Saudi Arabia, Loser of Own Game

The oil price war initiated by Saudi Arabia is no oil war and is rather a kind of economic self-flagellation. Due to a calculation error and incorrect analysis, Saudi Arabia has started a game from which it will definitely emerge loser.

By relying only on their petrodollars, the Saudis intend to appropriate a share in today’s complicated and tumultuous world and they have stepped in a path whose end is not clear. They are set to meet an undesirable fate should day distance from economic and political wisdom.

Iran has delivered on its pledges to raise its oil output after international sanctions were lifted. The country managed to bring back its production to the pre-sanctions level shortly. Unlike Saudi Arabia’s childish and obstinate policies, Iran is pursuing strong logic and considers its strategic decision as non-negotiable. The only objective sought by Iran is to recover the market share it lost after the imposition of unjust sanctions. Although the Saudis still intend to take advantage of oil for political ends they must keep in mind that they will be the first victim of the fire they have set.

As most experts believe, Saudi Arabia will be the big loser in the price war due to the dependence of 90% of its budget on oil revenues while Iran has been weaning its economy of oil money.

The Saudi regime is currently running a $150 billion budget deficit and that is why it has turned to getting loans from banks, scrapping subsidies on basic commodities and raising taxes.

The Saudis are wondering what they are gaining in return for huge spending on the war on Yemen and proxy war in Syria.

It must be kept in mind that the Iranian society, unlike the Saudi society, is accustomed to hardships. The 1979 Islamic Revolution, eight years of Iraqi war (1980-1988), unjust sanctions, domestic and international crises have all pushed Iran to a point where it can face any kind of difficulties.

One cannot claim that Saudi Arabia will go bankrupt overnight, but its capacity in benefiting from petrodollars for administering its society and using it in its wars will decline quickly and the country is poised to face serious crises in coming years.

The Yemen and Syria war expenses, financing extremist groups as well as billions of dollars spent on arms purchase are just part of challenges faced by the Saudi rulers.

Iran is well aware of these facts and it is not bluffing when it says it will regain its market shares and it announces its policy based on its realistic knowledge of international affairs. This policy is supposed by political and economic logic relying on realism.

Iran to Build Petchem Hub in Austria

Iran is likely to build a petrochemical hub in Austria for gaining a better access to target markets in Eastern Europe, a senior Iranian petrochemical official said.

Managing Director of Petrochemical Commercial Company Mehdi Sharifi Niknafs said the company has recently inked a memorandum of understanding (MoU) with an Austrian company for establishing a petrochemical hub in the country aimed at accessing petrochemical markets in eastern European countries like Czech, Bulgaria, Slovakia, etc.

Sharifi Niknafs said petrochemical products will be exported in proportion to international province.

“Due to the imposition of special conditions upon us during years of sanctions, high exports costs are paid, but these problems will be gradually resolved in the light of the positive effects of the implementation of Joint Comprehensive Plan of Action,” he added.

IOOC to Boost Storage Capacity to 25 Barrels

Iranian Offshore Oil Company (IOOC) will boost its storage capacity to 25 million barrels by repairing 7 storage tanks by the year-end to March 20.

Managing Director of IOOC Saeid Hafezi told Shana that the company's storage capacity is currently at 18.2 million barrels which will cross 25 million barrels once it brings online 7 old storage tanks by the end of the year.

"For the time being, we have no plans to add to the number of our storage units," said Hafezi.

He said, however, that IOOC is planning to boost its crude oil output by injecting water to oil reserves in the fields it has developed. 

IOOC is one of the 6 subsidiaries of the state-run National Iranian Oil Company (NIOC) and operates oil production in the Persian Gulf.

Iran to Start Pre-qualification of IPC Bidders

Iranian Minister of Petroleum Bijan Zangeneh said the ministry is about to start "pre-qualification" procedures for the new petroleum contract model Iran unveiled late 2015.

Speaking with Shana, the official said no tenders will be held before the terms of Iran Petroleum Contract (IPC) are finalized.

Asked when the first version of IPC will be signed with a company, Zangeneh said a draft of the contract needs to be prepared before any contract can be signed and "I can give no specific time for that for the time being." 

He said the petroleum ministry will begin pre-qualification of IPC bidders' credentials in May.

"No tenders can be held before a draft IPC is finalized," the minister added.

He further said IPC is in fact a buyback deal with some modifications, adding, "We are moving forward based on a consensus for finalizing these contracts and the parliament has authorized the administration to pursue finalization of the contract."    

• NIGC Pitches 10 Projects to Foreign Investors at Neftegas 2016

National Iranian Gas Company (NIGC) presented a package of 10 gas projects up for grabs by foreign investors in a ban-free Iran at Russia's Neftegaz 2016 International Exhibition from April 18 to 21.

The presented projects are Urtshai underground gas storage facilities, Ghezel Tapeh underground gas storage facilities, a gas pipeline from central city of Damghan to northern city of Sari, Mahshahr Power Plant gas pipeline, Sahdegan Steel Company, Phase II of Ilam Gas Refinery, IGAT-11, IGAT-9, 10 gas pressure boosting stations, and Bidboland-Pataveh gas pipeline, said NIGC spokesman Majid Boujarzadeh.

The forum served as an efficient platform to discuss problems and prospects of oil and gas industry, and to exchange knowledge and experience in exploration, extraction, processing and transportation of fossil fuels.

Among participants in the exhibition and forum were members of the Russian government, heads of relevant ministries, well-known businessmen and experts.

Boujarzadeh said NIGC presented its latest developments and achievements at the showcase which grabbed a lot of attention among the visitors.

Tehran, Stockholm eager to expand energy ties

Iranian Minister of Petroleum Bijan Zangeneh said that Iran and Sweden are eager to expand cooperation on energy issues.

"Cooperation in the oil sector has been limited in the past," Zangeneh said after a meeting with Swedish Energy minister Ibrahim Baylan.

He added that Swedish companies can supply Iran's petroleum industry with the required state-of-the-art machinery.

The minister also said Tehran and Stockholm can cooperate in energy efficiency as well as in the petrochemical industry and production of industrial machinery.

In a December meeting with Sweden's Minister for Enterprise and Innovation Mikael Damberg, Zangeneh had said that the two countries can enhance their energy ties, adding that Swedish companies can supply Iran's petroleum industry with the required state-of-the-art machinery.

Iran Seeks Better Energy Ties with South Africa

Iranian Minister of Petroleum Bijan Zangeneh and South African Energy Minister Tina Joemat-Pettersson met in Tehran and exchanged views about cooperation in the oil and gas sectors.

Referring to his previous talks with the South African minister about broadening cooperation between the two countries, Zangeneh said: “Now that sanctions imposed against Iran have been lifted Iran’s conditions have differed too much from the past.”

He noted that South Africa was a major buyer of Iran’s oil in the past, expressing hope that trade relations between the two counties would increase as soon as possible.

Before this meeting, a memorandum of understanding was signed between Iran’s Research Institute of Petroleum Industry (RIPI) and South Africa’s national oil company PetroSA on cooperation about gas-to-liquids (GTL) technology and crude oil blending.

“RIPI and South Africa’s national oil company [have agreed to] cooperate in slurry reactor-bed GTL. Based on the MOU, PetroSA will invest in Iran in this field,” he said.

He said that refining technologies and crude oil blending system will be the bases of research and technology cooperation between the two sides.

The MOU was signed by Katouzian and Acting Vice President at Trade Supply and Logistics (TS&L) department of the Petroleum, Oil and Gas Corporation of South Africa (PetroSA) Ms Baxolile J. Zwane during a ceremony overseen by Iranian President Hassan Rouhani, South African President Jacob Zuma and Iran’s Minister Zangeneh.

RIPI has long embarked on studies about GTL and given the growing progress in this regard on global scale, it is seeking to update its technological knowhow and reduce the cost price of products.

Italy’s ‘Enel Trade’ to Buy Iran’s LNG

Italian company ‘Enel Trade’ in Tehran signed  an agreement for purchasing liquefied natural gas (LNG) from Iran.

During the visit of Italian Prime Minister Matteo Renzi to Tehran, managers of Italy’s Enel Trade and National Iranian Gas Export Co. signed an MoU that once finalized, will make Italy a client of Iran’s LNG.

Iran, so far unable to have its shares in the LNG market due to sanctions, is planning to make its presence known in new gas markets through signing contracts with international reputable companies.

According to Ali-Reza Kameli, Director General of National Iranian Gas Export Co., the MoU was signed in the presence of President Hassan Rouhani and Italian Prime Minister Matteo Renzi.

“The signing of the MoU with Enel Trade was the result of several months of negotiations with the Italian company and evaluating the potentials for long-term supply, information exchange, cooperation in the field of gas and LNG, as well as making use of benefits offered by educational courses between the two countries,” Kameli said.

He went on to add that Iran could export LNG to Italy in the long run provided that the country implemented various LNG projects and paved the ground for entering the LNG market.

As of yet, three LNG projects, including ‘Persian’, ‘Iran’ and ‘Pars’, have been established in the country, but Pars and Persian have stopped due to sanctions. Officials at National Iranian Gas Export Co. have announced that the removal of sanctions will further expedite the process of Iran’s LNG projects which are over 50 percent in progress.

Iran to Sell 700,000 b/d Crude Oil to Europe

Iranian Minister of Petroleum Bijan Zangeneh said Iran has signed a deal for the delivery of 700,000 b/d to European countries.

"The European Union regards Iran as a creditable and reliable partner for energy supply," said the Iranian official following a meeting with European Union Commissioner for Climate Action and Energy Miguel Arias Canete in Tehran.

He said the meeting was primarily about bolstering Iran-EU ties, adding that "They are highly interested in long-term partnerships with Iran and regard Tehran as a reliable and trustworthy partner for energy supply."

"Europeans can [always] count on Iran's energy resources," said Zangeneh highlighting over a century of energy supply by Iran without any bad records.

He said EU has indicated readiness to cooperate with Iran in energy sector, adding a course of dialogues will be arranged between Iran and EU for a better supply of oil and gas to Europe by Iran and investment of European companies supported by their governments in Iran's oil, gas and petrochemical industries.

Zangeneh said Iran and EU are expected to issue a joint statement for energy cooperation as well.

"Benefits play an important role in formation of relations and the goal of trading with Europe is winning benefits and Iran views Europe as a strategic partner," he added.

He said Iran has signed a deal for export of 700,000 barrels per day of oil to European destinations which is yet to be realized.

Regarding petrochemical exports, Zangeneh said most Iranian petrochemical companies are private companies but new opportunities will arise for them in the post-sanctions setting.

The Iranian minister the European energy commissioner’s presence in Iran indicates the Europeans’ willingness to broaden cooperation with Iran in the energy sector, energy supply and diversification of sources of energy. He noted that Iran views Europe as a strategic partner.

For his part, Canete said Iran’s liquefied natural gas (LNG) could become an instrumental element in Europe’s energy mix over the coming three to four years because Iranian officials are making efforts to compete three LNG facilities.

He said that LNG matches the European Union’s energy supply security.

He referred to challenges emanating from Europe’s dependence on Russia’s gas, adding that Iran can be a good option for supplying gas to Europe in the future. He noted that despite tensions with European countries, Iran never cut energy supply to this continent.

Zangeneh and Canete exchanged views about holding an energy trade forum next year in order to discuss the format of future energy deals.

Canete said it is inevitable to draw up more flexible oil contracts as oil prices are experiencing heavy fluctuations under the present circumstances. He said that more flexible deals will encourage European companies to invest in Iran’s upstream midstream and downstream projects.

Zangeneh and Canete also reached basic agreement for cooperation in peaceful nuclear energy projects.

Aghar Gas to Double Output

Iran’s annual growth in domestic gas consumption and its international obligations for exporting gas to Turkey, Iraq and other neighboring countries have made gas production capacity enhancement a top priority of the Ministry of Petroleum.

Iran’s Central Oil Fields Company (ICFC) accounts for more than 40% of Iran’s gas output. Not long ago this important company introduced opportunities for foreign investment in its gas fields within the framework of Iran Petroleum Contract (IPC), the new model of oil contracts Iran has developed to replace buyback contracts which are no longer attractive. The second phase of Aghar gas field is one of them.

Aghar gas field is located 110 kilometers southeast of the southern city of Shiraz and 35 kilometers southeast of the city of Firouzabad and adjacent to the city of Qir in Fars province.

Discovered in 1972, this gas field is administered by ICFC. So far, 16 wells have been drilled in this gas field, 13 of which are operating. It started production in March 1999. Natural gas and gas condensate produced in this field are delivered to Farashband gas refinery via two separate 90-km pipelines for processing.

Gholam-Hossein Montazeri, CEO of Zagros Oil and Gas Production Company, has recently said that the second phase development of Aghar gas field is on the agenda for doubling production from this gas reservoir to 40 mcm/d. Planning has been done for the second phase development of Aghar gas field which is the second largest after Kangan among ICFC fields.

The planned 200% increase in Aghar’s gas output will require certain facilities near Farashband gas refinery to handle processing. The gas produced by Aghar will be sent to oil fields in southern Iran, particularly Maroun oil field.

This gas field is equipped with wellhead installations, four gas gathering centers, a stream pipeline carrying gas from wells to central facilities and finally Farashband refinery, a gathering and separation center, slugcatcher, control room, pumping station, reception systems and pigging.

Aghar gas field has a production capacity of 95.22 mcm/d of natural gas and can produce 4,300 b/d of gas condensate.

Feasibility studies on Aghar gas field with the objective of updating previous studying models, including new information, completing previous studies, interpreting and analyzing petrophysical logs and modeling fractures have been concluded after four years under the supervision of the Technical Affairs Directorate.

The studies conducted on this field indicate around 40% increase in the gas reserves of this field.

If the culmination in the middle of the gas field is included, more than 71% of gas reserves in this field would be recoverable. Such conclusion is achieved following renewed examination of petrophysical parameters applied in previous studies and the results of well core studies.

Under natural conditions, given wellhead restrictions, the final recovery rate would be 34.7% with a sustained production ceiling of 22 mcm/d by 2023. The final recovery rate will reach 71.5% after compressors are installed in 2023.

Carrying out drilling for maintaining the production ceiling and enhancing recovery, conducting periodic static tests, appraisal drilling in the culmination, raising the field’s PGC to 3 mcm/d and drawing up an optimal scenario after making economic calculations for the application of compressor and drilling 6 new wells for reaching a daily output of 30 mcm/d are among the results of studies conducted on Aghar gas field.

Investment Opportunities in Ferdowsi Oil Field

More than 108 years of search in Iran for hydrocarbon reservoirs has ended in the discovery of big reservoirs like South Pars gas field and Azadegan oil field.

Iran has more than 100 oil and gas reservoirs, implying that the country has on average made an oil or gas find a year.

 But 50 years ago, a Swiss company made a discovery in the Persian Gulf that continues to remain unprecedented. It was the discovery of Ferdowsi oil field which contains heavy crude oil.

Ferdowsi oil field is located in the central part of Persian Gulf, more precisely east of South Pars gas field and close to Golshan gas field. It is some 190 kilometers far from Bushehr Port and some 88 kilometers from the coastline.

