Tehran Oil Show, Symbol of Resilience

The 29th edition of the annual Iran Oil Show stood as a powerful testament of sustainability and self-reliance in the oil and gas sector of Iran that is a vital player in the global energy scene. The 2025 Oil Show was more than simply showcasing massive hydrocarbon deposits and opportunities for $137 billion investment, as it highlighted a strategic orientation towards domestic innovation. Contracts worth $200 million were signed with knowledge-based companies for first-time manufacturing.

Such concentration on first-time manufacturing is indicative of Iran’s determined efforts to further localize its petroleum industry and reduce dependence on imports in the midst of tough international sanctions. The figures presented during the Oil Show indicated a significant jump in the share of domestic manufacturers in implementing oil projects from less than 25% two decades to more than 85% now. This achievement is specifically visible in the development of the South Pars gas field. The tangible economic benefits of domestic strategic investments show efficiency in job creation, provision of industrial services and exports.

Challenges caused by international sanctions imposed on Iran’s petroleum industry are no secret to anyone. But the 2025 Oil Show gave a clear image of resilience and forward move. By supporting domestic manufacturers and developing a dynamic ecosystem of startups and knowledge-based companies, Iran expressed its commitment to long-term energy independence and its constant role in the global energy market, regardless of international sanctions. Such commitment to self-sufficiency, along with opportunities for significant investment, is a convincing narrative for international observes who are seeking to understand the growing dynamism of Iran’s energy future.

Tehran Oil Show, Turning Point in Foreign Investment Attraction

The 29th edition of the Iran Oil Show was held 8-11 May at the Tehran International Permanent Fairgrounds. A total of 2,200 domestic and foreign companies attended. Saman Qoddousi, director of the 29th Iran Oil Show, has described the event as one of the most important in the Middle East. Minister of Petroleum Mohsen Paknejad, speaking at the inauguration, highlighted opportunities for international cooperation and upgrading ties with other countries, particularly neighboring nations. He said Iran seeks to create new markets to increase its share of global energy trading.

He also announced plans to complete more than 30 major petroleum industry projects with a $10 billion investment by next March, which would add 250 tb/d to national oil production and 30 mcm/d to national gas output.

Win-Win Step

During his visit to the Oil Show, President Masoud Pezeshkian said linking oil, gas, refining, and petrochemical companies with top universities across Iran would be a necessary win-win step, saying such events would introduce the capabilities of companies to consumers and policymakers.

Pezeshkian said it was also essential to work out mechanisms to help companies involved in the oil and gas sectors achieve maximum capacity and turn a profit.

“We have to connect various links of activity properly and develop a full structure so that these companies would develop at a higher pace and manufacture products of high quality,” he said.

The president said his administration would do its best to help resolve problems of companies involved in the oil, gas, refining, and petrochemical sectors.

He said linking industries with universities would result in reciprocal assistance between universities and companies. “On the one hand, academic elite would be engaged with the realities of this sector, while on the other, they can offer solutions by relying on their knowledge.”

37 Domains of Expertise

The motto chosen for Oil Show 2025 was “Investment in the Petroleum Industry, Guarantor of Ensuring Economic Growth and Development”. That suggests the priorities and strategic pivots of the petroleum industry in the current calendar year. That is why this edition of the annual oil show was focused on introducing capacities for investment, modern technologies, capabilities of local firms, as well as interaction with foreign investors.

At his inaugural speech, Minister Paknejad stressed that the petroleum industry should be defined based on sophisticated technologies, saying supporting domestic manufacturing and enabling Iranian specialists were top priorities. Key agreements have been signed for the development of oil and gas fields. Some projects on flare gas capture and refinery upgrading have become operational or are close to coming online. More than 37 domains of expertise, varying from upstream to downstream oil and gas and topics associated with investment, financing, commerce, and modern technologies were covered at the show.

Financing Approach

Paknejad said national oil production capacity had grown under the 14th administration, with gasoline and gasoil output having grown 7 ml/d and 8 ml/d, respectively. He said oil exports continued at the maximum level possible. Paknejad said development of oil and gas fields would require more than $20 billion in annual investment, which would require redesigning financing instruments and developing new approaches. The presence of fledgling companies, startups, leading universities, and technology parks alongside industrial companies demonstrates the depth of experience-innovation link toward progress in the petroleum industry.

One key issue with attracting investment has always been to facilitate the process of contracts and ease the terms and conditions of investment. To that effect, Minister Paknejad said the Economic Council has already decided to reduce the time spent on the permitting process from 3 years to less than 1 year for upstream oil and gas contracts. Other measures undertaken concerning facilitating the process of contracts have been to sweeten the terms of upstream oil and gas contracts by increasing the rate of return on investment, offering tax incentives, and rewarding surplus production.

Trust-Building Measure

Paknejad said the Ministry of Petroleum has adopted a package of incentives and new contracting terms to reduce risk, increase transparency, and accelerate the return on investment. The revised structure of IPC and public-private partnership deals, alongside new tools like the Petroleum Industry Private Guarantee Fund to issue up to $6 billion letters of guarantee, would build confidence with local and foreign investors.

Another key issue is supporting domestic and first-time manufacturing. Paknejad said: “So far, 86 contracts worth $200 million have been signed with 68 knowledge-based companies, which have helped save on hard currency costs and obtain self-sufficiency in lab equipment manufacturing.”

“At this year’s show, we are witnessing the extensive presence of knowledge-based companies. We forecast $150 million worth of first-time manufacturing contracts with knowledge-based firms. We also hope that using such capacities as the resources of the National Development Fund of Iran (NDFI) and banks and attracting international resources would enable us to sign over $10 billion of contracts for developing oil and gas fields.”

New Markets

Referring to opportunities for international cooperation and upgrading ties with other nations, particularly neighbors, the minister touched on the 18th meeting of the Russian-Iranian Business Council (RIBC), which he described as a “golden opportunity” for Iran-Russia cooperation in joint projects.

He also referred to the agreement signed with Turkmenistan to swap its gas with Turkey via Iran’s territory, saying: “That would help stabilize Iran’s standing as the energy hub in the region. We are seeking new markets in the region and beyond in a bid to increase Iran’s share of global energy trading.”

2,200 Exhibitors

In this round of the oil show, about 2,200 Iranian and foreign companies were in attendance. The petroleum industry is Iran’s economic driver. Actors in the oil and gas sector come together at the annual show to showcase their latest achievements and communicate directly with their peers. China, Russia, Spain, Italy, Britain, Switzerland, South Korea, Turkey, India, the UAE, Canada, France, Germany, and Brazil were represented at the event.

Qoddousi, manager of NIOC Public Relations, said five halls were added to the exhibition space to bring it to 40,000 square meters. He said it was a major event for sharing know-how, establishing commercial communications, and presenting the achievements of Iranian industrialists.

An outstanding feature of this year’s show was the possibility of online participation. Qoddousi said the AI-powered exhibition facilitated a virtual tour of the event from across the globe.

“The AI provided the possibility of localizing and introducing companies. A virtual show was also launched to serve those who cannot attend physically,” he said.

Iran on Track to Become Regional Oil Center  

On the sidelines of the 29th Iran Oil Show in Tehran, the CEOs of the four main subsidiaries of the Ministry of Petroleum presented reports on their achievements and their plans, reiterating that Iran is determined to become the largest petroleum industry operational center in the region. Significant oil and gas production, development of refining and transmission infrastructure, significant progress in the petrochemical industry, and efforts to attract domestic and foreign investment are all indicative of the dynamism of the petroleum industry under conditions of sanctions, with a view to Iran playing a pivotal role in the regional energy market.

250,000 b/d Output Hike

CEO of National Iranian Oil Company (NIOC) Hamid Bovard said Iran is set to become the largest operational center for the petroleum industry, adding that NIOC is seeking to clear the way for national development and growth.

He said that the annual oil show symbolizes great potential in the energy sector, promising a bright future and an economy based on domestic potential.  

Bovard maintained that should domestic capital be directed toward the petroleum industry, other economic sectors would become active to facilitate the materialization of 8% economic growth envisaged in the 7th National Economic Development Plan.

He said that Iran enhanced its oil output by over 150,000 b/d last calendar year to 20 March 2025 on an annual basis, adding: “[For the current calendar year], up to 250,000 b/d output increase from the year before is targeted, for which specialized equipment including offshore and onshore drilling rigs are needed.”

Bovard said the NIOC Directorate of Investment has made strong and unique decisions, adding: “We have placed orders with the private sector to import drilling rigs under five-year contracts with favorable terms of advance payment.”

He added that at least $1.5 billion in investment was needed for that purpose, calling for the private sector to join in.

Bovard said research cooperation had begun with Iranian universities and a Norwegian university, adding: “Such partnerships have boosted our drilling yield by 15%, which may improve by 30% if activities continue.”

He said, although sanctions have become tougher, the Ministry of Petroleum has devised new methods of transport and alternative maritime routes to keep exports afloat. Despite pressure, he said, crude oil exports go on to the point of having hit fresh records.

He also referred to the role of artificial intelligence (AI) in improving the petroleum industry’s performance, saying this technology can place Iran on the route to becoming a leading global player.

On the process of upstream contracts, Bovard said one key factor in delayed talks was supplementary studies. “Numerous companies enter into talks for cooperation, and we are trying to minimize the time spent on associated studies.”

The CEO of the NIOC also talked about the development of key gas fields for achieving 1.34 bcm/d output by the end of the 7th National Development Plan. He said talks were underway for early recovery from the Kish gas field, whose high capacity can help supply the growing energy demand. Development plans have also been defined for the North Pars gas field.

Referring to the Arash field, he said: “Talks are underway via the Ministry of Foreign Affairs and governing bodies. We hope that its development would begin soon as talks go on.”

Bovard said since last March, close cooperation had been developed with Russian companies in studying joint fields, leading to preliminary agreements on financing and construction.

He said talks were also underway with Turkey, Iraq, and other neighboring nations to facilitate the development of jointly-owned fields.

$3bn Refining Projects

CEO of National Iranian Oil Refining and Distribution Co. (NIORDC) Mohammad Sadeq Azimifar said liquid fuel delivery to power plants last calendar year had grown 40% year-on-year.

“Last calendar year, 21.8 billion liters of liquid fuel was delivered to power plants,” he said.

He added that some fundamental measures were undertaken last calendar year for upgrading infrastructure for fuel delivery, the most significant of which was commissioning the 460km Bandar Abbas -Rafsanjan transmission pipeline.

Boosting the tank truck fleet helped improve transfer, he said, adding that under the 14th administration, gasoline and gasoil output grew 8 ml/d and 7 ml/d respectively.

He said the wastewater treatment project that came online last calendar year at the Tehran refinery would reduce drinking water consumption in Tehran by 1.5%.

“Furthermore, some refineries have invested in new solar power plant projects for 1,500MW power generation,” he added.

Azimifar said a 60,000 b/d refinery would become operational in the current calendar year in Siraf, adding that small-sized refineries and attracting new investment would be instrumental in developing the refining industry.

He said that numerous projects became operational last calendar year for upgrading the quality of products, one of which was the isomerization unit of the Shiraz oil refinery that upgraded gasoline production at this facility to Euro grade.

He said more than $3 billion of new refining projects would come on-stream in the current calendar year, adding: “With the operation of these projects, national refining capacity would increase 180,000 b/d.”

In the current calendar year, about 1,000 km of crude oil transmission pipelines and three quality upgrading projects are to come online at the Shiraz, Isfahan, and Tehran refineries.

According to Azimifar, a number of first-time manufacturing contracts had been signed with science-based companies to produce catalysts for refineries.

“Science-based companies’ capacity has increased in recent years so that we can rely on them in the key sectors of the refining industry,” he said.

Azimifar said digital transformation would be a key factor in NIORDC’s work, adding: “We believe that we can increase the refining industry’s productivity 15-20% by using new technologies.”

106mt Petchem Output

Hassan Abbaszadeh, the CEO of National Petrochemical Co. (NPC), said valuable steps had been taken to develop the Iranian petrochemical sector.

“This industry currently has a capacity of about 97 mt. Last calendar year, about 42 mt of final petrochemical products were manufactured, excluding feedstock, for $24 billion, of which 29 mt valued at $13 billion was exported and 13 mt valued at $11 bn was sold locally,” he said. “In the current calendar year, 15 petrochemical projects are to come online with a $6 billion investment, adding 8 mt to the petrochemical industry capacity. It is also estimated that 35 mt of the total 83 mt to be produced in the current calendar year would be exported, and the rest would be sold on domestic markets.”

Abbaszadeh said the petrochemical production capacity is to reach 106 mt by the end of the current calendar year, with real production estimated at 83 mt.

He said, in addition to 15 petrochemical projects, four feedstock supply projects would come online in the current calendar year.

“A portion of feedstock supply projects would come online by the Persian Gulf Bidboland Gas Refinery within the framework of West Karoun gas flare capture. Of a total of 55 flares that should be turned off, 14 will be turned off this year, and the captured gas will be used in the industry. 10 more flares have been turned off since March,” he added.

Abbaszadeh said $4 billion would be invested in four feedstock supply projects that are to come online in the current calendar year. The petrochemical industry would receive 9 mcm/d of captured flare gas and 850 b/d of condensate from NGL 3100 as feedstock.

He said three items of equipment would be unveiled for the first time throughout the implementation of petrochemical projects in the current calendar year, adding that maximum use of domestic manufacturing capacity in the petrochemical sector would be on the agenda.

Abbaszadeh also emphasized the significance of domestic manufacturing and supporting science-based companies in the petrochemical industry, adding: “By the end of the 7th National Development Plan, the share of domestic manufacturing in the petrochemical industry would increase from the current 70% to 75-80%.”

Another issue highlighted by Abbaszadeh was the development of export markets. He said that studying target markets was underway in various countries in an organized way.

He said President Masoud Pezeshkian had reiterated further exports to neighboring countries, including Iraq, Pakistan, Afghanistan, and Turkey, adding that relevant documents were being prepared.

Abbazadeh said building a North-South Corridor was the most important issue for Iran-Russia cooperation, as most petrochemical plants are located in southern Iran.

“Meanwhile, Iranian companies have made significant progress in catalyst production and exports in recent years. Iran is exporting $70 million worth of catalysts to Russia per year,” he added.

Noting that Iran’s petrochemical production capacity would reach 131 mt a year by the end of the 7th plan, he said: “The 7th Plan emphasizes completion of the value chain. The petrochemical industry is also ready to attract investments varying from $20 million to $2 billion.”

He said that positive measures had been undertaken to attract domestic and foreign investment.

“Talks were held with foreign companies during this show, and they voiced their readiness for investment,” said Abbaszadeh.

Gas Cooperation

CEO of National Iranian Gas Co. (NIGC) Saeed Tavakoli said NIGC had adopted new measures to facilitate international contracting, investment attraction, and expansion of gas ties with neighboring states.

He said dry gas production in Iran reached 880 mcm/d for the first time last winter. He added that a 30 mcm/d gas production increase within three months indicated integrated management within the Ministry of Petroleum.

Regarding NIGC’s performance last calendar year, he said 17 gas compressor stations became operational with 30 turbocompressors installed in various parts. The transmission capacity in the eastern corridor increased up to 50 mcm/d, he added.

“In some cases, our staff in the phase one of refineries transmitted up to 39 mcm/d of gas although the nominal capacity was 25 mcm/d,” he said.

Tavakoli referred to the role of gas trading in state policies, saying: “Under the 7th National Economic Development Plan, Iran is required to expand gas cooperation with neighboring countries. Therefore, NIGC’s priority is to expand gas exports and bring into operation a regional hub with neighboring nations. Iran-Turkmenistan gas cooperation would be a prelude to regional gas trading.”

He said swap talks were also underway, saying Iran was ready to receive gas in Sarakhs.

Regarding Turkmenistan-Iran-Turkey gas swap operations, Tavakoli said: “This agreement took effect late last winter. It is the first G2G contract. Turkmenistan has the largest onshore gas reserves in the world. Sharing a border with Iran, it is a key partner in energy supply.”

