New Chapter for Cooperation

Iran's President Hassan Rouhani was re-elected in the May 12, 2017 race for a second four-year term in office.

The Iranians casting ballots for Rouhani meant vote for the persistence of endeavors for interaction and cooperation in foreign policy and following up on the economic, industrial and social development plans of the outgoing administration.

President Rouhani was elected in 2013 on the platform of "foresight and hope". He managed to overcome misunderstandings and misperceptions and tear down the wall of mistrust. The signature of the landmark nuclear agreement with six world powers, dubbed the Joint Comprehensive Plan of Action (JCPOA), laid the groundwork for interaction and cooperation based on mutual interests and respect.

The symptoms of this success are seen in all political, economic and industrial sectors; however, the petroleum industry, due to its international aspects, has laid bare the JCPOA more than other sectors.

In the wake of the implementation of the JCPOA in January 2016, multitudes of meetings have been held, and expert-level and manager-level talks have been held. Memorandums of understanding and heads of agreement have been signed over these years.

Iran's Minister of Petroleum Bijan Zangeneh is an experienced minister familiar enough with rules of game. By adopting oil diplomacy, Minister Zangeneh pursued an approach which could be described as "realistic interaction" based on "mutual interests".

Given Iran's giant oil and gas reserves, the country's petroleum industry has extensive plans for development in the oil, gas, petrochemical, refining and gas supply sectors. Iran is potentially one of the most attractive markets for investment.

Iran has opened the doors of this developing market to big international companies, so that they would expand their activities and use their capitals in favor of global energy security for coming decades.

In the crisis-hit Middle East region which is home to huge energy deposits, Iran is a safe haven so that investors would work comfortably.

President Rouhani's re-election and the persistence of Minister Zangeneh's attitude mean giving a new chance to the world to prove its goodwill and fulfill its obligations.

Iran, First CRA Producer in Mideast

On May 24, 2017, Iran signed a deal worth € 556 million with a Spanish-Iranian consortium under which the group will provide pipes used in Iran's petroleum industry.

The consortium, which includes Spain's Tubacex S.A. and Iran's Esfahan Steel Company, will produce pipes made of a corrosion resistant alloy for a network of 600 kilometers, or about 370 miles, over three years.

The deal came less than a week after President Hassan Rouhani's landmark re-election win with a big vote. The event, which is first of its kind since Iran and six world powers struck a historic nuclear deal in 2015 and implemented it in 2016, was signed in the presence of Iran's Minister of Petroleum Bijan Zangeneh, CEO of Esfahan Steel Company Mohammad Jannesari and Tubacex's Commercial Corporate Director Anton Azlor.

Addressing the event, Minister Zangeneh said: "The tender bid for the manufacturing of these pipes was held and several companies ran. In the end, the consortium of Iran's Esfahan Steel Company and Spain's Tubacex won."

He expressed hope that following the signature of the contract, Iran would be able to fully manufacture CRA pipes in three years.

"That would allow us to produce these pipes in Iran and export them to the region," he added.

Zangeneh said procurement of CRA pipes had caused serious problems for Iran's petroleum industry during years of sanctions. "That is why manufacturing of this commodity was put on the agenda of the Ministry of Petroleum."

The minister said that domestic manufacturing of 10 groups of petroleum industry equipment was envisaged by the administration of President Rouhani, adding that 53 contracts had been signed.

Zangeneh said the CRA agreement was a result of the JCPOA (nuclear deal) implementation in Iran.

"We want to have interaction and friendship with the world. In the meantime by signing this contract it will become possible to manufacture this commodity in Iran," he said.

"The signature of this 550-million-euro contract will be good news for us (Ministry of Petroleum) but further for the Iranian manufacturing entity and its foreign partner as it guarantees Iran's long-term market," he added.

Zangeneh underscored Iran's insistence on the domestic manufacturing of commodities, saying: "At present foreign companies are interested in being present in all sectors including the manufacturing of commodities and equipment and also in the oil contracts."

12th Administration to Follow 11th

Zangeneh highlighted Rouhani's re-election win, saying: "By turning out [massively] in this election, the Iranian nation proved that it was politically the most mature and the most knowledgeable nation in the region."

"In Iran, people voted with open eyes for the social, cultural, economic and political future of themselves and their children," he said.

The minister said all Iranian people were a single "nation" while many countries in the region have not yet any "nation" and they hold tribal votes only.

"The people's presence in this election is a big source of honor for our country and undoubtedly, Iran is the first among regional countries in terms of political understanding and election," said Zangeneh.

Regarding the 12th administration's policies in the petroleum industry, he said that President Rouhani's future administration would push ahead with the 11th administration's agenda more strongly.

Zangeneh reiterated that contracts related to domestic manufacturing and development of oil and gas fields, particularly those owned jointly with neighbors, and enhanced oil and gas recovery projects would be pursued in the future administration.

556-Million-Euro Deal

Ali Kardor, the CEO of National Iranian Oil Company (NIOC), said after the transfer of technology for the construction of CRA pipelines into Iran, the country would become the first manufacturers of these pipes in the region.

He said that the contract, worth $630 million or € 556 million, would lead to the manufacturing of 600 kilometers of CRA pipes for Pars Oil and Gas Company (POGC).

"In order to implement this agreement, Esfahan Steel Company will establish a new facility, while two other facilities will be built on a 50-50 basis by this company and Spain's Tubacex in Kish Island," said Kardor.

He said that Kish Island was chosen due to its proximity to South Pars gas field, adding that 750 direct and indirect jobs would be created.

Working in Iran Easy

Azlor said working in Iran was easy due to abundant skilled manpower.

He said that Tubacex was willing to commence its serious and continued cooperation with Iranian partners as soon as possible, adding that a big team of Tubacex had been negotiating for 1.5 years with Iranian officials and companies about this contract.

Tubacex Tubos Inoxidables S.A. manufactures seamless stainless steel tubes, pipes and bars.It operates hot tube extrusion and finishing facilities in Llodio, Spain and a cold tube rolling mill in Amurrio, Spain.

The company was founded in 1993 and is based in Llodio, Spain. The company has sales offices in Europe, North America, Latin America and Asia. Tubacex Tubos Inoxidables S.A. operates as a subsidiary of Tubacex, S.A.

Azlor highlighted Tubacex's long record of investment in different sectors of energy, saying his company was willing to cooperate with Iranian companies and invest in Iran.

Compared with other countries in the world, he said, Iran enjoys high potential and skilled manpower and remains unrivalled in oil and gas.

CRA Technology Transfer to Iran

Jannesari said that Esfahan Steel Company was experienced in building wellhead and downhole equipment, as well as industrial alloys for oil and gas industry and power plants.

"The process of indigenization of CRA pipe manufacturing was on the Esfahan Steel Company's agenda several years ago and now we are witnessing the signature of contract for building these pipes," he added.

He described the process of CRA pipe domestic manufacturing as a complicated one requiring precise planning. He noted that the agreement with the Spanish company would allow the full transfer of technological knowhow for building such pipes to Iran.

The technology for manufacturing CRA pipes is monopolized by four top companies in the world. Since the number of proprietors of technology for building premiums is limited, the pipes will be produced using Japan's JFE Steel Corporation technology.

80% Growth in Petchem Exports

Iran's petrochemical exports recorded an 80% growth over three years under the administration of President Hassan Rouhani, the secretary general of the Union of Petrochemical Industry Entrepreneurs said.

Ahmad Mahdavi Abhari said the petrochemical exports rose to more than 20 million tonnes from 2013 to 2016.

"New customers, including Europe ones, volunteered to buy products from Iran," he said.

Mahdavi Abhari said the conditions became conducive to Iran's petrochemical exports after the country's nuclear deal with six world powers, known as the Joint Comprehensive Plan of Action (JCPOA), took effect.

After the entry into force of the JCPOA, a number of countries volunteered to buy petrochemical products from Iran, he said

"The Europeans are willing to purchase petrochemicals from Iran. In order to further enhance petrochemical exports to Europe, money transfer and banking transactions must be normalized," he added.

Mahdavi Abhari also said that Iran was using 82% of its petrochemical production capacity in 2016, versus 71% three years before.

Noting that petrochemical industry has relative advantage among industries in the country, he said: "Due to huge hydrocarbon deposits, Iran is endowed with major and exceptional potential for developing its petrochemical industry."

"Following the implementation of the JCPOA we have seen international companies change their attitude toward Iran," he said, adding that international delegates have been visiting Iran over recent months.

He also said that $26 billion was needed to complete some 60 incomplete petrochemical projects.

"In case these incomplete projects are completed, some 33 million tonnes will be added to the country's petrochemical production capacity," said Mahdavi Abhari.

OPEC Extends Output Cuts Deal

OPEC ministers agreed in their 172^nd ordinary meeting on May 25 for the producer group's now 14 members to continue cutting production by 1.2 mb/d in a bid to help stabilize the market.

In this meeting, Equatorial Guinea which is the third largest producer in Africa was approved as the new member of the Organization of the Petroleum Exporting Countries.

Surveys show that OPEC members had respected the November 2016 deal which took effect at the beginning of the year. However, non-OPEC oil producers like Kazakhstan, Azerbaijan and Mexico did not fully comply with their obligations for a 50% cut in their output.

OPEC-NOPEC Convergence

Hours after OPEC's agreement on the extension of the deal, non-OPEC producers said they would cut their production by 600,000 b/d. Non-OPEC comprises 11 countries including Russia, Kazakhstan, Oman, Azerbaijan and Mexico. In December, they fulfilled 50% of their obligations, which was much below OPEC's full respect for its commitment. Russia alone had agreed to cut its output by 300,000 b/d.

Before the meeting started, Iran's Minister of Petroleum Bijan Zangeneh had said that Tehran would abide by any decision reached by fellow OPEC members for an extension of the output cuts deal. He had said Iran would agree on the extension for six, nine or twelve months.

Noting that the objective sought in the OPEC agreement was to help stabilize oil market and reduce inventories, Zangeneh said: "As I said before, for all OPEC member states at the current stage, the suitable oil price is between $55 and $60 [a barrel]."

India Delegation Discusses Oil/Gas Ties in Tehran

An Indian delegation led by Foreign Secretary Subrahmanyam Jaishankar traveled to Tehran and discussed expansion of oil cooperation between the two countries with Iran's Minister of Petroleum Bijan Zangeneh.

In the meeting, the two sides exchanged views about an offer by India's OVL to develop Farzad B gas field and discussed differences between OVL and National Iranian Oil Company (NIOC) on the financing of the project.

Iran's deputy minister of petroleum for international affairs and commerce, Amir-Hossein Zamani-Nia, said: "There is firm determination in senior officials in the two countries and the Ministry of Petroleum for concluding negotiations for the development of Farzad B field by OVL."

"In the meeting between Iran's minister of petroleum and the Indian delegation, new ideals were raised," he said, adding that it was agreed that OVL's managers discuss possible solutions with NIOC managing director Ali Kardor and his deputy Gholam-Reza Manouchehri.

"Negotiations about some Indian private refiners' debt to Iran and discussion about possible options for the delivery of Iran's natural gas to India were among subjects of discussion between the two sides," said Zamani-Nia.

Meanwhile, Sirous Kian-Ersi, CEO of National Iranian Tanker Company (NITC), expressed readiness for broader cooperation with Indian refineries on the persistent and safe transfer of oil cargoes.

He made the remarks in his meeting with Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan, saying NITC is the largest oil shipping firm in the world.

Kian-Ersi said that Indian minister highlighted the significance and history of Iran-India relations, noting that Indian refineries and oil companies were ready to broaden cooperation with NITC for the transfer of oil cargoes from this country.

Indian Prime Minister Narenda Modi visited Iran nearly a year ago and signed 12 agreements in a variety of sectors including development of ports.

India remains a big buyer of Iran's crude oil. Its refineries increased their oil purchase from Iran in the wake of the implementation of Iran's nuclear agreement with six world powers.

SP14 Platforms to Come Online Next Year

The CEO of Pars Oil and Gas Company (POGC) has said the two platforms of phase 14 of South Pars gas field would come on-stream early next year.

Mohammad Meshkinfam said the installation of platforms would allow the transfer of 1 bcf of gas onshore.

He also referred to POGC's plan for reducing flaring in South Pars, saying the contract for associated petroleum gas gathering at the refinery of phases 2 and 3 would be signed soon.

Meshkinfam touched on Iran-Qatar negotiations about South Pars, saying: "The two countries held talks from time to time with the objective of coordinating affairs and maximum efficient recovery, but the two sides have no right to meddle with each other's development plans of their fields."

He said that studies were over at the border block of phase 12 for the feasibility of development in this zone, adding: "Supporting domestic contractors is at the top of agenda of the company."

He referred to the Farzad field and said that development of Farzad B was more prioritized than Farzad A due to its higher quality of gas.

"It is our plan to hire a consulting engineer for the field and we will sign an MC contract with Petropars. The field is not like South Pars, so it needs its own fundamental design," said Meshkinfam. "Golshan and Ferdowsi fields are not prioritized because they are not jointly owned and so far we have not had serious talks about these fields."

Spectral Gamma Logger Made in Iran

For the first time in the Middle East, an Iranian knowledge-based company has developed spectra gamma logger for oil cores.

The logger has been designed and built by Kish Tavana Energy. The logger was put on display at an exhibition organized by the Office of Vice-President for Science and Technology, and another exhibition staged by the Park of Science and Technology of University of Tehran.

The US and France were the leading countries building spectral gamma loggers. Now, Iran is among manufacturers of these loggers which are used in oil, gas, mining and geotechnical industries.

Spectral gamma ray tools provide insight into the mineral composition of formations. The total gamma ray spectra measured is resolved into the three most common components of naturally occurring radiation in sands and shale—potassium, thorium, and uranium. The data are used to distinguish important features of the clay or sand around the wellbore. The clay type can be determined, and sand can be identified as radioactive. The deposition of radioactive salts behind the casing by the movement of water can also be identified.

Spectral natural gamma ray systems designed for K-U-Th logging have been applied to evaluate stimulations and completions. One or more radioactive isotopes tag the various materials sent downhole. From a spectral log that separates the different isotopes, engineers establish the vertical zones of each of the different phases of the treatment.