Ferdowsi gas field is a giant reservoir with some gas in its Dalan and Kangan layers. It is the largest heavy crude reservoir in Iran and in the Middle East region.

Well number one of this field was spudded in 1966 in order to identify the heavy crude layers. Well number two was drilled in 1967 in order to examine the potential of gas layers.

Based on studies conducted on well numbers one and two, a major study was conducted by Swiss company Adax for estimating crude oil reserves in Ferdowsi field. The results indicated existence of huge crude oil deposits in this field. According to the studies, the field is estimated to contain 31 billion barrels of oil in place with a production capacity of 70,000 b/d. The Fahlian reservoir horizon measures 20 kilometers long and 13 kilometers wide.

After the Swiss company conducted its study on Ferdowsi field, due to the significance of the high heavy crude oil reserves and for acquiring more precise information for master development plan, National Iranian Oil Company (NIOC) instructed Petroleum Engineering and Development Company (PEDEC) with a directive to carry out 3D seismic test and drill two appraisal wells in the field for a more precise assessment and taking samples from heavy crude layers for necessary tests before submitting a master development plan to NIOC.

Drilling of a third well in Ferdowsi field with the objective of assessing oil and gas layers started in March 2010. Initial studies on the heavy crude oil layers showed that the five layers of the field, including Kajdomi (Bourgan), Daryan, Gadvan (Khaleej), Fahlian and Sourmeh (Arab) hold abundant crude oil with different AFP degrees.

Gas Potential in Lower Layers

NIOC drilled a second well (F2) to further examine gas potential in the Dalan, Kangan and Faraqoun layers in 1967 ascertained the existence of gas in these layers.

In 2005, Adax made a reevaluation of Ferdowsi oil reserves through the two wells and estimated the field to contain 35 billion barrels of oil in place with a daily production capacity of 70,000 b/d. The recovery rate of Ferdowsi field was estimated at 6 percent.

Development of Ferdowsi heavy crude oil field is under way in order to acquire technology for the recovery of heavy crude from fractured carbonated reservoirs with focus on practical research in order to choose the most appropriate method of heavy crude recovery.

This field was introduced as an opportunity for foreign investment in Iran during a conference for unveiling Iran Petroleum Contract (IPC), the new model of oil contracts.

Full development of Ferdowsi field will take five to seven years. Given significant oil and gas deposits in Ferdowsi field and the cost-effectiveness of its development, this field will be attractive to many foreign companies. Therefore, most of them are waiting for the finalization of the master development plan (MDP) of this field in order to launch serious negotiations.

NIOC is pursuing development of Ferdowsi oil field under a buyback deal. Due to the specialty of technology applied for the development of heavy crude fields and application of specialized tools, NIOC is set to award the development of this field to foreign companies under a buyback deal. Throughout its negotiations with foreign companies, PEDEC has provided them with general information about the field ,and it has promised to give them more information if a memorandum of understanding (MOU) is signed between the Iranian and foreign parties.

Ferdowsi oil field will be supplying 10,000 b/d of oil in the first phase and more than 300,000 b/d of oil after full development.

Technology Transfer

Since several decades ago, the world got to know heavy oil production and development of technologies for its transfer and refining. In Iran, studies have started as oil fields containing heavy crude have been explored. Today, technologies have been developed for production, transfer and refining of crude oil although technological issues are still being updated in this sector.

Fort its part, Iran has achieved technology for extracting heavy crude. Iranian petroleum industry specialists have developed a variety of lab-scale methods for heavy crude oil production, transfer and refining. Some of these technologies have already been applied and heavy crude oil fields are hoped to be developed soon as foreign companies are expected to step in to develop oil fields like Ferdowsi.

Iran Plast, Opportunity for Plastic Industry Globalization

Exhibitions across the world are a venue for countries to showcase their industrial potentialities. One may say that putting on exhibit stimulates the sense of rivalry among producers. Petrochemical industry is no exception to this rule.

Iran Plast 10 created a very good opportunity for the introduction of Iran’s industrial and technological capabilities in the petrochemical sector to the world in light of interaction between Iranian and foreign entities.

However, Iran Plast 10 was marked by several features, including the presence of 500 foreign companies. The reason for such strong presence could be attributed to improvement in the international atmosphere prevailing over Iran.

Iran Plast 10, which was held April 13-17, let Iranian producers showcase their latest plastic and polymer products.

Petrochemical Industry; Symbol of Economy of Resistance

Addressing the inauguration of Iran Plast, Iran’s First Vice-President Es’haq Jahangiri said: “Petrochemical industry is the genuine symbol of the Economy of Resistance and it has to implement these policies.”

“The most important challenges to Iran’s economy are unemployment, public welfare, development of Iran and in other words the economic strength of the country,” he said.

Jahangiri said Iran enjoys a special position in the region, adding: “Despite unrest and insecurity in the region, Iran is the focal point of stability and the calm spot in the region.”

He highlighted Iran’s huge oil and gas reserve as natural attractions of the country, saying: “Iran is not only able to overcome its economic challenges, but also it can turn into a center of development in the world and give a push to the world economy.”

“Iran’s civil and popular society has accepted the fact that the country’s top priority is economy. The Economy of Resistance is a common strategy recognized by all people. After access to joint strategy we have to adopt shared orientation towards it,” he said.

Jahangiri said Supreme Leader Ayatollah Ali Khamenei has assigned the government and the first vice-president to handle the Economy of Resistance and settle disputes on orientations of this type of economy.

He said a main feature of the Economy of Resistance is reliance on all potentialities of the country, adding: “This country enjoys great potential particularly in the petrochemical sector and by benefitting from experiences and specialists we have to get a good market overseas.”

Jahangiri said the Economy of Resistance must be outward-looking and interact with the world.

“Iran’s petrochemical industry exported some $10 billion worth of products last [calendar] year and undoubtedly this figure will increase in the [current calendar] year 1395 (which started on 20 March 2016),” he said.

“The Economy of Resistance does not restrict Iran’s economy. The necessity for the economic development of the country is interaction with the world and attraction of foreign investment so that we could play a complementary role in the global economy,” he added.

Jahangiri underscored the need for paving grounds for foreign investment in the petrochemical industry, saying: “The Ministry of Petroleum must have a transparent policy in feedstock pricing and supply in order to secure a reliable market for foreign investors. With strategic and appropriate planning in the petrochemical industry we can witness development and enhanced production capacity in [the petrochemical sector].”

He said that some $75 billion is planned to be invested in Iran’s petrochemical projects, adding: “This industry has a big market from which investors can benefit. I hope that Iran’s petrochemical industry would get the top ranking in the world in exports and petrochemical production.”

Petchem Feedstock

Iran’s petroleum minister Bijan Zangeneh invited foreign companies to invest in Iran’s petrochemical industry, saying: “Iran is in appropriate conditions in terms of feedstock supply for petrochemical units.”

“This year’s exhibition is being held under special circumstances. The sanctions have been lifted and we are close to implementing the Supreme Leader’s policies on the Economy of Resistance,” he said, adding: “Maybe the most important section in the policies of the Economy of Resistance would be to prevent raw materials sales and completing value-added chain in downstream industries.”

Zangeneh said Iran’s petrochemical industry saw its first jump under reformist former president Mohammad Khatami (1997-2005).

“The value of petrochemical products has reached $20 billion from $1 billion a year, and today after implementing all projects in the petrochemical industry this figure will reach $40 billion in 2025. To that end, we need $50 billion in investment,” he added.

Zangeneh said the most important section in the petrochemical industry is long-term, sufficient and competitive feedstock supply.

“In my view, Iran is in proper conditions in terms of gas feedstock supply. Favorable conditions have been created in the country in terms of production of ethane and LPG. For instance, in South Pars alone, there is capacity for 14 million tons of liquefied gas a year. Petrochemical industry is a capital and technology intensive industry. The financial resources needed for this industry must be provided by National Development Fund of Iran and foreign resources,” he added.

“In my capacity as the Minister of Petroleum, I hereby invite all foreign investors to cooperate in downstream and upstream sectors of petrochemical industry like olefin units,” said Zangeneh. “The future of petrochemical industry depends on the development of high value-added industries like olefins chain. The Ministry of Petroleum is currently providing special support for PVM (propylene via methanol) projects. We are also interested in creating six to seven petrochemical hubs across the country in cooperation with the private sector for transforming gas into propylene.”

Zangeneh said National Petrochemical Company (NPC) has taken good steps for developing MTP technical savvy and technologies needed by mid-stream and downstream industries. He added that Iran is preparing new plans for the development of Assaluyeh and Mahshahr hubs.

He referred to the launch of new units like Phase 2 of Pardis Petrochemical Plant, Marvdasht Petrochemical Plant, Kaveh Petrochemical Plant, Mahabad Petrochemical Plant, Kurdestan Petrochemical Plant, Phase 2 of Kavian Petrochemical Plant, Entekhab Petrochemical Plant, Takht Jamshid Petrochemical Plant and Dalahou Petrochemical Plant by March 2017, saying that these new plants will bring about a 25% growth in Iran’s petrochemical output capacity.

Stressing that the petrochemical industry currently needs a regulatory agency within the government, Zangeneh said: “Such a regulatory body will be of great help in guaranteeing competition and avoiding negative competition between petrochemical companies.”

12,000 Petchem Production Units

Mohammad-Reza Nematzadeh, Iranian minister of industry, mine and trade, also highlighted the growing trend of downstream industries, saying 12,000 petrochemical production units are currently operating in the country.

He said that Iran Plast can be instrumental in promoting Iran’s downstream petrochemical industries.

Nematzadeh called for the development of trade in the petrochemical industry in the general sense of globalization.

“Today, we are having a desirable growth in downstream petrochemical industries and currently 12,000 production units are operating in this sector, 8,000 of which are active in polymer,” he said.

Nematzadeh highlighted shortcomings in the downstream industries with regard to designing, engineering, reference labs and scattered units, saying: “Ministry of Industry, Mine and Trade is ready to help small-sized units in the downstream petrochemical industries to become united because they are facing problems in marketing and financing due to their small size.”

He said that the downstream petrochemical sector is facing shortcomings due to international sanctions of the past years, adding that the value chain has to be completed over the coming two to three years.

Iran Polymer Output to Hit 12mt

Marzieh Shahdaei, head of National Petrochemical Company, said the production capacity of polymer products in Iran currently stands at over 7.4 million tons, which would reach 12 million tons by the end of the Sixth Five-Year Economic Development Plan.

She said that Iran Plast is the most specialized regional and international specialized event in Iran.

Shahdaei said Iran Plast will be held in October in the coming years, adding that 25 foreign countries were represented in Iran Plast 10 which was held on 25,000 square meters of land. She added that 8,000 square meters was occupied by foreign companies.

She also said that 13 European, 10 Asian and two African and Oceanic countries were represented in Iran Plast 10.

Shahdaei said 200 business delegates from 17 countries were to visit Iran Plast 10.

She also referred to the planned startup of three polyethylene units in Kurdestan, Mahabad and Lorestan in the current year and said: “By launching these projects, 1.2 million tons of production will be added to the current capacity.”

“Polymer industries must have strategic communications with global car markets, packaging and agriculture industries and particularly target neighboring markets,” she said.

Referring to the NPC’s experiences of management of petrochemical projects, Shahdaei said: “The company plans to negotiate with international companies, consider new downstream projects, produce feedstock for downstream industries and transfer technology.”

Iran Plast, a Launch Pad to World Markets

Iran Plast 10 was inaugurated in Tehran in the presence of Iran’s first vice-president, minister of petroleum and industry, trade and mine as well as senior lawmakers. Such high-level presence in the inauguration proves the significance of this event for both government and parliament.

Petrochemical sector accounts for only a five-percent share in Iran’s oil and gas production, but in non-oil exports, this sector has a more than 40% share with the production of 47 million tons of petrochemicals. That is to say, it is the highest value-added and the biggest increase in the gross domestic product (GDP).

Since 70% of the value-added of petrochemical industry is in downstream industries, by developing this sector the country would be able to gain more than $48 billion in revenues every year. That would be half of the revenues from crude oil exports.

Procurement and conversion of raw materials like methane, ethane and crude oil to such products as bags, shoes and apparel, electric and non-electric equipment for kitchen, car parts and relevant equipment as well as what we see around ourselves like desks, chairs and decorations, building materials, medical equipment and computers are all products of petrochemical industries.

Despite its relative advantage in the petrochemical industry, Iran has not had a continuous supply chain in this sector. Raw materials are often sent to industrialized countries like China, Japan and European Union member states before being sold back to Iran in the form of products at skyrocketed prices. Of course, it is noteworthy that that with the development of upstream and mid-stream petrochemical industries in recent years, important steps have been taken for completing the value chain in this industry. However, the main revenue generator of this industry in Iran is selling raw materials. According to available data, the petrochemical industry is able to realize a 70% value-added. The petrochemical industry has not been developed at the same pace as upstream industries.

The aforesaid process has taken shape while the competitive advantage of petrochemical products particularly in the downstream sector against oil and gas sales has pushed this group of industries into bold relief in the eyes of politicians. Given the significant role of these industries in the economic and social development and the existence of potentialities in the country, the petrochemical industry needs to be taken into consideration more than before, in light of remarkable capacities for domestic and foreign industries.

Since Iran’s petroleum industry, particularly its petrochemical industry cannot keep working without interaction with the world and competition with foreign companies from across the globe, an important issue would be to make efforts to update this industry.

A good opportunity for interaction with domestic and foreign companies in every industrial sector would be to hold international exhibitions. As far as Iran’s petrochemical industry is concerned, Iran Plast can be viewed as the most important event in this industry. This biennial event hosts hundreds of Iranian and foreign companies. This year, it was held April 13-17.

Iran Plast Flooded by Foreigners

Iran Plast 10 was attended by 900 Iranian and foreign companies from 25 countries, up from 760 in Iran Plast 9. Therefore, the record of foreign presence in Iran Plast 10 was smashed.

Italy, Austria, Turkey, Taiwan, South Korea, China and India had pavilions at the exhibition while Britain, Germany, Spain, Greece, the Netherlands and the United Arab Emirates attended independently at Iran Plast 10.

Iran Plast and similar exhibitions represent great potential. Such events become a venue for trade transactions, closer cooperation between domestic and foreign businesspeople, display of domestically produced raw materials and foreign machinery as well as introduction of opportunities for investment.

Given their great potential, such exhibitions are expected to turn into venues for attracting foreign investment. They must not be limited to becoming only a venue for foreign companies to showcase their commodities, components and machinery.

Iran Plast and similar events could serve as a center for bringing together domestic and global potentialities for further development of petrochemical industry with a view to providing more extensive services.

The presence of foreign participants in this exhibition could be examined from two aspects: First is long-term presence in Iran’s market, contribution to projects and investment in different sectors and upstream and downstream industries, second is selling machinery required in the downstream industries, raw materials like more advanced polymers as well as different industrial components.

The fact is that the most important part of foreign companies’ presence in the oil, gas and petrochemical industries is related to upstream industries, oil and gas recovery, petrochemical, chemical and polymer production. That requires high technical and technological savvy as well as high financial capacity.

