Iran confident of oil deals despite US sanctions threat

Financial Tribune – Iran sees an unprecedented opportunity for international companies to operate in its oil industry, despite uncertainty over potential new sanctions from the United States, a deputy at the National Iranian Oil Company said.

“If we can overcome the challenge of investment and technology, Iran is the best place in the world for new conventional oil and gas developments,” Gholamreza Manouchehri, NIOC’s deputy for development and engineering, said in an interview with The Oil and Gas Year. There are plenty of investment opportunities in unconventional oil plays across North America, but “Iran has the best potential for conventional plays at the moment”, he said.

“Our new IPC [Iran Petroleum Contract] model is solid and international oil companies understand that it establishes a good framework for a long-term, win-win partnership,” Manouchehri said.

Iran resumed talks with international oil and gas companies after relief from economic sanctions last year. But one thing in the way of its collaboration with energy majors is US President Donald Trump’s efforts to undermine the nuclear deal.

Trump announced in October that he would not certify Iran’s compliance with the accord endorsed by his predecessor Barack Obama.

But Manouchehri asserted that Iran is forging ahead with its new oil deals, despite Trump’s threat to pull out of the deal.

“Even though we are still experiencing some problems regarding sanctions and the US, we are receiving a lot of interest from European, Russian and Chinese companies, and also from South Korea, Japan, Singapore, India, Malaysia and Indonesia,” he said.

“Our qualified labor force, service and EPC [engineering, procurement and construction] companies will support the development of the upstream industry and increase oil production in the coming decades.

Once OPEC’s second-largest and the world’s fourth-biggest crude supplier, the country hopes to return to its mighty days in the 1970s when it produced over 6.5 million barrels a day.

“We did have this kind of record back in the 1970s and we can come back to this figure and add another 1 million bpd of condensate. It depends on how much investment can be absorbed and how many companies will come,” he said.

“Reaching even 9 million barrels per day of oil is possible over a 20-year development program. We understand there is another 100 years of work that remains to be done in Iran’s oil and gas fields.”

Iran currently ranks third among OPEC suppliers, pumping around 3.8 million barrels of crude and condensate per day.

However, Manouchehri outlined a more modest production outlook for the next decade.

“Based on the studies that we have done in the last 15 months, we estimate that in 10 years, we can obtain 3 million bpd of additional production from the fields,” he said.

Azadegan and Yadavaran, two major oil deposits at the border with Iraq, are central to NIOC development plans.

“We also have the West Paydar, Azar, Aran, Cheshmeh-Khosh, Sumar, Changuleh, Yaran, Dehloran, Sohrab and Arvand fields and the Oil Layer of the South Pars Gas Field,” he said. Manouchehri said plans are in place to draw 1.2 million bpd from Azadegan and Yadavaran that hold over 60 billion barrels in estimated reserves.