 

Zangeneh Meets with Total, Lukoil and Gazprom Executives

Iran's petroleum minister, Bijan Zangeneh, has held talks with the top executives of oil majors on the sidelines of a ministerial meeting of OPEC countries.

The meetings included France's Total and Russia's Lukoil and Gazprom.

A direct meeting between Total CEO Patrick Pouyanné indicates the French oil giant's firm determination to resume its activities in Iran's petroleum industry. Pouyanné recently told CNN that his company would soon be the first Western oil company to resume work in Iran.

Last November, National Iranian Oil Company (NIOC) signed a heads of agreement with a consortium of Total, China's CNPC and Iran's Petropars for the development of Phase 11 of South Pars gas field. Total would be leading the consortium for the $4.8 billion deal.

Zangeneh had expressed hope that Iran would sign the first agreement within the framework of the Iran Petroleum Contract (IPC) with Total. He also said that Total had found a solution to finance this project.

No Obstacle to American Firms

Zangeneh told reporters in Vienna that Iran had no problem with the involvement of American companies in its oil and gas projects.

"They have been restricted by their own government and we know this," he said.

Zangeneh said many European and Asian companies from Japan, South Korea, France and even Britain had signed agreements with Iranian companies for future cooperation.

Regarding an agreement for Iran to sell crude oil to Russia, he said: "We are waiting for the Russian side to start the work. The agreement has been signed between National Iranian Oil Company and a Russian company and necessary coordination has been done. We are waiting for them to send their tankers to Iran to load crude oil cargoes."

Zangeneh also said that the offer by the Indian party for the development of Farzad-B gas field was unfavorable, adding: "In parallel with talks with the Indians, Iran has started negotiations with Russia's Gazprom for the development of this field."

Iran Petchem Output to Hit 59mn Tons

Iran's National Petrochemical Company (NPC) has forecast the country's petrochemical products to reach 59 million tons, earning the country $17 billion, in the current calendar year to March 2018.

According to the NPC projections, exports would account for 67% and domestic sales for 33%.

It said that Iran's petrochemical output reached 50.6 million tons in the last calendar year, while the installed petrochemical capacity had been 61.9 million tones.

Iran sold 27.6 million tons in the last calendar year with exports accounting for 20.5 million tones and domestic sales for 7.2 million tones.

The value of Iran's petrochemical products currently stands at $9.5 billion with domestic value-added estimated at IRR 163,800 billion.

The most important projects carried out by the NPC in the past one year include the inauguration of six projects (Lorestan polyethylene, Urumia sulfuric acid, Mahabad polyethylene, Marvdash ammonia and urea, Phase 2 of Karoun, Mahshahr's Takht-e Jamshid) with a capacity of 2.2 million tones and an investment of $1.3 billion with sales valued at over $2 billion.

In the current calendar year, 11 petrochemical projects are expected to come online. So far, five projects (Kurdistan, Takht-e Jamshid Pars in Assaluyeh, Kavian 2, Morvarid and Entekhab) have become operational and six more are yet to come online.

Once these projects become operational, Iran's petrochemical production capacity would rise to 72 million tons by the end of the current calendar year.

Pergas to Develop Karanj/Shadegan Fields

The head of Pergas International Consortium has announced the finalization of Karanj and Shadegan fields' development plans in the near future.

Colin Rowley said the consortium had prepared $1 billion in investment for the development of the fields.

He said that Pergas was in talks with Iranian E&P companies with a view to securing "win-win" projects.

Rowley expressed hope that a memorandum of understanding would be signed between Pergas and National Iranian South Oil Company (NISOC) by September.

The CEO of Norway's AGR also said that Pergas and NISOC were set to finalize their MOU for studying Karanj and Shadegan fields.

He said that the Pergas consortium comprised 20 companies, adding that the requirement for joining this consortium was a record of 15 years of operation.

The first non-disclosure agreement for the development of the two fields was signed last November between NISOC and Pergas.

The Philippine National Oil Company (PNOC), which is a member of Pergas consortium, has recently signed an MOU with National Iranian Oil Company (NIOC) to study Pazanan and Darkhuain fields.

IOOC Output Capacity to Reach 580,000 b/d

The Iranian Offshore Oil Company (IOOC) intends to bring its production capacity to 580,000 b/d, the company's managing director said.

Hamid Bovard said the target would be reached under Iran's 6^th Five-Year Economic Development Plan.

He said that the company had got authorization for a $1.8 billion investment to raise its output capacity by 107,000 b/d.

He added that the IOOC production capacity would also increase to 300 mcf/d.

Bovard cited the completion of Reshadat field, as well as drilling and completion of 12 wells in Siri as nine projects the IOOC would follow up on.

He said the IOOC planned to increase its production capacity by 40,000 b/d in the short-term, adding that the company's output would have been added by 20,000 b/d in June.

Bovard also referred to gas gathering project in Forouzan field, saying: "In addition to cooperation with nascent Iranian companies, we have had negotiations with Norwegians and Koreans. In case cooperation with the Iranian companies fails to yield results, we will pursue other available options."

He said that associated gas at Hengam oil field would be gathered in the near future, adding that an oil and gas processing facility in the field would be launched this year.

Bovard said the IOOC had installed 200 structures in the Persian Gulf, saying the company guaranteed Iran's strong presence in this region.

South Pars Oil Layer Output Crosses 1mb

Production from the oil layer of South Pars gas field has exceeded one million barrels, the CEO of Petroiran Development Company (PEDCO) said.

Roham Qassemi added that the second oil cargo from this field would be loaded soon. The first oil cargo, comprising 611,000 barrels, was loaded from this field recently. The oil layer of South Pars, whose tentative production had started in March, was inaugurated by Iranian President Hassan Rouhani in April.

The buyback deal for the development of the oil layer was signed in 2004 by PEDCO. It was among few development projects directly operated by National Iranian Oil Company.

The oil layer of South Pars, which is mainly composed of carbonated reservoirs, is estimated to hold between 1.5 billion and 4 billion barrels of oil in place in three formations.

37 Countries Attend Iran Oil Show

Tehran hosted Iran's 22nd International Oil, Gas, Refining and Petrochemical Exhibition from May 6 to 9. A total of 1,207 local companies and 816 foreign companies from 37 countries were in attendance. Thanks to Iran's 2015 landmark nuclear deal with six world powers that ended in the lifting of international sanctions imposed on Iran's oil sector, huge number of participants attended the exhibition.

Addressing the inaugural, Iran's Minister of Petroleum Bijan Zangeneh said when he took office in August 2013 financial resources were limited, tough sanctions were one year old while oil prices were on a downward trend.

"So we had no option but to continue to work and by spending limited resources piecemeal and through perseverance and the endeavors of all colleagues and contractors and manufacturers, we managed to achieve significant success thanks to God," he added.

Zangeneh said 11 new phases of South Pars gas field had become operational over the past three and a half years. "The South Pars production capacity has doubled over this time. By the end of the [calendar] year 1391 (March 2013), [its] daily output was 285 mcm/d, which reached 575 mcm/d by the end of last [calendar] year," he added.

Zangeneh said: "Given the capacity built for gas production in South Pars, the share of liquid fuel in the fuel mix of power plants dropped sharply from 43% in the [calendar] year 1392 to around 10% in the [calendar] year 1395."

He referred to gas delivery to power plants, saying it had increased from 36 bcm to more than 62 bcm over the same period.

Zangeneh said over that period of time Iran switched from importing to exporting fuel oil. In the calendar year to March 2017, he added, Iran exported 50 million liters of fuel oil.

Joint Fields Development Picks Up Speed

He pointed to the development of jointly owned fields as one of the most important achievements of the Iranian Ministry of Petroleum in the administration of President Hassan Rouhani.

"In the West Karoun oil fields (Azadegan, Yadavaran, Yaran), oil production rose from 70,000 b/d in July 2013 to 280,000 b/d in March 2017," he said.

Zangeneh also said that production started from the oil layer of South Pars at a rate of 25,000 b/d last April, while Azar oil field started pumping 15,000 b/d in March.

Oil Market Share Regained

Zangeneh said another achievement of petroleum ministry under the aegis of the nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), was Iran's return to the international oil market.

"Iran's oil production and exports post-JCPOA increased more than 1 mb/d and we managed to regain the share we had lost and was likely to never return," he added.

The minister said petrochemicals production had grown under the Rouhani administration.

"The volume of petrochemicals production under this administration has more than quintupled and will reach 9 million tonnes as new projects are coming online," he said.

Zangeneh expressed hope that the methanol unit of Marjan Petrochemical Plant with a capacity of 1.6 million tonnes would come online this summer. He said that Iran's petrochemicals output capacity would have increased by 10.5 million tonnes over a four-year period.

Gasoline Production at Condensate Refinery

The minister said gasoline production started from Bandar Abbas Gas Condensate Refinery despite all restrictions. The refinery, which would make Iran self-sufficient in gasoline production, is operated by the Persian Gulf Star Oil Company.

Gas supply to villages and small towns was another point highlighted by Zangeneh. He said that gas supply to the southeastern city of Zahedan started after IRR 7,500 billion investment. The number of villages connected to gas network soared from 14,000 in 2013 to 23,000 now.

The minister said contracts had been signed with domestic manufacturers to produce 10 largely needed items in the petroleum industry. He added that in some cases domestic and foreign manufacturers would cooperate together.

"We hope that a contract would be signed soon for the manufacturing of anti-corrosion pipes so that Iran would quit importing this commodity and would even become an exporter," said Zangeneh.

Upstream / Downstream Sector Needs

The Iranian minister said that several important projects needed to be taken into consideration in upstream sector. He highlighted enhancing the recovery rate of oil reservoirs and enhanced oil recovery with the focus on developing joint fields, and renovation of oil installations which are mostly decrepit.

"In the downstream sector, the second jump in the petrochemical industry has started and it must lead to fruition. In the refining sector, the refining capacity must reach 3 mb/d of crude oil and gas condensate," he added.

IPC and Domestic Contractors

Zangeneh referred to the new contractual framework, known as Iran Petroleum Contract (IPC), saying they were needed to boost all domestic contractors and manufacturers.

"Our main focus in these contracts is on domestic manufacturers. Iranian companies will be able to sign agreements directly with the petroleum industry in the realm of their capabilities. Moreover, an Iranian E&P company is required to work alongside foreign companies and most of the job will be handled by the Iranian party," he said.

Zangeneh said that Iran was expected to sign $80 billion contracts in two years, adding: "It means injecting $50 billion into labor market that would create job opportunities."

He also said that oil sector was responsible for feeding petrochemical plants. Under the country's 6th Five-Year Economic Development Plant, he added, Iran would be able to attract $40 billion in foreign investment for its petrochemical sector.

Positive Track Record in Oil/Gas Sector

The Parliament spokesman Ali Larijani said at the ceremony that the Rouhani administration had made a lot of attempts for jointly owned reservoirs.

"There is currently good potential in the country for oil and gas [production] and the Iranian Ministry of Petroleum's approach is based on benefiting from the country's capacities and developing close ties with big companies," he said.

Larijani called for significant investment in the oil and gas sector as a national priority, saying it was important to focus on enhanced recovery and avoid waste of resources.

"We have to apply technologies that would block the waste of energy and oil and gas resources. Of course, this issue is among the government's top priorities," he said.

Larijani said there were good advantages in the country in the petrochemical sector, adding: "Of course there are disputes over its price, to which the Iranian minister of petroleum responded after showing up in Majlis."

He added that the industry and energy committees of the Iranian parliament were in contact with the Ministry of Petroleum to find ways of attracting investment in the petrochemical sector.

Majlis Investment in Iran Petchem

Larijani said the private sector must get involved in the petrochemical industry more seriously so that "we will utilize domestic potentialities".

"Some projects envisaged at the Ministry of Petroleum could be developed with the help of the private sector. We can also help these companies by dipping into the National Development Fund of Iran," he added.

"Over recent years, proper measures have been taken in the oil and gas sector. That was logical. Majlis will support these activities. There is good atmosphere for work and endeavor in the oil and gas industry. We hope that we will see more prosperity in this sector in the near future," said Larijani.

Commitment to JCPOA

Larijani said that Iran would remain committed to the nuclear deal it signed with world powers.

"There have been disputes on the nuclear agreement. What was achieved was the least demanded by Iran. Any modification of this agreement will give rise to new issues. Of course we remain committed to this agreement," he said.

Larijani also said terrorist groups wreaking havoc in some countries in the West Asia region had affected oil and gas exploration.

He noted that the behavior of some countries in the region had led to misunderstanding.

Larijani gave an acceptable assessment of Iran's security situation, saying it had not been achieved overnight.

Attraction of Investment and Technology Transfer

At the beginning of the inaugural, Kasra Nouri, general manager of public relations at Iran's Ministry of Petroleum, said 800 domestic companies could not be allotted booths at the Oil Show since the entire land was used at the Tehran International Permanent Fairgrounds.

"This international event, as one of the largest petroleum industry exhibitions in the world, is honored to welcome 1,207 Iranian companies plus 816 foreign companies from 37 countries," he added.

Nouri said foreign companies were mainly from Germany, China, Ukraine, Switzerland, Italy, United Arab Emirates, Austria, Armenia, Belgium, France, Hong Kong, India, Malaysia, Monaco, the Netherlands, Poland, Canada, Venezuela, South Korea, Australia, Russia, Spain, Singapore, Turkey, England, Azerbaijan, Norway, Sweden, Brazil, Bulgaria, Romania, Japan, New Zealand, Taiwan, Portugal, Indonesia and Finland.

He said that the presence of 37 countries at the Oil Show indicated Iran's post-JCPOA standing in the petroleum industry. "I hope that required grounds would be paved for both sides to benefit from this opportunity (JCPOA) quickly and easily," he said.

Nouri said the 22nd Oil Show was centered on attracting investment and transferring technology.

"This exhibition provides a good opportunity to introduce grounds for investment and display the capabilities of companies active in this sector, including manufacturers of equipment, exporters, contractors, investors, engineering designing and knowledge-based companies as well as directors of public and private sectors," he added.