He said that Iranian and Russian officials were putting the final touches on an agreement for Iran to import Russian gas. This project depends on expert surveys about existing infrastructure in Azerbaijan, Armenia, and Georgia. Iran and Russia do not share any land border, so gas transmission would be possible only via the three countries.

Touching on underground natural gas storage projects, he said: “Currently, two key storage projects are underway, one of which in Sarajeh, Qom, is set to come online by next March.”

Noting that foreign investment is welcomed, Tavakoli said: “There are good opportunities for investment in Iran’s gas industry with a high rate of return on investment. Good talks have been held in this regard, and I think that energy-intensive companies and industries can make the best use of investment opportunities.”

Tavakoli said Iran was ready to pump gas to Pakistan, but it depended on the Pakistani side’s willingness.

Regarding gas exports to Turkey, he said: “As Iran’s gas exports deal with Turkey expires in 2026, we are trying to extend the agreement with them.”

Oil Show Message: Iran Oil Industry Standing

About three decades has passed since Tehran hosted the annual Oil Show despite international sanctions and political upheavals. Participants vary from explorers and prospectors to distributors of crude oil and feedstock to other sectors, manufacturers of equipment, and traders. The Iran Oil Show links the Iranian petroleum industry with local and foreign firms. Ever since the first edition of the Iran Oil Show was held in 1995, Iranian companies have proven their efficacy alongside foreign companies. The second round of the event in 1997 was held with 75 Iranian and 81 foreign companies from 10 countries in attendance. But this year, more than 2,000 Iranian and foreign companies put on display their achievements.

Almost every year with the advent of spring, all subsidiaries of the Ministry of Petroleum, be it in the upstream or downstream sector, become active to prepare their best achievements to be showcased at the oil show. They come from all across Iran. Iranian companies have left behind exploration and production. They are now at a stage to showcase their equipment, know-how, and innovations to the extent of surprising local and international visitors.

Resilience

Activity at the exhibition started at the beginning of the Persian year. Oil companies seek to learn about exhibitors and make arrangements for negotiations with foreign parties. Ordinary citizens are also informed of this event. Posters announcing the date of the oil show are seen all across the city. In the background, the Iranian cypress symbolizes resilience and steadfastness. It also resembles an oil drop. The pattern chosen for the poster is indicative of digital communications as a sign of the oil show’s concentration on interaction between modern technologies and the petroleum industry.

Long Lines

Iran’s ongoing nuclear talks with the United States coincided with this year’s oil show. Although news of toughening sanctions or speculation about the future of talks abounds, the first imagination is that the oil show would be a desert. But in reality, everything is different. From the first day of the show, private and public vehicles flock to the fairground. Long lines take shape at the entry gate. They are both exhibitors and visitors who are keen to further learn about the latest achievements in the petroleum industry.

After passing through the entrance, as soon as we enter the exhibition, we will realize, based on the signs with maps of the halls and booths, what a massive range of oil industry actors we are facing. From the booths of major subsidiaries of the Ministry of Petroleum to small-scale companies that are active in the field of producing spare parts for equipment needed by this industry.

This exhibition is the largest industrial and commercial event in Iran, which is held annually, and a large number of capable domestic and foreign companies in the oil, gas, refining, and petrochemical industries are in attendance. It is a very valuable opportunity for companies active in this industry to showcase their achievements and products to stakeholders and experts in this industry, and to guide their future activities and innovations by considering market demand trends and the growth orientation of this industry.

Foreign Companies

There are also many foreigners, either as exhibitor or as visitor. China, Russia, Spain, Italy, Britain, Switzerland, South Korea, Turkey, India, the UAE, Canada, France, Germany, and Belarus are represented in the event. Saman Qoddousi, director of the 29th Oil Show and head of the NIOC Public Relations Department, has said 2,200 Iranian companies were present in the Iran Oil Show, one of the most important in the Middle East.

Senior Officials Visit

The key slogan chosen for this year’s oil show was “Investment in the Petroleum Industry, Ensuring Economic Growth and Development”, which reflects priorities and strategic axes of the petroleum industry in the current calendar year.

This round of the oil show was arranged with a wide variety of products and service groups located in different halls; in each hall, there were crowds of visitors standing in front of different booths, and the exhibitors were explaining their company’s new achievements. In some booths, several managers were busy signing contracts. In the meantime, people with cameras in their hands were passing between the booths, filming and photographing the team that had come to visit the exhibition, and at their head were the CEOs of the subsidiaries of the Ministry of Petroleum, senior managers, or officials. President Masoud Pezeshkian and his administration spokeswoman, Fatemeh Mohajerani, CEO of Social Security Investment Co., Mohammad Reza Saeedi, head of Mostazafan Foundation, Hossein Dehqan, head of Plan and Budget Organization, Hamid Pour-Mohammadi, head of State Inspectorate, Zabihollah Khodaeian, head of State Audit Court, Ahmad Reza Dastgheib, chair of Majlis Energy Committee, Mousa Ahmadi, and commander of Khatam al-Anbia Construction HQ Brig. Gen. Abdorreza Abed were among the visitors.

Oil Show Halls

NIGC and NIOC

Hall 5 hosted National Iranian Gas Co. (NIGC) and its associated industries. Inside the booth, several managers and participants were busy negotiating. Journalists were also interviewing in every corner, microphones in hand. Halls 8 and 9 were never empty of visitors and journalists, as they were hosted by NIOC, the organizer of this international event and, of course, one of the most newsworthy companies in the oil industry. Important upstream industries were also present in these halls; well-known names such as MAPNA Oil and Gas Development Company, Pasargad Energy Development Co., Petropars, North Drilling Co., and 

Machine Sazi Arak, among others.

Halls 6, 31 A/B, and 27 hosted top manufacturers of oil and industrial equipment. Each of them was present with a piece of their latest products, and the grandeur of the equipment and parts had only one meaning; even if we are in the weakest international interactions, by relying on domestic power and the skills of Iranian specialists, we can provide all the equipment we need, not only to meet domestic needs, but we can even export equipment and technical knowledge to other countries. In addition to bringing smiles of satisfaction to the faces of officials and CEOs of the chemical and oil industries and causing them to walk through the hall with their heads held high in power, these booths also attracted the attention of foreigners, who looked with admiration at the development of Iranian skills and knowledge. Knowledge-based companies and startups also depicted the currency and growth of the country’s new technologies in Halls 10 and 11.

NIORDC

National Iranian Oil Refining and Distribution Co. (NIORDC) and Iranian Oil, Gas and Petrochemical Products Exporters (OPEX) union were also present in Halls 40 and 41, which explains the high number of journalists present there. NIRODC’s senior officials were giving interviews to journalists while some companies were preparing to sign MOUs. These halls also featured companies active in the fields of electricity, electronics, and precision instruments. Halls 44-1 and 44-2 hosted process and mechanical equipment, and Hall 18 was dedicated to other products and services.

NPC

All these booths, equipment, and achievements indicated Iran’s power, but in halls 35, 38, and 38B, the story was much different; these were the locations of foreign companies, international pavilions, and of course, National Petrochemical Company (NPC) and associated industries; the same petrochemical industry that we know as the country’s economic driver and has accounted for a significant share of exports and foreign exchange earnings. Here, too, everything was orderly and precise. Numerous meetings were constantly held in the booths. At any given moment, someone would approach a booth and ask to visit the company’s managers. The presence of foreign companies and international pavilions was also a source of pride, because many of them said that the attractiveness, capacity, and potential of the Iranian oil industry were so great and valuable that they were not willing to leave Iran easily. They were very satisfied with their presence in Iran and believed that if there was a slight opening in the international conditions, the number of foreign companies present in Iran would undoubtedly increase significantly. According to one of the foreign exhibitors at the exhibition, many companies are waiting for the economic and political conditions to be slightly eased so that they can quickly flock to Iran. Another exhibitor considered Iran an investors’ paradise and expressed hope that international interactions would proceed in a way that would provide more and easier opportunities for cooperation with Iran.

Contract Signing

A radio station was regularly announcing news of events related to the oil show. On the first day, Vice President for Science and Technology Hossein Afshin and Deputy Minister of Petroleum for Engineering, Research and Technology Omid Shakeri had overseen the signing of 16 contracts and 2 MOUs between the subsidiaries of the Ministry of Petroleum and knowledge-based companies for the local manufacturing of petroleum industry equipment. The contracts were valued at $150 million. The head of National Iranian South Oil Co. (NISOC) announced four first-time manufacturing agreements worth $100 million, adding: “Two key agreements on turbine and compressor have been signed with knowledge-based companies.”

On the sidelines of the last day of the oil show, the contract for the development of the Gordan and Pazan gas fields was signed between NIOC and three domestic companies. This 20-year contract, worth $948 million, was signed with Bakhtar Group, Petro Farhang Holding, and Hana Energy Gostar to maximize gas recovery, create jobs in less-developed areas, and provide sustainable feedstock to southern refineries. According to estimates, 179.5 bcm of gas and 58.19 million barrels of gas condensate are expected to be produced under this agreement.

An MOU for capturing 4 mcm/d of flare gas in the Salman field, an MOU for development of the Khayam gas field in Hormuzgan Province, agreement for supplying 800 tonnes of additive chemicals by the Tehran refinery were among other developments on the final day of the event.

More Accessible than Before

Another important point that many Iranian and foreign exhibitors raised was facilitating the conditions for participation, registration, and entry of companies to the exhibition and receiving a booth. According to them, this year the booths had even been larger. Of course, this point was also raised by the director of the 29^th show on the same day of its opening. According to Qoddousi, the wide reception of this event has led to the addition of five halls to the exhibition space, bringing the total area of ​​this year’s exhibition to over 40,000 square meters.

Standing Tall

Majid Boujarzadeh, director of the Public Relations at the Ministry of Petroleum, told “Iran Petroleum”: “We are standing by ourselves, and as the Minister of Petroleum announced, we will wait for nobody. We will push the petroleum industry ahead by relying on our own technical savvy, but we welcome the presence of capable companies.”   

Peyman Imani, CEO of Iranian Central Oil Fields Co. (ICOFC), also said that as negotiations are underway between Iran and the US, there is growing hope among manufacturers and contractors, as well as foreign companies active in Iran. He said: “Overall, I evaluate everything that was said at the exhibition and the news of the negotiations as positive, and I hope that an opening will be achieved that will allow us to continue the path we are on more strongly than before.”

Although 28 editions of this exhibition had been held, this year, the 29^th edition was much different, because it was being held in conditions and days when the world’s eyes were on the news of the nuclear negotiations between Iran and the US. At every moment, contradictory news was being reported about the failure of the negotiations or the possibility of further sanctions, but in this part of the capital, which had become the land of Iranian oil within 4 days, there was no news of international concerns and all you could see was only power, achievement, and innovation being displayed for the audience.

Kasra Nouri, chief of staff of the Ministry of Petroleum, said the petroleum industry is on the receiving end of sanctions. “Although it is faced with the most unprecedented pressure, it has kept the economy running thanks to the efforts and prudence of petroleum industry staff,” he said, adding: “Although there are challenges and sanctions, this edition of show indicates that this industry has recorded favorable achievements in both development of technologies and production in the oil, gas, refining and petrochemical sectors, as well as associated industries.”

Nouri said the most important message of the 29^th Oil Show under conditions of sanctions is that this industry is standing tall despite all pressures, threats, and sanctions.

Oil Show Stimulates Optimism for Investment in Iran

Reza Abesh Ahmadlou

Amid ongoing diplomatic talks between Iran and the United States that are largely expected to end in sanctions lift, foreign companies are exploring opportunities for investment in Iran’s petroleum industry. With tough sanctions still effective, foreign companies from around the globe attended this year’s annual oil show in Tehran. Foreign companies, particularly the Chinese ones, showcased a pronounced eagerness to engage, viewing Iran’s oil and gas industry not merely as a market but as a strategic partner for growth and innovation. Their presence, ranging from first-time participants keen to explore the landscape to seasoned veterans looking to expand existing ties, highlighted the dynamic and evolving nature of international engagement despite prevailing complexities.

Why We Came

For many, the Iran Oil Show 2025 represented a maiden voyage into a market brimming with potential. Among the enthusiastic newcomers was Jason Jiang, Sales Manager at China’s Crown Extra Lighting Co. from Changzhou. While his company had previously explored opportunities in regional hubs like Dubai and Oman, their participation in Tehran marked a significant strategic pivot.

"This is our first time in this exhibition," Jiang told “Iran Petroleum”, his voice reflecting a blend of excitement and curiosity. His firm specializes in lighting solutions applicable across the oil, gas, and chemical industries, a niche perfectly suited for Iran’s expansive resource base. "I have heard a little about this [investment package] and this is why we are here in Iran," he affirmed, linking his company’s presence directly to the recently unveiled package of 200 investment opportunities. This ambitious initiative, inviting both Iranian and foreign companies to study and contribute to projects worth over $137 billion, served as a powerful magnet for new entrants.

While “Crown Extra Lighting” had not directly operated in Iran previously, their products have found their way into Iranian projects indirectly through collaborations with major Chinese petroleum companies like Sinopec and China National Offshore Oil Corporation (CNOOC), which have established a footprint in the country. This existing, albeit indirect, connection offered Jiang’s company a valuable insight into the operational environment.

Evaluating their inaugural participation, Jiang was markedly positive. “We learn about the Iranian market here because we have been in touch with many customers in the last few days,” he observed. The company’s booth saw a steady stream of visitors, demonstrating a clear interest in their specialized products. “They visited our booth and showed their interest in our products. They have sent us several inquiries in the first two days.” This immediate and tangible engagement underscored the exhibition’s efficacy as a direct conduit for market exploration and lead generation, reinforcing the decision to participate for the first time. The experience provided “Crown Extra Lighting” with invaluable direct feedback and established foundational relationships for future business endeavors in a market they now recognize as incredibly “rich”.

Extending Business Now

In contrast to the first-time enthusiasm, some foreign companies returned to the Iran Oil Show, building upon previous engagements and deepening their commitment to the Iranian market. Frank Gao Diliang, International Business Department Director at Jiali Technology from Hangzhou, China, was one such returning participant, having previously attended the Iran Oil Show 2024. His presence signaled a strategic continuity and a proactive approach to expanding established business ties.

Jiali Technology, a specialist in centrifugal pumps used extensively in the petroleum industry for crude oil and finished product transportation, recognizes the critical role their equipment plays in Iran’s energy infrastructure. Our company specializes in centrifugal pumps. Used in the petroleum industry, the crude oil transportation, all the finished product transportation,” Frank explained, emphasizing the core of their offerings”. His company already boasts a strong trade partner in Iran, laying a solid groundwork for their expansion efforts. “So, we want to extend our business now,” he stated, articulating a clear objective for their repeated presence.

Frank confirmed awareness of Iran’s new investment package but admitted to not knowing the intricate details, highlighting a common challenge for foreign firms navigating complex market information. However, the general knowledge of significant investment opportunities was clearly a driving force for their return. “Jiali Technology” has also implemented projects in other regional countries, notably Iraq, showcasing their regional experience and adaptability in diverse Middle Eastern energy landscapes.

Assessing their participation, Frank remained optimistic despite a slight dip in visitor numbers on the third day compared to the initial days. “I think it is good, good,” he remarked. “Yesterday and the first day, there were many, many customers to visit our booth.” This consistent flow of interest indicated a robust demand for their specialized equipment. When questioned about obstacles beyond sanctions, Frank candidly identified “payment, Banking problems” as a key hurdle. “We need some facilitation about the payment, the ways of payment for Iran,” he urged, pointing to a practical area where improvements could significantly streamline business operations for international partners. Despite this challenge, Jiali Technology’s commitment to extending its business in Iran remains unwavering, underscoring the perceived long-term value and strategic importance of the market.

Conditions Conducive to Investment

Another significant Chinese presence was

Jenny Zhu, Foreign Trade Commissioner of Yangzhou Panstar Heat Exchanger Equipment Co., also making their debut at the Iran Oil Show. Her company, a major Chinese factory, specializes in the production and manufacturing of plate heat exchangers—equipment vital for refining processes in the oil and gas industry.