This sector has independently failed so far to attract international investment mainly due to domestic and foreign restrictions. Unjust international sanctions imposed by some Western countries have been a major obstacle to investment in upstream industries in Iran, restricting Iran’s potential for rivalry with other countries in the region.

Foreigners Eye Iran Petchem Market

By Shiva Saeedi

Iran Plast 10 was held April 13-17 in Tehran. This specialized event, which used to be held twice a year, is now being held on an annual basis. The lifting of sanctions has pushed Iran with a population of 80 million further to bold relief for foreign companies. A tour of pavilions of the exhibition bears proof to this fact.

It was raining, but the exhibition was flooded by visitors. We choose to go to Hall No. 38 where mainly European companies from Switzerland, Germany and Austria are putting their achievements on exhibit.

Iran Meeting Expectations

Austria’s pavilion is also eye-catching in the exhibition. The sales manager of Wittmann company is showing catalogues to some customers.

Wittmann Battenfeld GmbH offers a wide product range encompassing the HM (hydraulic moulding) series, TM (toggle moulding) series, the Vertical machines and the machines of the new Power Series with EcoPower for fully electric machines, MicroPower for micro-injection moulding, MacroPower for large machines as well as the new servo-hydraulic Smart Power.

Additional strengths lie in the fields of automation technology and special techniques such as AQUAMOULD and AIRMOULD, PIM Powder Injection Moulding, LIM Liquid Injection Moulding, IML Inmould Labeling, the VARIOMOULD variotherm process and the CELLMOULD structural foam process.

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Wittmann’s sales manager says with enthusiasm that he is experiencing his first ever presence in Iran.

“But my company had attended Iran Plast years ago. We have been here for 30 years. I think this exhibition has been very positive for us. We have already signed several contracts,” he said.

He gave a positive assessment of his activities in Iran, adding that Iran Plast has met Wittmann’s expectations.

He noted that he has held fruitful talks with Iranians. He said Iran is a hi-tech country, adding that his company is targeting Iran’s market.

Regarding petrochemical industry market in Iran, he said: “We have divided the market into two sections: the ordinary section and the specialized section. The second section is our desired market which has so far met our expectations.”

Regarding differences between petrochemical market in Iran

Ideal Opportunity

Companies from the United Arab Emirates (UAE), India and Turkey are showcasing their achievements in other booths.

Precision Plastic Products Co. (L.L.C.), based in Dubai, is represented there. This company has so far had several small-sized projects in Iran and is now looking to broaden its presence with a view to a brighter future.

“I think that Iran Plast this year is filled with much more enthusiasm. More Iranian companies are referring to us and are willing to broaden their activities with us. The conditions are more prepared than in the past, for our presence in Iran,” the company’s representative at Iran Plast said.

“I believe that conditions have improved for investment in Iran because people are more hopeful. Of course there are some challenges like payment and forex rate, but there are more solutions for the expansion of trade ties after the removal of sanctions. In my view, Iran’s market is very broad and there are more chances for development when compared with markets in Saudi Arabia and the United Arab Emirates, because Iran has been far from the world for years and there is now an ideal opportunity for boosting its activities,” he said.

The Precision Group, comprising of two companies – Precision Dies & Tools Manufacturing Co. (L.L.C.) and Precision Plastic Products Co. (L.L.C.) - was established in Dubai, United Arab Emirates, in 1984, and is an ISO9001-2008 certified pioneer and market leader in the manufacture of aluminum extrusion dies, tools, press tools, blow moulds and injection moulds, precision moulded plastic products and thermo-formed industrial packaging.

Successful Deals

Unlike other pavilions, Germany’s pavilion is quiet and calm. A chat with some booth holders shows that most companies present there are among Iran’s longtime customers and they have their own market. Most of them had come to Iran before the exhibition started and they had held their negotiations and they are now showcasing their equipment and products.

Baumüller’s representative at Iran Plast is a man in his fifties. He speaks very calmly to visitors. After ten minutes of negotiations with a five-member group, they decide to resume talks in coming days.

“We were in Iran for 15 years, and then we left Iran’s market,” he told Iran Petroleum.

“Iran’s petrochemical industry has the chance to grow quickly; therefore it is an ideal market for us,” he added.

He said he was making his first visit to Iran Plast, saying he has had fruitful talks and many industrialists have contacted him.

He refused to provide any figure about the volume of his company’s transactions with Iran during the pre and post sanctions.

“The volume of our contracts has become bigger and the reason is quick growth of the market,” he said.

He said Iran’s market 25 years ago was not as big as it is now and Iran was not so involved in auto making industry.

He said that his company has also been active in Iran’s neighboring countries, but has preferred to focus its activities in Iran, Turkey, India, China, South Korea and Japan.

Asked to compare Iranian and Turkish markets, he said: “Iran’s market is more attractive than Turkey’s because Iran has machinery with better performance. In Iran’s market, only low-cost machinery is not used and manufacturers are looking for better quality. For this reason we are willing to bring technology into Iran. Iranian companies have very intelligent and educated manpower, which is one of important advantages of Iran’s market. I think that these problems will have been resolved in the upcoming months and we will be able to fare better than before.”

Baumüller is an international automation partner for mechanical engineering. Components offered include automation, drive electronics, motors and software, and they excel in automation, software, sheet metal and cable solutions. Baumüller services are applicable to the printing, plastics, textile, packaging, bag manufacturing, extrusion, injection molding, drill press, and many other industries. 
Turkey-Iran Rivalry

In addition to Austrian and Swiss companies, Indian companies have also their special visitors. Some Indian companies have already established representative offices in Iran. Yashar Ahmadi, chairman of Board of Directors of a company active in tire making, printing and manufacturing. He represents several companies, including an Indian.

Regarding his Indian partner’s presence in Iran Plast, he said: “This company has installed around 20 machines in Iran and has been active in Iran for 15 to 17 years. Due to sanctions, its activities had been slowed down, but the company is now decided to expand its activities. Iran’s market is now headed towards quality and we predict Iran’s market conditions to get much better.”

“Of course, we are behind Turkey and Saudi Arabia in machinery. But if we want to give an estimate, we can reach Turkey in five to six years,” said Ahmadi.

Propylene Output Growth Eyed

Iran’s petrochemical sector will take a sigh of relief and see rejuvenation after all export restrictions stemming from banking, insurance; transport and transaction sanctions have been lifted following the implementation of the country’s landmark nuclear deal with world powers.

Furthermore, the lifting of sanctions will accelerate attraction of foreign investment and speed up completion of projects.

One of the most important plans envisaged by Iran’s petrochemical industry has been the development of value-added chain in this sector in line with policies of the Economy of Resistance instructed by Supreme Leader Ayatollah Ali Khamenei. In this regard, Iran should call a halt to its sales of raw materials in the petrochemical sector in the coming years. To that end, one of future strategies of petrochemical industry over the coming 7 to 8 years would be focus on enhanced propylene production.

To that effect, Iran’s petrochemical industry will try its best to convert most of its gas and methanol to propylene.

Iran is producing a large amount of ethylene and has access to big volumes of ethane in South Pars gas field. Ethylene and polythene productions also stand high in Iran.

But for each five million tons of polyethylene, Iran has only one million tons of propylene while most downstream industries need propylene for their development plans.

All chemicals and composite polymers like polyurethane are dependent on propylene. For instance, production of chemical substances like polycarbonate requires importing phenol and acetone. Both these materials need to be produced from propylene.

Given the significance of producing propylene from gas and methanol, the Petrochemical Research and Technology Company (PRTC) held a seminar under the title “converting gas to polypropylene” on the sidelines of Iran Plast 10.

Petrochemicals, Key to National Economy

Mohammad Hassan Peyvandi, deputy head of National Petrochemical Company (NPC), said at the seminar that the company is determined to concentrate on the development of technical savvy for developing the country’s petrochemical industry “because petrochemical sector is the basis of the country’s economy and development and is highly job creative.”

He said that Iran is currently producing propylene at 99% purity.

“Many maintain that higher methanol production poses a threat, but I do not agree with this view because in my opinion if we manage to have the top rank in production, it will generate value-added for us, particularly in labor force sector,” said Peyvandi.

“Of course, the point to be reflected upon is that all units will not reach the stage of production. I reiterate once more that being the center for propylene production is by no means a negative point because we have to accelerate development in the petrochemical industry,” he added.

Peyvandi said certain issues require a look beyond domestic needs.

“Supplying polypropylene feedstock to downstream petrochemical units is the top priority of petrochemical industry in the country. Due to access to the world’s largest gas resources, Iran has abundant methanol. By launching a semi-industrial unit with a capacity of 350 million tons a year, we will convert methanol to polypropylene which is of high value,” he added.

Peyvandi said seven packages of Western technological knowhow given to Iran before the imposition of sanctions for the production of methanol, low gas prices and extensive financing by China let Iran hold 5 million tons of methanol. Once other petrochemical units become operational, he added, the relevant capacity will enhance at least 19 million tons.

“It can be argued that 24 million tons of methanol will be produced over the coming five years. This methanol should be converted into products of high value-added. Therefore, a semi-industrial pilot unit with a capacity of 350,000 tons a year was designed in the first step and the purity of propylene derived from methanol has been brought to 97%. This purity will soon reach 99% after catalyst studies are completed at PRTC and then we can convert propylene to polypropylene which is a substance of high value for industry,” said Peyvandi.

“Since the government is authorized to invest in modern technologies we have got permit from the petroleum minister for building a plant to convert methanol to polypropylene and we hope that this project would be finalized after approval by the Economic Council,” he added.

Big Jump in Mideast Methanol Production

Zohreh Majedi Asl, expert with PRTC, said: “It is predicted that a big jump would be made in methanol production capacity in the Middle East as of 2019, while demand will not change significantly.”

According to her, methanol production capacity at petrochemical plants in Iran currently stands at 5.16 million tons a year, which will reach 21.24 million tons after new projects become operational.

Noting that propylene is mainly used for producing polypropylene, Majedi Asl said polypropylene prices are forecast to jump significantly in coming years.

She said that the technical savvy for propylene via methanol (PVM) process has been indigenized by PRTC, adding: “Low feedstock prices and easy access to technical savvy, low-pressure process and appropriate temperature, fixed bed reactors and proper reaction control are among advantages of this method.”

K2016 and Iran-Germany Economic Ties

Germany is the largest economy in Europe and is one of the top economic powers in the world. It ranks first in terms of exports in the world. Germany’s economy relies on services and industry that makes up more than 99% of its gross domestic product (GDP).

Every year, Iran is importing most of its commodities from this country. The most important issue in industrialized countries is their access to raw materials and energy sources. These countries also heavily depend on consumer markets for the survival of their industrial exports.

When it comes to bilateral trade relations, we see that Germany is instrumental in Iran’s trade transactions. This country accounts for 5.5% of Iran’s trade transactions. The main reason is that imports from Germany stand high and according to official reports Germany has been among the top five countries importing commodities to Iran.

Over the past century, Germany has been displayed its capabilities and cutting edge technologies by holding international exhibitions. One of these annual exhibitions has been K plastics and rubber exhibition. Based in Düsseldorf, K exhibitions have been held every three years since 50 years ago. The exhibition organizers take advantage of every opportunity to promote it. Since after China, Germany was represented the most at Iran Plast 10, K exhibition organizers decided to hold a seminar on the sidelines of Iran Plast in a bid to benefit from this golden opportunity for convincing more companies to attend. The Düsseldorf international exhibitions company in cooperation with its representative agency in Tehran (Foujan Rahbaran Ati) held a seminar on the second day of Iran Plast 10 to introduce K plastics and rubber fair.

The speakers at the seminar were Erhard Wienkamp, Member of the Management Board at Messe Düsseldorf GmbH, and Ulrich Reifenhäuser, Chairman of the Exhibitor Council for K2016. They spoke about K2016 and Germany’s trading with other countries in plastics industry.

Wienkamp echoed a phrase from Iran’s Minister of Industry, Mine and Trade Mohammad-Reza Nematzadeh on the fact that the idea of Iran Plast came from K exhibition of Dusseldorf. He expressed happiness about this issue and said: “This year, we expect more than 3,000 companies to attend the K exhibition. Among them 60% will be from foreign countries including Iran that would have six booths on more than 700 square meters.

He said that motto chosen for K 2016 in Düsseldorf from 19 to 26 October will be "Plastics shape the future". He added that the K show will put on exhibit machinery, equipment, raw materials, auxiliary materials, half-finished products, industrial compounds, upgraded plastic products and services. He said that K2016 has been promoted on social media, adding that potential Iranian visitors could purchase ticket for the exhibition in Tehran.

For his part, Reifenhäuser said Germany will take back its share of Iran’s market from Chinese companies.

Reifenhäuser, who is also member of the Association of Petrochemical Industry Machinery in Germany, said: “We will take back our share from Chinese companies in Iran’s machinery market.”

Asked if German plastic machinery companies are determined to win back their share in Iran’s petrochemical and plastic industries market now that international sanctions have been lifted on Iran, he said: “I am well aware of this issue and the reason for the participation of the Association of Machine Makers at Iran Plast 10 is to take back its share in Iran’s market.”

“German machine makers intend to become once more the largest exporter of plastic injection machinery as well as machinery related to downstream petrochemical industries to Iran. I have to highlight this point that the bargaining chip wielded by German machine makers for presence in Iran’s market is the high standard quality of machinery manufacturing compared with other countries in the world,” he said.

When asked to comment on the Chinese companies’ taking advantage of years of sanctions to replace German machine makers and win big shares in Iran’s market, Reifenhäuser said: “In terms of standards and quality, Chinese machine markers could be never compared with German machine makers.”

He expressed surprise at news that Iranian machine makers have proposed to make joint ventures with German machine makers so that Iranian companies would be able to transfer technology from Germany. “I am surprised at this proposal because joint venture between Iranian and German machine makers has never existed.”

He added: “The most important reason is the difference in the level of technologies and standards between Iranian and German plastic industry machine makers and we have to acknowledge that German machine making companies enjoy the highest standards among all machine making companies in the world.”

Also asked if German machine making companies that have intention of returning to invest in Iran’s plastic and polymer machinery are not worried about the re-imposition of sanctions, he said: “We are by no means worried and that’s why we are in Tehran. However, I have to note that despite the announcement of lifting of sanctions on Iran, financial and banking sanctions have not yet been fully lifted and there are still restrictions for banking and financial transactions between Iranian and German machine making companies.”

He added: “One of the most important challenges to machine making industry in Iran and the presence of brand proprietors in Iran is that the market is not competitive because the presence of some dealers and intermediaries would block direct contact between producers and consumers in Iran’s market.”

However, he said, the prospects are bright for cooperation between Iranian and German machine making companies.

“Given the history of the two countries and Iran’s young population, we expect growing demand in Iran’s machine making market in the long term,” added Reifenhäuser.

Among domains of cooperation between Iran and Germany, he cited production without waste, manufacturing light machinery, cyber production system, using raw polymer materials and providing better access.