Iran Post-JCPOA Crude Oil Hit Record

As international sanctions were tightened in 2011, the Iranian economy and industry faced serious challenges. Iran's oil sector was hit the hardest due to a reduction in foreign direct investment and the ensuing slowdown in oil and gas production capacity. As a result, Iran's standing was weakened in world energy market. Official figures show that when the sanctions were in place (January 2011 to May 2014), oil purchase by China, Japan, India, Turkey and South Korea – all of them traditional buyers of Iran's oil – was slashed by a half year-on-year. The reason was that the sanctions started imposing tough restrictions on oil and gas transfer to Europe in 2012, heavily affecting Iran's oil sector. Within a year, Iran's oil exports sharply fell from 2.8 mb/d in July 2011 to below 1 mb/d in July 2012.

But after Iran's nuclear deal with six world powers – the Joint Comprehensive Plan of Action (JCPOA) – took effect in January 2016, Iran's oil exports started growing to cross 3 mb/d of crude oil and gas condensate now.

Ali Kardor, head of National Iranian Oil Company (NIOC), told reporters during his visit to Iran Oil Show that Iran had 75 million barrels of gas condensate parked on water. "In addition to production and other costs, the cost price of parking each barrel of gas condensate on water amounts to $12. As soon as the JCPOA was implemented this figure fell to zero."

"Moreover, during years of sanctions, certain equipment was purchased even twice and some equipment which had been blocked in other countries. The equipment that was imported was not of high quality. But after the implementation of the JCPOA this problem was resolved and high-quality equipment was brought in," he said.

Kardor said Iran also regained its oil money that had remained frozen in foreign banks.

"The cost price of projects increased during sanctions. According to international indicators the cost price of each project was increased by more than 2.5 times," he added.

Kardor said: "The sanctions had advantages for us, but their disadvantages outweighed and they were imposed on NIOC."

Iran Oil Exports Hike, Main JCPOA Achievement

Kardor, who is also Iran's deputy minister of petroleum, said the jump in Iran's oil exports was the main achievement of the JCPOA. He said: "With the JCPOA, Iran's oil exports would have fallen sharply. Had the JCPOA talks not started Iran's oil exports would have reached 450,000 b/d. Even all countries that were friendly to Iran had cut their purchase of oil from Iran."

He said the implementation of the JCPOA was a blessing for Iran's petroleum industry, adding: "Regardless of whatever is said about non-dependence on oil, if someone can present a model for running the country with 450,000 b/d of oil we will award him the Nobel prize."

Talks with Total

The NIOC chief said that negotiations were under way for awarding Phase 11 of South Pars gas field to France's energy giant Total.

"Negotiations with this company are under way and in final stages. We are not interested in signing a contact in the run-up to the [presidential] election," said Kardor.

Asked about awarding Farzad B filed to the Russians, he said: "We are currently hiring consultants within EPCF framework in order to accelerate operation of this field. In our view, the option for extracting gas from this field is to [convert it into] LNG."

He was also asked about any effect of Iran's presidential election on the presence of foreign companies in the country's oil sector. Kardor replied: "Like developed countries in the world, Iran will be developed through interaction, foreign investment and application of sophisticated technologies."

$3bn Bonds

Kardor said NIOC planned to print $3 billion of bonds in order to reimburse its debts.

He also said that the state-run firm had devised plans for empowering domestic companies.

"Domestic producers and manufacturers have so far proven their capabilities, but we are currently seeking to enhance the technical capability of domestic contractors for implementing petroleum industry projects," said Kardor.

Regarding the maintenance of oil wells that have experienced sharp pressure fall-off, he said: "Ever year, 100 wells are dealt with in order to resolve the issue of pressure fall-off."

Record Oil Exports

Kardor said Iran's crude oil and gas condensate exports reached 3.047 mb/d in March, hitting a record since the 1979 Islamic Revolution. "That happened due to gas condensate parked on water and it will not repeat itself again."

He said that Iran's crude oil exports stood at 2.5 mb/d in the Iranian month ending April 20, adding; "Iran's average crude oil exports are forecast to reach 2.7 mb/d this [calendar] year [to March 2018]."

He dismissed allegations that Iran had offered lucrative discounts to oil dealers, saying: "Such allegations are untrue and Iran's crude oil pricing is based on market conditions. That does not mean discount or selling at low prices."

Kardor also said that India had yet to pay for oil it had bought from Iran before the JCPOA was implemented. He added that Iran's post-JCPOA oil sales had been paid fully.

Gas Development Saves Iran $18 bn

The implementation of Iran's nuclear deal with six world powers and the removal of sanctions gave rise to major developments in Iran's gas industry. As a result, production picked up, domestic distribution network was expanded and exports grew. In other words, the Joint Comprehensive Plan of Action (JCPOA) facilitated access to required equipment for completing gas refineries in South Pars gas field that finally helped sweet gas production soar from 550 mcm/d in January 2016 to 700 mcm/d in January 2017.

As international sanctions were lifted, liquid products exports became possible and within the framework of Article 12 of Law on Removal of Production Obstacles, required financial resources were provided for expanding gas supply to villages.

The JCPOA created an opportunity to find new markets for exporting gas and other products like sulfur and liquefied petroleum gas (LPG). Furthermore, negotiations for building the first liquefied natural gas (LNG) plant in Iran raced ahead. After all, Iran's gas industry regained its standing on the international scene.

Hamid-Reza Araqi, CEO of National Iranian Gas Company (NIGC), told reporters on the sidelines of Iran's 22nd Oil and Gas Show that the state-run gas firm had been instrumental in national development.

"The environmentally friendly nature of natural gas is the most important issue that highlights the role of this company," he said.

Araqi said a major objective pursued by developed countries in the world was to connect their power plants to natural gas network in order to reduce environment pollution.

"The country's power plants' use of natural gas has been an important initiative that has contributed to both the environment and the economy," he added.

Araqi said Iran's power plants consumed around 47% of middle distillate fuel produced in the first half of the calendar year 1392 (started in March 2013).

"This figure has now fallen to below 10% and 90% of power plants use gas throughout the year. That has saved the country $18 billion due to middle distillate fuel," he added.

Gas Supply to Underprivileged Areas

Araqi said supplying natural gas to underprivileged areas was another responsibility assigned to NIGC.

"Under this administration, endeavors were focused upon supplying natural gas to the villages that had not been connected to gas," he added.

Araqi said that more than 9,000 villages received gas under the administration of President Hassan Rouhani.

"Gas supply to villages will reduce migration of villagers to cities and result in the establishment of new factories and industrial plants," he added.

The official said last calendar year was the best year for NIGC as towns and villages were connected to gas network, gas pressure booster stations were inaugurated and gas trunklines were launched despite Turkmenistan's suspension of gas supply to Iran.

"The most important principle was job creation that happened throughout all activities of NIGC," said Araqi.

He said that more than 96% of gas supply equipment is being produced in the country. "In addition to national development, NIGC has taken a big stride in job creation and self-sufficiency of Iran."

Noting that NIGC is instrumental in generating revenue for the government due to replacing liquid fuel with gas, exporting kerosene, fuel oil and gasoil, Araqi said: "The Company has provided at least IRR 80 billion in aid to the government."

Gas Exports to Iraq

Araqi said Iran must export some 200 mcm/d of gas under the country's 6th Five-Year Economic Development Plan.

"Currently there is such potential, and negotiations with the Iraqis are under way for opening letters of credit (LC) and exporting [gas] to Iraq," he added.

"In case financial issues with Iraq are finalized we have to export 50 mcm/d of gas to this country, which will be 10 to 11.7 mcm/d in the first year," said Araqi.

He said that negotiations were also under way for exporting gas to Oman, adding that once the talks are finalized by the National Iranian Oil Company (NIOC), NIGC would be tasked with its implementation.

"Any company that is able to invest in different sectors of Iran's gas industry will be welcomed," he said.

Araqi said Iran's technical savvy had reached a stage where it can compete with cutting edge technologies.

"We are well ahead of other countries in many sectors and we can compete with them with our own knowledge-based technologies," he added.

Tapping Joint Fields

Araqi said: "We are well aware of this issue that gas production and recovery in Iran is still on the rise and is another outcome of the JCPOA for the gas industry. However, some maintain that this level of production and consumption may cause dependence on this clean energy, off which it will be difficult to wean the country."

"We also know that nowhere in the world places its energy products in the same basket. But for the time being, since we share reservoirs with other countries like Qatar, it is noteworthy that in case you do not extract from this reservoir others will do," he said, adding: "And this means they will get your money and wealth. Therefore, you have no other option but recovery. You have no way but to get lion share of this joint reservoir so that your wealth would not fall into the hands of others."

Araqi said: "However, NIGC has been exhausting its efforts in order to explore anywhere there might be a gas reservoir build refineries and expand its networks through new pipelines and storage facilities."

"We are currently under conditions that border cities in our neighboring countries are demanding that we let them enjoy this endowment and that is an honor for Iran that it has managed to bring peace and serenity to its people through establishing security," he added.

Iran, Sustainable Oil Product Supplier

The entry of foreign investment and purchase of new high-quality equipment at reduced prices was an achievement of Iran's historic nuclear agreement (JCPOA) for the refining and distribution sector in Iran. Thanks to the lifting of sanctions, Iran can get its petrodollars and purchase commodities whose import was banned for years.

Abbas Kazemi, CEO of National Iranian Oil Refining and Distribution Company (NIORDC), told reporters at Iran Oil Show that the JCPOA saved the country from tough restrictions.

"The implementation of the JCPOA allowed us to purchase equipment needed for the petroleum industry at a price equal to one-third of what we paid during years of sanctions," he said.

Kazemi said operations for the startup of Bandar Abbas Gas Condensate Refinery started in 2007 and it was expected to become operational in four years. "But nobody asked why the refinery failed to come online despite availability of sufficient financial resources," he added.

Kazemi said it was the administration of President Hassan Rouhani that bore the brunt of international sanctions imposed on Iran. "The entry into force of the JCPOA saved us from tough restrictions because we no longer pay high costs for displacement."

"During years of sanctions we purchased commodities from some countries. After the JCPOA implementation, we buy the same commodities directly from European countries and at a price cut by two-thirds," he added.

Kazemi said the JCPOA lifted sanctions imposed on energy, banking and transport sectors. "After the JCPOA implementation, the banks' embargo has been lifted, but it depends on a bank to choose to work for Iran or not."

"Had the sanctions not been lifted compressors bought from Germany's Siemens for the gas condensate refinery would not have been imported and Iran would have to pay much higher and purchase products of lower quality from China. That higher cost would have been imposed on people," he added.

Kazemi said Iran could manufacture compressors, but it was not economically viable. "We need four compressors every five years. Who is ready to invest in this sector?" he asked.

Kazemi threw his weight behind domestic manufacturing companies, saying: "We achieved self-sufficiency in manufacturing some equipment and we have qualified companies. Oil Turbocompressor Company (OTC) is one of good companies making turbocompressors under Siemens license and this German company buys components from OTC."

Switching From Import to Export of Gasoil

Kazemi said Iran was an importer of gasoil in the calendar year to March 2015, adding that the country turned into an exporter of this product by selling 13 million liters a day, two years later.

He praised the role of the JCPOA in the development of refining sector, saying: "Domestic potential is acceptable, but we need imports in some sectors like licenses and certain instruments."

Kazemi said refineries in Iran are ageing, and produce a lot of fuel oil, adding: "Based on a law drafted in the Parliament last [calendar] year,  the share of fuel oil production is planned to fall below 10% by 2025. Meantime, the fuel oil production rate by refineries currently stands at 25%, which we hope will reach 10% as soon as possible thanks to investments under way."

"With the startup of the first phase of Bandar Abbas gas condensate refinery, the gasoline production unit of Bandar Abbas oil refinery and the gasoline production unit of Lavan refinery, some 16 million liters of euro-4 gasoline will be added to the country's total gasoline production. We hope that with the launch of new projects more euro-4 gasoline will be distributed in different cities," he said.

Domestic Manufacturing Share Up

Kazemi said most equipment used in new refining projects was manufactured domestically, adding that 60 to 65% of the equipment is domestically manufactured.

"We have also made good progress in catalysts and we hope we will become self-sufficient. Currently 70 to 80% of our required catalysts are made domestically," he added.

Kazemi said there was an option for gas stations to work under a brand, adding: "Of course it is not obligatory. We do not want to harm anyone's business and this is just our proposal for everyone to take part in this project under which the owners of brands will assume responsibility for all possible problems."

He said the processing units of Bandar Abbas Gas Condensate Refinery were 43% complete in 2013, which reached 97% in 2016 after the JCPOA took effect.

Asians Interested in Refinery Optimization Projects

Kazemi referred to quality improvement projects at four oil refineries in the country, saying: "In order to reduce fuel oil production by 15% at our refineries we will need $14 billion in investment, $5 billion of which has been provided so far."

He said that equipment has been ordered for a $1.2 billion project to improve the quality of products at Abadan oil refinery.

"All investors in Iran's oil refinery quality improvement projects are from East Asian countries," he said. "Basic studies had been conducted in 2001, but they have been modified based on new market needs."

Kazemi said kerosene consumption had fallen from 28 million liters to 4 million liters in recent years due to increased gas production in South Pars gas field.

"We have made progress in exporting oil products over recent years. The number of our jetties has increased from 2 to 6 and we have 5 more jetties under construction," he added.

Bright Future Awaiting Iran E&P Firms

Iran's 22nd Oil and Gas Show, unlike those held in previous years, saw the participation of Iranian exploration and production (E&P) companies. Eleven Iranian E&P companies, cleared by the Ministry of Petroleum to bid for new oil projects under the Iran Petroleum Contract (IPC) model, showed off their potential at the exhibition held in May in Tehran. They also took the chance to hold talks with foreign companies for future partnership. These companies know quite well that they still face a tough road ahead to become an E&P firm; however, they pin hope on the future. They hope to be given a prominent role in the petroleum industry after IPC deals have been signed.

The 11 companies qualified by the Iranian Ministry of Petroleum to bid for IPC projects in partnership with foreign companies are as follows: Petropars, Oil Industries Engineering and Construction Company (OIEC), Energy Dana, Petroiran Development Company (PEDEC), MAPNA Group, Khatam al-Anbia Constructions HQ, Industrial Projects Management of Iran (IPMI) affiliated with Industrial Development and Renovation Organization (IDRO), Persia Oil and Gas Industries Development Company (POGIDC), Ghadir Investment Company and Pasargad Energy Development Company (PEDC).