“Yes, this is our first time,” Zhu confirmed regarding their participation, joining the ranks of new entrants eager to tap into Iran’s vast energy potential. Like her counterparts, she was aware of the 200 investment opportunities package, signifying the broad reach and impact of this initiative in attracting foreign interest. Panstar’s products are “widely used in the oil and gas industry, especially refining companies,” aligning perfectly with Iran’s stated need for investment in its downstream sector, which targets about $80 billion for 1.5 mb/d in refining capacity. “We hope we can offer our equipment to your country,” Zhu expressed, outlining a direct and pragmatic approach to collaboration through equipment supply.

Domestically, there is great demand for Panstar’s products in China, and they have also found a significant market in Russia, demonstrating their established expertise and global reach. When asked about the exhibition’s performance over the initial days, Zhu’s assessment was effusive. "It is very valuable, very potential. Very nice. Professional. The oil exhibition is professional," she enthused, her words painting a picture of a well-organized and highly relevant event that resonated with her company’s strategic objectives.

Perhaps one of the most striking insights came when Zhu was asked about obstacles beyond sanctions. Her response was definitive: "No. No special obstacle. You see that the ground is paved for you to work with Iran." This bold statement reflects a perception that, despite external pressures, the underlying market conditions and the receptiveness of the Iranian side are highly conducive to business. It suggests that for some, the potential rewards and the clear opportunities outweigh perceived barriers, indicating a strong belief in the viability and profitability of operations in Iran. This perspective offers a powerful counter-narrative, emphasizing the readiness and ease of engagement for companies willing to explore the market directly.

Roaring Trade

The international flavor of the Iran Oil Show 2025 was further enriched by the presence of European firms, often operating through their Asian branches to navigate the complexities of the market. Daniel Hu, Sales Manager of the Chinese branch of Erreesse Valve, headquartered in Grignasco, Italy, represented one such significant participation. This marked Erreesse’s first visit to Iran, a strategic move driven by a clear directive from its European headquarters.

"Yes, first time. First visit to Iran," Hu confirmed, highlighting the company’s proactive step into the Iranian market. His evaluation of the exhibition was overwhelmingly positive. "I think it's a very fantastic exhibition. There are many specialist experts and many businesses in here," he remarked, appreciating the high caliber of attendees and the vibrant business environment. This observation underscores the event's success in attracting key decision-makers and facilitating meaningful interactions.

Hu acknowledged awareness of Iran’s recently unveiled investment opportunities in the oil industry and expressed a strong desire for cooperation. “Of course... Erreesse is a European company, and even the headquarters is not easy to do business with Iranians. But headquarters ask us; actually, we are the Erreesse China branch. And they asked us to attend this exhibition. They want to do business with Iran. So they ask us to do this, to attend the exhibition and do business directly with Iranians,” he revealed. This candid insight illustrates a deliberate and strategic decision by a European company to leverage its Chinese branch to directly engage with the Iranian market, demonstrating a clear appetite for business despite perceived logistical challenges from its main headquarters.

“Erreesse Valve” is a specialized equipment manufacturer, providing “well equipment” to the industry. This focus positions them perfectly to contribute to Iran’s upstream sector, which is slated for a major boost, aiming for a production plateau of 5.7 mb/d of crude oil and 1.5 bcm of gas, necessitating substantial investment and technological upgrades. The company is already highly active in other Middle Eastern countries, as well as Russia and Southeast Asia through its China factory, demonstrating a robust track record in diverse and complex markets. This experience provides “very valuable experience to be present in the Iranian market,” as Hu affirmed.

When asked about other obstacles beyond sanctions, Hu’s response echoed a determined resolve. “Actually, there is no difficulty for us. We will try our best to do all the effects for business with Iran,” he declared. This statement underscores a profound commitment and a proactive approach to overcoming any potential challenges, reflecting a confidence in their ability to successfully operate and contribute to Iran’s energy landscape. The enthusiasm and determination shown by Erreesse Valve’s Chinese branch highlight the strong pull of Iran’s market for international players.

 A ‘Treasure Trove’ of Opportunity

The 29^th Iran Oil Show 2025 proved to be more than just an exhibition; it was a clear signal of Iran’s unwavering commitment to revitalizing its energy sector and fostering international partnerships. The event followed closely on the heels of the National Iranian Oil Company’s (NIOC) “Transformation in Investment and Development in Iran’s Upstream Oil and Gas” conference, which highlighted 200 projects worth over $137 billion. These opportunities span both the upstream sector (around 100 projects in oil fields) and the broader oil industry value chain (another 100 projects).

Iran, ranking first globally in combined oil and gas reserves, recognizes its oil industry as the main focus of its economic development and a pivotal source of government revenue, public welfare, and value creation. Despite experiencing setbacks over the past two decades due to economic sanctions and a lack of strategic investments, the sector remains the “driving force” of the Iranian economy.

The exhibition served as a crucial platform to address the investment drought that has affected Iran’s competitive edge and led to imbalances in energy, monetary, and banking systems. By showcasing the latest innovations, technologies, and industrial solutions, the Iran Oil Show aims to play a vital role in the country’s economic development and the prosperity of its energy sector. The average recovery rate from Iranian oil fields currently stands at about 25 percent, significantly lower than the 50 percent achievable with current global development technology and more than 40 percent in Persian Gulf countries like Iraq. With most of Iran’s oil wells in the second half of their lives and an automatic annual production drop of eight percent, the need for advanced technologies and foreign expertise is paramount.

The palpable enthusiasm from both first-time and returning foreign participants, particularly from Chinese and other foreign firms, highlighted a growing confidence in navigating the Iranian market. Their proactive engagement and candid discussions about opportunities and challenges underscore a shared vision for long-term collaboration. The sheer volume of companies, the expanded exhibition space, and the clear statements of intent from foreign representatives cement the Iran Oil Show 2025 as a resounding success and a hopeful harbinger of increased international investment and technological exchange in Iran’s vital oil and gas industry. The exhibition provided a powerful affirmation that despite external pressures, the “ground is paved” for mutually beneficial partnerships and sustained economic growth.

Iran’s Role in Europe’s Energy Security Equation

Ameneh Mousavi

Iran-US nuclear talks are underway. These talks aim to lift sanctions on Iran to allow the Islamic Republic to sell oil and facilitate banking transactions. Iran’s former ambassador to France, Abol Qasem Delfi, tells “Iran Petroleum” that Iran would return to Europe’s energy market should talks with the United States pay off. He said the Europeans do know that Iran can be a reliable supplier of Europe’s energy needs due to its rich oil and gas deposits.

The following is the full text of the “Iran Petroleum” interview with Mr. Delfi.

How do you assess Iran’s current oil sales as Tehran and Washington are trying to hammer out a deal to get out of the current impasse? Can ongoing talks help improve Iran’s oil, gas, and petrochemical products sales?

We are negotiating with the Americans, and our problems are supposed to be resolved through negotiations. But knowing that we have not yet reached a specific conclusion on the deal, naturally, the status of the country’s energy market in the international arena has not changed. That is, we are under sanctions. Some countries have received a US waiver to buy Iranian oil by benefiting from the OFAC system. Of course, we have also found a solution to this issue, and by taking advantage of some solutions, we have been able to offer our oil in global markets. Of course, it is worth noting that with the negotiations, international conditions will soften somewhat, and this softening of the atmosphere will leave its impact on the markets and economic trends. As we have also felt it within the country. With the start of negotiations, the rate of currencies,  prices of gold coin, and other determinants of economic markets that are closely related to sanctions have decreased significantly. I would like to say that the negotiations between Tehran and Washington have not yet officially affected our energy market, but the hard currency and gold markets have shown signs of being affected earlier and have experienced a decline. Of course, we should not forget that Iran’s goal in sitting at the negotiating table is the removal of sanctions imposed on the country’s economy, especially in the sectors of oil, gas, and petrochemicals. Just as the Americans are seeking assurance that Iran does not have access to nuclear weapons, we have also said that we are seeking to lift economic sanctions on Iran. Such a path that will lead to a transformation in our country’s energy market and leave its effects on various dimensions of the energy and economic markets. In 2015, following the signature of the JCPOA, and between 2016 and 2018, when Trump withdrew from the JCPOA, we were able to have normal conditions for selling our country’s oil and, of course, despite some problems, we were able to partly receive our money. I was reading an analysis not long ago that when the JCPOA was signed in 2015, international sanctions against Iran were eased, and our country could resume its oil exports under normal conditions. Iran was able to increase its crude oil exports faster than experts had predicted. I think, with the success of the negotiations between Tehran and Washington, in these circumstances, where there is serious determination on both sides, this could happen again.

So, do you think that an agreement will improve Iran’s status in the energy market?

Yes, in case of an agreement, the conditions for Iran’s energy market will change, and many buyers will enter the Iranian energy market; with diversification in the buyers of Iranian oil, our country’s economy will also improve.

Given ongoing political tensions between Russia and Europe, once sanctions on Iranian oil and gas are lifted, could the Far East be a suitable destination for Iran’s energy market?

Not long ago, European countries such as France, Germany, Britain, the Netherlands, and, of course, Italy were the main buyers of Iranian oil, but with the intensification of sanctions at different times, European countries stopped buying oil from Iran. In 2015, after the signing of the JCPOA, the president of the European Commission visited Iran and held negotiations with the Ministry of Petroleum, and we were supposed to, once again, become one of the suppliers of European oil to diversify the energy basket of European countries. That was how France’s Total (now TotalEnergies), Eni, and Shell moved to invest in Iran. A case in point was the agreement between National Iranian Oil Co. (NIOC) and Total-led consortium with China and Iran for developing Phase 11 of the South Pars gas field in 2017. However, Total pulled out of Iran due to the US withdrawal from the JCPOA. I would like to mention that Europe has focused on the energy sector, including oil, gas, and petrochemicals. It took some measures in 2016, but due to the first round of sanctions imposed on Iran by the Trump Administration, investment by these companies in Iran came to a halt.

Europe’s energy market has seen significant changes following Russia’s invasion of Ukraine. Can Iran grow into a key energy player of this continent?

As for Russia, I must say that with Russia’s attack on Ukraine, the Europeans imposed a ban on gas imports from Russia, and over time, Russia’s share of the European gas market decreased, and the country was forced to sell its gas to other countries, such as China. The Europeans also turned to the Persian Gulf countries to compensate for the loss of Russian gas. In the meantime, Qatar and Saudi Arabia made great efforts to replace Russia in the European oil and gas market. As Iran, we have not succeeded in re-entering the European energy market due to sanctions. In case Iran reaches a principled solution with the Europeans by resolving its differences with them, we may hope that by entering the vast European market, we can sell our oil and gas in this market and consequently bring the world’s latest technologies into our country. European countries know that Iran, as the world’s second and third largest holder of oil and gas reserves, can be a reliable supplier of Europe’s energy needs.

Under the 14^th administration, the Ministry of Petroleum has extensive plans to attract foreign investment. Regardless of the future of sanctions, do you think that Iran is still attractive to investors?

We need to undertake efforts to attract foreign investment, particularly from Europeans and more specifically French and Italian companies like TotalEnergies and Eni, in order to create conditions for the expansion of the country’s energy infrastructure.

Mutual Interests in Iran-Bolivia Energy Cooperation

Shuaib Bahman

Intl. Affairs Analyst

Bolivia’s petroleum industry has experienced deep-seated challenges and developments in various periods, including reduced production, growing dependence on imports, financial tensions, and political interventions. Bolivia used to supply the bulk of its local needs in the past and was a net exporter of crude oil, but now it depends on fuel imports due to the failure to meet local needs. The recent announcement by Iran and Bolivia to cooperate further in the petroleum industry gives Iran a good opportunity to gain a toehold in the Bolivian market by using its capabilities.

Bolivia Oil Sector

Bolivia’s oil production has continuously declined over the past decade, hitting a historic low since 1993. In 2023, its annual production reached 8.6 million barrels, down 16% year-on-year and down 50% from 2014 when its output reached its top. Bolivia’s oil output averaged 23,560 b/d in 2023, still down from 27,920 b/d a year before. This constant decline has been due to the fall in the content of ageing oil fields, insufficient exploration, and underinvestment in exploration and production.

Bolivia holds about 241 million barrels of crude oil in place. Although significant at the national level, these reserves are nothing when compared to key oil producers. This amount is being used up without any new discoveries being made. Efforts have been made to discover new resources or revise ageing fields; however, these have made meager contributions to enhanced output as they have not been sufficient to reverse the declining trend.

Local oil demand is growing in Bolivia. According to official data for 2023, consumption hit 80,000 b/d, which is much more than national output. Gasoil and gasoline are particularly important for the transport, agriculture, and industrial sectors. Therefore, Bolivia is importing about 70% of its oil and 85% of its gasoil needs.

Grounds for Cooperation

Iran-Bolivia relations in the petroleum industry indicate multilateral cooperation in technical, operational, investment, and capacity development domains. Such a cooperation has taken shape to bolster Bolivia’s energy sector and advance common strategic interests. Such cooperation relies on common goals of increasing domestic capacity, reducing external dependence, and benefiting from technological and commercial cooperation between the industrial sectors of the two countries. Iran and Bolivia can cooperate in the following sectors:

1. Sharing exploration experience: Thanks to its qualified companies specializing in exploration, Iran can share its successful experience with Bolivia in exploration projects and may effectively cooperate in this field. Iran has always shown readiness to share its successful experience in E&P. Bolivia is also interested in benefiting from Iran’s technical know-how, mainly in designing and building refineries.
2. Upgrading refining and petrochemical output capacity: Bolivia is interested in benefiting from the potential of Iranian tech companies in designing, manufacturing, and commissioning oil refineries, which would help develop oil infrastructure in this Latin American nation.
3. Exchange of technology and know-how in renewable energy: Bolivia has some capabilities in generating electricity from solar energy and associated technologies. Iran can also benefit from this technical savvy, while cooperation can take shape in this sector. Iran’s exchange of know-how and technology with Bolivia in renewable energies would boost productivity for both.
4. Bilateral cooperation in oil, gas, refining, and the petrochemical sector: Such a cooperation would clear the way for developing export markets and enhancing industrial capacity in both nations.
5. Tech companies: One sector in this regard is designing, building, and launching oil refineries in Bolivia. Bolivian officials are interested in benefiting from the potential of Iranian tech companies to renovate existing infrastructure and support new refining projects. Therefore, Iranian companies specializing in exploration, refining, and the petrochemical sectors can handle projects for designing, building, and commissioning refineries and oil infrastructure in Bolivia.  
6. Joint Technical Committees: To accelerate the expansion of cooperation, it is essential to set up technical committees in both countries in the oil, gas, and renewable energies sectors so that necessary planning can go ahead jointly.
7. Direct investment and joint ventures: Iranian state-run oil companies have examined direct investment in Bolivia’s oil and gas projects, indicating their willingness to set up joint companies with Bolivia’s national oil company. These initiatives have been defined within the framework of R&D talks on joint technology, infrastructure projects, and participation in developing new fields. Therefore, the possibility of Iranian firms investing directly in Bolivia’s oil projects can stabilize Iran’s presence in that country’s market.

Cooperation Outlook

Iran-Bolivia cooperation in the petroleum industry is an example of relations that have taken shape based on completing reciprocal capacities and reducing dependence on traditional energy powers. Oil cooperation between Iran and Bolivia, relying on sharing technical experience, developing refining technologies, and applying new energies, can set the stage for the sustainable development of the petroleum industry and Iran’s expanded presence in Bolivia’s market. While Bolivia is grappling with the challenge of production and dependence on imports, Iran may play a key role in its energy sector by using its technical expertise. Continuation of such cooperation may help boost the standing of both nations in the regional and international energy markets.

AI-Powered Oil Exploration Tool a Must

Petroleum industry managers have announced that Artificial Intelligence (AI) is a vital tool for bypassing sanctions, reducing risks, and boosting exploration productivity.

Mohioddin Jafari, director of exploration of National Iranian Oil Co. (NIOC), while addressing a panel discussion on “The Transformative Role of AI in the Future of Oil and Gas Field Exploration,” said that new methods were being sought in exploration.