Reifenhäuser also referred to the story of plastics and said: “The most important reason for claiming success is economic progress and development.”

He said that the Asian region is the top consumer of plastics in the region with a 46% share, 26% of which belongs to China.

Germany has a 24% share in the global plastic industry machinery exports, followed by China with a 13% share.

Reifenhäuser also referred to wastes, saying: “The reason for the production of wastes after plastic consumption stems from its long life and its irregular performance

RIPI: From Coking to NanoPad

Iran’s Research Institute of Petroleum Industry (RIPI) is well known to those involved in the oil and gas industries. Most modern technologies related to Iran’s energy sector are developed at this institute which has three departments – upstream, downstream and environment.

In an interview with Iran Petroleum, President of the Downstream Department of RIPI Mansour Bazmi outlines the most important projects under way in this sector.

Q: Would you please tell us about the Downstream Department of RIPI?

A: The Downstream Department comprises catalyst research center, development of oil refining and processing technologies, development of gas refining and transmission technologies, development of chemical, polymer and petrochemical technologies, devilment of equipment processing and technology, nanotechnology center as well as Center for Kermanshah Oil Research and Technology Development. This department was very active notably in the calendar years of 1393 and 1394, and it operated a variety of projects. Besides contributing to self-sufficiency and upgrading petroleum industry knowhow, these projects annually save millions of dollars or generate revenues after being internationalized.

Q: One of your recent achievements was indigenization of coking technology. Would you please explain about it?

A: One of the most significant projects of this department last [calendar] year was process coking knowhow which helps produce coke from refinery residues. Coke is in fact made from what is sold today on the market under the name of fuel oil. Currently across the globe, oil companies favor a decline in their fuel oil production. A common international method, used particularly in the US, is delayed coking whose objective is to transform refinery residues which have no significant value to products of higher value. In Iran, like everywhere else in the world, fuel oil is not consumed largely because domestic power plants also run on gas. Meantime, low-sulfur fuel oil has many customers in the world and sells well. Of course, Iran’s fuel oil does not have such features. Therefore, it would be more useful to convert fuel oil into products of high value. All refineries in Iran are producing fuel oil. Even in our modern refineries fuel oil production has not been reduced to zero. Through delayed cooking, we can produce middle distillates like kerosene, gasoil and naphtha which is used as feedstock for gasoline production.

Furthermore, this process helps us produce some sort of coke that is needed in the aluminum manufacturing industry. Half a ton of coke is used for producing one ton of aluminum. Currently this amount of coke is purchased from other countries. Therefore, Iran’s aluminum producing industry currently depends on this coke. By implementing this project Iran will be able to transform fuel oil to middle distillates and become self-sufficient in coke production in the near future.

Q: What are RIPI’s plans for industrialization of delayed coking?

A: This project was implemented in collaboration with IMIDRO (Iranian Mines & Mining Industries Development & Renovation) and we acquired the technical savvy for this process through a three-year-long project. Its super pilot was inaugurated at RIPI. In this project we produced coke and middle distillates. The Downstream Department plans to design in cooperation with IMDRO the first industrial coking plant near Abadan oil refinery in Arvand zone. Allotment of land for these industrial installations has been done and environment and soil studies have been carried out. RIPI, IMIDRO and a foreign company are currently conducting technical and economic feasibility studies.

Q: One of your important projects has been demercaptanization of gas condensates. Would you please explain about it?

A: Following the green light from the Iranian petroleum minister (Bijan Zangeneh), the first industrial unit of demercaptanization of condensate (DMC) was planned to be built in Phases 2 and 3 of South Pars [gas field]. This unit is being designed by RIPI and supported by National Iranian Oil Company and Pars Oil and Gas Company. Iran is facing problems in selling gas condensate due to the bad odor released from methyl mercaptan (methanethiol). Iran is selling condensate at much lower price than Qatar because of mercaptan. Should Iran fail to sell condensate at proper price it will have to reduce production in some refineries. But with the operation of [DMC] project, 80,000 barrels of condensate produced at Phases 2 and 3 of South Pars will be refined and then will be sold at better price and more easily. This project

scheduled to come on-stream in the calendar year 1395. Qatar is refining gas condensate by applying US technology, but in Iran this process is to be done by RIPI-developed technology. The product we would provide to NIOC will be much better than Qatar’s condensate in terms of quality. The mercaptan content in our gas condensate will be much lower than in Qatar’s and we could win many customers for our sweet gas condensate in the future. That would be a breakthrough in the South Pars refineries. This project is under way at a cost of 70 to 80 million Euros. It is being operated by RIPI within the framework of a consortium. The licensing and engineering affairs are up to RIPI. Investment in this project will return one year after its implementation.

Q: Another important project operated by this department is designing and building desalting units. Would you please provide more details?

A: Another important project operated by this department in the last year was implementing desalting processes. A bottleneck with crude oil production is the issue of designing and building desalting units. Desalting units do not cost much, but they are very important units. Without these units, crude oil could not be exported. Crude oil will become exportable after its water and salt contents are determined. Since desalting is a requirement for crude oil production in the country the Iranian petroleum minister insists on reducing the duration of indigenization of the aforesaid process. The bulk of crude oil we produce is salty. In other words, water and salt come out in large quantities along with crude oil. We need to have desalting units in our installations on the ground so that we would supply oil on the market with acceptable quality. On the other hand, the licensing and the basic design of desalting units are often handled by foreign companies. But the Downstream Department of RIPI in the years 1393 and 1394 built and launched a desalting pilot and developed software for designing this equipment. After the desalting pilot was launched, a foreign company reputed in desalting helped RIPI to promote this savvy in Iran and neighboring countries. We had negotiations with foreign companies throughout this project and we also received proposals from inside. We also plan to negotiate with neighboring countries like Iraq that has good potential for this purpose. Then we will enter into talks with other countries with necessary potential.

An important feature of this project is its modular feature. Desalters are often built as a unit on site. But in this project, a modular desalter is built and installed. It means that it is built at factory and then installed on the site. Another feature of this desalter is that construction duration is cut by half. Furthermore, maximum share is given to domestic manufacturing. Construction of the first module has been offered to an oil company and for the first time designing and construction of crude oil desalting module will be implemented in 1395.

Q: Have you had any activities in exporting license and engineering services?

A: Yes, another plan by this department in the past years was the issue of exporting license and engineering services abroad. For the first time in the history of petroleum industry, technical savvy and licenses for refining units are exported to other countries. That is while Iran has often been an importer of technical savvy, license and basic engineering for refineries.

In 1394, RIPI signed an agreement for granting license and for basic designing of nine refining units including naphtha treatment, gasoil treatment, naphtha-to-gasoline conversion unit, visbreakers to reduce the quantity of residual oil, amine treatment, sulfur treatment, sour water treatment, and producing bitumen from distillation tower residues. The designing of these nine units will be over in the summer for delivery to the client.

This refinery is designed at 80% by RIPI, but that is not the only activity in exporting license. We have also conducted studies on a refining unit in Indonesia. Technical and economic feasibility studies have been conducted for this unit by using Iran’s heavy crude oil and we are currently in talks with this company for basic designing. Meanwhile, we have signed an agreement with South Africa for GTL slurry-based technology, blending Iran’s crude oil to be used in the refineries of that country and refining processes.

Q: You have reportedly a unit under construction in the GTL technology. Could you tell us about that?

A:  Yes, in 1394 RIPI had a contract for designing a fixed bed GTL unit. It was signed with the private sector. The project was 90% complete by March 2016 and is nearing completion. By applying this technology the private sector will build a 3,000-barrel unit in Qeshm. Also in 1394, a contract was signed with National Iranian South Oil Company (NISOC) for building a 1,000-barrel slurry-bed unit that is an updated technology. By applying this technology, associated gases which cause environment pollution after being flared are transformed into liquid products. This project started in March 2016 and we hope that it will be over by next March. Engineering and license for this project are offered by RIPI and will be built near Ahvaz by NIOC and NISOC. By building this unit, in addition to completing slurry bed technical savvy we will develop an important technology in the country for future use.

Q: Would you please tell us also about the construction of the first composite pipe to be used for crude oil delivery?

A: In polymer, composite pipes are used instead of metal pipes for reducing corrosion. The petroleum industry spends too much on corrosion. Composite pipes are replacing metal pipes in the world. Composite is in fact a type of highly resistant polymer used for transferring corrosive materials like salt crude oil that seriously damages pipes. We laid out 10 kilometers of pipeline in Ahvaz for carting salty crude oil for the first time in the country. The technology for producing composite proper for crude oil recovery has been developed by RIPI and it has been given to the private sector. The private sector built this section of the pipeline and we laid it out in Ahvaz. This pipeline, which is the first composite pipe for crude oil delivery in the country, will become operational this year. Composite pipes are not corroded and they will reduce to zero corrosion costs.

Q: Would you please talk about the Downstream Department’s plans for catalyst production?

A: RIPI has so far acquired technical savvy for several important refining catalysts and it has assigned the private sector to produce them. The private sector is producing catalysts with technical knowhow provided by RIPI, the most important of which is the catalyst for the gasoline production unit of Persian Gulf Star Refinery. The first phase of this refinery becomes operational this year. Moreover, producing desulfurization catalysts and raising gasoil and naphtha standards to euro-5 grade are among activities of the Downstream Department. These catalysts have been produced by the private sector. We have also produced Zeolites that are widely used in the petroleum industry. We have managed to produce Zeolite A. A private company is currently producing this type of Zeolite. We have also started two important activities in catalyst with the support of National Iranian Oil Refining and Distribution Company. One is production of hydrocracking catalyst which is widely used in refineries and another one is the production of RCD catalyst which is used for desulfurization of residues of distillation towers. We will have mastered the technical knowhow for the production of these two catalysts by March 2017 to be provided to the private sector.

Q: Which activities have you had in nanotechnology?

A: Another field studied by the Downstream Department is nano. In 1394, RIPI developed materials that improve thermal transmission in nano-structured thermal transducers and was successfully tested in NISOC-run areas. The second case was nano-structured insulators which we built and successfully tested. These insulators are capable of stopping thermal waste in the oil and gas industries.

An interesting nano project was the production of absorbents for eliminating pollutants created at gas stations. Gasoline vapors and pollution around gas stations are due to the fact that gasoline vapor spread into air when gasoline tanks are being offloaded or loaded.

Under a contract with NIORDC in 1394, RIPI has produced absorbents of gasoline vapors and we are currently building a module to be installed at Azadi Square gas station. This module absorbs vapors released from gas stations and can contribute to safeguarding the environment in the country and city of Tehran.

This module will be installed at Azadi Square gas station in the first half of 1395 and it can be used in all gas stations. This vapor recovery unit could be installed in the gas stations in all big cities. Advanced Vapor Recovery Units (VRUs) are used in developed countries like the US.

Saudi Arabia Destroys Dream of $100 Oil

The downward trend in oil prices started in July 2014. Oil prices were more than halved in six months.

Analysts believed that the market is saturated due to the strength of the dollar and the oil oversupply. Therefore, oil prices will keep falling and top oil producers have had to bid farewell to $100 oil.

But that’s not all. Oil giants in the world have been running budget deficit and have had to axe jobs. No bright prospect was seen for low-cost oil.

Furthermore, as oil prices were dropping, sanctions on Iran were lifted and the country returned to world market.

In late 2015, oil prices hit their seven-year lows - $20 a barrel. That was when oil exporters decided to take action. Venezuela, a country whose inflation has reached 700%, desperately needs higher oil prices to survive, so it held emergency meetings with Russia and Saudi Arabia. The result was oil freeze scheme which required oil producers to keep their output ceiling unchanged until the market gets out of saturated status.

At the beginning, United Arab Emirates, Qatar, Nigeria, Iraq and Kuwait welcomed this plan. Saudi Arabia insisted that Iran should also join the production freeze plan.

But since Iran was still reeling from the Western sanctions it only expressed support for the project. More meetings were held on the issue, but the final result was put off to the Doha meeting which ended in a relative failure.

Uncertain Future

One month before the Doha meeting, different markets reacted to speculation about its outcome which was expected to shore up prices. Under such circumstances, oil prices rose from $30 to $40 a barrel. But analysts were pessimistic about any recovery in prices.

Governments across the Middle East and north Africa can expect to lose $2 tn in income over the next five years as the slump in oil and commodity prices sends unemployment soaring and denies them tax receipts, wrote The Guardian.

The drop in oil prices from their peak between 2004 and 2008, coupled with declines in metal and basic food prices, will force many governments to borrow to make up the difference, the International Monetary Fund said in its annual Fiscal Monitor.

The Washington-based lender said borrowing was already increasing across the region and pushed debt to GDP ratios in emerging market and middle income economies to levels last seen in 2008.

Analysts have previously warned that Saudi Arabia and a handful of other countries have large savings and can absorb the loss for several years, but widening fiscal deficits are expected to create even more political instability in countries like Venezuela.

The IMF said: “The fiscal positions of commodity exporters have been especially hard hit. In the Middle East and North Africa, the cumulative fiscal balances of oil exporters alone are expected to deteriorate by over $2tn in the next five years relative to 2004–2008, when oil prices peaked.

“In 2016, the outlook remains uncertain, particularly for oil exporters that based their budgets on optimistic oil price assumptions and may have to revise their plans in the course of the year,” it said.

For its part, Reuters wrote: “An oil output cut by global producers, following on from the output freeze initiative, is quite unlikely and would be months away, OPEC sources said; suggesting any additional action to boost prices is unlikely.”

While a cut would go further, OPEC delegates say doubts over compliance with the output freeze

Backwardation

OPEC and Russia might like to take all their credit for oil’s recovery with their plan to freeze production. Futures prices show that’s not the whole story, wrote Bloomberg.

While much of the 30 percent rally in Brent crude futures over the past two months has stemmed from the producers’ dialogue, a diminishing contango -- where oil for short-term delivery is cheaper than later shipments -- shows that markets are also feeling the loss of supplies from a number of areas- from the North Sea to Nigeria and Iraq.

"Brent is flirting with backwardation because of supply outages in Nigeria and North Sea field maintenance,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “At best, the Doha meeting is aiming to maintain the status quo in supplies. But these outages are ultimately more important, as they effect a change in the oil balance.”

Inconclusive Meeting

Negotiations in Doha between some OPEC and non-OPEC countries on April 17 ended without any agreement on limiting supplies, a diplomatic failure that threatens to renew the rout in prices.

Discussions stumbled after Saudi Arabia wouldn't agree to any accord unless it included Iran, which did not take part in the meeting.

Sixteen nations representing about half the world's oil output gathered in the Qatari capital in a bid to stabilize the global market, the first significant attempt at coordinating oil output between the Organization of Petroleum Exporting Countries and nations outside the group in 15 years. There were significant hurdles to any deal after Saudi Arabia's Deputy Crown Prince said the kingdom wouldn't agree to restrain its production without commitments from other major producers including Iran -- which has ruled out freezing for now.

Iran, which is reviving oil exports after international sanctions were lifted in January, ruled out any limits on its output before reaching pre-sanctions levels, dismissing the notion of joining the freeze as "ridiculous." Iran’s Minister of Petroleum Bijan Zangeneh said before the meeting that he wouldn't attend the Doha talks and won't be a signatory to any deal as it would amount to self-imposed sanctions.