Many rounds of talks have been held between these companies and potential foreign partners and the National Iranian Oil Company (NIOC) to develop oil and gas fields in Iran. Some have managed to sign memorandum of understanding (MOU) or heads of agreement (HOA). Some others hope to sing MOUs soon. After the re-election of incumbent President Hassan Rouhani in a landslide victory in May, these companies hope to have a new experience by working in oil sector.

Post-JCPOA Atmosphere

This year's Oil Show was marked by the increased number of Western companies that had been emboldened by the implementation of Iran's historic nuclear deal with six world powers or the JCPOA. The Western companies had come to Tehran to get to know more about Iran's petroleum industry and its investment incentives, as well as Iranian companies that they might choose as partner in the future. The negotiations were not expected to be finalized as long as the exhibition was under way; however, it provided them a chance to hold preliminary talks.

When I talked with the managers of E&P companies about their negotiations with foreign companies, Iran's recent presidential elections had not been held and nobody knew who would emerge winner. But they hoped that President Rouhani would win re-election so that the process started by Minister of Petroleum Bijan Zangeneh for the implementation of IPC deals and establishment of E&P companies would continue.

The roadmap was clear for all companies, and their talks with Western companies were at a satisfactory stage due to Iran's commitments under the JCPOA.

When asked about the future of their activity in Iran's petroleum industry despite all hardships they said that Iranian companies were the best one in the region. Now, the establishment of E&P would be a new experience for Iranian firms in order to turn up in global oil market. Iran was the first country in the Middle East to nationalize its oil industry and currently sits atop the largest hydrocarbon reserves in the world.

Iran Companies' Potential

The IPMI, which is among shortlisted companies, has been mainly active in South Pars gas field. President Rouhani recently launched Phases 17&18 of South Pars, to which the IPMI was a contractor.

The IPMI has been in talks with numerous foreign companies for a year now and has been specifying in fields whose development could serve as the leader. Like other Iranian companies, the IPMI believes that operating megaprojects in Iran would need foreign companies' assistance.

As a new contractual framework has been developed for oil contracts in Iran, Iranian companies would be able to find a suitable market for showcasing their potentialities and take advantage of post-JCPOA opportunity for attracting technology and capital.

Fruitful Talks

PEDCO is well known in Iran's petroleum industry. It has operated numerous projects, the latest of which was the development of the oil layer of South Pars gas field. In an unforgettable day, the South Pars oil layer officially started production at a ceremony attended by President Rouhani.

Roham Qassemi, CEO of PEDCO, said he held fruitful talks with foreign companies at the Oil Show. His company had been holding talks with a number of foreign companies since a year ago. Qassemi said in case Rouhani was re-elected and IPC contracts were signed the Iranian E&P companies' talks with foreign firms would pick up speed.

He refused to name Western companies PEDCO has been in talks with, saying: "I prefer not to name any company before any memorandum of understanding has been signed."

"But I assure you that we have had good talks with foreign companies and I am very hopeful that we would sign contracts after the presidential election's outcome becomes clear," said Qassemi. He added that Rouhani's re-election would send a clear message to the world for cooperation with Iran.

Qassemi said foreign investment and cutting edge technologies were inevitable for Iran's petroleum industry.

"Based on the new model of oil contracts we must witness enhanced oil and gas recovery. It will not happen unless we use state-of-the-art technologies which Iranian companies lack but can acquire through partnership with qualified foreign companies," he added.

Qassemi referred to the South Pars oil layer, saying: "For drilling in the South Pars oil layer we need extended

drilling in long legs ,but the point is that Iranian companies are not qualified in this domain. In this field we have to apply the technology owned by international and experienced companies."

He highlighted that Iran and Qatar jointly own the South Pars oil layer. "Since the Qataris are exhausting their capacity to recover oil from this field, Iran must enhance its oil recovery from this field as soon as possible."

Qassemi hoped that PEDCO would have a role in the development of South Pars once a decision is made about the second phase development of the oil layer by a foreign company.

Reliance on Veteran Managers and Young Manpower

In the weeks leading to the start of Iran Oil and Gas Show, an MOU was signed between NIOC and Ghadir Investment Company for studying four oil and gas fields (Kish, Sepehr, Jofair and Phase III of Darquain. Ghadir will have six months to submit its report on the six fields to the NIOC.

Ghadir Investment Company is headed by Abdorreza Haji-Hosseinnejad, the former CEO of Petroleum Engineering and Development Company (PEDEC).

Ghadir is enjoying such advantages as the potential and experience of veteran oil industry managers and talented young manpower.

Haji-Hosseinnejad said development of petroleum industry would affect Iran's economy, noting that signature of oil contracts would motivate national economy.

He referred to talks he had held with foreign companies in recent months, saying there was nothing to worry about with regard to the implementation of oil projects.

"Iranian companies enjoy the manpower potential and they can acquire technologies from foreign companies to develop some fields," he said.

Haji-Hosseinnejad said South Azadegan oil field was developed when Iran was under sanctions, and Iranian companies had to carry out the task.

Before the JCPOA was implemented, drilling each well cost $20 million, he said, adding that the figure had been reduced to $7.5 million thanks to Iranian manpower and experience.

He said that Ghadir Investment was experienced in downstream oil sector, but was not experienced enough in upstream sector. He added: "The Ministry of Petroleum has endorsed the qualifications of this company for activity in exploration and production. It means that despite its tough review procedure, the ministry has accepted the company's plans for presence in this sector."

"We also have detailed plans for activity in this sector, and in the future we will definitely be able to operate as an E&P company," said Haji-Hosseinnejad.

Competition Created

Among E&P companies currently in talks with foreign firms for IPC deals, Petropars was the first one to sign a heads of agreement (HOA) with a consortium of France's Total and China's CNPC for $4.8 billion in November 2016.

Petropars has been mainly involved in the development of South Pars gas field, and was serving as partner to foreign companies developing South Pars. It can now develop South Pars on its own. Petropars has experienced cooperation with renowned foreign companies, but it prefers not to mention the names of foreign firms it has held negotiations with at Iran Oil and Gas Show. The company sees international conditions being in favor of Iran's oil industry as Iranian companies have grown significantly in recent years. Now by relying on their experience in operating megaprojects like South Pars they can bargain with their foreign partners for playing a more prominent role in the petroleum industry.

Abbas Taqipour-Nia, director of business development at Petropars, expressed hope that development of South Pars Phase 11 would start soon.

He said the presence of famous Petropars in the development of South Pars phases has given rise to competition and helped reduce prices.

Taqipour-Nia expressed hope that following Petropars' talks with foreign companies; more contracts would be signed based on the IPC model.

EPCF Projects

As Tehran Oil Show was under way, the CEO of OIEC held intensive talks with the representatives of foreign companies about signing IPC-style contracts. OIEC was the contractor for the South Pars development phases 20&21 which recently came on-stream. OIEC is also in charge of development of Azar field, which is one of the most difficult projects in terms of drilling. Early production started from this field early this year.

Behzad Mohammadi, CEO of OIEC, said: "We negotiate with foreign companies based on our capability for the development of oil and gas fields." He said OIEC and foreign companies had expressed their expectations during talks held for future partnership.

On the sidelines of the Oil Show, a memorandum of understanding for cooperation between OIEC and NIOC was signed for studying Sepehr field. But OIEC's scope of activity is not limited to signing this MOU. They are also willing to operate megaprojects alongside leading foreign companies in Iran.

"Until recently, we were dependent on EPC (engineering, procurement and construction) projects, but due to what has been done in South Pars I believe that in Iran's oil market there is no longer any place for EPC contractors ,and the projects have shifted from EPC framework to frameworks with financing like EPCF (Engineering, Procurement, Construction and Finance)," he said.

All I said was based on my interviews before Iran's presidential election. Now, everyone knows that Hassan Rouhani has been re-elected for a second term in office.

When I talked with the manager of an Iranian E&P company, his voice was filled with hope. "Good days are ahead of us. We and Western companies are optimistic about future cooperation," said one of them. "Now we push ahead with talks more strongly and I hope that we will soon witness signature of oil contracts."

The victory of the incumbent president in the presidential election assured foreign investors about the security of their investment. For their part, Iranian companies would be able to enhance their capabilities and operate oil and gas projects not only in Iran, but also in other countries. This is what Minister Zangeneh expects from Iranian E&P companies.

Italian Gov't at Iran Oil Show

Italy had the second largest number of exhibitors, behind Germany, in this year's Oil Show. More Italians were willing to attend the 22nd show, but due to the shortage of space it was impossible. The Italians might have even been more numerous than the Germans.

However, the important point with the Italian pavilion was the presence of government delegates for the first time, which was an indication of Italian government's support for companies willing to invest in Iran's oil and gas sector.

Fabio Casiraghi, CEO of FCE which organized Italian exhibitors presence at the Oil Show, said Italian companies are eager to invest in Iran's petroleum industry as they are well aware of Iran's potential.

Here is the full text of "Iran Petroleum" interview with Mr. Casiraghi.

Q: How do you assess Iran's 22nd Oil and Gas Show?

A: This exhibition is one of top oil industry companies in the world in terms of the number of visitors and exhibitors. The outstanding features of this exhibition distinguish it from similar exhibitions, and that is the number of domestic exhibitors. It means that Iranian companies can do their activities in full tranquility.

Q: What is the advantage for domestic companies?

A: In any exhibition, domestic exhibitors show the industrial power of a country. Therefore, foreign companies can cooperate with domestic companies in operating petroleum industry projects in order to show better performance. Iran is currently one of untapped markets in the oil industry because during years of sanctions fewer companies came to invest here. I don't have exact data about the number of Iranian companies, but what could be seen indicates their strong presence.

Q: What do you think of Iran Oil Show's arrangements?

A: I think that all Iranian companies must be housed in a single pavilion so that everything would be well organized. That did not happen this year. Moreover, more than 30 Italian companies failed to show up due to lack of sufficient space.

Q: How many Italian companies attended this year's Oil Show?

A: More than 71 Italian companies were present in different offshore and onshore sectors, development of oil and gas fields as well as petrochemicals production. Last year, the number of Italian companies present at this show was the same.

Q: What has been the achievement of presence of Italian companies in annual oil shows, particularly after sanctions were lifted on Iran?

A: Last year was a very special year for Italian companies because Iran opened the doors of its petroleum industry after the removal of sanctions. Therefore, there was more eagerness and curiosity. Currently many Italian companies have realized that Iran is a big market. However, due to financial restrictions on money transfer, this market has been heavily damaged.

However, I believe that despite all these conditions most Italian companies intend to invest in Iran's oil sector because they have understood Iran's oil industry potential.

Q: Are you aware of the process of memorandums of understanding and contracts that some Italian companies have signed with Iran's oil sector?

A: Yes, these MOUs yielded very positive results. One of these Italian companies is Tecnimont which has so far signed many MOUs in Iran. None of them have been finalized, but turn of time will resolve it. I am speaking for Italians. I think that a bright future is awaiting relations between Iranian and Italian companies because it is the first time that the Italian government is attending Iran's international oil, gas, refining and petrochemical exhibition. I hope that we will see more MOUs to be signed in the future.

Q: Is there any contract to be signed between Iranian and Italian companies over the next year?

A:  Yes, sure. But I can't give details before their signature. Major contracts are to be signed in the petrochemical sector.

Q: Before attending the Oil Show, you had monitored Iran's petroleum industry. Which sector in the industry is more profitable for investment?

A: Italian companies are not very big companies, but they have cutting edge technologies. Many of these companies know Iran for more than 50 years now and they do not need to study Iran anymore. However, the companies that do not know Iran directly have entered its market after consulting others. What's important is that small and medium sized Italian companies need the Italian government's support for operation in Iran.

Q: The Iranian government is determined to implement new oil contracts, but it incessantly tells foreign companies in the negotiations that they should not only eye Iran's market and they should also consider partnership with Iranian sides. What do you think of that?

A: If conditions are such that Italian companies could invest in Iran at all stages, we can expect transfer of knowhow and technology, but big companies hardly do it.

Q: Are Italian companies willing to cooperate with Iran directly or work after joining a foreign partner?

A: It depends. Some companies are mulling over direct work in Iran, but some others that produce specific products are not only looking for a trading partner they are  also seeking to transfer technology to other companies.

 

35 French Firms Ready to Work in Iran

French companies that took part in this year's Oil Show expressed readiness to step into Iran's oil industry. Their field of activity included drilling, engineering, commodity and equipment manufacturing, refining and petrochemical production. Like last year, the French companies attended in a pavilion and signed memorandums with Iranian parties. Thanks to the implementation of Iran's nuclear deal with the world powers, some French companies attended the exhibition this year in order to negotiate contracts.

The following is the text of "Iran Petroleum" interview with Agnès Hagyak oil & gas project manager at Business France.

Q: How do you compare Iran's 22nd Oil Show with the previous one?

A: Last year, companies in our group reached big achievements through their negotiations with Iranian companies. We managed to find several partners for ourselves. Based on our experience of previous presence in Iran, we tried to increase the number of companies in France's pavilion. Given the capability of Iranian companies we can easily find partners.

Q: How many companies are taking part this year in your pavilion?

A: We have 35 companies in France's pavilion this year, 17 of which did not attend last year. These new companies have taken part this year based on their knowledge of Iran's petroleum industry. This exhibition was a good opportunity for French companies to show off their potential and find Iranian partners. There are also French companies that used to participate in Iran Oil Show, but they were absent this year. That is not because they do not like to attend. Rather, they have found partners in previous years and they do not see it necessary to attend the Exhibition again.

Q: In which sectors have French companies managed to sign MOUs or contracts?

A: These companies have managed to win projects in all sectors including exploration, drilling, engineering as well as upstream and downstream equipment manufacturing. They have so far achieved good results.

Q: Have new companies attending for the first time monitored Iran's oil industry?

A: Many of them had monitored Iran's petroleum industry market before deciding to come. They had even found partners. But there are some others still reviewing it. Some of them traveled to Tehran last year as visitors, but they are now exhibitors. This year they are here mainly to sign contracts in Iran.

Iran Oil Show is interesting because we can meet with Iranian companies and also foreign companies operating in Iran. That helps us benefit from their experiences.

Q: Do you think that the lifting of sanctions on Iran has managed to persuade foreign companies to invest in Iran? Or it is just because of investment attractions in Iran?