“In a bid to counter international restrictions, we need to redefine some exploration processes with AI assistance,” he said.

“In the high-risk drilling phase, AI can provide geologists with more precise data to help improve decision-making,” he added.

Jafari touched on challenges of AI, saying: “Manpower’s resistance against eliminating traditional methods, concerns over leakage of confidential data, and the non-homogeneity of data are among the most important obstacles lying ahead that should be managed properly.”

Mohammad Sadeq Mehrjroo, technical director of Iranian Central Oil Fields Co. (ICOFC), referred to the global standing of AI as the fourth industrial revolution, saying the objective is for Iran to try to be among the top 10 in the world.

“Higher accuracy than human beings, lower costs, and the ability to integrate data are among the advantages of AI that are largely used in exploration, seismic processing, and geological modeling,” he said.

Referring to ICOFC’s measures in this sector, he said: “Establishment of specialized committees, data management, and identification of challenges, defining research projects, and organizational cultural development are among plans underway on how to put AI into practice.”

Mehrangiz Naderi, director of research and technology at Pars Oil & Gas Co. (POGC), said AI reduces risks, time, and costs in projects, adding: “Application of this technology in some projects has reduced time by 70%, risks by 60% and costs by 40%.”

She also touched on challenges of digitalizing existing data and the growing need for interdisciplinary human capital in data-oriented sectors.

In conclusion, Seddiq Oryani, director of research and technology of the Directorate of Exploration of NIOC, said more than IRR 700 billion had been earmarked for digitalization at this Directorate.

“Such projects as smart drilling operations and applying machine learning in geophysics are underway. They are urged to expand networking at home and abroad”, he said.

ICOFC Gas Output Up 10 mcm/d

The CEO of Iranian Central Oil Fields Co. (ICOFC), Peyman Imani, has said ICOFC-run fields contributed 10 mcm/d to the national gas output hike last calendar year.

“Of a total 30 mcm/d gas output hike [last calendar year], more than 10 mcm/d was added thanks to our staff at ICOFC,” he said, adding that ICOFC also contributed 13,000 b/d of oil to the national oil output hike.

While highlighting the most outstanding development projects in the last calendar year, Imani said, “One of the key achievements was the development of the Dey gas field, from which the first recovery was made. Initial production from this field was about 2.4 mcm/d, which has now reached 3 mcm/d, but can go as far as 5 mcm/d.”

Noting that about 50% of the engineering and capacity of this project has been completed, he said: “Another key project last year was launching the Varavi gas compressor station, which became operational to make up for pressure loss between the field and the downstream refinery.”

“That helped increase sweet gas production from the Dey field during winter peak,” he said.

Imani gave a positive assessment of production and drilling, and said, “During the second half of last calendar year, 13 small and large-sized projects came online in various fields. The Khangiran field in northeastern Iran and the fourth well of the Dalan field were among key projects.”

Imani said a crash plan had been adopted by the Ministry of Petroleum for developing gas fields, adding: “The project has been approved after obtaining necessary permits from the Economic Council. It requires $4.3 billion in credit.”

Implementing this project would significantly add to the national energy basket.

The official said that the Tous gas field project would come online in late 2025 to add 3 mcm/d to gas supply capacity in northeastern Iran.

Although the “Khar Tang” field is not among ICOFC’s obligations, the required planning has been made for drilling at least one well in the field.

3- 427 km of Pipelines Operational in 1 Year

The acting CEO of Iranian Gas Engineering and Development Co. (IGEDC), Behnam Mirzaei, said 427 km of gas pipelines came online last calendar year with a €360 million investment.

“Operating this number of projects in the gas pipeline and gas compressor station sector had a significant impact on gas transmission capacity and completion of gas industry infrastructure,” he said.

Mirzaei said three gas compressor stations had come online over the past three years with a €200 million investment.

“The Khour Mowj, Ab Pakhsh, and Durahan gas compressor stations, with a total capacity of 9 turbines, came online. Their operation would enhance recovery from South Pars gas fields, guarantee gas grid stability, and increase the capacity of gas trunklines,” he said.

Referring to the Dashtak-Nehbandan gas pipeline as a key technical achievement in the gas industry last calendar year, he said: “Completing the gas supply system ring in the east and boosting the gas grid stability in eastern and northeastern Iran are among the blessings of this project.”

He also touched on the Ardabil-Germi pipeline, which he said the 77km pipeline was among the most strategic projects in Ardabil Province in favor of sustainable gas supply, employment prosperity, and livelihood improvement.

Mirzaei said that the 121km Minab-Sirik gas pipeline had provided the necessary infrastructure for gas supply to Kuh Mobarak and exporting gas to neighboring nations. Meanwhile, operating 37km of the Laft-Gourzin-Bandar Abbas gas pipeline and its extension in the current calendar year would supply gas to the Persian Gulf Industrial Park, Qeshm Island, and the local power plant and industries.

The second section of the 42-inch Rasht-Chelvand gas pipeline – 80km in length – would also result in the stability, flexibility, and development of gas supply in the area.

“Building eight production centers and other structures are among other achievements of IGEDC last calendar year,” said Mirzaei, adding that the Ilam, Sari, Yazd, and Arsanjan production centers, the Kiasar logistics center, construction of a condensate export facility in Siraf, and the Iranshahr flood control and telecom buildings in “Kahriz Sang” are among construction projects by IGEDC last calendar year.

Mirzaei said the Semnan pressure control station was another key project of IGEDC last calendar year, adding it would automatically and safely control pressure in the Rey-Semnan pipeline.

NISOC Vital Role in Energy Supply

The CEO of National Iranian South Oil Co. (NISOC), Ebrahim Piramoun, has emphasized the vital role of this company in the national energy supply.

 While stating that “NISOC runs five production offshoots operating in five provinces to extract and produce oil and gas,” he said, some giant and strategic oil fields are also managed by NISOC.

Piramoun also touched on NISOC’s performance under the 14^th administration, saying: “In full arrangement with National Iranian Oil Co. (NIOC) and the Ministry of Petroleum, NISOC has significantly contributed to national oil production. Implementation of these plans has enabled NISOC to make a significant contribution to energy supply and gas imbalance reduction.”

He said more than 30% of gas supplied by NISOC had been delivered to the national grid, which was above the company’s obligations. In addition to energy supply, gas flaring and environmental pollution have declined.

“The same trend is set to continue forcefully in the current calendar year to bring gas flaring down to zero. Such an objective would be achievable with the private sector’s support and by implementing development projects,” he added.

Piramoun said plans were also underway for enhancing output, adding: “Although many years have passed since production started from oil fields, there is still massive underground potential that would become operational by attracting necessary investment and developing new fields.”

Referring to the impact of sanctions on the petroleum industry equipment supply, he said Iran had managed to supply its needs by relying on local capacities.

Noting the growing trend of oil and gas production, falling pollution, and implementation of development plans, he said: “Despite sanctions imposed on necessary equipment in recent years, the Iranian petroleum industry has managed to largely supply its needs by relying on domestic potential and supporting domestic manufacturers.”

Piramoun highlighted NISOC’s 75% share of national oil output, adding that the petroleum industry had, over recent years, experienced genuine growth as most necessary equipment has been supplied locally.

He expressed hope for a significant decline in gas flaring by 2026.

SP Gas Output Set to Shoot up 15 mcm/d

CEO of South Pars Gas Complex (SPGC) Gholam Abbas Hosseini has said SPGC accounts for 73% of national gas supply, adding the South Pars gas field is set to increase output by 10-15 mcm/d soon.

“As the largest gas complex in the Middle East, SPGC produces nearly 600 mcm/d of sweet gas, supplying 73% of national gas output. In addition, SPGC is responsible for feeding the Persian Gulf Star Refinery,” he said.

Hosseini said SPGC is an LPG seller contributing to hard currency generation in Iran, adding: “For this purpose, there are numerous opportunities for investment in the first-time equipment manufacturing in the gas industry during the show. Manufacturing of rotors, compressors, and compressors may in particular offer opportunities for investment.”

He said last calendar year, SPGC was faced with similar challenges as the preceding year with regard to household gas consumption.

“Overhaul of refineries is done in the first half of the year. Last [calendar] year, due to a delayed overhaul, we faced a cold spell when two refineries were still being overhauled. However, thanks to our staff, we managed to complete an overhaul of all refineries by November to get ready for winter,” he added.

“Last calendar year, we installed two turbines in short intervals from one another, which raised the 13^th refinery’s output by about 12 mcm/d. Furthermore, extra capacity was built for the Jam gas refinery. These lines were managed, and the Jam refinery had higher recovery from Kangan. That largely contributed to the winter gas supply as we smashed the gas production record as we produced 3.5 bcm more gas than the year before,” Hosseini said.

Regarding plans, he said: “For the coming winter, we have started the overhaul of refineries based on a specific timeframe. For the first time, we have started the overhaul and maintenance at the beginning of the year. Repair work is clear.”

He expressed hope for the completion of the overhaul by October so that the 13^th refinery would see its output grow 10-15 mcm/d.

South Pars Recovery Expected at 722 mcm/d

CEO of Pars Oil and Gas Co. (POGC), Touraj Dehqani, has said that maximum gas recovery from the giant offshore South Pars gas field is planned to reach 722 mcm/d during the next winter.

He said that POGC had been formally tasked with the strategic management of a gas compression project whose agreement was signed late last calendar year. “Delays in the South Pars compression project have to be compensated. To accelerate the compression projects, each hub has to become operational with a $2.4 billion budget allocation.”

He said the gas industry experienced an exceptional year last calendar year, adding: “As soon as the new administration took office, a cold spell struck. Under such circumstances, POGC largely supplied national gas needs.”

“POGC accounts for 70% of national gas consumption, 50% of petrochemical feedstock, and 70% of power plants’ gas needs. The gas condensate produced at South Pars is also instrumental in gasoline production and feeding refineries,” he added.

Dehqani said South Pars hit a record output of 716 mcm/d last calendar year, up from 706 mcm/d registered a year before.

Although Iran owns the second largest gas reserves and is the third producer in the world, it is the 4^th largest consumer. Imbalance has grown into a serious challenge in the country. For this reason, effective policymaking is required with regard to energy consumption at high levels,” he added.

Dehqani said the 7^th National Economic Development Plan has determined specific obligations for enhanced recovery, hoping that POGC would see its output increase by an extra 25-30 mcm/d. “This increase would partly help make up for production loss and partly increase national production capacity.”

He said POGC is required to increase gas recovery by 200-250 mcm/d over five years, adding that the Kish, North Pars, Belal, and Farzad gas fields were among development projects.

Dehqani said more than $80 billion had been invested in POGC, noting that the company had hired expert manpower.

First Digital Refinery Due in Qeshm

Vice President for Science, Technology, and Science-Based Economy Hossein Afshin said Iran’s first digital refinery would be launched in Qeshm by 2026, set to coincide with the next annual Oil Show.

Hossein Afshin made the remarks during the unveiling of the second phase of the Pasargad Well, Reservoir, and Facility Management (WRFM), noting that the first part of the center, focusing on business intelligence, was unveiled last winter.

Afshin stated that the first step of the WRFM’s second phase, which involves developing an artificial intelligence module, was expanded through the efforts of Sharif University of Technology, Amir Kabir University of Technology, and the University of Tehran.

Emphasizing that this infrastructure is at the cutting edge of technology, he added that the platform must be continuously updated, and its AI system further developed.

Afshin highlighted that the second part of the project, launched today, is an upstream oil intelligence assistant. He said the Pasargad Energy Development Co. (PEDCO) has pledged to inaugurate the country’s first digital refinery in Qeshm next year during the 30th Oil Show.

Stressing PEDCO’s leadership in the petroleum industry digitalization, Afshin said the Office of the Vice President for Science and Technology will fully support the initiative, as pioneering efforts require high risk tolerance.

He noted a major transformation in Iran’s petroleum industry and expressed hope that the third phase and further model development by researchers will continue.

Meanwhile, Alireza Sadeqabadi, the CEO of PEDCO, thanked all contributors to the project, noting significant achievements in business intelligence.

He said $10 million had been invested in the center, which had already generated $200 million in revenue for the country. The integration of business intelligence and AI enables wealth generation in Iran.

He emphasized that traditional wealth-generation methods are obsolete, urging the adoption of innovative approaches for revenue growth.

Flare Gas Capture Needs $200mn Investment

CEO of Persian Gulf Hoveyzeh Gas Refining Co. (PGHGRC), Afshin Kiani, has said development plans were underway in the upstream sector to ensure sustainable feedstock for petrochemical plants.

The company has prioritized capturing associated gas in the Darquain and West Karun gas fields.  

Stressing the critical role of feedstock in the petrochemical value chain, he said: “The core mission of PGHGRC is to provide sustainable feedstock for Bandar Imam Petrochemical Company (BIPC) and fuel for the national gas grid. Accordingly, Persian Gulf Petrochemical Industries Co. (PGPIC), as the majority shareholder, has decided to make strategic investments in the upstream chain to achieve long-term goals in feedstock security and production stability."

He added that completing the value chain is impossible without a steady supply of feedstock, adding: “As the operational arm of PGPIC, PGHGRC has prioritized developing the Darquain and West Karun gas fields to capture associated gas for petrochemical use and domestic fuel.”

“Once operational, the project will fully capture flare gas, reducing environmental pollution and boosting efficiency”, he said. He added that financing follows a feedstock prepayment model, with BIPC providing funds in exchange for future supply.  

The estimated $200 million investment for the field development is to be injected over 25 months, Kiani said. “This requires continuous oversight, precise resource management, and stakeholder interaction.”

“We’re currently receiving 140-145 mcf/d of gas from various resources, which is equivalent to 4,000 tonnes of gas. This capacity may be increased up to 500 mcf/d or 14,300 tonnes a day,” he said.

Kiani said that 50% of the received gas would be fed into the national fuel grid, and the remaining 50% would feed BIPC. Part of this feedstock is also used for LPG exports.

“Successful development of the Darquain and West Karun fields by 4Q 2025 could add 2-3 mcm/d of gas to the grid, easing pressure on existing resources during peak demand,” he added.

Investment in the Petchem. Sector Gets Special Attention

The director of investment at National Petrochemical Co. (NPC), Hamid Reza Ajami, has highlighted the key role of investment in the petrochemical sector.

“Investment is one of the main pillars of value generation in the petrochemical industry, and NPC is following up on this issue,” he said.

“The process of studying and issuing business permits in the investment sector, financing investment projects, and using international capacities and experiences in favor of investment development are the three aspects which we are pursuing,” he added.

“So far, about 140 permits have either been issued for investment or are in final processes. These investments total $99 billion, which would yield in 8 to 10 years,” said Ajami.

An estimated $7-8 billion in investment is needed in this sector every year, he said, adding that domestic and international shows and events facilitate more direct communications with investors.

“We have to be able to direct private investment into this industry. To that end, using external capacities, including membership of the Shanghai Cooperation Organization (SCO), tops our agenda. We have also held talks with some countries during the Oil Show, and we will soon sign MOUs,” he said.

“In the process of permitting, we have benefited from AI tools. We have eliminated dependence on traditional processes to accelerate the projects and boost accuracy. Smart application of technology, particularly in permitting, would be our approach in the future too,” he added.

Petchem Holdings Welcome Value Chain Completion

The head of investment and business development at Tadbir Energy Development Group (TEDG), Arash Bostanmanesh, has called for paying attention to the required infrastructure for value chain completion.

He also stressed National Petrochemical Co. (NPC)’s support for petrochemical industry actors.

He said TEDG was currently involved in the petrochemical industry, moving through the value chain from upstream to midstream and downstream.

“One of the projects we have underway pertains to propane dehydrogenation (PDH), and we are determined to find solutions to get closer to the final product of the chain,” he added.

Referring to the completion of the propane chain and the challenge in the way of butane, Bostanmanesh said: “We hope to be able to find a solution in the downstream sector to reach production economically. Should we fail to export the produced LPG, the butane price would decline, and we would not be able to materialize the economic objectives we are envisaging.”

He said that butane is being produced in two forms of normal butane and isobutane, the latter having been further welcomed overseas due to its use in high-quality gasoline production.