Iran-Saudi Rivalry

Here are excerpts from The Wall Street Journal’s account of the Doha meeting:

“Oil producers that supply almost half the world’s crude failed Sunday to negotiate a production freeze intended to strengthen prices.

The talks collapsed after Saudi Arabia surprised the group by reasserting a demand that Iran should also agree to cap its oil production.

A deal would have marked a new level of cooperation between non-OPEC countries and OPEC members that producers hoped would keep prices above January lows of $26 a barrel.

U.S. crude plunged 6.7% to $37.70 a barrel and Brent was down 6.9% to $40.14 a barrel in early Asian trading.

While markets could be disappointed by the failure to freeze oil production in the short term, the longer-run impact could well be blunted by the reality that low prices are already pushing out many cash-strapped producers, making a formal freeze less important.

Saudi Arabia’s position that Iran joins the freeze or there would be no deal scuttled the discussions before they started, participants said, and the meeting descended into sniping and confusion.

The day before the meeting, Saudi Arabia’s deputy crown prince, Mohammed bin Salman, was quoted by Bloomberg News as ruling out any deal that didn’t include Iran.

Other Saudi officials in the delegation had signaled on Saturday evening that the kingdom would consider a freeze without Iran’s participation, and a draft agreement was circulated, according to participants.

Iran had already declined to participate in the negotiations. It had ruled out any freeze until its production recovered the nearly one million barrels a day lost after international sanctions were imposed over its nuclear program.

The country was recently released from the sanctions and has said it planned to increase production to 4 million barrels a day, from 3.1 million barrels. Market observers said such an increase would take years.”

Bullish Reaction

Seeking Alpha website wrote: “The meeting of OPEC and non-OPEC oil producers in Doha, Qatar on Sunday, April 17th, ended without an agreement to freeze oil production.”

“Representatives from thirteen OPEC countries and five non-OPEC nations were present, but the lack of attendance of Iran scuttled the possibility of an agreement. The Saudis refused to cooperate if Iran didn't agree to freeze production along with other OPEC members. There is no absolute reason that Iraq has to participate in a freeze and the agreement could still go forward. Apparently the market thinks it will.”

“Although some thought the purpose of the Doha meeting was to ratify a deal that had already been worked out, the Russian representative himself stated this view and claimed that he was shocked that this wasn't the case, the market doesn't seem to have believed that. Analysts, many of whom have been wrong about the price of oil lately, were quick to make dire predictions. One forecast a quick drop to $30 a barrel. Within minutes of trading on Sunday night, WTI crude was down approximately 6%. Oil prices quickly reversed, though and rallied the rest of the night and following day on April 18th.By the close of futures trading on Monday afternoon, the WTI May futures contract was down only 58 cents (1.4%) from its Friday close.”

Saudi Oil Politicization Derailed Doha Talks 

The long-awaited meeting of oil producers, including OPEC and non-OPEC, in Doha on April 17 ended inconclusively. The 18 countries who attended this meeting were expected to reach agreement on freezing their oil output level at the January level until October.

Due to differences over the draft agreement on output ceiling, the talks were delayed. In the end, the participants concluded that they needed more time to reach agreement on oil production ceiling. However, the political behavior of Saudi Arabia with regard to energy was inevitably instrumental in the failure of the Doha meeting. While Saudi officials had earlier claimed that the Doha meeting will reach agreement with Iran’s presence they finally derailed the talks under the pretext of Iran’s refusal to freeze its output ceiling.

What comes below is aimed at reviewing Saudi Arabia’s oil policy and the consequences of the failure of the Doha meeting.

Saudi Arabia and Playing with Oil

Saudi Arabia used to regulate its oil policies more pragmatically and always sought to make a distinction between energy and foreign policy. However, over recent years, particularly after King Salman took office this approach has changed significantly. Such factors as supply, demand and volume of reserves are no longer decisive parameters in Saudi Arabia’s oil policy. What has caused Saudi Arabia to change its approach is partly related to its adventurist rulers on one hand and to political rivalry between Tehran and Riyadh, on the other. Due to their rivalry with Iran, young and adventurous rulers are using economic tools particularly oil. By adopting such a strategy, the Saudis are pursuing several objectives simultaneously:

1. Failure of JCPOA: Ever since Iran started nuclear talks with six world powers, Saudi Arabia spared no efforts to derail them.  But due to Tehran’s logical and realistic behavior, the Saudi regime failed to achieve its goals. Since they were sure that Iran will be able to raise its oil production and move to regain its pre-sanctions share in world markets after the implementation of the Joint Comprehensive Plan of Action (JCPOA), the Saudis sought to drive down oil prices in an attempt to hurt Iran’s economy. Saudi Arabia was opposed to the lifting of sanctions on Iran from the very beginning; therefore it tried to deprive Iran of access to financial resources by cutting oil prices and ratchet up pressure on Iran. When that plot proved to be a failure, the Saudis brought up the idea of Iran’s oil production freeze at the January level in an attempt to bring Iran’s output back to the pre-sanctions level.

Iran’s Regional Policies: The fact that Saudi Arabia has killed the chance of an agreement at the Doha meeting shows to what extent the oil policy of this country is influenced by its geopolitical confrontation with Iran. Therefore, it seems that Deputy Crown Prince Mohammed bin Salman has extended his authority to Riyadh’s oil policy after he was given authority over defense and economic plans in this country

While most oil exporters were hopeful of reaching an agreement at the Doha meeting, this Saudi approach derailed the talks. In fact, by adopting intransigent and illogical policies, Saudi Arabia killed hopes of oil exporters and investment companies for reaching an agreement and restoring order to this tumultuous market. It seems that Saudi rulers prefer low oil prices to higher revenues for Iran whom they consider as their regional rival.

Allegations against Iran: The Saudis’ allegations against Iran started while Tehran had said time and again that it will be in favor of any cooperation among oil producers for bringing stability back to oil market. However, due to post-sanctions circumstances, Iran said it would not join the freeze scheme. Iranian officials had reiterated Iran’s position in all formal meetings and in their interviews. Therefore, Saudi Arabia knew well that Iran will not attend the Doha talks, nor will it join the freeze plan. Therefore, Saudi Arabia was brandishing the name of Iran in an attempt to accuse Tehran of seeking to destabilize the oil market. That was the case while Iran has had no role in the oil market stability and the Saudis themselves have opted for oversupply and low prices for political ends and they are pushing ahead with this illogical policy obstinately.

Doha Failure Consequences

World oil production currently stands at 96.4 mb/d, while total demand has been 94.8 mb/d during the first quarter of the current year and is expected to reach 95.9 mb/d by the end of the year. The demand continues to remain much lower than the current level of production and the production is expected to jump higher after Doha talks. Under such circumstances, one must see whether oil producing countries will reach any agreement on freezing their production level or they will see oil prices fall due to existing differences and political excuses. Under the present circumstances and following the failure of Doha talks, several important points must be taken into consideration as follows:

Saudi Arabia’s unbalanced policies have left the oil market saturated and given rise to a state of imbalance in the market at the rate of 2 mb/d. This oil oversupply comes against the backdrop of no demand from the market while Saudi Arabia has been merely pursing its own political objectives by increasing its output. In other words, Saudi Arabia’s political motivations and objectives have destabilized markets. Under such circumstances, Saudi Arabia, having derailed the Doha talks, is playing an influential role in the persistence of low oil prices. That would by no means benefit oil producers and will even bring about discontent in Russia and Venezuela. It is likely to give rise to divergences between Saudi Arabia and Persian Gulf littoral states because these countries have suffered losses due to low oil prices and they will not be able to withstand Saudi Arabia’s lack of cooperation and obstinate policies on the long term.
Although in their closed meetings, Saudi officials cast doubt on Iran’s ability to raise its oil exports as it has already declared, but official positions taken by Iranians have been based on the fact that the growing global demand for oil will help Iran speed up its oil supply. Under such circumstances, Saudi Arabia’s approach vis-à-vis energy issues and Riyadh’s use of oil as an instrument for its political objectives will make oil market players, ranging from top oil companies like ExxonMobil to business companies like Vitol, discontent. Meantime, adoption of such an ambiguous policy by the Al-e- Saud regime may push major oil companies to invest in other countries like Iran with transparent oil policy.
Lack of agreement between major oil producers will further drive down oil prices in world markets. In fact, such a disagreement will jeopardize a relative stability achieved in oil prices in recent months and rivalry in oil production will further cut prices in coming months because no agreement between oil exporters will send a message to oil consumers that oil supply will continue without any reduction production levels.
Saudi Arabia’s resort to pretexts about Iran’s absence from the Doha meeting is by no means reasonable and logical because Iran is entitled to bring its production level back to the pre-sanctions level and if Iran’s share is set to decline in world markets such a decline must be handled by countries that have raised their oil production in recent years and occupied Iran’s place. However, Saudi Arabia that has benefited the most from selling oil to Iran’s former customers during years of sanctions does not agree to Iran’s regaining its share of market and will continue selling more than 8 mb/d of oil. This Saudi approach shows that they are benefiting from Iran’s absence in the market and they make every effort to hold Iran back.

1-----Deepwater Egypt to Sustain Subsea Capex

Douglas-Westwood (DW) latest subsea hardware market forecast predicts expenditure of $94.3 billion between 2016 and 2020.

This represents a 19% decline compared to the 2011-2015 period.

Report author Mark Adeosun said SURF and pipeline spend will account for more than 67% ($63 billion) of the forecast spend. “Over 7,500 km (4,660 mi) of SURF and pipelines will be installed over the next five years, supporting subsea vessel utilization levels towards the end of the forecast period.

“However, it’s pertinent to note that the pipeline market is dependent on a handful of mega projects. Therefore, cancellations or delays will negatively impact market size over the forecast period.”

Africa, Asia, and Latin America will account for a combined 47% of total subsea hardware expenditure over the forecast period.

Deepwater basins should grow in importance, representing 48% of subsea hardware spend – an 8% increase compared with 2011-2015.

Fasttrack development plans for large deepwater fields such as Eni’s Zohr gas discovery in the Mediterranean Sea offshore Egypt and ExxonMobil’s Liza discovery off Guyana will support deepwater expenditure in the latter years of the forecast period, Adeosun added.

Research director and editor Steve Robertson said: “Despite the negativity caused by the prolonged low oil price, subsea hardware remain a critical option for future developments, as new reserves are discovered in remote and deepwater basins.”

2----India to Reuse Tapti Platform

ONGC has signed an agreement to take control of the Tapti field facilities offshore western India from current co-venturers BG and Reliance Industries.

The joint venture had informed India’s government of their intention of abandoning the field and associated facilities on cessation of production.

ONGC intends to re-use the processing platforms and associated export pipelines for its Daman and C-26 Cluster developments in order to enhance production of gas and condensate from the Daman block in the Arabian Sea.

Production from these two projects is expected to start during the second quarter of the current financial year, building to a peak of around 11 MMcm/d of gas and more than 11,000 b/d of condensate.

Currently 10 new wellhead platforms, one riser platform, subsea pipelines, and other facilities are under construction for these projects, which involve drilling of 36 wells.

The Tapti process platform will be modified to receive the gas.

According to ONGC, this asset transfer agreement is the first of its kind in India’s E&P sector.

3----Australia’s Gorgon to Become Operational

Chevron Corp. has started producing LNG and condensate at the Gorgon Project on Barrow Island offshore Western Australia. The first LNG cargo is expected to be shipped next week.

The Gorgon Project is supplied from the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 80 mi (130 km) and 136 mi (220 km) off the northwest coast of Western Australia. It includes a 15.6 million ton per annum LNG plant on Barrow Island, a carbon dioxide injection project, and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.

Chairman and CEO John Watson said: “We expect legacy assets such as Gorgon will drive long-term growth and create shareholder value for decades to come. The long-term fundamentals for LNG are attractive, particularly in the Asia/Pacific region, and this is a significant milestone for all involved.”

Chevron said it is positioned to become a major LNG supplier by 2020. In particular, the company’s Australian projects are well located to meet growing demand for energy in the Asia/Pacific region and more than 80% of Chevron’s Australian subsidiaries’ equity LNG from the Gorgon and Wheatstone projects is covered by sales and purchase agreements and heads of agreements with customers in the region.

The Chevron-operated Gorgon Project is a joint venture between the Australian subsidiaries of Chevron (47.3%), ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas, (1%) and Chubu Electric Power (0.417%).

4----Presalt Appraisal Well in Brazil

Statoil together with operator Repsol Sinopec and partner Petrobras has completed the Gavea A1 well in the ultra-deepwater presalt block BM-C-33 in the Campos basin offshore Brazil.

The well encountered a hydrocarbon column of 175 m (574 ft) in a good-quality reservoir of silicified carbonates of the Macabu formation.

The well reached a total depth of 6,230 m (20,440 ft) and was successfully tested producing around 16 MMcf/d of gas and 4,000 b/d of oil through a 32/64-in. choke.

This is the fourth appraisal well in the license, which comprises the Seat, Gavea and Pão de Açucar (PdA) discoveries. In 2013-2015, the consortium drilled and tested the Seat-2, PdA-A1, and PdA-A2 appraisal wells.

With Gavea A1 the consortium has finalized the appraisal activities in BM-C-33 and will now evaluate the subsurface data and assess lean and cost-effective development concepts.

Repsol Sinopec Brasil (35%) is operator of BM-C-33 with Statoil (35%) and Petrobras (30%) as partners.

As announced in December 2015, Statoil will take over operatorship of the license. This is expected to happen in 3Q 2016, subject to the approval from Brazilian authorities (ANP).

5----Heriot-Watt Grant for North Sea Frontier Study

Heriot-Watt’s School of Energy, Geoscience, Infrastructure & Society has secured a £0.25-million ($0.36-million) grant from Britain’s Oil and Gas Authority (OGA).

This will support research to evaluate the geological structure and hydrocarbon prospectivity of the western platform and Mid North Sea High areas of the UK central North Sea, and is the first such award issued by the regulatory body as part of its “Frontier Basins” research initiative.

Heriot-Watt’s Professor John Underhill said the university’s recent successful bid to house the OGA’s 3D Visualization Suite in the Lyell Centre at its Edinburgh campus proved a helpful factor.

“The state-of-the-art equipment will help better interpret complex geological and engineering data and the open access facility will support the dissemination of data and analytical tools to academia and industry alike.”

6----- Oil Price Freeze, 'the Only Way'

Freezing production is "the only way" for the world's oil producers going forward, the head of Iraq's state oil-selling company says.

"They should do this deal as this is the only way to support the oil price," Falah Alamri, the director general of Iraq's oil marketing company, told the Financial Times in Switzerland. "Everybody needs it and Iraq supports this deal," he added.

OPEC and non-OPEC oil producers met in Qatar, with plans to discuss whether the world's big producers should freeze output as a means of trying to support the flagging price of oil. Major producers tentatively agreed to a production freeze in February, but since then opinions have been mixed on whether freezing will occur.