A: Iran's market has always been a target of French companies. Given the abundance of oil and gas and untapped reserves, there is room for maneuvering in Iran. Of course the lifting of sanctions has not been ineffective. Many French companies were monitoring Iran's market during years of sanctions and they are highly interested in Iran's oil sector.

Q: Iran's petroleum minister, Bijan Zangeneh, has always underlined the necessity of technology transfer under the newly developed format of oil contracts. Do French companies have any plans to that effect?

A: Many French companies are willing to establish technical knowledge bases in Iran. Furthermore, some Iranian companies have seen their technical knowhow grow and that is of great help to us in operating projects. For instance, Entrepose which has a long record of cooperation with Iran's petroleum industry is still willing to cooperate with Iran. It first came to Iran in 1935 and is still willing to work with Iran in EPC projects.

In this year's Oil Show, two Iranian agencies comprising several qualified domestic companies held talks with us about joint cooperation. That has made this year's show different. There are also two French agencies present in this year's exhibition and they are planned to meet with the subsidiaries of the Ministry of Petroleum. They are not big companies, but a group of small-sized specialized and knowledge-based companies that conduct geoscientific studies.

According to planning, international bodies working with us will meet senior Iranian oil, gas, refining and petrochemical managers and will report their achievements to an international conference in France. These agencies look at Iran's 22nd Oil Show as a marketing project.

Q: How do you assess Iran's 22nd Oil Show quantitatively and qualitatively?

A: We always attend international exhibitions across the globe. But given the existence of huge oil and gas reserves in the Middle East and in Iran, this exhibition has always attracted us and other French companies.

Q: What do you think of the new French government's approach vis-à-vis interaction and cooperation with Iran, particularly in oil and gas sector?

A: There will definitely be no problem because Iran offers golden opportunities to European investors and companies. Therefore, it is important for the new government, too.

New Chapter in Iran-the Netherlands Energy Cooperation

Dutch companies have been extensively attending Iran's annual oil show for two years. Last year they signed several memorandums and contracts with Iranian companies in the presence of Dutch energy minister. They are now seeking to strike deals for gas extraction and petrochemical production in Iran. Pierre Bartholomeus, Director of PMG Advisory, a group of Dutch experts have been tasked by the Dutch Embassy in Tehran with removing banking obstacles so that new agreements would be signed.

The following is the full text of "Iran Petroleum "interview with Bartholomeus:

Q: How many Dutch companies are attending Iran's 22nd Oil and Gas Show?

A: This year the Netherlands is present at this exhibition with 15 companies. Our main objective is to establish direct and long-term contacts with Iranian companies so that they could launch new businesses in cooperation with these companies.

Q: Dutch companies were strongly present at Iran Oil Show last year, too. What were the Oil Show's achievements for the Dutch companies?

A: Last year was very good for us because serious negotiations started for new oil projects in Iran. However, a delay is seen due to problems related to money transfer. Of course a group of Dutch experts have been tasked by the Dutch Embassy with resolving this problem as soon as possible, so that both new and old projects could become operational in the shortest possible time.

Q: What are the fields of specialty of companies present in the Dutch pavilion?

A: They are specialized in oil and gas, renewable energies and petrochemical production. They provide services such as equipment manufacturing, engineering and application of technology.

Q: Under its new framework of oil contracts, Iran's Ministry of Petroleum plans stress the partnership of Iranian and foreign companies and transfer of technology. What do Dutch companies plan to do?

A: This is the exact objective sought by the Dutch companies. We examine the Iranian market and envisage transfer of technical savvy and cooperation with Iranian companies in operating projects on a long-term basis. Throughout the Oil Show we have sought to arrange one-on-one talks between Iranian and Dutch companies so that problems and challenges would be resolved in favor of joint cooperation. The same companies that are present at the 22nd Oil Show will return to Iran in November for a meeting with Iranian companies about transfer of technology. Of course, there are some memorandums of understanding like the one signed between Dutch giant CPM and [Iran's] Research Institute of Petroleum Industry (RIPI) that will be followed up on.

Q: During this year's Oil Show, you had talks with the Iranian Offshore Oil Company (IOOC). What has been the outcome?

A: Such issues as smart fields, offshore services, enhanced and improved recovery, no flaring and gas refining were discussed and we hope they will end in practical cooperation. The point that helps distinguish Dutch firms from other European companies is the existence of a gas field in the north of the country. We are currently extracting gas from this field and we can transfer technology for extraction from such fields to Iran.

Q: It seems that the Dutch are specialized in deep water operation. Have you had any discussions on this issue with the National Iranian Oil Company (NIOC)?

A: Negotiations have been held with Frames to build installations for subsea gas recovery. One of technologies that we have in this regard is that we can operate electricity and gas units jointly. In other words, electricity will be used for gas production through injection, while gas will be used for electricity generation.

Q: In the end, how do you assess Iran Oil Show?

A: I am happy with this exhibition and we hope that a larger space would be allotted to Dutch companies next year. The presence of Iran's deputy minister of petroleum and the Dutch ambassador in the inauguration of the Dutch pavilion indicate the determination of the two countries for joint cooperation in oil sector.

Spain Firms Eye Iran Downstream Sector

Spanish companies are eying Iran's oil market. Most Spanish firms that attended the 22nd Oil and Gas Show in Tehran were downstream firms. They are willing to make partnership with Iranian companies and they believe that the best way for them to enter Iran's oil sector lies in such partnership. Spanish firms are willing to transfer technology to Iranian companies. Over the past 20 years they have always sought to invest in Iran's oil and gas industry. But due to sanctions they had been deprived of such a chance.

"Iran Petroleum" has interviewed Francisco Núñez, head of the Industrial Technology Department of ICEX. Núñez was chief organizer of Spanish firms at Tehran Oil Show.

Q: How has the presence of Spanish firms attending Oil and Gas Show changed compared with a year ago?

A: Compared with last year, the number of companies at this pavilion of the exhibition has increased. Even some Spanish companies have taken part in the exhibition outside the pavilion structure. Twelve Spanish companies are taking part in the 22nd International Oil, Gas, Refining and Petrochemical Exhibition.

Q: As someone who has already participated in this Oil Show, how do you assess this year's show?

A: Iran's Oil Show is one of the best exhibitions in the world. This year we saw many well-known companies being present. It shows the significance and the standing of this exhibition in the world.

Q: To what extent have the implementation of the JCPOA and the subsequent lifting of international sanctions persuaded Spanish companies to consider presence in Iran's oil sector?

A: All companies present at Spain's pavilion in Iran Oil Show have been willing to be involved in Iran's petroleum industry over the past 20 years. Today and with the implementation of the JCPOA all these companies are working for this industry.

Q: Which sector are Spanish companies present at Iran Oil Show involved in mainly?

A: These companies are mainly active in downstream sector. Having opened representative offices in Iran, these companies are directly working in Iran's petroleum industry.

Q: In case of implementation of new oil contracts and massive presence in Iran's petroleum industry, what will be your plan for cooperation with Iranian companies and transfer of technology in this industry?

A: Currently before these contracts enter into force, some Spanish companies have joined Iranian companies, and it seems that one of the best options for activity in Iran is the formation of a joint firm with the Iranians. One option is to transfer technology to partners. Regardless of international sanctions, Spanish companies have always shown interest for activity in Iran's oil sector and it has certainly become easier in the wake of implementation of the JCPOA and the removal of sanctions.

Q: Are Spanish companies willing to invest directly in Iran's petroleum industry?

A: Yes, Spanish companies have expressed willingness in this regard.

TAIM WESER Seeks Credit in Iran

Spain's TAIM WESER has cooperated more than 25 years with Iran's industry and mine sector. It first attended Iran Oil Show this year. This company supplies equipment to transport, energy, mine, oil and gas sectors. This company is endowed with technology for the most perfect transport belt, stockyard machinery, loading station for coke and sulfur at a refinery. Only two companies in the world have such a technology and TAIM is one of them. 

Cristobal Cutillas, Area Sales Manager of TAIM WESER, told "Iran Petroleum" that his company was willing to cooperate with Iranian companies in assembling components of devices.

"Despite sanctions, we have been working with the Iranian government and companies for more than 25 years," he said.

Cutillas said his company had failed to cooperate directly with Iran's petroleum industry, adding; "We were willing to win a foothold in another industry before stepping into this sector. We have no doubt about Iran's petroleum industry, and this exhibition is a good opportunity for identifying this industry. Furthermore, our other objective for presence at his exhibition is to showcase our company's capabilities to Iranian customers."

"We have always insisted that Iran is the land of investment opportunities. For instance, all oil refineries in Iran need big investment because they are ageing; therefore, they need our products. Our company has the experience of working in other countries like the United Arab Emirates (UAE), Kuwait and Turkey in oil and gas sectors," he added.

Cutillas said Iran Oil Show helped his company know further about Iran. He added: "Throughout this exhibition we realized that Iranian companies had made progress and Iranian EPC and E&P have become more advanced. After monitoring the market and Iranian companies, we will decide about cooperating with Iran's petroleum industry. Currently in other countries due to shortages of skilled manpower we have to use our own manpower. But in Iran there is skilled manpower and we don't have to do so."

South Korea Firms Keen on Iran Ties

South Korea is among countries that never halted their cooperation with Iran during years of tough international sanctions. This Asian country is one of the leading buyers of Iran's oil and it has been involved in many oil and gas projects in Iran. South Korea's willingness to expand its activity in Iran is no secret to anyone. South Korea sent a big business delegation to Iran after Tehran and six world powers struck a landmark deal in 2015 to explore grounds for cooperation.

South Korean companies have been largely present in Iran's annual oil shows. This year, 40 to 50 South Korean companies put their products on exhibit in Iran.

Among them were 27 companies that attended the exhibition in a pavilion set up by Korea Trade Investment Promotion Agency (KOTRA), which is a non-profit governmental organization under South Korea's Ministry of Trade, Industry & Energy. KOTRA's deputy chief Kim Tae-yong was attending Iran Oil Show for the first time. He believes that many small and medium-sized South Korean companies are interested in operating projects in Iran, saying they are ready to share their technologies with Iranian companies. The following is "Iran Petroleum" interview with him on the sideline of Iran Oil Show:

Q: Had you already participated in Iran Oil Show?

A: This is the first time we are active in this exhibition in a pavilion.

Q: How many companies are present in the South Korea pavilion?

A: Officially there are 27 of them, but in total 40 to 50 South Korean companies are present at Iran Oil and Gas Show.

Q: Which sectors of oil and gas industry are these companies involved in?

A: These companies are active in different sectors related to oil, gas and petrochemical projects.

Q: Which companies have expressed more willingness for presence at Iran Oil Show?

A: KOTRA mainly supports small and medium-sized companies which are active in supplying components. Some of these companies even have offices in Iran, some others are looking for trading partners and some others are making financial and commercial assessments in order to decide about the continuation of their activity in Iran. But generally speaking, most South Korean participants at this exhibition have an office or agent in Iran. Therefore, we have arranged business meetings for some companies that have no Iranian trading partner so that they would be able to broaden their cooperation or find buyers for their products.

Q: How have South Korean companies welcomed Iran Oil and Gas Show?

A: This exhibition has been a good opportunity for them because we know that Iran's oil, gas and petrochemical sector is one of the largest markets in the world. Meantime, a large number of small and medium-sized South Korean companies are active in Iran's oil and gas industry. They have also developed numerous projects in the Middle East and developing countries. They have enough competence and experience and are willing to broaden their work in Iran in the wake of the removal of sanctions. For these reasons, participation in this show is a good opportunity to establish contacts with Iranian businesspeople and get familiar with potential partners.

Q: How do South Korean companies assess Iran's oil and gas market?

A: In the wake of sanctions relief last year, Iran has turned into a dreamland for Korean companies to conduct various economic activities. Last year we sent a big business delegation to Iran. KOTRA also has sent its own delegates to Iran. This trend indicates the small and medium-sized South Korean companies' interest in Iran's oil and gas industry. Most of them are willing to find a market for their products. Iran is the best option for the activity of Korean companies. Most Korean companies have experienced cooperation with Iran in the pre-sanctions years and they are willing to preserve their strong relations with Iran. Most of them are willing to expand their trading ties with Iran.

Q: Are Korean companies showing any inclination for sharing knowledge and technology with Iranian companies?

A: Sharing knowledge and technology is a basis of perpetual cooperation. That is why many small and medium-sized companies are seeking to establish such relations but provided that they could find reliable partners. Iran's market has always been of great value for Korean companies.

 

Germany Occupies Largest Pavilion at Oil Show

Iran's annual Oil and Gas Show remains an attractive event for those involved in petroleum industry. Some companies that were keeping low-profile in previous years were showing off this year. German companies showed their high interest in Iran's oil and gas sector. The largest European pavilion belonged to Germany with 88 companies placing their products on exhibit.

Iran Petroleum has interviewed Klaus Friedrich who was heading the Germany pavilion. Friedrich advises the German ministry of economy. He is well familiar with Iran's oil and gas sector and believes that Iran's business environment for foreign companies will reach an ideal status by 2021.

Q: Had you already taken part in Iran's Oil and Gas Show?

A: Sure! This is not the first time I'm travelling to Iran. We were present in this exhibition before the sanctions.

Q: Do you see any differences between this year and previous years in this exhibition?

A: This year the exhibition was as large as it was last year, but I feel that we had more specialized visitors.

Q: How many German companies are present in your pavilion?

A: We have 88 companies that are present along with the official representative of the German ministry of economy, but in total there are 119 German firms present in this show. The number of participants shows a 75% increase compared to the year before.

Q: What sectors are these companies active in?

A: It is a bit difficult to answer this question due to the large number of companies. These companies are supplying a variety of products. Although their clients are mainly involved in oil and gas they supply a variety of products and services. German manufacturers of small and big pumps, industrial valves, various machinery, instruments, special pumps, petrochemical plants and engineering service companies are present in this exhibition. Of course all these companies have coordinated with the German ministry of economy.

Q: What kind of companies has welcomed presence in Iran's oil and gas show?

A: Generally speaking, companies involved in the manufacturing of machinery, electricity generation companies, engineering services companies, chemical companies and parts' manufacturing companies have shown special interest in the Iran show.

Q: How have small and medium-sized German companies been willing to participate in this exhibition?

A: Of course small and medium-sized companies are largely willing to operate in Iran, but at present there are some minor problems like communications in Persian. These companies are looking for partners in Iran.