“In Iran, demand is higher for normal butane, while our isobutane production is higher. Therefore, in light of existing capacities and economic challenges, we need to find a favorable solution by consultation and winning NPC support, particularly in the R&D sector.”

Bostanmanesh said: “As we go down from middle products, prices grow 4 to 5-fold per tonne, yielding a much higher value-added. But we are facing some restrictions, including licensing restrictions.”

“Moving towards final products would mean moving toward solid products whose transport and storage are much easier. That would win us more customers,” he said.

Iran Backs OPEC+ Decisions for Market Stability

Iran’s petroleum minister, Mohsen Paknejad, has said that Tehran would support OPEC+ decisions to ensure oil market stability.

“Iran will continue to support decisions made by OPEC+ for market stability, particularly in light of current uncertainties dominating the oil market,” he said.

The minister said OPEC+ had voluntarily agreed to cut its overall output by 2.2 mb/d in 2022, adding they are currently lifting the output gradually.

He said OPEC+ would return 411,000 b/d to the market in June, adding: “The November 2023 decision for production cut and its gradual reversal was entirely voluntary and beyond the framework of official decisions made by OPEC+ ministerial meetings.”

“OPEC+ member states are fully ready to take action in conjunction with market conditions and the global economy and to make necessary decisions about the oil market to maintain stability and help OPEC+’s economic growth,” he added.

Paknejad said as the chair of the OPEC Conference, Iran would continue to closely watch oil market developments.

OPEC is to hold its 9^th seminar in Vienna from 9 to 10 July.

Transport, Biggest Energy-Intensive Sector

CEO of National Iranian Oil Refining and Distribution Company (NIORDC) Mohammad Sadeq Azimifar said on 12 February 1979 that the transport sector was consuming 185 ml/d of various petroleum products. He was speaking at a ceremony to commission fuel diversification projects.

The development of transport has always been a priority, particularly for developing nations. In response to this concern, fuel supply for transport vehicles is a major cause of concern for countries. Azimifar said 71% of petroleum products produced in the country is consumed in the transport sector. He said that petroleum products’ consumption in the transportation sector in the current calendar year grew 7% year-on-year. He said this incremental trend would keep going on, adding that high demand was the result of an expanded public transport fleet.

High Demand Predicted

Increased demand and subsequently consumption of energy in the transport sector is not limited to Iran. It is visible all across the globe, specifically in 2025 which started with major political, economic, and environmental developments. That shows in 2025, the global energy industry will be experiencing big challenges that will change the strategic view and approach of key companies involved in the energy market.

Energy demand is projected to grow significantly in 2025, particularly in the transport sector. It is particularly important in recent years when the tourism industry saw significant growth in travel following the end of the COVID-19 pandemic. The reason is based on the fact that tourism is the driver of growth in the road and air transport sectors.

In the meantime, the global population is forecast to grow 27% in 20250 from 2024, a growth which would drive demand up for transportation and subsequently energy. That would definitely impact hydrocarbon and renewable energies. A key factor is the rapid growth of urbanization, which would increase the need for advanced transport infrastructure and finally demand for energy.

Economic growth in Asia and Africa would push demand up for transporting passengers and cargo. Surveys show that demand for passenger transport would have grown by 80% by 2050 from 2019. For instance, passenger transport in Sub-Saharan Africa would grow three times while it would be 90% in the Middle East and North Africa.

EVs

Energy demand is expected to reach 50-70 million barrels of oil equivalent per day (mboe/d) by 2050, which would lead to environmental consequences. Due to their environmental and economic advantages, electric vehicles are good options for this purpose. However, the problem is that their manufacturing is limited to China, the US, and the European Union. The countries with higher economic and demographic growth would experience low-level penetration of EVs. Commercial restrictions on EVs and their spare parts would slow down global efforts for reduced use of fossil fuels. Therefore, all these issues are interlinked, showing a high demand for petroleum products in the transport sector, including cars, trains, airplanes, and vessels.

Another highly significant aspect of transport is to achieve the 2030 sustainable development goals. For instance, transporting medications and medical equipment is necessary for saving human lives especially when pandemics strike. To further underline the significance of this issue, one may refer to the fact that passenger transport fell by half in 2020 due to COVID-19. Distribution of necessary commodities like farming crops, foodstuff, and medical equipment did not stop. Therefore, the transport sector is a leading consumer of oil in the world. More than half of global oil demand comes from this sector.

Fuel Mix Diversity

In Iran, in line with global approaches, numerous studies, and plans have been conducted to control energy demand in the transportation sector; among these, some petroleum products such as gasoline and oil and gas are of greater strategic importance, and for this reason, Iranian refineries are seeking to increase the production of these products by changing process units and implementing quality improvement projects. In this regard, 24 prioritized projects are envisaged in the 7^th National Economic Development Plan with gasoline and gasoil set to grow 30 ml/d.

A major need in Iran pertains to fuel mix diversification. The increased share of CNG in the fuel mix using incentives is among the long-term and strategic objectives and plans of NIORDC in the 14^th administration for the purpose of stability in the distribution network and diversification of the fuel mix.

Azimifar said effective policymaking had begun to diversify the national fuel mix in Iran, for which purpose, 100 new CNG stations and bioethanol facilities would be built.

Refinery Development

Another important issue is to upgrade the quality of fuel. Once the 14^th administration took office, projects for developing refineries were pursued. NIRODC has been an active entity in this regard.  To reduce the gap between production and consumption, it adopted a crash plan for gasoline production and added more than 8 ml/d to national gasoline output. According to official data, the isomerization unit of the Shiraz refinery came online with a 5,000 b/d capacity to upgrade the quality of gasoline by supplying 1.6 ml/d of euro-grade gasoline. This project was aimed at boosting the refinery gasoline production by 20%, enhancing gasoline octane number in the refinery from 87 to 91, reducing its benzene content to below 1%, reducing aromatics to below 35%, reducing the sulfur content of gasoline to below 2 ppm as well as cutting environmental pollutants.

Gasoline production in the Persian Gulf Star Refinery increased 4 ml/d to 44 ml/d. The Tehran refinery’s output was up 2 ml/d to reach 9 ml/d. In Isfahan’s refinery, gasoline production increased 2 ml/d to 14 ml/d while in Tabriz the output reached 4 ml/d, up 500,000 l/d. These figures show that Iran no longer depends on gasoline imports, but energy efficiency projects should not be ignored and it is necessary to find a solution to them.

Ground for Development

Planning for fuel efficiency is a strategic priority for many countries in the energy sector. For this reason, they have turned to models for simulating and examining energy demand in the transportation sector, which leads to improved efficiency and sustainability of energy consumption. One of the issues that has taken center stage is route optimization, using real-time data, which can ultimately reduce traffic and time wasted on the roads and minimize unnecessary fuel consumption.

Another issue is the need for infrastructure and strategic investments in the field of public transportation and the move toward green vehicles. In fact, in recent years, the realization of the energy transition and the use of renewable fuels have become more prominent than ever. In Iran, many studies and plans have been carried out and foreseen. Implementing them will not only guarantee the development of the country but will also provide a wide and growth-oriented space for investors.

The adoption of energy-efficient technologies, including more efficient internal combustion engines and hybrid-electric solutions with cleaner fuels and lighter but stronger materials for vehicle construction, remains essential to shaping sustainable transportation trends. Improving the efficiency of internal combustion engines, hybrid solutions, and material transport offer complementary pathways to achieving more sustainable energy demand trends in the transportation sector, as they build on existing technologies, production capabilities, and transportation infrastructure. It is also unclear to what extent biofuels, battery-powered electricity, and other sustainable fuel options can reduce or increase demand for petroleum-based products.

Iranian AI for the World Oil Industry

In an era where quick and precise access to specialized information is a key to effective decision-making and competitiveness in strategic industries, Pasargad Energy Development Co. (PEDC) has greatly benefited from modern technologies. PEDC has managed, for the first time in Iran, to use artificial intelligence (AI) in an indigenized platform for the simultaneous management of well, reservoir, and surface in production and drilling. PEDC has also provided the first intelligent assistant for the upstream oil sector (UIA) based on a large language model (LLM) to facilitate search and upgrade data precision.

To learn further about the necessity of using AI in the petroleum industry, “Iran Petroleum” has interviewed Saeed Dehqani, CEO of Sepehr Pasargad Oil & Gas Production Co. (SPOGPC)

PEDC has, in recent years, taken steps in favor of business intelligence (BI) and AI. What have been these measures?

Since February 2024, the issue of developing and using CI and AI for the development of oil and gas fields has been considered a PEDC priority. As you know, E&P companies do not handle the management of wells, reservoirs, and surface facilities in an integrated and real-time manner. Last January, the simultaneous, real-time center for Wells Reservoir and Facility Management (WRFM) was unveiled. The CEO of PEDC, Mr. Sadeq-Abadi, called for full intelligent work at the center within a year. Thanks to round-the-clock efforts by PEDC and the cooperation of tech enterprises and prestigious universities, AI was added to the capabilities of this platform in the production and drilling sector within five months. As we know, under the present circumstances, we cannot receive all these platforms from foreign companies. Even in the case of the possibility of their purchase, we will face numerous challenges regarding their installation and use.

Which phase is this platform in now? What capabilities does it share with users?

Among PEDC’s WRFM capabilities, I may refer to real-time data receipt in addition to facilitating data analysis. This platform provides a venue for standard data gathering and storage for real-time analysis to observe data processing and receive necessary warnings while data is displayed in an integrated system. Therefore, preliminary interpreted data is shared in an integrated format with specialists who are supposed to make decisions. This platform contains various management systems including real-time well production management, warning system and pressure data system, wellhead installations temperature and oil transmission units, real-time drilling operations management system, comparing drilling operations parameters, surface reparation system, existing well output forecast, rate of penetration (ROP) forecast at about 12 BI modules and 3 AI modules. It is used in the development of the Sepehr and Jofair oil fields.

Last January, part of this platform was unveiled for data management and security of production from the Jofair and Sepehr oil fields. What were the platform achievements for these two fields?

As you mentioned, one case in point with these platforms is the Sepehr and Jofair oil fields. Through this experience, we managed to reach up to 98% uptime and experience only 2% downtime. It has also been instrumental in time management and cost reduction. For instance, in a well, we managed to prevent a production halt and even increase production by $150 million. In general, one of the main issues that increases costs in reservoirs containing asphaltene is that if the well pressure and temperature performance is not monitored and analyzed real-time and the pace and rate of fluid production are such that asphaltene can deposit in the well or surface facilities, the well may stop producing, and require a workover or rig repair, or we will have to use chemical injections to prevent asphaltene formation regularly, which also has a large financial burden. Both of these cases have high costs. In companies with a history of using chemicals to prevent asphaltene formation, it has cost them about $0.7 to $1.4 per barrel. With the well management that was done with this platform in PEDC, we tried to either not inject at all or to inject in very small amounts, which, ultimately, in addition to keeping the wells in production, has reduced the operating expenses (OPEX) of Fahlian wells compared to other fields.

What are the requirements for production and development on such a platform?

This platform allows us to move toward a fully digital oil field. In some fields in Iran, SCADA systems have been installed, but since there is no platform for integrating and analyzing well, reservoir, and surface data, this maturity has not been completed. We have installed sensors and measurement systems in the fields, but we did not have a platform that could use real-time data for management decision-making, especially since it was only in the production area and not in the development area, including drilling and directing horizontal wells. Thanks to Mr. Sadeq-Abadi’s support, we have managed to move toward digital oil fields while designing a platform based on our own needs. This platform also receives online information from drilling rigs and downhole operations. This means that the center and platform are not only monitoring centers, but also have decision-making and warning capabilities, and use artificial intelligence to predict trends. On the other hand, since the ability to upload production forecasting programs, drilling, and geological operation programs has been developed on this platform, it gives the user an advantage to be able to compare their plans with what is currently being implemented. In addition, it is possible to set the range of various parameters such as pressure, temperature, weight, speed, etc., within the range desired by the expert and the user, so that it can warn in case of change. This system is active round the clock, and does not require an operator to monitor it.

The first phase of the BI-based center was unveiled in late December 2024. AI was projected to be added to it in the current calendar year. What achievements have you had in this sector?

Last calendar year, the BI of this platform was completed based on the mission for which it was designed. In general, in light of the objectives set for AI, we have made three achievements in this sector. One is an intelligent production forecast. Rather than embracing time-consuming models like 3D simulation models, we may use AI to make forecasts for a well in less than 10 seconds to see if optimal production is being fulfilled. As far as the production forecast is concerned, we intend to reach

a stage where even AI can identify the root causes of wells for us. It means that we gradually move toward receiving approaches for stabilizing and increasing output through AI. Another module for which we have taken good steps is the optimization of the pace of drilling. One key issue about drilling is to obtain the optimal pace and maximum speed in drilling. Then we focus on intelligent projection of challenges during drilling because it is a key issue in the petroleum industry, which we hope will be unveiled in 3 to 4 months. Such an intelligent forecast will occur using methods, use both adjacent wells’ data and real-time well data using AI in a fraction of a second.

We have also heard about UAI. What is the mechanism of this platform?

During our activities, we realized that our students and experts must have access to various resources, and to reduce the time this access, we need to achieve a platform like ChatGPT. The main problem with these platforms is the large breadth and low depth of information; in fact, we are faced with a large amount of ​​information but with a low level of expertise. Therefore, they are not specialized in the disciplines of the oil industry. Accordingly, we first acquired the knowledge of launching the initial platforms that we wanted to launch in the oil industry, similar to the same model. Then we moved towards the production and development of our desired platform. This LLM-based platform has caught everyone by surprise, but it can be of great help to experts. We have applied many documents regarding upstream oil to this model. This is an upstream intelligent assistant, which is known as UIA. We have entered the petroleum industry in a specialized way, which is unique. This platform may be transformed into an intelligent assistant in the petroleum and energy industry. Currently, the technical know-how for the upstream oil industry is fully available. Books and various standards about geophysics, geology, petrophysics, reservoirs, production, surface installations, QC, and HSE have been fitted into this model, and its English edition was unveiled by the Vice President for Science and Technology, Mr. Afshin, at the Oil Show. Since most scientific documents, standards, and documentations in the oil industry are in English and can be communicated in written and audio form, Persian text and audio editing will soon be available. What has taken time is the difficulty of translating technical terms in oil industry texts and finding Persian equivalents. Therefore, a careful review is necessary so that users can easily trust it. PEDC intends to share this platform with the public. Such a platform can be of help in various disciplines and for fast decision-making. It also shortens the time for access to data. We do not need to leaf through standards or look for something in specialized books.

What share of the design and development of this platform is local?

Those involved in this project were all Iranian experts and domestic tech companies. Its infrastructure has been created inside Iran, and most importantly, the knowledge gained by domestic experts in this field. That is, if we can then provide the hardware infrastructure challenge and receive specialized resources from all relevant actors in this field, this intelligent assistant of the petroleum industry will mature faster and become more applicable. Especially in important new topics, such as hydraulic fracturing and ERD drilling etc.

Could you update us on our current standing in AI in the world?

AI still has a long way to go in the petroleum industry. What PEDC currently focuses on pertains mainly to intelligent development and production from oil and gas fields and power generation. Following the project management rule that if you manage 20% of problems, you will jump 80%, we have categorized the problems, and we are currently dealing with issues that would be highly instrumental in reducing time or cost, and risk. For example, the initial priorities in the drilling, production and guidance sectors of horizontal wells, and safety and corrosion, have been, but at the same time, our colleagues in the technical areas are modernizing the studies; something that is the basis for decision-making on how to develop the field, and it is necessary to change the perspective in that sector. As I said, there is a lot of room for work in this area. We can accelerate the pace of progress in the field of artificial intelligence by leveraging the efforts of our experienced experts in this field and by trusting and employing young people who are graduates of top universities. I believe that this new generation that is entering the labor market can be transformative because they understand teamwork and are open-minded. It is noteworthy that today, a large part of our daily activities is carried out digitally; from buying a car online to banking. A large part of our social life is on virtual platforms and online, so we cannot continue to work in companies and industries in traditional ways. In such circumstances, it is necessary to coordinate this social life and corporate and industrial activities, and give young people the opportunity to change the way things work with new methods. PEDC intends to show that change and progress are achievable and possible.