Oil has fallen to about $40 a barrel from more than $100 a barrel in 2014, with global markets plagued by oversupply and a lack of demand.

In a recent interview, Saudi Arabia's Prince Mohamed bin Salman told Bloomberg that Saudi Arabia would cooperate on a freeze only if Iran takes part. Iran has repeatedly said it won't freeze production.

Goldman Sachs, which is probably the most influential bank in the commodities sector, warned that a freeze was pretty unlikely, saying people shouldn't expect a "bullish surprise." But that hasn't discouraged Iraq in its belief that now is the time to freeze.

"Demand is increasing and supply is decreasing as American shale oil especially is falling," Alamri told the FT. "The timing is right. A deal would now be effective."

The oil chief's comments come just two days after data showed that Iraq increased production to record levels in March, pumping out 4.55 million barrels a day. In 2015, the Persian Gulf state was the sixth-biggest producer of oil.

7----Saudi to Supply Egypt with Oil Products

Saudi Arabia is to provide Egypt with 700,000 tonnes of petroleum products a month under a $23 billion deal over five years between Saudi Aramco and the Egyptian General Petroleum Corp, an EGPC official said.

"The Saudi Fund for Development will pay Aramco for the petroleum products directly, and receive in return the amount from Egypt in instalments," the source told Reuters.

The deal is part of financial support for Egypt announced during a visit this month by Saudi Arabia's King Salman.

It also highlights a change in strategy by Saudi Arabia to focus more on financial support for Egypt that will also provide Saudi Arabia with a return on its investment.

Egypt will get financing for the products but will have to repay the money.

Saudi Arabia, along with other Persian Gulf oil producers, has pumped billions of dollars, including grants, into Egypt's flagging economy since the toppling of President Mohamed Mursi of the Muslim Brotherhood in 2013 after mass protests against his rule.

9---Egypt to Cut Fuel Subsidies

Egypt will reduce spending on fuel subsidies by nearly 43 percent in the 2016/17 budget due mainly to lower global energy costs, officials said.

Finance Minister Amr al-Garhy told a news conference state energy subsidies would fall to 35 billion Egyptian pounds ($3.94 billion) from about 61 billion pounds in the 2015/16 budget.

Consumers reacted angrily when the government cut spending on energy subsidies in mid-2014, a measure that caused domestic prices of natural gas, diesel and other fuels to rise by as much as 78 percent. They were reduced again in the current budget.

However, the deputy finance minister for fiscal policy said a decline in international oil prices would account for the bulk of the reduced subsidy spending in the next fiscal year.

"Most of the savings in petroleum product subsidies will be a result of lower global oil prices," the deputy minister, Ahmed Kojak, told Reuters.

3----Lukoil Won't Do Deals With OPEC

A top Russian oil executive may just have killed off any lingering talk of an agreement among producing countries to freeze output.

The world's top exporters, including Russia, failed to agree a production freeze at talks, but said they would continue to work together to find a way to support prices.

Whatever happens now, there's very little chance of Russia -- the world's second biggest oil producer after the U.S. -- ever agreeing to restrain output, said Lukoil CEO Vagit Alekperov.

Asked whether Russia and OPEC could eventually reach a deal, Alekperov told CNN: "I don't think so, despite the fact that work on so called coordination of our activities is underway."

He said Russia wouldn't "integrate" with OPEC, noting that his country had maintained its distance from the cartel even during the Soviet era.

Lukoil is Russia's second biggest oil company after Rosneft. It claims to produce around 2% of the world's crude oil.

Alekperov said Lukoil and other Russian oil companies have adjusted to low prices and are able to "earn money to invest and money for shareholders."

Alekperov, who owns 23% of Lukoil, said he believed oil prices bottomed out earlier this year and will now rebound.

"What we're seeing today ... indicates that we're coming to a period of stability of prices and a trend towards higher oil prices," he said.

Alekperov also downplayed the Russian government's claim it could increase production in response to the failure of the Doha talks. He said most of Russia's oil reserves are in mature oil fields.

"You need new oil fields to boost the production in new territories," he said. "They're in the Arctic of course, the Far East, the deep waters of the Caspian sea...so it's hard to talk today about getting these territories producing soon, because they require colossal spending."

5---Gabon Seeks OPEC Return

The African nation of Gabon wants to rejoin OPEC after more than two decades, two OPEC sources said, becoming the second former member in a year to seek a return to the oil exporters’ group just as it is taking the first steps in years to prop up prices.

If it returned, Gabon would be the smallest producer in the Organization of the Petroleum Exporting Countries and bring its ranks to 14 countries following last year’s return of Indonesia, which had quit in 2008.

“They sent the request to OPEC officially,” said one of the sources, an OPEC delegate.

An oil official in Gabon declined to comment.

Gabon joined OPEC in 1975 and left in 1995 over the exporter group’s refusal to grant its request for reduced annual contributions in line with the country’s small production, news reports said at the time.

The move to rejoin comes as key OPEC members and outside producers such as Russia are attempting to support prices through a deal to freeze output which will be discussed this weekend in Doha. The initiative has helped oil prices to start recovering from a 12-year low reached in January.

OPEC in 2014 had abandoned its traditional role of cutting supply to support the market, accelerating a drop in prices which were falling due to oversupply and prompting critics to question its relevance.

Gabon produces 200,000 barrels of oil per day (bpd) according to the International Energy Agency, and output is in decline. Last year, the government launched an offshore licensing round in a bid to boost exploration.

Ecuador, which pumps 530,000 bpd, is currently the smallest OPEC producer.

The next step, the sources said, would be for OPEC oil ministers to discuss Gabon’s request. They hold their next meeting in June.

---- Doha Talks Failure Weighs on PG Bourses

Stock markets in the Persian Gulf look fell after oil prices tumbled in response to the collapse of talks between oil producers in Doha.

Brent futures are trading at $41.27 per barrel, down 4.3 percent from their last settlement. The failure of the Doha meeting to agree on an oil output freeze may not make a huge difference to prices in the long term - analysts thought a freeze would have had only a minor impact on market conditions. But the talks' failure does deal a blow to sentiment in the oil market.

Asian shares have pulled back, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.9 percent lower.

In Saudi Arabia, the main stock index fell 1.5 percent as it became clear that the Doha talks were running into trouble, but their failure was announced well after the market closed.

The petrochemical sector may be hardest hit, esepcially after Saudi Arabia Fertilizers Co extended its earnings slump, reporting a 51.5 percent decline in net profit to 286 million riyals ($76.3 million).

Analysts had expected the unit of Saudi Basic Industries to make 314.6 million riyals. Shares in SAFCO are down 21.1 percent year-to-date. SABIC is expected to report its earnings early this week.

Another major commodity company, Saudi Arabian Mining Co (Ma'aden), reported a 35.3 percent fall in first-quarter net profit but still beat analysts' forecasts

Canada 0il/Gas Investment to Drop 62%

Capital spending in Canada's oil and gas sector this year is expected to drop 62 percent from 2014 when crude prices started to collapse, according to the Canadian Association of Petroleum Producers, as the global crude rout drags on.

The C$50 billion decline to C$31 billion ($23.62 billion) will be the largest two-year fall since records began in 1947 and highlights how Canada's oil and gas industry has been forced to retrench in the face of a 65 percent drop in crude prices since mid-2014.

2014 was a high point for capital investment in oil and gas, when the industry spent a record C$81 billion.

"Canada needs urgent action to remain an attractive market for oil and gas investment, and to be competitive relative to other oil and natural gas producing jurisdictions," Tim McMillan, CAPP president and chief executive officer, said after the report was released.

McMillan said expanding Canada's export pipeline network and developing LNG export facilities should be a national priority to help create economic activity.

However, TransCanada Corp's Keystone XL pipeline to the United States was rejected last year after years of opposition from environmentalists and local landowners, and no company has made a final investment decision about any of the 19 LNG export terminals proposed for Canada's Pacific Coast.

As capital spending plummets, the total number of wells drilled in Western Canada is forecast to drop to 3,500 this year, down 66 percent from the 10,400 wells drilled in 2014.

CAPP said including indirect jobs more than 110,000 people across Canada have been laid off as a result of the oil and gas downturn and the impact was being felt across the country.

"Governments will see revenues from industry's royalty and tax payments reduced further, which could impact their ability to fund public services such as universities, hospitals and roads," McMillan said.

Despite the cut in spending and reduced conventional oil well drilling, Canadian crude production is expected to keep growing this year as new oil sands projects planned before the downturn, such as Canadian Natural Resources Ltd's Horizon expansion, come into operation.

-----Oil Market to Stabilize Next Year

International Energy Agency (IEA) chief Fatih Birol said he expects the oil market to come back into balance from oversupply by next year, providing there is no major economic downturn.

Birol said low oil prices have cut oil investment by about 40 percent in the past two years, with sharp falls in the United States, Canada, Latin America and Russia, and the world's reliance on Middle East oil will accelerate substantially in the next few years.

"This year, we are expecting the biggest decline in non-OPEC oil supply in the last 25 years, almost 700,000 barrels per day. At the same time, global demand growth is in a hectic pace, led by India, China and other emerging countries," he told reporters after meeting Prime Minister Shinzo Abe in Tokyo.

"At the turn of this year or latest 2017, we expect oil markets to rebalance and the prices to rebalance. When we look at all the fundamentals - demand, supply and stocks - I have all the reasons to believe that in the absence of a major economic downturn we are going to see balance in the markets latest by 2017."

Iran Petroleum Ministry Spearheads Economy of Resistance

A few years ago, Iran’s Supreme Leader Ayatollah Ali Khamenei instructed the Iranian government with implementing the Economy of Resistance. This notion mainly depends on people’s potentialities and state, supporting national production, management of foreign currency revenues, and management of consumption and establishment of knowledge-based companies. The Economy of Resistance was developed when Iran was still under international sanctions. Some maintained that the Economy of Resistance may no longer be helpful as Iran has received sanctions relief following its nuclear accord with six world powers.

However, Iranian authorities do not agree. This issue was not overshadowed and it even gathered steam under the administration of President Hassan Rouhani.

For its part, the Iranian Ministry of Petroleum is playing a leading role in the implementation of the Economy of Resistance. It has so far taken special measures in benefiting from scientific and academic potentialities.

The Office of Deputy Minister of Petroleum for Research and Technology has recently held a seminar titled “Knowledge-Based Petroleum Industry; Symbol of Implementation of Economy of Resistance” as another step towards realization of its objectives with regard to the Economy of Resistance.

Iran’s First Vice-President Es’haq Jahangiri, addressing the opening of the seminar, said: “Iran’s Ministry of Petroleum has fulfilled its obligations in this regard by taking measures in harmony with the main pillars of the Economy of Resistance.”

Noting that Iran’s Ministry of Petroleum is among ministries that have devised plans for implementing the Economy of Resistance in the current Iranian year, he said: “Of 24 points in the document of Economy of Resistance, three points are up to the Iranian Ministry of Petroleum.”

Jahangiri referred to priorities envisaged for the petroleum industry in the current calendar year, saying: “Oil and gas exports as well as gas pipelines including gas pipeline to Iraq and also operating petrochemical plants are among priorities which the Ministry of Petroleum need to follow.”

He pointed to clauses related to oil in the Economy of Resistance, saying: “According to these clauses, a priority for the Iranian Ministry of Petroleum is to enhance production from joint oil and gas fields. To that effect, the Ministry of Petroleum is seeking to significantly raise oil production from West Karoun fields.”

He said that the Iranian Ministry of Petroleum started building eight gas condensate refineries last calendar year with private sector’s investment as another step towards implementing the Economy of Resistance.

Jahangiri also referred to the concept of knowledge-based economy and said: “The agreement the Ministry of Petroleum signed with universities last year is aimed at transfer of knowledge and technology from research centers and universities to the petroleum industry.”

He said the petroleum industry is spearheading growth in the country, adding: “We have to take into account the transfer of technology in the issue of signature of contract with foreign companies.”

Jahangiri said the West-imposed sanctions against Iran mainly targeted the petroleum industry. He said the Economy of Resistance requires paying attention to sectors that are less vulnerable to sanctions.

“We have to act so as the world could not impose embargo on purchase of Iran’s oil by customers, and one of [these options] is diversifying oil sales,” said Jahangiri.

He said a root cause of the country’s problems is the state-owned nature of the economy and its dependence on petrodollars.

“Due to this issue, there has not been a sustainable economic growth in Iran. Sometimes indices have gone up and sometimes they have fallen, leading a two-digit inflation rate,” he added.

Jahangiri said unemployment and less welfare pose the most significant challenges to the country’s economy, adding: “Today, economy is Iran’s top priority.”

“Based on the past tough conditions we reached the point that investment has to be made in the country. As the Supreme Leader has been heard saying, the economy must be Iran’s top priority,” he added.

Jahangiri said running the country in the last calendar year was a miracle given the sharp decline in oil prices.

“In the [Iranian calendar years] 1389 and 1390, although oil exports reached 2 mb/d and oil prices were above $100 forex rate shot up while in 1394 the country’s economy faced no challenge. Moreover, no unbridled inflation emerged in the country,” he added.

Jahangiri said the Rouhani administration implemented proper economic policies in the year 1394 and created a positive trade balance without oil. “This way of administration of the country tempted the Western governments back to the negotiating table,” he said.

Upstream/Downstream

Iran’s petroleum minister, Bijan Zangeneh, referred

to activities carried out in the upstream and downstream oil sectors in line with the policies of the Economy of Resistance, saying: “Acquiring technological capability in enhanced recovery from reservoirs, appropriate arrangement for the implementation of projects as well as supporting and bolstering domestic potentialities for manufacturing highly consumed petroleum industry equipment are the most important plans in the upstream sector.”

He said that signing agreement with universities on oil field studies with the objective of acquiring technical savvy for enhanced oil recovery from oil reservoirs was among the most important plans envisaged by the Iranian petroleum ministry with regard to the implementation of the Economy of Resistance.

“For the first time in the history of petroleum industry, studying major oil reservoirs has been assigned to universities. Furthermore, it has been decided that these universities along with a foreign partner would study the reservoirs in light of the implementation of the Joint Comprehensive Plan of Action (JCPOA),” said the minister.

Zangeneh said the agreements signed with universities in the upstream sector worth more than IRR 10,000 billion.

The Iranian minister said another technological activity in the upstream sector was supporting the manufacturing of largely consumed petroleum industry equipment.

“With the lifting of sanctions and the possibility of cooperation between domestic and foreign companies, the manufacturing of this equipment will pick up speed and manufacturing companies will be able to consume these products in Iran’s market and also export them to regional markets,” said Zangeneh.

Regarding downstream projects, the minister said agreements, worth more than IRR 5,000 billion, are to be signed with 12 universities and research centers for carrying out studies about olefin and ethylene production, as well as oil and gas refining.

He said that National Petrochemical Company (NPC) also plans to sign a contract with a leading European company for building a facility to convert methanol to propylene.

“Energy efficiency is another important sector in the downstream industry. By preventing energy loss, we can make consumption efficient and also generate wealth,” he added.