Q: In your view, how have German companies eyed Iran's market in the wake of the lifting of sanctions?

A: So far these companies have shown good inclination for activity in Iran, but just one year has passed since the sanctions were lifted and it is not a long time. We need two years to prepare the ground for partnership. However, we have not had any negative feedback so far.

Q: Do you find the current atmosphere suitable for cooperation between Iranian and German companies?

A: At present the conditions are suitable; however, there are challenges. The challenge of banks and financing of projects must be taken into consideration. Loans must be granted to projects. Of course such problems existed in the past, too and they are normal problems in business.

Q: How long will it take Iran's business environment to become ideal for foreign companies, particularly German firms?

A: We estimate that by 2021 the business environment would have become fully ideal for foreign companies to work with Iran's oil and gas industry. Of course, based on import and export data, trading cooperation between the two countries has grown. But in Germany, companies are not required to provide information about their activities to the ministry. Therefore, we do not have precise figures on the growth rate of exchanges between the two countries.

Q: Are German companies ready to share their new technologies with their Iranian partners?

A: In the field of transfer of technology, German companies are fully ready to cooperate with Iran and there is no problem in this regard.

Q: In your opinion, which sector of Iran's energy will have a higher chance to grow over the coming five years?

A: Of course, the traditional sectors of Iran's energy like oil and gas offer more chances for foreign investment. However, for German companies, renewable energies are of special importance. Germany is not rich in oil and gas, but it has been strong in the sector of renewable energies. It is of course powerful in the field of machinery and oil and gas engineering, too. But in general everything depends on the will of the Iranian government to expand cooperation in different sectors of energy.

Iran Manufacturers' Turn Up at Oil Show

Iranian manufacturers of equipmet and components proved a strong presence at the 22nd international Oil and Gas Show. Foreign companies have expressed willingness to have an Iranian partner, while until recently they used to bring all their necessary equipment to Iran with them to operate projects. In their view, the products of Iranian industrialists did not meet necessary quality standards.

After going through ups and downs over the past one decade and facing tough and complicated conditions, Iran's petroleum industry is racing ahead at full speed. It has perpetuated its development and taking advantage of the benefits of Iran's nuclear deal with world powers, it has tightened its belt to achieve the point it deserves.

The active presence of Iranian manufacturing companies at the 22nd Oil Show put on display the trend of progress and self-sufficiency in Iran's oil industry and laid the groundwork for broadening economic and technical cooperation in the region and the world.

Everywhere in the world, exhibitions provide a venue for companies to show off their industrial potential. Therefore, putting on exhibit the industrial capability would stir the feelings of manufacturers for competition. Petroleum industry is no exception to this rule. In this regard, Iran's 22nd Oil Show provided a good chance for domestic manufacturers to showcase their technical and technological achievements in order to let the world learn of each other's progress and interact. Of course this year, the Oil Show has new features including rivalry among foreign companies to enter Iran's petroleum industry and find Iranian partners. The reason is that international conditions have improved for working in Iran and Iranian companies have made tangible progress. It might be premature to make a precise assessment of the achievements of this year's exhibition. However, a large number of Iranian companies unveiled their latest scientific and technical achievements and sophisticated equipment in order to benefit from this oil festival. Furthermore, signature of memorandums and contracts was another outcome of this year's show.

Domestic manufacturing of commodities and acquiring cutting edge technologies have always been a major cause of concern for Iran's petroleum industry. Over recent years, domestic manufacturing has picked up speed as Iran's Ministry of Petroleum has made maximum use of domestic potentialities to meet domestic needs. However, the significance and advantages of commercialization and related revenue generation should not be ignored. Over recent years, identifying approaches and obstacles to commercialization, devising suitable options for risks and guaranteeing investment in different sectors are among the activities of Iranian oil industry managers. A simple estimate makes clear how much investment would be needed in coming decades in the oil sector. More than half of this amount would go to purchasing equipment. The strategic nature of oil sector and its dependence on foreign countries are used as pressure leverage against our country.

Joint Production with Malaysia, France and the Netherlands

Reza Khayamian, head of the Society of Iranian Petroleum Industry Equipment Manufacturers (SIPIEM), said Iranian companies were meeting 70% of Iran's oil industry needs.

"Furthermore, Iranian companies are manufacturing and exporting equipment like downhole pumps, reformer pipes and instruments in countries like Malaysia, France and the Netherlands to be supplied to big oil companies," he said.

He added that major contracts were signed in this year's exhibition with domestic companies, citing procurement of catalysts for Tehran oil refinery.

Iran among Industrial Regulator Producers

Houman Saffarzadeh, director of foreign commerce at Venan Company that produces equipment for pressure booster stations, said before sanctions were imposed on

Iran this company used to purchase all its equipment from European countries.

But today, he noted, pressure relief valves, filter meters, plug valves and regulators are domestically manufactured.

"Currently, this equipment is 40% cheaper than foreign prototypes. Four companies used to manufacture regulators installed in pressure booster/reducer stations. Iran is now the fifth country manufacturing this commodity," he said. He added that Venan had established a joint venture with Germany's RMG for producing commodities and equipment.

Gas Well Completion Equipment

Over the past five years and following the toughening of sanctions on Iran and an American company's refusal to continue cooperation in completing gas wells, Iran moved to buy replacement equipment from a European company and started producing equipment complying with international standards in Kish Island.

Petropars Oilfield Services Company (POSCO) reviewed efforts made in the past and focused on the heavily monopolized sector of manufacturing gas completion equipment. Through a joint venture with a European company, POSCO moved to establish and launch a plant for producing such equipment. Iranian engineers and technicians finally managed to prepare five series of monobore in collaboration with their European partner in summer 2014. This factory can also produce SSSV and other equipment used in completing wells. That was a strong point in drilling needed for launching new development phases of South Pars gas field. Some of this equipment has been used in Phase 19 of South Pars and installed successfully inside wells.

It must be always kept in mind that the Iranian government has thrown its weight behind domestic manufacturing companies in recent years and given them many opportunities. In a new directive, the Iranian Ministry of Petroleum ruled that all companies benefiting from the National Development Fund of Iran (NDFI) would have to buy 50% to 70% of their equipment from domestic manufacturers. However, in case such equipment is not available in Iran they will have to buy overseas.

As a result of international sanctions, Iranian oil managers placed more confidence in domestic companies; therefore, use of domestically made equipment grew.

Gas Turbine Components

Ali-Reza Darvishi is the Chief Executive of Badr Engineering Systems (BES). This company designs and manufactures parts and equipment for gas turbines like those made by GA, Siemens, ABB, Mitsubishi, Hitachi, etc.

Over recent years, this company has managed to build turbines purchased from Siemens. By relying on its own manpower, BES has managed to design and develop these turbines which are vital to Iran's gas transmission.

For Darvishi, the world has become a global village where no boundary is marked for science and technology and all nations need each other for development.

After Iran's nuclear deal with world powers took effect in early 2016, exchange of data and technology in the petroleum industry increased and that has led to progress in domestic companies, he said.

"Now, we can invite any individual or company from anywhere in the world to our country and offer scientific and practical cooperation," said Darvishi.

Cryogenic Pumps Produced in Iran

Faraj Pourvand, CEO of Iran Industrial Pumps Company (IIP) said his company had built cryogenic pumps in order to pump liquefied propane at very low temperature and also to transfer liquefied petroleum gas (LPG) from refinery to vessels for export.

A cryopump or a "cryogenic pump" is a vacuum pump that traps gases and vapors by condensing them on a cold surface, but are only effective on some gases. The effectiveness depends on the freezing and boiling points of the gas relative to the cryopump's temperature. They are sometimes used to block particular contaminants, for example in front of a diffusion pump to trap backstreaming oil, or in front of a McLeod gauge to keep out water. In this function, they are called a cryotrap, water-pump or cold trap, even though the physical mechanism is the same as for a cryopump.

The quality of IIP-built pumps is much better than those produced by Asian countries and they cost only two-thirds of European-built ones.

It took IIP three years to design and build these pumps. According to estimates, the manufacturing of oil, gas and petrochemical pumps as well as water supply pumps in the country has saved Iran more than $400 million.

The commercialization of research is so significant that the number of consulting groups in industrialized countries is on the rise. While turning into a major pillar in modern technology, commercialization tops the agenda of many research centers; however, a few of these companies have managed in commercialization.

9 MOUs Signed during Oil Show

A total of 9 memorandums of understanding were signed on the sidelines of Iran's 22nd Oil Show in Tehran. The MOUs, which were signed with both domestic and foreign companies, are centered on studying oil fields based on the newly developed model of oil deals (IPC), conducting research projects, and development of technology and sale of polyethylene. All these were aimed at helping Iran's petroleum industry take a step closer to the world oil market.

8 Oil Fields to Be Studied

Four MOUs were signed between National Iranian Oil Company (NIOC) and domestic or foreign companies to conduct studies on eight oil fields. They included Iranian E&P companies and the Philippines' state-run oil company (PNOC EC).

Sepehr oil field was assigned to the Oil Industries Engineering and Construction Company (OIEC), Ab Teimour and Mansouri fields to Iran Power Plant Projects Management Co. (MAPNA), Pazanan and Darkhoein 3 fields to PNOC EC, and Susangerd, Cheshmeh Khosh and Paydar Gharb to Iran's Industrial Development and Renovation Organization (IDRO).

Gholam-Reza Manouchehri, deputy managing director of NIOC for development and engineering, said a total of 28 MOUs had been signed with Iranian and foreign companies to study oil fields in the country.

"Based on these MOUs, NIOC will receive 75 study proposals, most of which focused on enhanced recovery," he said.

Manouchehri said agreements worth $80 billion were planned to be signed over coming two years.

"Studies show that it is possible to increase Iran's oil production capacity by 3 million barrels and plans are envisaged for stabilizing and promoting Iran's standing within the Organization of the Petroleum Exporting Countries (OPEC) and in the world," he said.

Manouchehri said signature and implementation of oil contracts would help create jobs in Iran's oil sector.

Iran, Leading Energy Player

Manouchehri said Iran holds more than 150 billion barrels of recoverable liquid hydrocarbon reserves and more than 700 billion barrels of crude oil in place.

"Every one-percent increase in the rate of recovery would mean an increase of 7.5 billion barrels to the country's oil in place," he added.

"Given the fact that abundant hydrocarbon potential remains [untapped] in the Persian Gulf and in western Iran, in coming years Iran continue to be among the top three players in the global energy sector," said Manouchehri.

Ab Teimour, Mansouri Output Capacity to Rise

Manouchehri also referred to fields for which agreements had been signed with Iranian and foreign companies to conduct studies.

He said that Ab Teimour has potential to increase its production capacity to 150,000 to 450,000 b/d, citing proposals. He added that Mansouri field, which is currently producing 60,000 b/d, could see its output reach 300,000 b/d.

Manouchehri also said that Changouleh and Azar fields would see their production capacity grow.

"The results of these studies show that Iran could quickly increase its oil production capacity and we hope that capacity for a minimum output growth of 3 million barrels would be created," he said.

Manouchehri said studies had been conducted on Mansouri and Ab Teimour fields in the past, adding: "New studies which are under way in cooperation with international partners provide very transparent figures about the output of these fields," he added.

Manouchehri said technology transfer was of great significance in upstream contracts, adding: "This transfer of technology is under way at several levels, one of which is transfer of technology to upstream companies serving as domestic partner. In this method, domestic companies could benefit from the profits of these companies in the long-term."

He said that oil production in conventional reservoirs with a natural rate of recovery cost $7 a barrel.

"In secondary and tertiary recoveries, production costs reach $10 to $15 [a barrel], which indicates the need for making more investment and increased operation and production costs," said Manouchehri.

Tehran-Manila Oil Ties Broadened

Pedro A. Aquino, CEO of PNOC EC, said the signature of MOU for studies on Pazanan and Darkhoein 3 oil fields was a starting point for cooperation between the two countries.

"The signature of this MOU is an important event in the history of the Philippines' national oil company," he said.

Aquino said that the MOU had been drawn up with the focus on common interests of the two countries.

He offered gratitude to the Iranian government and the NIOC, and expressed hope that the MOU would open doors to more friendly relations between Tehran and Manila.

Iran Oil Contractors Getting Stronger

Mansour Moazzami, Chairman of IDRO Board of Directors, and also deputy minister of industry, mine and trade, said on the sidelines of IDRO-NIOC agreement for studying Susangerd, Cheshmeh Khosh and Paydar Gharb oil fields that formation of E&P companies was an unprecedented step by the Iranian Ministry of Petroleum.

He said that implementation of IPC and subsequently

job creation would help materialize the policies of resilient economy in oil sector.

"Thanks to the implementation of the JCOPA and the drafting of new oil contracts, domestic companies would be able to benefit from the capabilities of foreign companies in the world energy sector," he added.

Moazzami said Iranian companies were now able to build platforms and deliver on time.

"These capabilities are the outcome of big opportunities provided to domestic contractors by the Ministry of Petroleum," he said.

Moazzami said IPC deals would facilitate transfer of technology and capital into Iran.

Enhanced Recovery from Azar

Behzad Mohammadi, CEO of OIEC, said on the sidelines of the signature of MOU for conducting studies on Sepehr oil field that international conditions had become conducive to Iran's presence.

"We hope that we will have a part in the energy market through activity in the upstream oil sector and by benefiting from the opportunity created for international cooperation," he said.

Mohammadi referred to OIEC's capabilities in operating oil and gas projects and citing Azar oil field development, he said: "Despite the toughness of job in the jointly owned Azar field and the complexities of this field, its production started in March 2017 and currently 15,000 b/d of oil is recovered from this field."

He expressed hope that production from this field would reach 30,000 b/d soon, which is planned to reach 110,000 b/d.

"Based on talks we have had we are seeking to award the second phase of development of this field under the new format of oil contracts," said Mohammadi.

MAPNA Operating $50bn Projects

Abbas Aliabadi, CEO of MAPNA, said on the sidelines of the signature of MOU with NIOC that MAPNA had carried out projects valued more than $50 billion.

He said that MAPNA had been involved in many activities particularly in the development phases of South Pars gas field.

Aliabadi said MAPNA was specialized in working out mechanisms in the capital market in order to gather money from people to finance major projects.