Innovative EOR Potential in Iran

Reza Abesh Ahmadlou

Materials and Energy Expert

Enhanced Oil Recovery (EOR) techniques have become indispensable in the global oil industry, particularly as conventional oil reserves dwindle and the energy demand continues to rise. EOR methods are designed to extract additional crude oil from reservoirs that have already undergone primary and secondary recovery stages, which typically recover only 30-50% of the original oil in place. Over recent years, significant advancements in EOR technologies have been made, offering new opportunities to maximize oil recovery, extend the life of mature fields, and improve the economic viability of oil production. This article explores some of the most promising new EOR methods, with a focus on their potential application in Iran, a country with vast oil reserves and a strategic interest in optimizing its oil recovery processes.

1. Gas Injection Synergies

Gas injection methods, particularly those involving CO₂, nitrogen, and hydrocarbon gases, have shown significant promise in enhancing oil recovery. These techniques work by increasing reservoir pressure and reducing oil viscosity, facilitating easier flow and extraction. When integrated with other EOR methods such as thermal, chemical, and microbial techniques, the synergistic effects can lead to even greater enhancements in oil recovery.

1.1. CO₂ Injection

CO₂ injection is one of the most widely used gas injection methods in EOR. The process involves injecting carbon dioxide into an oil reservoir, where it dissolves in the crude oil, reducing its viscosity and interfacial tension. This enhances the oil’s mobility and allows it to flow more easily towards production wells. The primary benefits of CO₂ injection include improved oil recovery, extended reservoir life, and environmental benefits through carbon sequestration.

In Iran, where CO₂ emissions from industrial processes are a concern, CO₂ injection could serve a dual purpose: enhancing oil recovery and mitigating climate change impacts. The Weyburn-Midale CO₂ Project in Canada and the Permian Basin in the United States are notable examples of successful CO₂ injection projects, demonstrating both economic and environmental benefits.

1.2. Nitrogen Injection

Nitrogen injection is another EOR technique that involves injecting nitrogen gas into the oil reservoir. Unlike CO₂, nitrogen does not mix with the oil but acts primarily as a pressure maintenance agent. Nitrogen is abundant and relatively inexpensive, making it a cost-effective option for EOR. The Cantarell Field in Mexico is a prominent instance of nitrogen injection, which resulted in a significant increase in oil production.

For our industry, nitrogen injection could be particularly useful in maintaining reservoir pressure in mature fields, where natural pressure has declined. The abundance of nitrogen and its cost-effectiveness make it an attractive option for Iranian oil fields.

1.3. Hydrocarbon Gas Injection

Hydrocarbon gas injection involves injecting gases such as methane, ethane, or natural gas liquids into the oil reservoir. These gases mix with the crude oil, reducing its viscosity and improving its flow characteristics. The Prudhoe Bay Field in Alaska is a prime example of hydrocarbon gas injection, where it has significantly boosted production rates and extended the field’s productive life.

In Iran, where natural gas is abundant, hydrocarbon gas injection could be an effective method for enhancing oil recovery. The use of associated gas, which might otherwise be flared, could also reduce environmental impact and improve the overall efficiency of oil extraction.

2. Synergies with Other EOR Methods

The integration of gas injection with other EOR methods, such as thermal, chemical, and microbial techniques, can create powerful synergies that enhance oil recovery. For instance, the combination of CO₂ injection with steam can improve oil displacement efficiency due to the combined effects of thermal expansion, viscosity reduction, and the miscibility of CO₂ with crude oil.

2.1. Thermal EOR and Gas Injection

Steam injection is a thermal EOR method that involves injecting steam into the reservoir to reduce the viscosity of heavy oil, making it easier to flow towards production wells. The combination of gas injection with thermal methods like steam injection can create synergistic effects that further enhance oil recovery. For example,

the Duri Field in Indonesia has seen significant increases in oil recovery rates through the combination of steam injection and CO₂ flooding.

Heavy oil reserves are substantial in Iran and the combination of thermal EOR and gas injection could be particularly effective. The synergy between these methods could lead to higher production rates and extended economic life of heavy oil fields.

2.2. Chemical EOR and Gas Injection

Chemical EOR methods, such as polymer flooding and surfactant flooding, can be integrated with gas injection to enhance oil recovery. For instance, the combination of CO₂ injection with polymer flooding can improve sweep efficiency and oil displacement by utilizing the complementary mechanisms of viscosity reduction and interfacial tension reduction.

Chemical EOR methods have been successfully applied in some fields of Iran, so, the integration of these methods with gas injection could further enhance recovery rates. The Bell Creek Field in Montana is a notable example of this synergy, where CO₂ injection combined with polymer flooding has significantly increased oil recovery.

3. Technological Advancements in EOR

Recent technological advancements have significantly enhanced the effectiveness of gas injection methods in EOR operations. Real-time reservoir simulation, 4D seismic monitoring, smart well technologies, and the integration of machine learning and AI have provided operators with powerful tools to optimize gas injection strategies and maximize oil recovery.

3.1. Real-Time Reservoir Simulation

Real-time reservoir simulation has revolutionized the way oil reservoirs are managed and developed. By providing enhanced modeling capabilities, these simulations allow for more accurate and detailed representations of the reservoir’s characteristics. The integration of gas injection methods with real-time reservoir simulation enables operators to predict the movement and interaction of injected gases with the reservoir fluids more accurately.

The adoption of real-time reservoir simulation in Iran could significantly improve the efficiency of EOR operations. By optimizing gas injection parameters, operators can ensure maximum oil recovery and efficient resource utilization.

3.2. 4D Seismic Monitoring

4D seismic monitoring, which involves repeated seismic surveys over time, provides a real-time view of the changes occurring within the reservoir. This technology is particularly useful for tracking the movement of gases and fluids injected during EOR operations. By providing detailed insights into the reservoir dynamics, 4D seismic monitoring enables better management of EOR operations.

In Iran, where reservoir heterogeneity can be a challenge, 4D seismic monitoring could provide valuable data for optimizing gas injection strategies and improving oil recovery.

3.3. Smart Well Technologies

Smart good technologies, equipped with advanced downhole monitoring systems, provide real-time data on various reservoir parameters, such as pressure, temperature, and fluid composition. These systems enable continuous monitoring of the reservoir conditions, allowing for precise control over the EOR processes.

The combination of smart good technologies with gas injection methods in Iran could enhance the overall efficiency of EOR operations. By dynamically adjusting injection parameters based on real-time data, operators can respond quickly to changing reservoir conditions and maximize oil recovery.

4. Economic and Technical Challenges

Despite the significant potential of gas injection EOR techniques, several challenges must be addressed to ensure their successful implementation. Economic feasibility remains a critical concern, particularly given the high costs associated with gas procurement and the integration of multiple EOR techniques. Additionally, managing the complex interactions between different EOR methods and heterogeneous reservoir conditions requires sophisticated modeling and robust operational protocols.

Economic considerations are paramount in Iran as the high costs of gas injection EOR could be a barrier to widespread adoption. However, the potential for increased oil recovery and extended field life may justify the investment, particularly in mature fields where primary and secondary recovery methods have been exhausted.

By embracing continuous innovation, fostering collaboration, and committing to sustainability, the oil industry in Iran can overcome existing challenges and unlock the full potential of gas injection EOR, paving the way for a more efficient and environmentally responsible future.

AI and Its Impact on the Energy Sector 

Fereydoun Barkeshli 

Senior Energy Expert 

Artificial Intelligence has emerged as an important technology that is transforming the energy sector in a way probably never been experienced before. Innovations in AI are taking place quite rapidly, and new horizons and changes are virtually on a daily basis. AI was earlier thought to have much to do with the renewable sources of energy, but in recent times, it is increasingly penetrating the conventional energy sector as well.

As the world is undergoing a profound transformation driven by the twin forces of artificial intelligence and digitization, every aspect of energy and energy-related activities is virtually affected on much shorter intervals than before.

Artificial intelligence and digital technology offer innovative solutions to optimize and improve energy consumption across various levels of the economy. The present article aims to explore and address the way these technologies are reshaping the landscape of energy efficiency and examining some of their applications as well as challenges, and the future path towards the best and optimum applications of AI.

Energy Efficiency 

Energy Efficiency refers to using less energy to provide the same level of output during a certain stage of operation and chain of operations. It plays a crucial role in lowering energy costs, reducing pollution and GHG, and leading to higher energy savings and vulnerability to energy shortages and security. According to the OPEC Secretariat, improving energy efficiency could account for around 40 percent of global CO2 emissions by the year 2024. This view was expressed during a joint climate action brainstorming session in November 2024. However, the view is shared by the IEA in its quarterly assessments. 

One of the most important applications of AI in energy efficiency is the development of smart grids. Smart grids utilize digital communications technologies to monitor and manage electricity flows from all generation sources to meet the varying electricity demands of end users. Artificial intelligence algorithms can analyze vast amounts of data from smart meters, optimize sensors and other devices to forecast energy distribution, and surely reduce waste in the system.

Artificial intelligence can therefore forecast peak demand times and adjust the energy supply accordingly. This technology thus not only ensures that energy is used or stored efficiently, but also helps prevent blackouts and reduce reliance on power plants, changing to other sources of energy such as gas, coal, or diesel.

Artificial intelligence can be supportive of demand response programs and enables consumers to reduce or shift their power usage during peak periods in response to time-based rates. By analyzing real-time data on electricity consumption and market conditions, artificial intelligence systems can identify opportunities for energy demand reduction. 

Having said that, for instance, during peak demand times, AI can be adjusted to automatically convert smart appliances in homes or businesses to reduce energy consumption without compromising comfort. This saves money for the consumers and helps stabilize the grid and reduce the need for additional power plants.

It is important to differentiate between traditional and non-AI-operated smart grids.

Smart Grids 

Among all other aspects of the way Artificial Intelligence helps the improvement of energy supply chains is the smart grid. Grids have been installed on all energy utilities for many years, and they have advanced over the years. A power plant, no matter how it generates electricity, from renewables or fossil fuels, is meant to transmit electricity over long distances and to a variety of energy users along the borders and under various circumstances. 

But smart grids have revolutionized the process in a way never imagined even a decade ago. Smart grids utilize digital communication technologies to monitor and manage electricity flows from generation sources to meet the varying electricity demands of end users. Artificial Intelligence algorithms can analyze vast amounts of data from smart meters, sensors, and other devices to predict energy consumption patterns, optimize energy distribution, and reduce waste. This is particularly important in countries where a huge amount of energy is wasted in transmission, due to older versions of cable networks.

Demand Forecast

Artificial Intelligence can forecast peak demand times and adjust the energy supply accordingly. This not only ensures that energy is used efficiently but also helps prevent blackouts based on schedule by the electricity providing authorities or due to breakdowns because of overcoming energy needs by certain households. This is all because of the smart grid application. However, as mentioned above, smart grids have many functions in the energy generation chain, including oil and gas.

Integration of diverse energy sources is an important feature of smart grids generated by AI. The system allows for a unified energy generation and storage system across the entire energy spectrum, regardless of the source of energy, such as wind, solar, gas, crude oil products, or nuclear. As such, it provides consumers with greater control over their energy use through real-time information and demand response. However, currently, the most widespread and developed smart grid applications are within the electricity sector. This is because electricity grids are complex and require sophisticated control systems to maintain stability. 

 Nevertheless, expansion to other energy sectors has begun in a big way. Below, I would like to name a few:

Smart gas grids can monitor and control gas pipelines, optimize distribution, and detect leaks. Smart grids can optimize the operation of district heating and cooling systems, improving energy efficiency and reducing costs. The future of energy may involve integrated energy systems that combine electricity, gas, and heat. 

Smart grids are also essential for the transportation sector, as electric vehicles increase in numbers and many governments provide incentives for the public to use electric vehicles. Smart grids will be used to control the charging of electric vehicles to the grid, when and where needed.

Grid Optimization 

As mentioned earlier, Artificial Intelligence is revolutionizing grid management by dynamically adjusting power distribution. This process helps to prevent the grid overload and ensures stable power supplies under increased system integration of decentralized renewable sources. The ability of Artificial Intelligence to process and analyze vast amounts of real-time data from various sources makes it a highly valuable tool for grid operators.

In the renewable energy sector, accurate forecasts of resources and timing for wind and solar are crucial. Weather forecasting isn’t always accurate. As such, solar and wind turbines may face difficulty in running for adequate power generation. Although there can always be a breakdown and failure of grid systems in any country.

As such, smart grids are programmed to supervise the timings and duration for a certain volume of inward and outward energy generation systems. This system is particularly important when a country or region has surplus power or shortages on a seasonal basis. To be more precise, in certain regions of Iran, energy consumption is lower during winter, whereas a neighboring country has a higher energy demand for the same season of the year. Grid optimization supports and regulates the schedule so both the supplier, in this case Iran, and the receiving country over the border are at their full advantage without interruption.

 

Grid Integration 

Artificial Intelligence plays a pivotal role in integrating renewable energy sources into the smart grid. With the increasing deployment of solar panels and wind turbines, managing the variability of all resources becomes crucial. AI algorithms can forecast renewable energy production based on weather patterns and even include gas injections once necessary, and have access to a variety of sources of inputs to produce the required electricity based on the generation capacity of the given power station.

In the meantime, AI can be modeled to optimize the operation of battery storage that stores excess energy for later use. By determining the optimal times to charge and discharge, batteries based on the AI-aided grid model maximize the utilization of renewable resources while minimizing the reliance on a single resource of energy source.

It is noteworthy that digitization in energy efficiency is the key to achieving a sustainable AI-aided grid design. This has been referred to as the Internet of Things (IoT) in recent years. This refers to the network of interconnected devices that communicate and exchange data over the internet. 

In the context of energy efficiency, IoT devices such as smart meters, sensors, and connected appliances play a crucial role in monitoring and managing energy consumption. Smart meters provide real-time data on electricity usage, allowing consumers in households or businesses, and industries, to track their consumption patterns and make informed decisions about their energy use and the price that they pay.

Way Forward

As the demand for electricity keeps growing, direct usage of fossil fuels is marginalized. The share of petrochemical industries in oil and gas consumption has increased dramatically, and gas-powered power plants are becoming a thing of the past. Power-generating systems increasingly need to support multi-directional flows of electricity between the grid users. Meanwhile, links between power stations and systems and transportation are rapidly increasing. As such, it is becoming inevitable to distance itself from smart grids and devices in any country that aspires to advance.

In the meantime, the capabilities of Artificial Intelligence are rapidly progressing. 

According to a 2024 International Energy Agency (IEA) report, AI already serves more than 50 different uses in the energy systems. IEA estimated that the size of the market share for Artificial Intelligence in the energy sector could easily surpass $ 23 billion in 2025. 

Challenges Ahead

However, it has to be noted that training and installing large models can consume significant amounts of energy. Some models are estimated to consume around 1287 kWh, which is equivalent to the energy used by an average American household for about 44 years. Running inferences on AI models requires less energy than training, but can still consume substantial amounts of energy, especially for applications requiring real-time processing or large volumes of data. Estimates suggest that inference can consume 0.1 to 1 kWh per prediction, depending on the model’s complexity. 

Overall, data centers around the world are estimated to consume around 200 terawatt-hours (TWh) annually, which is roughly 1 percent of global electricity consumption. As for the oil sector, approximately 10 percent of a barrel of oil is consumed in the production of the oil, although it varies depending on the field, crude type, and technology. However, Artificial Intelligence and energy are going to be a new power couple. They will not be able to survive without one another. There’s no decoupling between energy and AI.

The spread of AI operating systems and the ability to run billions of data, requires heavy cooling stations that rely on a variety of energy sources, including oil and gas. This is ironic, but a fact that needs to be addressed. It is needless to say that technology keeps advancing and will find remedies for the limitations. However, for now, the countries that are rich in energy resources are better positioned to advance in AI technology.