Zangeneh said the petroleum industry adjusted its move with the Economy of Resistance since the very beginning, adding: “Clause 2 of this policy pertains to knowledge-based economy and increasing the share of production and export of products, as well as knowledge-based services. Moreover, achieving the top knowledge-based position in the region is among the plans of the petroleum ministry that we are following up on seriously.”

Certain image that the Economy of Resistance is no longer necessary as sanctions has been lifted, he said, adding: “On the contrary I believe that the policies of the Economy of Resistance must be taken into further consideration in the post-JCPOA era.”Zangeneh said that having a brand registered is a knowledge-based activity, adding: “Over the past ten years, speculators and traders have become rich in the petroleum industry and they have significant revenues without producing any barrel of oil. Speculators and traders involved in this sector are getting more revenues than oil producers.”

The minister said financing of the projects is also a knowledge-based economy and added: “Some companies say the projects are only waiting for finance, which is the most important part of a project.”

Top Knowledge-Based Economy Spot

Mohammad-Reza Moqaddam, deputy minister of petroleum for research and technology, said Clause 2 of the Economy of Resistance underscores the necessity of knowledge-based economy and Iran’s access to top regional position in this regard.

“In Clause 17 of the 6th Development Plan, all activities related to upstream and downstream oil industries are required to become knowledge-based,” he said.

“A review of the implementation of knowledge-based economies in different countries shows that countries are divided into leading and following companies in the light of development of science and industry and reliance on different branches of science. In the leading countries, development of research centers and innovative products are on the agenda, while the following countries focus on the purchase of products from the leading countries,” said Moqaddam.

He said single-product economies relying on natural resources have been proven to be fragile, adding: “Given the superiority of oil and gas advantages and domestic potential in this sector, oil and gas industries in Iran can become the prioritized sector in Iran in terms of access to knowledge-based economy.”

Moqaddam said a review of countries that have been successful in implementing the structure of knowledge-based economy shows that these countries have applied technological jump strategies.

“Technology jump materializes through technological cooperation with other countries and by taking into consideration an endogenous and outward-looking economy,” he added.

Zangeneh said the necessary condition for technological cooperation was the attractiveness of domestic market.

“We have to apply the strategy of technology versus market and this strategy will pay off through unifying small-sized domestic markets with a centralized management in international negotiations,” he added.

Moqaddam said the main players in the oil and gas industries are companies that would be able to provide finance on one hand, and manage megaprojects on the other.

“Such natural talent belongs to exploration and production companies in the upstream sectors and general contractors in the downstream sector of the petroleum industry,” he said.

In order to have a petroleum industry in harmony with the policies of the Economy of Resistance, Moqaddam said, the Ministry of Petroleum envisages five projects including signature of agreements for cooperation with universities and research centers for the technological development of 52 oil and gas reservoirs, signature of memorandums with 12 universities and research centers in the downstream sector, construction of 10 groups of widely consumed commodities and equipment for the petroleum industry, development of scientific and technological capabilities in implementing energy efficiency projects by strengthening cooperation between research centers and energy service companies and finally establishing exploration and production and general contractor companies.

The “Knowledge-Based Petroleum Industry; Symbol of Implementation of Economy of Resistance” seminar was held on April 16 with senior government officials, MPs, senior petroleum ministry officials and private sector representatives in attendance.

During the seminar, seven panel discussions were held.

Technology Transfer in Downstream Oil Industry

The second panel was focused on the role of universities and research centers in the transfer and development of technology in the downstream oil industry.

Presided over by Ja’far Tofiqi, secretary of Committee for Development of Technology and Innovation in Oil and Gas Industries affiliated with the Office of Vice-President for Science and Technology, the panel was attended by deputy petroleum ministers for gas, petrochemical as well as refining and distribution affairs.

Hamid-Reza Araqi, CEO of National Iranian Gas Company (NIGC), said gas odorant production is to start in Assaluyeh this calendar year.

“By producing this substance, the monopoly of several foreign countries on this material will be broken and this product will be probably exported,” he said.

Araqi said manufacturing gas turbines and smart pigs, gas sweetening and agricultural sulfur production have been among NIGC activities for more reliance on domestic potentialities.

“NIGC’s policy in the 2010s is shifting from self-sufficiency to self-reliance and from relative to competitive advantage,” he added.

Araqi expressed NIGC’s full readiness for exporting gas as well as technical and engineering services to Iraq, saying: “NIGC’s efforts over the past three decades have ended in this result.”

Higher Refining Capacity

Abbas Kazemi, CEO of National Iranian Oil Refining and Distribution Company (NIORDC), told the panel that the country’s refining capacity will reach 3.1 mb/d from the current 1.8 mb/d after development projects have been launched.

He cited Persian Gulf Star Refinery, Siraf refining park and Anahita refinery as new development projects, saying: “These projects are aimed at increasing crude oil and gas condensate refining capacity and preventing crude oil and natural gas sales. That is a full manifestation of materialization of slogans of the Economy of Resistance.”

Kazemi referred to the supply of knowledge-based commodities like catalysts and chemicals in cooperation with universities and research centers, saying: “Optimization of refineries, preventing crude oil and natural gas sales, making the economy invulnerable to sanctions and bolstering self-belief and national confidence are among policies pursued by NIORDC in operating development projects.”

He referred to the implementation of quality and quantity enhancement projects at refineries, saying: “Of 71 million liters of daily gasoline consumption, 24 million liters has been euro-4, and of 79 million liters a day of gasoil consumption, 24 million liters has been euro-4.”

Enhanced Petchem Output

Marzieh Shahdaei, CEO of National Petrochemical Company (NPC) said the company’s output was four percent up in the last calendar year 1394 year-on-year. She said that petrochemical industry is a clear manifestation of materialization of the Economy of Resistance.

“By converting exportable materials with high value-added, the petrochemical industry has taken effective steps in completing the value chain. This issue has been enshrined in the Economy of Resistance.

According to Shahdaei, leading research centers towards practical research, helping production plants for making maximum use of existing potentialities and reducing dependence on foreign resources are among policies the NPC has followed in recent years.

Referring to major objectives of research and technology sector, she said: “Attention to this section of NPC activities and assigning affairs to universities would create a fundamental structure for technology and bring about reliance on knowledge-based technologies.”

Shahdaei enumerated NPC’s achievements as a 4% growth in output, 18% increase in petrochemical exports and launching new projects in the last calendar year.

She said that drawing up energy efficiency standards at NPC has saved $4.6 billion in natural gas consumption.

Industry-University Link

Ja’far Tofiqi, secretary of Committee for Development of Technology and Innovation in Oil and Gas Industries affiliated with the Office of Vice-President for Science and Technology, said industry and universities have developed appropriate relations in recent years and have developed a lingua franca.

Noting that knowledge-based economy is the keyword of the Economy of Resistance, he said that knowledge-based economy relies on using potentialities of knowledge and technology.

“Today, the role of universities and research centers as the most important bodies providing knowledge and technology for knowledge-based industry has been recognized,” said Tofiqi.

He said that the path pursued by the petroleum industry so far needs to be modified so that universities would serve knowledge-based industry.

Saeed Pakseresht, director of research and technology at NIGC, Majid Ershad Langroudi, chancellor of University of Shiraz, Amir-Hossein Davaei, deputy minister of Information Technology and Communications for technology and innovation, and Mahmoud Nili Ahmad-Abadi, chancellor of University of Tehran, were among other speakers to this panel.

Agreements with 9 Universities

A major event during the “Knowledge-Based Petroleum Industry; Symbol of Implementation of Economy of Resistance” seminar was the holding seven panel discussions on the petroleum industry and the Economy of Resistance.

What comes below is a brief review of the discussions in the seven panels.

E&P Companies, GCs: Technology Transfer

The third panel focused on the role of exploration and production (E&P) companies and general contractors (GCs) in transfer and development of technology for the materialization of knowledge-based petroleum industry.

Presided over by Reza Veyseh, chief coordinator and supervisor at the Office of First Vice-President, the panel reviewed parameters of success in technology transfer, parameters of success in implementing E&P knowledge-based megaprojects, drawing up new oil contracts with a view to realizing the Economy of Resistance with focus on supporting E&P and GC companies, maximum participation in international markets and formation of market for E&P companies and benefiting from their services, introducing successful examples of transfer and development of technology through E&P companies across the globe, outlining the features of GC companies, introducing leading companies in the country, region and the world and the significance of establishment of new domestic and international GC companies in increasing the level of fundamental knowledge and operating knowledge for the country’s petroleum industry.

In his address to the panel, Veyseh said the Economy of Resistance is based on six elements, namely, endogeneity, outward-looking, popularity, justice, knowledge-based and jihad-oriented character.

“By upgrading domestic production and enhancing non-oil exports, it would be possible to benefit from an economy independent of crude oil,” he said.

Veyseh said enhanced productivity, application of monetary and hard currency policies, transparency and cleanness in economy and increasing value-added in economic activities are preludes to the materialization of the Economy of Resistance.

Referring to the petroleum ministry’s measures for the formation of a knowledge-based petroleum industry, he said: “Having signed agreements with universities and research centers in the upstream and downstream sectors, the petroleum industry has been a leading entity in realizing knowledge-based economy.”

50 Agreements Signed

Hamid Aladpoush, director of designing and basic engineering policymaking at the Office of Deputy Minister of Petroleum for Research and Technology, referred in his speech to the methods of transfer and development of technology through new E&P and GC companies and parameters of success in the transfer of technology and implementation of knowledge-based megaprojects.

“Establishment of GC and E&P companies are among the new infrastructures required for making the petroleum industry knowledge-based,” he said.

E&P Companies, GCs: Domestic Capability

The fourth panel focused on the role of E&P companies and GCs in boosting domestic capabilities, market and market policy vis-à-vis development of technology.

Chaired by Gholam-Reza Shafei, deputy head of Management and Planning Organization for strategic supervision, the panel discussed a variety of issues including pathology of upgrading the capacity of oil service contractors, petroleum industry consulting engineers and manufacturers, commodity supply chain and the role of Iranian manufacturers in boosting domestic capacities.

Addressing the panel, Shafei said international sanctions provided an opportunity for the country to gain experience in different sectors including manufacturing, consulting and contracting in the petroleum industry.

“Under circumstances the sanctions have been lifted, although there is backwardness we have to benefit from the experiences of nearly twenty years in the country,” he added.

Shafei expressed hope that the petroleum industry measures in upgrading domestic capabilities would serve national interests.

Domestic Capabilities in IPC

Parviz Sangin, director general of technology commercialization and manufacturing at the Office of Deputy Minister of Petroleum for Research and Technology, said the Ministry of Petroleum envisages maximum use of domestic capability under Iran Petroleum Contract (IPC) deals.

“If we apply the draft IPC properly we will realize the objectives of the Economy of Resistance,” he said.

Sangin cited upgrading domestic capability, meeting international standards, domestic manufacturing and development of industrial clusters at international level as NIOC priorities, saying: “In order to maximize the share of domestic sector we have to identify strong and weak points of domestic companies and move to upgrade them (companies).”

Referring to the Ministry of Petroleum’s plans for enhancing domestic share in upstream oil contracts, he said: “When domestic companies become more capable in implementing projects international, companies will also cooperate with them and we will witness transfer of technology for exploration and production.”

“There is no ideal model for domestic manufacturing in the world. However, in countries like Brazil, England and Malaysia, domestic share is between 40 and 80 percent. Furthermore, many countries are making efforts to bring their shares to 25 to 30 percent,” he added.

Domestically Manufactured Oil Commodities

The fifth panel focused on the effect of domestic manufacturing of ten groups of petroleum industry commodities and equipment on the transfer of technology with commercial and competitive advantages with a focus on empowering the chain of exports value and technical and engineering services.

Chaired by Hamid-Reza Katouzian, the head of the Research Institute of Petroleum Industry (RIPI), the panel discussed a variety of issues including domestic manufacturing and technological development of petroleum industry commodity and equipment and its effect on international interactions and regional exports, upgrading knowledge-based companies with focus on designing, engineering, manufacturing and installation of equipment and transfer of technology and completion of supply chain of basic commodities and equipment of oil industry as factors contributing to the Economy of Resistance.

In his speech to the panel, Katouzian said Iran’s Vision Plan envisages development of technology, acquisition of top position and mastering advanced technologies. He said: “The country’s short-term and long-term strategy requires exogenous and resistive economy. To that end, proper management of oil and gas reserves is needed.”

Katouzian said preparing the necessary infrastructure for the manufacturing of petroleum industry equipment is a must, adding: “Supporting manufacturing in petroleum industry projects is an influential factor for the materialization of the Economy of Resistance.”

“The Ministry of Petroleum is working out mechanisms to upgrade manufacturers of commodity and other technologies in the country. We hope that in the near future we will be able to export petroleum industry commodity and equipment to other spots in the world,” he said.

Ramin Qalambor, deputy head of NIOC for logistics, manufacturing and procurement, said: “Today, technology indigenization, boosting knowledge-based economy and materializing the Economy of Resistance are among tasks assigned to the NIOC Directorate of Commodity Manufacturing Logistics.”

Bahram Barani, member of the Association of Petroleum Industry Equipment Manufacturers, highlighted the industrial maturity of the private sector, saying: “As far as petroleum industry equipment manufacturing is concerned, the ministries of economy and industry are required to cooperate with the Ministry of Petroleum.”

“Petroleum ministry staff must have motivation for domestic manufacturing of equipment

New Technologies and Energy Efficiency

Energy efficiency through reforming procedures and transferring and developing technologies of efficient use were the topic of the sixth panel chaired by Mohammad-Mehdi Rahmati, deputy minister of petroleum for planning and supervision on hydrocarbon reserves.

The effects of implementation of the Economy of Resistance on efficient use from the standpoint of petroleum industry, development and upgrading of scientific, innovative and technological capabilities in energy efficiency and transfer of technology and knowledge-based economy in industries and buildings were among the issues discussed in this panel.

Gasoline Consumption Conservation

Omid Shakeri, director of research and technology at Iran Fuel Conservation Organization, stressed the need for saving energy in Iran, saying: “All countries whose per capita energy consumption had increased in the past moved to curb it.”

He said the Economy of Resistance highlights the issue of efficient use of energy on three occasions, adding: “By cutting fuel consumption by 50%, 5,000 million barrels of oil will be saved.”

Shakeri said reducing energy intensity will cap carbon emission, increase investment and create jobs in the country.

“By phasing out clapped-out taxis, we will see the saving of 6 billion liters of gasoline in the country. Furthermore, by replacing dilapidated buses, electrification of agricultural wells and development of railway transport we will be able to reduce energy intensity in Iran,” he added.

Oil Saved

Yadollah Sabouhi, secretary of the Committee of Energy Efficiency and Environment affiliated with the Office of Vice-President for Science and Technology, said reducing energy intensity will save 750 million barrels of oil a year.

“A high economic growth rate is achieved when energy intensity is cut in the country. Of course, reducing energy intensity requires some changes in attitudes,” he added.

Sabouhi said new technologies are needed for reducing energy intensity, adding: “By reforming energy consumption paradigms, 400 million barrels of oil a year will be saved in the short-term. In the long-term, 750 million barrels of oil will be saved a year.”