He said that MAPNA had been recognized as the third largest constructor of power plants in the world, saying the company was in compliance with standards.

MOUs with Universities

Like previous years, Iran's Research Institute of Petroleum Industry (RIPI) signed MOUs with Iranian and foreign companies and universities on conducting research projects. This year it signed MOUs with Italy's University of Milan and the Iranian Offshore Oil Company (IOOC).

RIPI signed an MOU with Tehran Polytechnic University in upstream, downstream and environment sectors. Mansour Bazmi, deputy head of RIPI for technology and international relations, said that the memorandum would allow joint research projects.

He expressed hope that Petroleum University of Technology (PUT) and Milan University would start cooperation as soon as possible.

Offshore Research Projects

The MOU signed between IOOC and RIPI is valued at nearly IRR 200 billion, is expected to take effect in three years. It was signed between Hamid-Reza Katouzian, head of RIPI, and Hamid Bovard, CEO of IOOC.

"Following the signature of this MOU, a joint working group committee will be established in coming weeks to focus on different subjects within the purview of IOOC," said Bovard.

Katouzian referred to past cooperation between RIPI and IOOC, saying: "In this MOU, issues such as analysis and interpretation of seismic testing, issues related to enhanced recovery, environmental issues, carbon management and corrosion management will be followed up on."

ACERC-IOOC MOU

Hamid-Reza Tayebi, head of the Academic Center for Education, Culture and Research (ACECR), signed an MOU with Bovard, head of IOOC, with the objective of broadening research and practical cooperation as well as transfer of technology and rendering lab services.

Bovard said development of technology and application of state-of-the-art technologies to petroleum industry would be among objectives pursued by IOOC in the MOU.

"The ACECR enjoys valuable experiences in different sectors including removal of oil pollutants and production of chemicals like demulsifiers, and over coming months several MOUs and agreements of cooperation will be signed between these two bodies," he added.

Bovard said the ACECR would be able to work in such fields as reservoir studies, offshore geology, intelligent and horizontal drilling, chemical production, environment and efficient use of energy.

"The IOOC is set to use chemicals produced by the ACECR in Kharg," he said.

Coldbox Technology Development

An agreement for the development of coldbox technology was signed between National Iranian Gas Company (NIGC) and Aban Air Cooler Co. NIGC managing director Hamid-Reza Araqi and AACC CEO Reza Kheyri signed the agreement that seeks to empower domestic manufacturers.

Saeed Pakseresht, director of research and technology at NIGC, said coldbox was widely used in the oil, gas and petrochemical industries. He added that coldbox was like the beating heart of liquefied natural gas (LNG) production process.

Noting that coldbox was used in advanced projects, he added: "Our objective is to empower domestic suppliers. To this end a contract is signed with a domestic company in cooperation with a foreign partner."

The head of AACC said his company had always sought to "indigenize" most of the equipment needed by industries in the country.

Itochu to Buy Polyethylene

Japan's Itochu Corporation signed an agreement to buy polyethylene from the Persian Gulf Petrochemical Industry Commercial Company (PGPICC). The agreement was signed between PGPICC's chief Mohammad-Hossein Kakoeinejad and Itochu's Koshi Hirayama.

PGPICC had signed an agreement with Itochu last November for the financing of a project.

The new agreement signed on the sidelines of Iran Oil Show is to take effect in coming months.

So far one container carrying 24 tonnes of polyethylene has been sent to Japan to examine the way of delivery and terms of payment.

"Based on this agreement, PGPICC will send 11,000 tonnes a month of polyethylene, valued at $150 million a year, will send to Japan's Itochu to serve different markets," he said.

Hirayama said his company was willing to expand its activities in Iran as Itochu was in cooperation with Iran's petrochemical sector before international sanctions had been imposed on Iran.

He said that Itochu had moved to finance petrochemical projects in Iran and sell petrochemicals, adding that it was considering conditions for investment in Iran's petrochemical industry.

Libya, Resource-Richest Poor Country

Libya is a petrostate that supplies crude oil to world markets, particularly Europe. Ever since the outbreak of military conflict between the government of slain dictator Muamar Gaddafi and his foreign-backed opponents, oil production and export in this North African country has faced disruption. In addition to serving as important leverage, oil exports were also a major source of revenue for the country. The parties to the conflict were trying hard to win dominance over oil reservoirs.

The conflict between the Gaddafi government and his opponents ended in the victory of the later. However, since the dictator was ousted and slain, the country has not witnessed any stability. Libya has turned into a country with different local governments and there is no bright perspective for its future. That has left significant impacts on Libya's oil production and export.

The present article aims at reviewing the status of Libya's oil production before and after ongoing crisis, the role of oil in ongoing war and Libya's future standing in world markets.

Oil Causes War

There is no doubt that oil was instrumental in the Western governments' support for the opponents of Gaddafi. Since the very beginning of unrest in this country and ever since Western governments mulled over military intervention in Libya, Gaddafi claimed that civil war in Libya was a conspiracy by the Western governments to get their hands on oil there. Libya's oil was so significant for the Western governments that during the NATO invasion of Libya, Gaddafi told American and French governments: "If you want oil we will sign contracts with your companies. That does not require a war."

For a variety of reasons, Libya's oil has been effective in the start of crisis and war in this country. Some of the reasons are as follows:

Concentration of Conflict in Oil-Rich Areas: One of reasons that highlighted the significant role of oil in Libya's unrest was the concentration of conflicts in oil-rich areas. Since the start of conflicts in Libya, the fiercest confrontations between pro-regime forces and opposition militia were happening in cities and ports where oil extraction, refining and export were carried out. The most important reason for a quick shift in the Western governments' position and their support for the opposition was that most of Libya's refineries and oil fields are located in the east and the militia managed to seize many of them during the first days of conflict.
West Fed Up with Gaddafi Oil Policy: When the West lifted sanctions on Libya in 2003 after Gaddafi expressed readiness to stop supporting international terrorism and destroy its weapons of mass destruction nobody knew that oil cooperation with the Libyan government would face challenges. The lifting of sanctions cleared the way for international oil companies to bid for oil projects; however, it gave Gaddafi a good opportunity to take advantage of this opportunity for imposing his wills. Competition over oil extraction in Libya was so tight that the country's national oil company managed to impose unprecedented sanctions on rivals. Under these conditions, the foreign companies had to invest billions of dollars in oil exploration in Libya, but they had to pay 90% of their revenue to the government. As a result, countries like Italy were no longer willing to cooperate with Gaddafi. The European governments' refusal to cooperate with Gaddafi was aimed at winning more profitable contracts under a post-Gaddafi government.
US Willing to Control Libya Energy: The US's role in the future of Libya's energy is an important cause of crisis in this country. Under Gaddafi, the US did not have good relations with Libya and the ouster of Gaddafi could pave the way for American and multinational companies to operate projects there. The US was pursuing two objectives: On one side it was intent on seizing Europe's energy market, and on the other it targeted China's presence in Libya's energy sector.
Russia, China Presence Weakened: In the years leading to the start of crisis in Libya, China and Russia managed to expand their presence and influence in Libya, particularly its oil and gas industry. For instance, in 2007 Russia's Gazprom managed to win oil exploration and extraction license against Italy's Eni. China was also an importer of energy products from Libya, and the exchanges between the two countries in 2010 had grown 30%. Consequently, the weakened presence of Russia and China in Libya and stopping their influence in Africa's energy sector constituted another strategic objective pursued by the West in the Libyan crisis. As soon as Libya plunged into crisis, China stopped its oil production activities there and expelled its staff. Moreover, many of Gazprom's service workers had to leave Libya.

Future Prospect

Political differences and military confrontations between armed groups and political parties in Libya have caused a sharp decline in this country's oil production in recent years. Libya's conditions have improved and conflict with militia has been curbed to a large extent and oil production has increased. However, oil production and exports in Libya remain dependent on political and security conditions in this country. Although parties to the conflict in Libya have agreed to unify state institutions and establish a national army, there is no bright prospect for the political future of this country.

Libya could be described as the "resource-richest poor" country in the world because Libya holds the largest oil reserves in Africa, but it has failed to revive its petroleum industry due to political disputes, armed conflict and the shutdown of oil fields.

Civil war has disrupted production in Libya and it seems that this country is unlikely to return its output to the pre-crisis levels in the near future.

The important point with the political future of Libya is the connection between political stability and oil/energy. Since non-oil economic activities had grown quickly compared with the pre-war era, it has an insignificant role in GDP and exports. Successful political transition and sustainable development in Libya depend on the country's political stability, security and global oil prices. In the long term, that would pose a serious challenge to Libya's economy. In other words, dependence on petrodollars during the period of stagnation of international demand for oil and urgent need for economic diversification in order to deal with financial and economic stability and resolve the challenge of unemployment is a serious challenge for any economy, including Libya's economic imbroglio.

Under such circumstances, the fall in oil price amounts to a serious blow to Libya's oil-dependent economy. This country is still reeling from political instability and social division. Any government that manages to take a lion share of oil revenues and forces its political opponents to obedience will be able to bring about stability. Furthermore, given the tribal structure of Libya, a fair division of oil revenues would be a must in this country. In case the prospective government of Libya follows in the footsteps of Gaddafi and spends oil money on strengthening its own position and ignores some parts of the country, another wave of violence and unrest will engulf Libya entirely.

The oil issue in Libya has international aspects, too. The presence of multinational companies in Libya and providing secure conditions for their activity represent an important point in Europe's energy policy. Leading companies that were running Libya's economy had to pull out due to unrest there. Some of them are Britain's BP, Royal Dutch Shell, France's Total and BASF, Norway's Statoil and Spain's Repsol. They are all now willing to return to this country which desperately needs billions of dollars in investment in different sectors particularly exploration, development of new fields and maintenance of operating fields. Furthermore, Libya has 9,500 kilometers of oil and gas pipeline which need reparation and maintenance and that represents a good opportunity for foreign companies.

As oil was key to the start of war in Libya, one has to wait and see whether or not it would help bring stability back to this country in the future.

Mexico Offshore Drilling Set to Start

Premier plans to spud its first exploration well offshore Mexico, in partnership with Talos Energy and Sierra Oil & Gas, before the end of May.

The ENSCO 8503 semisubmersible drilling rig is en route to the Zama well location. Zama is a large structure with potential resources in the range of 100-500 MMbbl, and a well-defined flat spot on seismic, indicative of the presence of hydrocarbons.

Premier expects drilling of Zama and the secondary target Zama Deep to last up to 90 days.

Last month, the company received final processed broadband seismic data across its three blocks in the Ceara basin off Brazil, and plans to draw up well locations from this data ahead of potential drilling in 2019.

Premier is seeking to farm down its operated interests in the basin and is working with other operators in the region on well cost reduction synergies.

Off the Falklands, Premier continues to work on funding packages for the Sea Lion oil project, and hopes to be in a position to sanction the development in 2018.

Elsewhere, long lead items are in place for the company’s sanctioned Bison, Iguana and Gajah Puteri gas field developments offshore Indonesia, targeted for start-up in 2019.

Offshore Vietnam, production from Premier’s Chim Sao field has averaged 15,700 boe/d of late, with strong reservoir performance offsetting the field’s natural decline. Drilling of two infill wells should get under way in August.

Cairn Switches Offshore Senegal Exploration

The drillship Stena DrillMAX has completed operations on the latest appraisal well of the SNE oil field offshore Senegal.

Operator Cairn Energy’s main goal was to flow oil from one of the principal units in the upper (400 series) reservoirs and demonstrate connectivity between the two wells.

Pressure data from the latest well, SNE-6, confirmed good connectivity with SNE-5, 1.5 km (0.93 mi) away.

Currently Cairn is analyzing the results to determine how water flood secondary recovery could be applied to the upper reservoirs.

Further analysis will follow once interference test data has been gathered from the observation wells, to assess the impact on modeled reservoir architecture, the recoverable resource base, and the probable development plan.

Chief executive Simon Thomson said: “This is our ninth successful well in Senegal in three years. The results from this latest well together with SNE-5 and VR-1 provide essential data as we move towards submitting a development plan for the SNE field to the government of Senegal in 2018.”

SNE-6 is being P&A’d, with the Stena DrillMAX relocating to spud the FAN South exploration well, 20 km (12.4 mi) southwest of SNE-3, well in 2,175 m (7,136 ft) water depth.

This will target two prospects with potential resources of more than 110 MMbbl; an Upper Cretaceous stacked multi-layer channelized turbidite fan prospect and a Lower Cretaceous base of slope turbidite fan prospect, equivalent to the 2014 FAN-1 oil discovery.

 

Stubborn Oil Glut Despite OPEC Cuts

After the first OPEC oil production cut in eight years took effect in January, oil traders from Houston to Singapore started emptying millions of barrels of crude from storage tanks.

Investors hailed the drawdowns as the beginning of the end of a two-year supply glut - raising hopes for steadily rising per-barrel prices.

It hasn't worked out that way.

Now, many of those same storage tanks are filling back up or draining more slowly than investors and oil firms had expected, according to global inventory estimates and more than a dozen oil traders and shipping sources who told Reuters about storage in facilities that do not make their oil volumes public.

The stalled drawdowns shed light on the broader challenge facing OPEC - the Organization of the Petroleum Exporting Countries - as it struggles to steer the industry out of the downturn caused by oversupply. With U.S. shale oil production surging, inventories remain stubbornly high and prices appear stuck in the low-$50s per-barrel range.

The market has not strengthened enough to drain many major storage facilities around the globe - which OPEC oil ministers had hoped would be a first step toward rebalancing what has been a buyer's market since late 2014.

Estimated inventories in industrialized nations totaled 3.025 billion barrels at the end of March - about 300 million barrels above the five-year average, according to the International Energy Agency’s latest monthly report.

Preliminary April data indicated stocks would rise further, the IEA said. Crude stocks stood at a record 1.235 billion barrels.

OPEC and other non-OPEC nations - most notably Russia - are now widely expected to extend production cuts for another nine months, through March 2018. A panel reviewing scenarios for the producer group's meeting next week is also looking at the option of deepening the cuts.

The ongoing struggle to thin supplies has forced economists to cut their oil price forecasts. Bank of America, for instance, last week lowered its 2017 target for Brent by $7 a barrel to $54.