Conclusion

In conclusion, while I fully subscribe to the development and globalization of AI training, it is the right time for the OPEC member countries (MCs) to discuss the idea of networking and formulating a common AI algorithm. The idea of a cross-border network has potential advantages.

A network could facilitate knowledge sharing and innovation practices among member countries. As such, it allows for faster energy integration and tackles complex challenges. Such collaboration could help promote standardization on several fronts, including climate change, zero carbon emissions, managing market volatility, and capacity-building policies.

Perhaps, the OPEC MCs can begin with an expert meeting to examine different approaches and discuss options. An expert meeting can examine diverse perspectives and viewpoints. OPEC has had experience in meeting and working together on a variety of issues of common interest and concerns, such as exchanging data, examining long-term strategies, common climate policies, and unifying stances toward issues of common and mutual interests. It is obvious that a common AI and energy model for an organization that is created for a different purpose sound different to absorb, but it can be tested. An exchange of views on where each MC stands is quite an achievement.

US Oilfield Giants Brace for Tough Times

Top U.S. oilfield service firms have signaled a challenging period ahead, as a recent slide in oil prices pushes producers to temper their drilling activity and rethink their budgets.

SLB, Halliburton, and Baker Hughes all flagged cautious customer spending in their first-quarter reports, citing a lack of visibility, especially in North America.

Higher output from the OPEC+ grouping and a global tariff war that has raised demand concerns drove crude prices to near $55 a barrel this month, from around $78 just before U.S. President Donald Trump assumed office in January.

“With oil prices falling out of the well-defined range that had persisted for much of the past 2+ years, producers’ budgets are encountering meaningful strain for the first time in several years,” said Raymond James analysts.

Many producers have warned that drilling becomes unprofitable below $65 per barrel. Brent crude was trading around $63.

Diamondback Energy trimmed its 2025 capital budget by $400 million and said it would drill and complete fewer wells, while Coterra Energy said it would cut its Permian rig count by 30% in the second half of the year.

The cuts by the independent producers could potentially affect the service firms that supply them with rigs, crews, and equipment.

Halliburton CEO Jeff Miller said customers were reviewing 2025 plans, which could lead to more idle time for fleets and, in some cases, sending equipment overseas or into retirement.

Analysts at Jefferies said while delays in North American activity have now stretched into the second quarter, international projects are facing slowdowns.

SLB flagged slow starts in Mexico and Saudi Arabia, and now expects global upstream investment to decline in 2025.

Baker Hughes forecast a low double-digit drop in North American spending and mid-to-high single-digit cuts internationally.

Tariffs are also adding fresh uncertainty, including driving up equipment costs.

Halliburton forecast a 2-cents-to-3-cents per share impact in the second quarter from the trade tensions, while Baker Hughes warned of a $100 million to $200 million hit to 2025 EBITDA if tariffs stay in place.

Meanwhile, all three companies are concentrating on pockets of resilience such as LNG infrastructure, power grid upgrades, and data center-driven power demand to weather a slower, more uneven recovery.

Baker Hughes expects to book at least $1.5 billion of orders in data-center equipment over the next three years.

“We are really not seeing customers pull back from LNG, gas infrastructure, or the data-center projects," said CEO Lorenzo Simonelli.

Shell Faces Delays on 2 Wells at Perdido

Shell, the top U.S. offshore producer, said two of its wells to boost production at the Perdido offshore development were delayed to the end of the year, while one was brought online in March.

All three wells, part of Perdido’s Great White unit, were originally expected to be online in April and set to produce up to 22,000 barrels of oil equivalent per day (boe/d) at peak rates, expanding output from the platform.

Perdido, which began production in 2010, has an output capacity of 125,000 boe/d at peak rates. Shell is the operator of the field with a 35% working interest, while Chevron and others hold the remaining stake.

Shell in December had also announced plans to bring online two additional wells as a part of the Silvertip unit to boost Perdido’s output. These wells are expected to collectively produce up to 6,000 boe/d at peak rates, with first oil expected in 2026.

The oil and gas rig count declined by about 5% in 2024 and 20% in 2023 as lower U.S. oil and gas prices over the past couple of years prompted energy firms to focus more on boosting shareholder returns and paying down debt rather than increasing output.

Even though analysts forecast that oil prices would decline for a third year in a row in 2025, the U.S. Energy Information Administration (EIA) projected crude output would rise from a record 13.2 b/d in 2024 to around 13.4 million b/d in 2025.

That increase in production, however, was lower than the EIA’s outlook in April due to lower oil price forecasts as U.S. tariffs increase the chances of weaker global economic growth and oil demand.

On the gas side, the EIA projected that an 88% increase in spot gas prices in 2025 would prompt producers to boost drilling activity this year after a 14% price drop in 2024 caused several energy firms to cut output for the first time since the COVID-19 pandemic reduced demand for the fuel in 2020.

AB Foods’ Bioethanol Plant Future Imperiled

The removal of UK tariffs on U.S. ethanol in the U.S.-UK trade deal could sound the death knell for Associated British Foods’ loss-making bioethanol plant at Hull, northern England, following a warning last month that its future was uncertain.

The trade deal will reduce Britain’s 19% tariffs on U.S. ethanol to zero through a 1.4 billion-litre (370 million gallon) quota that far exceeds U.S. exports to the UK last year.

AB Foods’ CEO George Weston told Reuters on April 29 that the group’s ethanol business had faced “significant problems” with “effectively subsidized imports”.

The group, which also owns Primark and a host of grocery brands including Twinings and Ovaltine, said the way in which UK regulations were being applied to bioethanol was undermining the commercial viability of its Vivergo plant in Hull, which produces bioethanol fuel for cars and animal feed.

AB Foods is calling for changes to UK bioethanol regulations regarding imports. It warned that unless talks with the government “improve the position,” it could mothball or close the plant, putting about 150 jobs at risk.

“We are very clear what we need to do with the ethanol business – that’s a regulatory issue that we need government support on.”

However, the opening up of the UK ethanol market to U.S. producers means the business now faces a new challenge.

“The government’s last-minute decision to allow tariff-free ethanol imports from the U.S. into the UK is causing great anxiety to many people in the northeast of England, not least to the many employees and suppliers, and farmers involved in the UK bioethanol industry,” an AB Foods spokesperson said.

They added that the company was working through the details and "the implications" with the government.

Britain’s National Farmers’ Union warned the ethanol measure could mean the loss of a profitable outlet for arable growers who supply the industry.

The Renewable Energy Association warned that the deal could enable U.S. producers, supported by U.S. tax credits, to sell into Britain at a cheaper rate than domestic suppliers can match.

INEOS closed its ethanol plant at its Grangemouth site in Scotland in January, blaming a reduction in demand for ethanol in Europe combined with increasing pressure from imports of ethanol from other regions.

Britain’s concession on ethanol and beef was made in return for the U.S. removal of 25% additional tariffs on steel and aluminum, and a quota of 100,000 cars at a duty of 10%. Remaining tariffs were unchanged.

British Prime Minister Keir Starmer said the deal would save jobs in the car and steel industries.

Unigel Approves Fertilizer Plant Deal with Petrobras

 Brazilian chemical firm Unigel approved a deal proposed by oil giant Petrobras to settle legal disputes over two fertilizer plants in northeastern Brazil, Petrobras said, confirming an earlier report by Reuters.

The deal would allow state-run Petrobras to work on resuming operations of the two plants in the states of Sergipe and Bahia, as President Luiz Inacio Lula da Silva’s administration seeks to reduce Brazil’s reliance on imported fertilizer.

Petrobras leased the two nitrogen fertilizer plants to Unigel in 2019 under a 10-year agreement, but both facilities have been shut since 2023, with Unigel citing unfeasible operating conditions due to high natural gas prices in Brazil.

The deal, which still needs to be ratified by the arbitration court, reestablishes Petrobras’ possession over the two plants, Petrobras said in a securities filing. Operations are set to resume after a bidding process to contract services to run and maintain them, it added.

Germany Energy Transition Hits Reverse in 2025

Clean energy sources generated the smallest amount of Germany’s electricity in over a decade so far in 2025, dealing a blow to the energy transition momentum of Europe's largest economy.

Electricity generation from clean power sources totaled just under 80 terawatt hours (TWh) during the first four months of the year, according to data from energy think tank Ember.

To compensate for the drop in clean electricity supplies, German power firms were forced to lift fossil fuel power output by 10% from a year ago, and the share of fossil fuels in the German generation mix has climbed to its highest since 2018.

This resurgence in fossil generation has placed Germany's power system under heightened scrutiny, as the country has promoted itself as a regional energy transition leader and a major proponent of a cleaner European electricity system.

Given the reversal in Germany's energy transition momentum so far this year, any continued backsliding by such an influential economy could undermine regional commitments to energy transition efforts.

A 31% drop in electricity production from wind farms has been the chief driver behind the lower clean energy supplies in Germany so far this year.

Just 39 TWh of wind-powered electricity was produced from January to April, which was the lowest wind total for that period since 2017, despite wind generation capacity in Germany climbing by roughly 30% in the intervening years.

Low wind speeds at turbine level were the main culprit behind the wind woes this year, and resulted in wind power's share of Germany’s electricity production mix dropping from 34% in January to April 2024 to 24% for those months this year.

German utilities may need to expect even lower wind output in the months ahead.

Wind power supplies tend to peak during winter and spring when wind speeds are normally highest for the year, and undergo their annual doldrums over the summer when wind speeds drop.

Spain LNG Imports Represent 35% of Gas Supply

Imports of liquefied natural gas from the United States rose to 35% of Spain’s total gas imports in the first four months of this year from just over 20% a year ago, while imports of Russian LNG declined, data showed.

Europe has increasingly imported super-chilled gas shipped from the U.S. since Russia’s invasion of Ukraine significantly reduced the amount of Russian gas piped to Europe.

In the first four months of the year, Spain imported the equivalent of 45,932 gigawatt-hours (GWh) of gas from the U.S., compared with 24,885 GWh a year earlier, according to data from Spanish gas grid operator Enagas.

The U.S. has become the main gas supplier to Spain, replacing Algeria, which ships liquefied gas and also pumps gas directly to Spain through pipelines.

Spain’s overall gas demand declined by 3%, Enagas said.

The U.S. liquefied gas also replaced the liquefied gas sent from Russia. As a share of Spain's total imported gas, Russian gas fell to 13.3% in the first four months of this year, down from 22.4% in the same period last year.

Oil Refiners’ Robust Profits Defy Souring Outlook

Global oil refineries’ strong profit margins signal healthy oil consumption today, a stark contrast with the grim long-term demand outlook.

Sentiment in the oil market has soured in recent weeks, due to concerns about the impact that U.S. President Donald Trump’s trade war will have on global economic activity and energy consumption. The International Energy Agency last month sharply slashed its oil demand forecast for 2025 to 730,000 barrels per day from 1.03 million bpd in March, citing trade tensions.

At the same time, the surprise plan by OPEC+ to sharply increase crude production by 960,000 bpd between April and June has increased bearishness about long-term oversupply.

But looking at current conditions on the ground, one would be forgiven for thinking that the oil market is doing extremely well.

Refining margins, which reflect the overall profits a plant makes from processing crude into fuels such as gasoline and diesel, remain elevated. The Singapore margin for refining Dubai crude is around $7 a barrel, compared with $4.25 a year ago, according to data provider LSEG.

Similarly, benchmark European Arab light margins are at $6 a barrel, some 36% higher than the price one year ago, while U.S. Gulf Coast Mars margins have more than doubled over the same period to near $16 a barrel.

These margins are obviously being flattered by the steep decline in oil prices this year, and they are lower than the peaks seen during the height of the energy crisis that followed Russia's invasion of Ukraine in 2022. But they remain high compared to recent history and certainly do not reflect a contraction in demand.

Importantly, U.S. refineries are operating at elevated levels, processing over 16 million bpd last week, 123,000 bpd higher than last year.

Yet Brent crude forward prices indicate that investors don’t think demand will hold up.

While the Brent July contract is trading at a premium to the October contract, indicating a healthy supply and demand balance, prices in the fourth quarter of 2025 onwards have, in recent weeks, shifted to a contango structure, whereby future prices trade above contracts for earlier delivery. This means investors expect to see an oversupply of oil relative to demand.

What explains this discrepancy between ample refining margins and the dour demand outlook?

One key factor is clearly that oil refineries, traders, and wholesale buyers are filling up gasoline stocks ahead of the peak summer driving season and refilling depleted diesel stocks following a particularly cold winter.

And even though consumer and business confidence may be falling and anxiety about an impending economic slowdown may be spiking, oil demand is continuing to hold up well.

While U.S. diesel and heating oil stocks are significantly below their 5-year average at around 107 million barrels, consumption of around 3.7 million bpd on a 4-week average basis remains above the 5-year average despite declining by 13.5% from this year’s high, according to the latest data from the Energy Information Administration.

Iron Ore Tells a Different Story in China

Concern is mounting over just how big a hit the Chinese economy is going to take from the massive tariffs imposed by the United States, but so far, the commodity most at risk is seemingly unaffected.

Iron ore is the major commodity most exposed to China, given that the world's second-biggest economy buys more than 70% of all seaborne volumes, which it uses to produce just over half of global steel.

But iron ore prices and import volumes have been largely resilient since U.S. President Donald Trump launched his trade war against China, which has escalated to the point where the United States imposes a tariff of 145% on its hitherto biggest trading partner.

Iron ore contracts traded on the Singapore Exchange ended at $99.35 a metric ton, having climbed since hitting a seven-month low of $96.20 on May 1.

The price has been trading in a relatively narrow range since October, with a high of $110.55 early in that month and a low at the start of May.

At the same time, China's imports of iron ore have eased slightly, with customs data showing first quarter arrivals down 7.8% from the same period a year earlier to 285.31 million tons.

But while that figure may look soft, it is largely because supply was constrained by weather events in Australia, which cut shipments from China’s top supplier.

The supply disruption is evident in China's port inventories, with data from consultants SteelHome showing they fell to a 14-month low of 133.8 million tons in the week to April 25.

Stockpiles were as high as 147.5 million tons in mid-February, showing that steel mills have drawn on inventories to keep production going during the period of supply disruption from Australia.

China’s imports of the key steel raw material are expected to have recovered in April, with commodity analysts Kpler tracking arrivals of 101.4 million tons, up from the March customs figure of 93.97 million.

China’s steel output is also holding up, with March’s 92.84 million tons being a 10-month high and up 4.6% from the same month in 2024, according to official data.

The overall picture so far this year for iron ore is that any import weakness is down to supply disruptions, and that China’s demand has remained relatively solid.

Enbridge Beats Q1 Profit Estimates

Canadian pipeline operator Enbridge exceeded market estimates for first-quarter profit, driven in part by higher earnings from its Mainline crude pipeline system, which it said customers want to see expanded despite lower oil prices.

The Calgary, Alberta-based company’s Mainline system is the largest pipeline system in North America, moving crude from Western Canada to markets in Eastern Canada and the U.S. Midwest.

Enbridge said the Mainline system worked with full capacity the entire first quarter, delivering a first-quarter record of 3.2 million barrels per day. The Mainline saw a rise in first-quarter adjusted core profit to C$1.45 billion, from C$1.34 billion last year.

Enbridge has been in talks with customers to add incremental capacity along the existing Mainline pipeline network to meet growing demand for oil export capacity from Canada.

The company forecasts the need for around 1 million barrels per day of additional pipeline space out of Western Canada by 2035 as the country's oil sands operators increase production.

Enbridge expects to make a final investment decision on the first phase of its Mainline project - which would add 150,000 barrels per day of capacity to the network and would include an expansion of the Flanagan South pipeline, a 954-km segment that runs from Illinois to Cushing, Oklahoma - later this year, CEO Greg Ebel said on a conference call.

Ebel said the bullish stance on the need for additional oil pipeline capacity in North America has not changed, in spite of a significant decline in oil prices this spring.

“Those shorter-term swings, which we watch very closely, can have some impact on production, but they don’t change the long-term view of energy demand and need,” Ebel said.

