan. These figures indicate ICOFC’s significant role in gas supply and storage.

The following is the full text of the interview Mohajer gave to “Iran Petroleum”:

What is ICOFC’s main approach in the current calendar year?

In light of the extent of its administered area and having three main offshoots – SZOGPC, EOGPC, and WOGPC – ICOFC is responsible for the bulk of the country’s gas supply. Undoubtedly, the development of gas fields, sustainable feedstock supply to gas refineries, and overcoming gas imbalance are our priority alongside the development of oil fields for output hike under the 7th National Economic Development Plan. Given the motto chosen for the current calendar year - investment in production - ICOFC, affiliated with National Iranian Oil Company (NIOC), is making its best to enhance its oil and gas production. ICOFC’s projects include gas field development, oil field development, construction of compressor stations, development of gas refineries, building sweetening units, and crude oil storage tanks. They are all aimed at helping increase national oil and gas output and contributing to the preservation of the supply from oil and gas fields, mainly green fields. The development of green fields would help remove gas imbalance and supply feedstock to gas refineries sustainably. ICOFC feeds five gas refineries. In case all these projects come online, 100-140 mcm/d of gas would be added to the national output. Regarding oil fields, I would like to say that some oil fields that have been supplying oil for years need to undergo development for enhanced recovery. We also have fields that are intact and have been recently discovered. Development of these fields would be done within the framework of investment contracts for their assessment, development, and early recovery.

How much does ICOFC’s investment projects add up to?

ICOFC has offered 25 packages of investment, worth $13.5 billion. Some of these packages have already received the necessary permit, including a license from the Economic Council, for $7 billion from the Plan and Budget Organization (PBO). We are in the process of obtaining permits for other investment packages. Would-be investors may choose any of the 25 packages. But the projects that have received an investment license will be awarded sooner.

Which sector is prioritized in your investment projects? Financing or technology import?

One requirement in ICOFC’s investment projects is that bidders are expected to be financially competent and have the necessary technical and construction potential. Field development is mainly done within the framework of IPC agreements under which the investor and E&P company would work shoulder-to-shoulder with one another. These companies often enter upstream contracts in a consortium that is responsible for commodity supply. They are long-term agreements signed with investment companies. In our terminology, an investor is responsible for financing, construction, development, manufacturing, and supply of the commodity as well as development of the field, as long as the agreement is in effect.

What mechanism is effective for overseeing E&P companies and their investor?

There are certainly requirements and oversights mandated by NIOC. There is a clear list of E&P companies to undergo assessment after registration. NIOC releases a list of companies every two years. This assessment is precise, and all necessary information is obtained from applicants until a list of E&P companies is released for one or two years. That pertains to assessing the technical and construction capacity, commodity supply potential, and even financial capabilities of companies. After these phases, an MOU and a confidentiality agreement are signed for the development of a single field or a cluster of fields. Under these MOUs, applicants present their technical and financial proposals after an initial assessment of the fields. These proposals include modalities of implementation of the development plan, identifying necessary commodities and their sourcing, as well as financial estimates. In studying oil field development, some issues like the length of field output ceiling maintenance, output level, and timeframe of implementation, maximum efficient recovery, and applying state-of-the-art technology and know-how are among the points to be taken into consideration in the technical proposals of companies.

How can ICOFC’s projects be attractive for would-be investors?

Oil and gas projects are naturally attractive to a large extent, mainly because of assurances over the return on investment in the short term and having a yield of more than 20%. That explains why NIOC’s projects offer a good rate of return on investment in light of their low construction costs. Although many aspects of development are tied to sanctions lift, it should be noted that we have good projects in terms of contracts and investment, making them attractive to both domestic and foreign investors. Therefore, ICOFC is open to local and foreign investment in its projects. Furthermore, thanks to our experience in implementing IPC and EPCF agreements, we can have good interaction with foreign investors. Under the present circumstances, given NIOC’s initiative for attracting investment, the process of awarding and implementing projects is accelerated and facilitated.

Do the investment packages consider modern technologies?

A segment of field development agreements pertains to transferring in new technologies. In new oil field contracts, an appendix is added to that effect. Depending on the category of project and its construction work, using AI can also be an option for monitoring the status of reservoirs and wells and output levels. Although the agreements initially include generalities about the development of fields, there is an option in the contracts obligating investors to use cutting-edge technology. We don’t restrict companies to using any specific technology and let them use new technologies based on the circumstances, potential, and challenges of their fields. One attractive feature of new oil contracts is the possibility of revising modalities and updating them based on the results obtained from the field for maximum efficient recovery.