“Reducing energy intensity can help raise commodity exports or help change them into high-value commodities,” he said.

For his part, Issa Mansouri, deputy minister of labor and social affairs for entrepreneurship and employment, said by saving fuel, economic growth and job creation will be achieved in the country.

IP-46-8

Regulations and Transfer of Technology

The role of regulatory bodies in transfer and development of technology and upgrading domestic potential in materializing the objectives of knowledge-based petroleum industry was the topic of the seventh and the last panel discussion.

The panel discussed such issues as the role of National Standards Organization in drawing up regulations for qualitative control of domestically manufactured products, regulatory experiences of transfer of technology and enhancing domestic capability in the world, legal challenges to involving domestic shares in oil and gas contracts.

Amir-Abbas Hosseini, deputy head of the Research Institute of Petroleum Industry (RIPI) and secretary of the panel, said approaches have been defined for achieving a low-carbon economy in line with the Economy of Resistance under the 6^th Five-Year Economic Development Plan.

Referring to the COP21 in Paris, which requires countries to mitigate global warming, he said: “Based on national capacity and scenarios of greenhouse gas emissions, Iran is willing to contribute to capping greenhouse gas emissions by 4% from business-as-usual (BAU) levels by 2030.”

He said that focus on the development of combined cycle power plants, development of nuclear electricity, development of using renewable sources of energy, capping flare gas emissions, enhancing energy efficiency in different consumer sectors, replacing carbon-based fuel with natural gas, strategic development of use of low-carbon fuels, and contribution to new market mechanisms in national and international arenas are among solutions for reducing greenhouse gas emissions in the unconditional section.

Regarding greenhouse gas emissions in the conditional cases, he referred to energy sectors, industrial procedures, protection and development of forests and agriculture and centralized waste management.

Hosseini added: “Within the framework of financial requirements, fulfilling obligations of national participation requires around $17.5 billion in investment. For the entire program on emission reduction, this figure will exceed $52.5 billion.”

Petroleum Ministry Indigenization

Hossein Amiri Khamakani, member of the Presiding Board of the Majlis Energy Committee, said a total of 9 bylaws have been drawn up over the past 20 years for supporting domestic manufacturing

Bandar Imam Eyes Asia Basketball Championship

The final match of basketball pro league was indicative of well thought out investment and proper planning by the Ministry of Petroleum of the Islamic Republic of Iran in this branch of sports. The two teams representing Abadan Oil Refining Company and Bandar Imam Petrochemical Plant found their ways into the finale of pro league basketball games while strong reams were competing. However, following previously thought-out plans, these two teams managed to make headway and mark a fascinating match.

It was a foregone conclusion that seven matches were needed to be held in the finale of the basketball pro league. Any team with four victories would become champion. Given the conditions of Abadan and Bandar Imam teams, everyone could guess that Bandar Imam would hold up the championship trophy for a third time and that turned out to be true.

The trainees of Mehran Shahin Tab’e sealed the fate of the completion after four matches and they managed to rank the first in Iran’s basketball championship. The value of this championship further comes to the limelight when one take into account the fact that Bandar Imam had only Hamed Haddadi as a star in the final. There were no more stars in its line-up. However, this team provided its competence and managed to join the top Asian teams.

Asian Background

Bandar Imam Petrochemical Plant's team has held atop the championship trophy for the second consecutive year. It was its third trophy in total. On several rounds, this team was unlucky and it finished runner-up or was ranked the third. In any case, this team has to run for West Asia matches in order to get permit for presence in the Asian club cup competitions. This team fared well last year in West Asia and it won the championship title. Now, Iran’s representative has a good chance to bid for championship in the Asian continent.

Hosting Matches

Bandar Imam Basketball team is set to represent Iran in Asian club cup matches in October. The promising point for this team is that Iran is to host matches. A delegation from the Asian Basketball Confederation travelled to Iran recently and visited the city of Mahshahr and the Bandar Imam Petrochemical Plant’s club. The delegates gave an optimistic assessment of the facilities in the city for hosting the Asian matches and reached agreements with Bandar Imam officials. Given the Mahshahr residents’ interest in basketball, holding the matches there would be a positive point. Many basketball fans are hopeful that the Bandar Imam Basketball team would manage to win the championship trophy in the Asian continent.

Nurturing Basketballers

An important point taken into consideration by Bandar Imam Petrochemical Plant’s team in the previous seasons was nurturing basketball players for future matches. Although most basketball teams recruit starts in order to win championship, Bandar Imam has been training basketball players thanks to the leading basketball coach Mehran Shahin Tab’e. This team managed to win the championship title by recruiting famous and effective players and that is of great value. Hamed Sohrab-Nejad, Hamed Afaq, Arsalan Kazemi, Mohammad-Reza Khabbazan, Behnam Yakhchali, Ali Dorqi, Mehdi Esmaeili, Ali Jamshidi, Erfan Nassajpour, Vahid Hajian, Masoud Soleymani, Shahaboddin Reyhani and Mohammad Zarei were the basketball players of Bandar Imam in this season. Hamed Haddadi joined them for the last four matches. A review of the team’s lineup shows how young they are.

Futurism

A good event for Bandar Imam Petrochemical Plant is that educated and experienced head coach Mehran Shahin Tab’e has renewed his contract. With a long background in Iran’s basketball, Shahin Tab’e has won great honors for Bandar Imam. He is poised to coach the team for Asian championship title. The presence of Shahin Tab’e and reparation of some weaknesses can put this team on the path of muscle flexing in the Asian continent.

Interview with Mehran Shahin Tab’e

Bandar Imam, an Exemplary Professional Club

During his tenure as coach, Shahin Tab’e has won Iran’s basketball big honors. Many attribute the current status of Iran’s basketball to Shahin Tab’e. This veteran head coach believes that the resultant of previous season’s basketball matches would be of great help to national team. Here is an interview with Shahin Tab’e.

Q: Congratulations! You managed to win the basketball league championship trophy.

A: Bandar Imam is a professional club with big potentialities. We knew quite well that Bandar Imam Petrochemical Plant’s team has potential to reach final matches in the league competitions. The reason for this issue was professional facilities and high readiness of the club managers for progress. The final result was the outcome of all these efforts and facilities.

Q: Despite all these issues, you agree that your team went through ups and downs.

A: Yeah, exactly. We even started the league with one loss. However, solidarity and unity were so strong in the team that the conditions got better for us with the turn of time. You saw that in the middle of the season we took part in West Asia competitions and we managed to win Iran honor in these games and we returned with a championship trophy. This result was achieved through friendship and of course due to the technical strength of our players. The inclusion of Hamed Haddadi in the team also helped us create good conditions.

Q: Many complain why Haddadi was not recruited since the beginning of matches, what do you think of that?

A: Hamed Haddadi is an influential figure in Asia’s basketball. Since he was playing in the China league we could not recruit him sooner. Meantime, he is originally from Khuzestan province and we wanted to support him and that is why we recruited him. During the four final games, he was of great help. One reason behind the big win of our team was the presence of Haddadi.

Q: In general, how do you evaluate the technical level of the previous league?

A: Every league has its own strengths and weaknesses. To me, the most important feature of the previous league was that no team had many stars in its lineup and top players had been distributed in the lineup of the teams. This issue prevented teams from being stronger than one another. I think that the league matches were held at a very good level and that could help improve the quality of national basketball team.

Q: You referred to the national team. Doesn’t your presence at Bandar Imam team interfere with your cooperation with national basketball team?

A: No, everything had been planned. I may spend more time, but it would not be such that one of these teams would be hurt. My responsibilities are clear and I do not shirk from any of my obligations.

Q: You have to run for Asian championship in October. Do you think that it would be possible for Iran to become the Asian champion?

A: Why not?! Bandar Imam has so far made relentless efforts so that we would be in position to host the Asian club cup championship. It would be in the interest of the country’s sports and the basketball community. If conditions are desirable for hosting the matches, championship would not be far-fetched. However, we have to make planning in order to dispatch a good team to the matches. I do not want to raise expectations but I think that Iran’s basketball deserves the championship title in Asia

Isfahan, Cultural Capital of Muslim World

Isfahan, a historic city in central Iran, is the third largest city in the country. It is also the third most populated city after Tehran and Mashhad. Isfahan shot to prominence between 1050 and 1722, particularly in the 16th century when the Safavid Dynasty was in power in Iran.

Isfahan is home to numerous monuments, some of which have been registered on UNESCO World Heritage list.

Isfahan was chosen as the cultural capital of the Muslim world in 2006 and as the capital of Islamic Iran culture and civilization in 2009.

In December 2015, Isfahan along with the northern city of Rasht joined the UNESCO Creative Cities Network.

Some historical monuments in Isfahan are as follows:

Naqsh-e Jahan Square

Naqsh-e Jahan Square (also known as Imam Square and formerly named Shah Square) was constructed between 1598 and 1629, when Shah Abbas moved the capital of his Persian Empire to the central city of Isfahan. This move prompted one of the greatest construction projects in history, best displayed by the UNESCO listed magnificent central square.      The square itself is surrounded by four of the city’s most important buildings all linked by a series of two-storey arcade. To the north, the entrance to the Imperial Bazaar, the Portia of Qeyssariyeh (1602-19), to the south, Imam Khomeini Mosque (1612-30), to the east, Sheikh Lotfollah Mosque (1602-18) and to the west, the pavilion of Ali Qapu (15th century).

Sheikh Lotfollah Mosque

Originally constructed as a private mosque for the royal court, it wasn’t for many centuries that foreign visitors were able to gaze upon the wonderful tile-work of Sheikh Lotfollah Mosque. In comparison with the Imam Khomeini Mosque, the structure is simpler, consisting of a flatter dome resting on a single, square chamber but the devil is in the detail as both the interior and exterior decoration is of the highest quality.

The monument's architect was Mohammad-Reza Isfahani, who solved the problem of the difference between the direction of qibla and gateway of the building by devising an L-shaped connecting vestibule between the entrance and the enclosure. Reza Abbasi's inscription on the entry gateway gives the date of the start of construction.

Chehel Sotoun

Chehel Sotoun is a pavilion in the middle of a park at the far end of a long pool, in Isfahan, Iran, built by Shah Abbas II to be used for his entertainment and receptions. In this palace, Shah Abbas II and his successors would receive dignitaries and ambassadors, either on the terrace or in one of the stately reception halls.

The name, meaning "Forty Columns" in Persian, was inspired by the twenty slender wooden columns supporting the entrance pavilion, which, when reflected in the waters of the fountain, are said to appear to be forty.

There are stone lions at the four corners of the central pool, and there is a hall and marble and vaulted cornices around it.

Khaju Bridge

The Khaju Bridge is noted as one of the finest construction and instance of Persian architecture. The 132-meter long and 20-meter wide in size, the Khaju Bridge has an interesting structure. Unlike other Bridges, this Khaju Bridge has 23-arches, 26 and 21 smaller and large inlets. The bridge is made up of bricks and stones. The stones used in construction of this bridge are 2-meter long. It has 20-meter distance between ceiling base and each of the channels. This bridge is not constructed with support of cables or so, it is arch bridge. The structure is in semi-circular form.

Siosepol

Siosepol also known as 33 Bridge, as it is made of 33 arches, is one of the main tourist attractions of Isfahan, Iran. The bridge is also called the Allah-Verdi Khan Bridge, named after the provincial governor who oversaw its construction. This bridge is on the Zayande River, which is one of the largest rivers in the center of the country, about 41,500 square kilometers long which flows from the east to the west. In different seasons the view of the river from the bridge is quite spectacular. Siosepol is the first bridge among the eleven bridges built in Isfahan and its construction dates back to year1602. The bridge is about 300 meters long, 14 meters wide and it has about 4,350 square meters of deck area which has made it the longest bridge over the river.

Isfahan; Gas Station Branding Pilot Plan

Fuel distribution in Isfahan Province, due to several features of this ancient province is very sensitive. The first important point about the province is its area. It is the third largest province after Tehran and Khorasan. The second point with this province is its industrialization status. Isfahan houses a variety of factories, industrial plants and power plants in and around it. The third one, which is of most importance, is the existence of abundant historical monuments and tourist attractions. Due to these features, Isfahan is frequently visited by Iranian and foreign tourists.

Hossein Sadeqian, director of the Isfahan zone of National Iranian Oil Products Distribution Company (NIOPDC), says this company is supplying fuel to Isfahan as well as other regions like Hamedan and Kurdestan provinces, and Manjil and Zahedan cities.

He said that the Isfahan zone of NIODC distributed around 20 billion liters of oil products through pipeline and oil tankers last calendar year. He added that more than 1,500 tankers were loaded with fuel from storage facilities.

Sadeqian referred to oil products storage capacity in Isfahan, saying: “Shahid Montazeri storage facility in Isfahan Province is one of the largest oil products terminals in the Middle East with a capacity of storing two billion liters of fuel. One specification of this storage facility is its proximity to Isfahan refinery.”

He said that 50 million liters of oil products is received from Isfahan refinery a day, adding: “The total transfer in Isfahan region stands at 105 million liters a day, distributed through pipeline and 2,000 tankers.”

Sadeqian said Isfahan zone of NIOPDC covers 12 central regions – Shahin Shahr, Najafabad, Golpayegan, Daran, Mobarakeh, Lenjan, Semirom, Shahreza, Naein, Kashan and Ardestan.

He said average gasoline consumption in Isfahan Province stands at 6 ml/d, adding that the figure reaches 9.5 ml/d during New Year and summer holidays. According to him, gasoil consumption varies between 7 and 7.5 ml/d, which falls 25% during holidays as gasoil-burning vehicles face restrictions for entry into Isfahan.

17 Brand Gas Stations

Sadeqian also said that 17 small-sized gas stations are being operated under the title of “branding” for the first time in Isfahan.

“Branding of fuel stations was done in line with the three objectives of consumption optimization and preventing unnecessary commuting, boosting public health and resolving the problem of demand for gas station building due to high land prices in Isfahan,” he said.

Sadeqian said 17 gas stations have been launched within the framework of branding, adding that 13 others are to become operational in the future.

He said that these stations are equipped with a system for vapor recovery during fuel transmission from oil tankers to storage facilities and after gathering vapors from cars’ tanks during refueling.

Sadeqian said these gas stations have been financed by the private sector, adding that some other organs like the Municipality, Isfahan Crisis Management Committee, Isfahan Province Department of the Environment, Isfahan Provincial Governor’s Office and Isfahan Fire Department have been involved in this project. He said that all safety, technical and commercial aspects of this project have been studied.

He said that the number of nuzzles varies between four and six in these gas stations.

Delivery to Iraq and Afghanistan

Sadeqian said the Isfahan branch of NIOPDC is able to export 4 ml/d of petroleum products including fuel oil and gasoil through tankers.

He said that Iran is exporting gasoil in tankers to Iraq and Afghanistan, while fuel is delivered to Bandar Abbas before being exported. Sadeqian said there is capacity for 120 oil tanks.

He also said that 8,000 liters per day of gasoline vapor is reconverted into gasoline at Shahid Montazeri oil products store.