Enbridge also saw a rise in earnings from its gas distribution unit to C$1.60 billion ($1.15 billion), from C$765 million last year.

Enbridge, along with I Squared and MPLX, announced a deal on May 6 to acquire up to 85% of the Matterhorn Express gas pipeline, a deal that will see the company continue to build its footprint in the U.S. Permian basin.

Enbridge, which said it expects to have an equity interest in 30% of the total natural gas pipeline capacity in the Permian by 2025, is paying close attention to how operators in that basin are responding to the lower pricing environment.

Some companies in the Permian are already beginning to drop drilling rigs in light of the lower oil prices.

But Ebel said the contracted nature of Enbridge's pipeline business will help to shelter it from any slowdown in production activity in the region.

Enbridge reported adjusted profit of C$1.03 per share for the quarter ended March 31, beating analysts’ average expectation of 96 Canadian cents per share, according to data compiled by LSEG.

Nord Stream 2 Agrees Debt Restructuring Deal

A court in Switzerland said Nord Stream 2, part of the Russian gas company Gazprom, has reached a debt restructuring agreement with its creditors.

The court had set a deadline of May 9 for Switzerland-based Nord Stream 2 to both restructure its debts and pay back small-scale creditors. The court had said it could declare Nord Stream 2 bankrupt if this condition was not met.

The $11 billion Nord Stream 2 pipeline to carry Russian gas to Europe was completed in 2021 but was never commissioned as relations with Moscow broke down ahead of Russia’s invasion of Ukraine in February 2022.

Europe slashed its imports of Russian gas following Moscow’s invasion, and Gazprom posted a $7 billion loss the following year.

The court in Zug in Switzerland said the decision could still be appealed. It declined to give further details on the debt or the creditors.

Gazprom did not reply to a request for comment.

The Nord Stream pipeline system is made up of two double pipelines across the Baltic Sea to Germany and was the biggest route for Russian gas to enter Europe. It was capable of delivering 110 billion cubic meters of gas a year.

But in September 2022, one of the two lines of Nord Stream 2 was damaged by mysterious blasts, along with both lines of Nord Stream 1.

U.S. President Donald Trump is pushing for peace in Ukraine, raising the prospects of a thaw in gas ties.

Officials from Washington and Moscow have held discussions about the U.S. helping to revive Russian gas sales to the continent, eight sources familiar with the talks have told Reuters.

But Brussels wants to ban new Russian gas deals by the end of 2025 and ban imports under existing deals by the end of 2027.

The plan, to be debated next month, would require approval from the European Parliament and a majority of member states.

Hungary and Slovakia have expressed their opposition to the move.

Iran-Azerbaijan Energy Ties: Potentialities & Barriers

Shuaib Bahman

Intl. Affairs Analyst

During Iranian President Masoud Pezeshkian’s recent visit to the Republic of Azerbaijan, gas cooperation between the two nations was discussed. Given their historical, cultural, and economic commonalities, Iran and Azerbaijan enjoy significant potential to develop cooperation in the energy sector, particularly gas. Such a cooperation may include energy exchanges, expansion of infrastructure, and joint investment. 

Grounds for Cooperation  

In addition to sharing a geographical border, Iran and Azerbaijan enjoy historical, cultural, and religious links. However, none have contributed to economic exchanges between the two countries. A key point in the financial sector is that both nations are energy-rich. At first glance, that may seem to dissuade them from broadening ties. However, a deeper study of the economic needs of Iran and Azerbaijan indicates that Iran and Azerbaijan enjoy great potential for developing their ties and cooperation in the energy sector.

A case in point for Iran-Azerbaijan cooperation is an exchange of gas and the use of energy and transit corridors. That was highlighted during President Pezeshkian’s visit to Azerbaijan, which can help expand energy and transit ties. That means cooperation in developing regional energy and transport corridors, in which Iran and Azerbaijan are instrumental. Such corridors can function as natural bridges between Asia and Europe, not to mention creating economic opportunities and boosting security.

Iran has already had a gas swap deal with the Republic of Azerbaijan, under which it received 400 mcm/y of gas from the Republic of Azerbaijan and supplied an equivalent volume to Nakhichevan. That is an example of cooperation in the gas sector that can be developed. Iran has also played a key role in the gas swap between Azerbaijan and Turkmenistan.

Restrictions and Challenges

Despite the willingness by Iran and Azerbaijan for cooperation in the energy sector, they seem to face obstacles and restrictions, some of which are as follows:

1. In the wake of the collapse of the Soviet Union, the Republic of Azerbaijan has tried to invest in its energy sector. To that effect, American and European investors have been seeking to increase their share in the production and exploration of oil and gas resources. Therefore, Azerbaijan is influenced by the US and the EU, which would impact Tehran-Baku cooperation. Baku’s willingness to expand its ties with the West has always put a limit on Iran-Azerbaijan ties in the energy sector. Therefore, the more Azerbaijan is willing to expand its political ties with the US and Europe, the more divergent Tehran-Baku cooperation would be.
2. Iran and Azerbaijan may rival each other in energy export, as Azerbaijan’s energy policy has been focused on exporting energy to Europe, which is the same long-term policy sought by Iran. Therefore, Iran and Azerbaijan may rival each other as both seek to export energy to Europe in the future.
3. Azerbaijan is looking to the West for energy exports. Therefore, Iran’s geopolitically valuable position would not matter much for Baku. Unlike Central Asian states, which depend on Iranian routes to the Persian Gulf to communicate with the outside world, Azerbaijan may have access to European nations via Western routes. That would largely impact Iran’s geographical value in Baku’s eyes. Therefore, Azerbaijan would consider Iran only as a channel for energy swap to supply oil and gas to Nakhichevan.
4. Iran-Azerbaijan cooperation in the oil and gas sector in the Caspian Sea faces numerous challenges. One key challenge would be to build a subsea pipeline. As long as the legal regime of the Caspian Sea has not been decided, energy-related disputes would continue to exist, which would push Tehran and Baku into rivalry rather than partnership. Baku intends to build a trans-Caspian pipeline, which Iran is opposed to.

Outlook

Historical, cultural, and religious commonalities between Iran and Azerbaijan have caused Tehran to prioritize expansion of ties with Baku in all sectors. Energy is a key element in strengthening Tehran-Baku cooperation. Despite great potential for cooperation in the energy sector, the two nations have thus far failed to take sufficient action. That should be attributed to restrictions in Iran-Azerbaijan ties, resulting from either political considerations or economic and technological obstacles and challenges.

Despite all challenges, Iran and Azerbaijan can cooperate in natural gas exchange, building oil and gas equipment, extracting and transmitting oil and gas from the Caspian Sea, using underground natural gas reservoirs, joint manufacturing of oil and gas machinery and equipment, oil and gas swap, and gas export. That would require the two countries’ view of the Caspian Sea as ground for cooperation, lessening external influence, paying attention to regional cooperation, and collaboration in energy pricing.

Russia Europe Gas Exports Outlook

Shuaib Bahman

Intl. Affairs Analyst

On the first day of 2025, whereas the five-year transit agreement between Ukraine and Russia was not renewed, Russian gas supplies to the European Union via Ukraine ended. The main reason for the suspension was Ukraine’s refusal to renew the agreement due to the ongoing war with Russia. The Ukrainian Energy Ministry announced that the transit of Russian gas through Ukraine had been suspended “in the interests of national security.”

Ukraine’s Energy Minister, German Galushchenko, called the event historic: “Russia will lose its markets and suffer financial losses.” Russia’s Gazprom also announced that natural gas shipments to Europe via Ukraine will stop as of the first day of 2025. Given the new situation, the question of what prospects Russia’s gas exports to Europe face this year is of great importance, as it could severely change current trends in the energy sector.

History

The former Soviet Union and then the Russian Federation spent half a century acquiring a major share of the European gas market, which before the recent war in Ukraine had reached about 35%. Gas exports to Europe began during the Soviet era and have increased in the past two decades. Before the war in Ukraine, the Russians had a 35% share of the European gas market, which fell to 8% in 2024.

In the past, various Russian pipelines transmitted 201 bcm of gas to Europe in 2018. This volume had decreased to about 15 bcm via Ukraine in 2023. The figures show that total pipeline gas exports from Russia to Europe in 2024 increased by 14% compared to the previous year to 32.1 bcm.

Transit Routes

With the end of gas transit through Ukraine, the Balkan Stream (TurkStream) pipeline is the only remaining route for Russian gas to Europe. It runs through Turkey and the Black Sea to Bulgaria, then on to Hungary, Serbia, and Bosnia and Herzegovina. TurkStream has two lines, one feeding the domestic Turkish market, while the other supplies Central European customers, including Hungary and Serbia.

However, TurkStream has a limited annual capacity of 31.5 bcm for both lines. Other pipelines were closed in the wake of the Ukraine war, including the Yamal-Europe pipeline through Belarus and the Nord Stream pipeline under the Baltic Sea that sent gas to Germany. The old pipelines carrying Russian gas to Ukraine through Europe are shut down, while the Yamal-Europe pipeline through Belarus has been shut down, and the Nord Stream route from the Baltic Sea to Germany was dismantled in 2022.

Declining Share

The cessation of Russian gas exports via Ukraine will deprive the European market of about 15 bcm of gas per year. With the expiration of the gas transit contract between Ukrainian oil and gas companies and Gazprom at the beginning of 2025, a new chapter in European-Russian energy relations has begun, in which Russia’s share in the European gas market has decreased to about 8%.

The most important impact of the Ukraine war on the energy market was to increase the role of diversification of countries’ energy sources and reduce Russia’s influence in the European energy market. However, while Russian imports of liquefied natural gas (LNG) via pipelines to Europe have decreased, Russian gas exports, transported by sea, are increasing, and Europe accounts for about half of these exports.

Europe Alternatives

Europe is trying to reduce its reliance on Russian gas, as it buys LNG from Qatar and the US in addition to gas supplies from Norway. The EU has redoubled its efforts to reduce its dependence on Russian energy and has been looking for alternative sources since the war in Ukraine began in 2022. Norway and the US have replaced Russia as Europe’s largest gas suppliers: in 2024, Norway exported 87.8 bcm of natural gas to Europe, accounting for 30.3% of total imports, while the US supplied Europe with 56.2 bcm of gas, accounting for 19.4% of total gas.

Renewables Outlook

With the end of Russian gas transit through Ukraine, the period when Moscow could easily use energy resources as a weapon against EU members is over. In the long run, Russia is the biggest loser of the expiration of gas transit through Ukraine, with its last major lever in the energy war against Europe now gone.

Overall, the outlook for Russian gas exports to Europe in 2025 is severely limited, and Europe is expected to keep reducing its dependence on Russian energy, while Russia faces challenges in finding new markets for its gas. European gas demand will increase in 2025 due to reduced gas transit through Ukraine and the need to fill storage by 90% by November. However, the EU is trying to minimize the impact of this change with plans to increase renewable energy, import LNG, and reduce gas consumption.

Europe is also moving towards increasing the share of renewables in its energy mix as it attempts to reduce its dependence on Russian gas. The share of solar and wind power in Europe’s electricity generation has increased from around 16.4% in 2022 to 20.5% so far in 2024, while the share of fossil fuel generation has decreased from around 44.6% in 2022 to 36.6% so far in 2024.

Therefore, Europe seems to be preparing to use more green energy, so that it will not need to import fossil fuels from Russia, the US, or even Qatar. Russia’s war in Ukraine has accelerated Europe’s move toward green energy.

Drilling Bit Reflected on the Heart of History

Yunes Sadeqi

History Researcher

From the adobe bricks of the Chogha Zanbil ziggurat to the millennia-old child footprints, from the ancient palace of Susa to the bungalows of the south, from the oil sources to the first well in Masjed Soleiman (MIS); all of them echo the same voice that here lies Khuzestan, the birthplace of oil and history. The story of oil in Iran cannot be bound to about a hundred years ago as it is as old as Khuzestan; a land that has housed heat and oil, out of which modern Iran was born.

Oil in Ancient Persia

The first signs of oil in Iran dates from ancient Persia. According to numerous sources, from the Sumerian period (5 to 6 millennia ago), bitumen was used instead of concrete in construction work in Susa. Even vessels and potteries were coated with bitumen to prevent water penetration. In Avesta, oil has been mentioned. That indicates the ancient history of this substance. 

As the Achaemenians came to power, oil was used for lighting and medical purposes. Famous Greek historian Herodotus has referred to oil wells located 22 km from Susa, from which oil, bitumen and salt were extracted and left so that salt and bitumen would deposit and oil would be obtained. Herodotus has also reported the use of bitumen in the wars between the Achaemenians and the Greeks.

Roman historian Ammianus Marcellinus has described the war between Sassanid king Shapour II and the Roman emperor, highlighting the Iranian war tactic in using petroleum.

“Iranians used to dip special leaves in the oil and then added another liquid to it. Then they set fire to their arrows and fired at the enemy. They were careful in firing the arrow so that it would not be shot fast to extinguish the fire. The arrows caused fire anywhere they landed and they could not be extinguished using water.

In his travelogue “Masterpiece to Those Who Contemplate the Wonders of Cities and the Marvels of Traveling”, Ibn Battuta has referred to the existence of oil and bitumen in Mesopotamia. All historical reports also indicate the role and use of oil in this geographical zone and Iranians’ awareness of oil.

Black Gold Rush

In the 19^th century, a British geologist was the first to discover the existence of oil in southeastern Iran during his archeological exploration. That was the beginning of Western governments’ attempt to win concessions from the Qajar dynasty. In late 19^th century, French archeologist Jacques de Morgan led a delegation to Chia Sorkh around Kermanshah, publishing his report in a magazine. As soon as this report was printed, the West learnt more about the existence of oil in Iran, preparing the round for William Knox D’Arcy’s involvement in the project. The first exploration group was led by J. P. Reynolds. Although drilling went on until November 1904 on about 259 ha of land with two wells starting production, insufficient volumes and distance challenges for carrying oil to Persian Gulf shores halted the project. Therefore, D’Arcy decided to abandon Chia Sorkh and explore southern Iran.

Drilling Bit

In 1905, the D’Arcy-led group started drilling in the Mamatin area in Khuzestan. This area had been recommended by geologists. Reynolds had brought about 20 British and Canadian drilling staff to this area. Neither of the first 661-meter-deep and the second 591-meter-deep wells struck oil. In 1907, the Reynolds team started drilling in the Naftoun field. In late 1907, the Indian government dispatched a group of soldiers to support drilling staff. In 1908, the Burma Oil Company (BOC) sent an inspector to the area and reported that further exploration was futile. At the end of April, Reynolds received a telegram from London instructing him to stop work, dismiss his employees, and return to the country. Reynolds, convinced that there was oil in MIS, decided after a discussion with Wilson not to stop work on the pretext of illegibility of the telegram text and to refrain from cutting up the rigs until a written letter could be delivered to them. But before the written notification from the BOC reached Reynolds, the echo of the drilling rig had struck the heart of history and in the early morning of May 26, 1908, MIS Well No. 1 erupted 15 meters at a depth of 360 meters, and one of the great events of modern history occurred.

Reynolds’ first move was to collect the oil that was being wasted, so he dug a large pond in the ground about 60 meters away from the camp and directed the oil there, then began the operation of building a valve for the well. According to the technical report of Samson, the geologist of the project, well number one reached oil at a depth of 1,179 feet and a 3.88-inch pipe was laid at a depth of 1,148-2 feet to make it possible to continue drilling in the Asmari oil reservoir. The depth of the second well, which reached oil ten days after the first well, was 307 meters. Thus, MIS entered the pages of contemporary history as the cradle of oil in the Middle East. Gradually, oil fields were discovered in the areas of Haftkel, Naft Sefid, Aghajari, Pazanun, Gachsaran and Lali, and the era of Iran’s industrialization began.

With the discovery of oil, Iran entered a modern era in its history, in line with this black substance, the development of parts of the country such as road construction, healthcare, educational centers, transportation, housing, etc. accelerated, and in proportion to the expansion of oil exploration, the elements of modernity and technology also intensified in the country, to the point that many oil-producing cities became symbols of religious, ethnic, and civilizational tolerance.