During the two-year price war started by OPEC, about half a billion barrels of crude and refined products flowed into storage facilities as oil prices hit lows of less than $30 a barrel in early 2016.

Much of the inventory build-up came as traders started using storage to make easy money on the widening spread between rock-bottom spot oil prices and substantially higher prices for contracts to deliver the oil in future months.

That price spread - a market structure known as contango - allowed traders to profit even after they paid for expensive storage in facilities such as the Louisiana Offshore Oil Port (LOOP) - the only deep-water U.S. oil port and a major conduit for crude imports - or supertankers parked offshore in Singapore.

Although the storage trade has been less profitable since the OPEC production cuts, much of that oil remains in tanks, said Chris Bake, an executive committee member at Vitol, the world's largest independent trader, during an industry conference last week in London.

"This 550 million barrel-plus inventory build of crude and products that started in 2014 is still very much there," he said. "How much is going to come out? That is an ongoing debate among all of us."

Nigerian Union Urges Exxon Mobil Shutdown

A Nigerian labor union called for the shutdown of all Exxon Mobil Corp facilities in the Niger Delta, a union representative said.

Reuters was unable to independently verify whether union members had shut down the company's facilities.

Oil industry sources said there had been no impact on production.

Madubuezi Azubuike, who chairs the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Rivers state, said the call followed the breakdown of talks with the company over sackings and was part of a strike that began last week.

"We have called for the shutdown of all Mobil facilities across the Delta today," he said.

The industrial action is in protest at the sacking of 150 workers in December, of which 82 were PENGASSAN members.

"No resolution has been reached so far. We have had meetings with top management of the union and Mobil executives, but with no avail over issues," Azubuike said.

The strike will target the oil company's wells, said Chika Onuegbu, another PENGASSAN official.

An Exxon Mobil spokesman said: "We respect the rights of our workforce and will continue to engage with them to resolve this situation but remain committed to the safety of our personnel and security of our facilities."

Strikes by Exxon workers in Nigeria at the end of last year did affect output, delaying loadings by weeks.

Nigerian labor unions have held a number of strikes in the last few months over the dismissal of oil industry workers

Canada Offers Loan for Abandoned Wells

The oil industry in Canada's resource-rich Alberta will be on the hook for a C$235 million ($172.7 million) government loan to clean up a rising number of oil wells abandoned by owners who have gone bankrupt, the province said.

The loan, repayable over 10 years, will go to the government-run, industry-funded Orphan Well Association (OWA), which cleans up wells for which no party is legally responsible, Alberta Premier Rachel Notley said at a news conference.

The number of so-called orphan wells in Canada spiked after the 2014 oil price crash as layoffs swept the oil patch and companies went bankrupt. Alberta, which produces about 80 percent of Canada's crude, had more than 1,500 orphan wells in February, up from 26 in 2012.

The loan is lower than the C$500 million an industry group asked for in 2016.

The OWA will double indefinitely its levies charged to all petroleum producers to a total of C$60 million a year, starting in 2019, Notley said.

That, however, could be adjusted in the future based on how many orphan wells are left, said Brad Herald, OWA chairman and vice president of western Canadian operations for the Canadian Association of Petroleum Producers industry lobby group.

Notley said part of the loan, C$30 million, comes from the federal government, which in this year's budget allocated C$30 million to Alberta to stimulate economic activity and employment in the resource sector.

Cleaning up the wells will create 1,650 jobs over three years, she said.

PGNiG Urges Tough Stance on Gazprom

State-run Polish oil and gas company PGNiG urged the European Commission to take a tough stance in its antitrust investigation into Gazprom, saying the Russian company should have to pay a fine and sell assets.

EU competition regulators said in March that concessions made by Gazprom following charges it has abused its dominant position in central and eastern European gas supplies should ease concerns of market abuse.

That provisional deal moved closer to ending one of Brussels' longest-running antitrust probes, which could have seen Gazprom fined up to 10 percent of annual global turnover.

However, the deal is subject to feedback from some EU states and market players, and Poland, which imports most of the gas it consumes from Russia, said in March it would use "all legal means" to block the proposed settlement.

"The European Commission should financially punish Gazprom and create competitive conditions on the gas market," PGNiG said.

Chief Executive Piotr Wozniak told a news conference that Gazprom had abused anti-monopoly laws by, for example, setting different gas prices for different clients, imposing higher prices for some clients and linking its gas supplies with control over gas infrastructure.

"We have calculated every single cent we have overpaid for the gas," Wozniak said, but declined to give a figure for this or the size of fine it was seeking for Gazprom.

PGNiG also said it wanted the Commission to take steps to prevent Gazprom from abusing its dominant position in future.

It said Gazprom should have to sell controlling stakes in companies that own key gas infrastructure in the EU, including the Jamal-Europe gas pipeline, as well as the Opal link and Katharina underground gas storage in Germany.

Wozniak said PGNiG was the last market participant to provide feedback in the EU's antitrust case against Gazprom.

"Mostly everyone has focused on its own market, but there is some agreement regarding the sale of infrastructure (...)," he said.

China's Guangzhou Gas Plans LNG Terminal

Guangzhou Gas Group plans to build a 2 million tons per year import terminal for liquefied natural gas (LNG) on China's southern coast by 2020, possibly in partnership with Woodfibre LNG, an executive with the Chinese firm said.

The Guangzhou company agreed in 2016 to buy 1 million tonnes of LNG annually for 25 years from an export facility that Woodfibre - a subsidiary of Singapore company Pacific Oil & Gas Ltd - is building on the west coast of Canada in British Columbia.

The proposal for joint investment in the Nansha LNG receiving terminal at Guangzhou port reflects efforts by LNG buyers and producers to share risks, said Liu Jingbo, deputy general manager of Guangzhou Gas.

Local government-backed Guangzhou Gas is one of China's fast-growing independent players in its LNG sector, outside dominant state giants like China National Petroleum Corp and CNOOC, having emerged over the past few years as a niche gas importer and infrastructure investor.

"We are considering investing in upstream (gas supply) and are also looking to producers to partner in the Nansha terminal," Liu said on the sidelines of an industry conference.

To secure gas beyond the Woodfibre deal for the Nansha terminal, Guangzhou Gas is looking for more flexible supplies under shorter terms, like three or five years, said Liu.

Guangzhou Gas supplies some 90 percent of the city's gas demand, with consumption forecast to more than double to 3.5 billion cubic meters a year in 2020 from current levels, driven by industrial, commercial and power sectors, said Liu.

Liu said his company also has plans to branch into natural gas trading rather than just being a buyer and distributor.

Backed by Indonesian billionaire Sukanto Tanoto's RGE Group, parent of Pacific Oil & Gas, Woodfibre LNG is an often overlooked front-runner in the race to build Canada's first LNG export terminal. More than a dozen projects have been proposed along British Columbia's coast.

Colombia Oil Reserves Down 16.8%

Colombia said its oil reserves were down 16.8 percent to 1.66 billion barrels at the end of last year, but that exploration was recovering after the global fall in crude prices.

At 2016 production levels the reserves are equivalent to 5.1 years of output, the energy ministry said in a statement. The figure was down compared to the 2015 figure of 2.0 billion barrels.

"Thanks to a recovery in international prices, exploration activity continues its recovery," Mines and Energy Minister German Arce said in the statement, adding more new wells were opened by April 30 this year than during all of 2016.

Colombia, the fourth biggest oil producer in Latin America, has been battered by the global fall in prices. Output has also been hit by persistent pipeline attacks by the left-wing National Liberation Army (ELN) rebels, who oppose the presence of multi-national oil companies.

Average crude output was 885,000 barrels per day in 2016.

 

New Oil Projects at North Sea

New oil projects over the next two years in the North Sea will have combined capacity to produce 1.2 million barrels per day (bpd), offsetting a slide in output from the oldest deepwater basin that produces the world's benchmark crude.

The projects stretch from the West Shetlands to the icy fringes of the Arctic Ocean, Reuters research shows.

North Sea crude output was 2.54 million bpd in 2016 and is forecast to reach 2.59 million bpd in 2017 and 2.63 million bpd in 2018, based on output figures for the three main producers Norway, Britain and Denmark from consultants Rystad Energy.

The North Sea produces Brent and three other crudes - Forties, Oseberg, and Ekofisk - that make up the Brent futures benchmark. The region is expected to report its third annual production rise in a row in 2017, reversing years of sliding output.

Since exploration began in earnest in the 1960s, about 40 billion barrels of oil have been extracted from the North Sea.

A 50 percent drop in oil prices from above $100 a barrel in 2014 has forced some North Sea producers to sell assets. Others have adapted as they seek to extract more of the 20 billion barrels estimated to lie under Britain's North Sea zone alone.

"The drop in the oil price forced everyone to focus even more than they were on (production) uptime and operating efficiencies which have risen dramatically over the last two years," Premier Chief Executive Tony Durrant told Reuters.

"We've been at over 90 percent operating efficiency and a lot of the other players are very high as well. If you roll back to 2012-2013, then the North Sea had a shocking record of about 65 percent," he said.

Reuters research shows a range of projects by majors and smaller companies coming on-stream in the next two years or so.

The giant Johan Sverdrup project by Norway's Statoil starts pumping 440,000 bpd in 2019, rising to 660,000 bpd by 2022.

BP is revitalizing the ageing Schiehallion and Loyal fields off the Shetland Islands with its Quad 204 project, adding 130,000 bpd to production.

Mark Thomas, BP's regional president for the North Sea, said in September that BP's cost of production had fallen to about $16 or $17 a barrel from above $30 in 2014.

FGE analyst James Davis said oil firms had drawn up development plans for old fields and delayed decommissioning dates to increase output beyond expectations and at lower cost.

"There is the obvious hurdle of limited remaining reserves, but operators appear to be positioning themselves to extract as much as possible out of what is left, at relatively low costs," he said.

Small explorers have tapped existing infrastructure to make little fields profitable, often relying on new technology.

Hurricane Energy, which specializes in extraction from naturally fractured rock, last week more than doubled the amount of oil it estimated was recoverable from its Lancaster field.

"The game has changed, but the North Sea hasn't gone away," Malcolm Graham-Wood of consultant Hydrocarbon Capital told online markets platform StockTube in March.

In January and February, the North Sea market attracted about $4 billion in acquisitions. But industry lobby Oil & Gas UK has said that without sustained investment as many as 80 oilfields could shut by 2020.

"We are in a period where we are staving off the overall decline in the North Sea, partly through efficiencies, partly through a group of new projects," FGE's Davis said.

Tunisia Southern Gas Protests Tense

Tunisian protesters threatening to blockade gas production in the south of the country rejected a government offer of jobs and investment and moved their protest closer to a pipeline and pumping station.

The protests in southern Tatatouine are testing Prime Minister Youssef Chahed's government and have already forced two foreign energy companies to halt production or remove staff as a precaution because of threats of disruption.

Six years after Tunisia's revolution ended Zine El-Abidine Ben Ali's autocratic rule, the North African state is still struggling to deliver economic opportunities to unemployed youth in marginalized regions like Tatatouine.

Around 1,000 protesters have been camped out for weeks in the Sahara near a gas pipeline in a region where Italy's ENI and Austria's OMV have operations. But government attempts to broker a deal with job offers have so far failed.

"We will not accept the offers of the government because these jobs are not immediate. These unemployed youths cannot wait," said Tarek Haddad, one of the protest leaders, in a video message on Facebook.

He said the protest would move to Vana, closer to a nearby pumping station, warning protesters would not retreat. Soldiers have recently moved into the area around the pumping station.

President Beji Caid Essebsi a week ago ordered the army into the area to protect strategic energy and phosphate production.

The government has already offered 1,500 jobs with energy companies, including 1,000 immediately and 500 next year. Officials have also offered 2,000 jobs in horticulture and environmental projects as well as $20 million to develop projects in the region.

"We want seriously to find solutions for the expectations of the protesters, but sometimes there are more demands than the possibilities," said Marbouk Korchid a senior official in the government said. "There are some exaggerated demands."

ENI says the protests have not affected production. But OMV has removed 700 non-essential staff as a precaution. Perenco halted production at its Targa and Baguel fields, while protests closed Canada-based Serinus Energy's Chouech Essaida field.

The protests are another challenge for Chahed whose government is struggling to push through sensitive subsidy and public spending reforms demanded by the IMF and other lenders to help stabilize economic growth.

Tunisia is a small oil and gas player with production at around 44,000 barrels per day, but its economy is just recovering from 2015 Islamist militant attacks on foreign visitors that hit the vital tourist industry hard.

Saudi Oil Wealth Attracts West

Saudi Arabia has again become the favorite destination for western political leaders seeking to promote arms sales and encourage other exports to boost their economies at home.

UK Prime Minister Theresa May visited last month to promote trade as the country seeks to diversify its export markets after Brexit.

U.S. President Donald Trump is scheduled to make his own pilgrimage to Riyadh later this week with reports suggesting the two countries have been negotiating arms deals worth more than $100 billion.

Britain and the United States are both angling to secure part of the stock market listing following the planned sale of shares in Saudi Aramco.

Both have major oil companies, oilfield service providers and technology firms that hope to secure contracts to develop the kingdom’s oil, gas, refining and petrochemical industries.

And both are also major financial services centers that see lucrative opportunities helping the kingdom raise external capital and manage its enlarged sovereign wealth fund.

But there is a contradiction between the kingdom’s need to reduce its foreign spending and plans to build up domestic industries on the one hand, and the hopes of U.S., UK and other leaders for an export bonanza.

More generally, there is a tension between western countries’ tendency to see the kingdom as a fabulously rich customer and its current need to reduce foreign spending following the slump in oil prices.

For the time being, it suits political leaders on both sides to talk up the potential for deals, but some may turn out to be long on symbolism and shorter on substance.

Saudi Arabia’s long-term development plan is to build up domestic manufacturing and services sectors to reduce its reliance on imports and foreign suppliers.

Stemming the outflow of foreign exchange by building up internal capabilities is one of the central objectives of the kingdom’s Vision 2030 plan.

Vision 2030 explicitly states “we plan to manufacture half of our military needs within the kingdom to create more job opportunities for citizens and keep more resources in our country”.

Vision 2030 promises “we will work towards localizing renewable energy and industrial equipment sectors” and “we will continue to localize the oil and gas sector”.

On defence, Vision 2030 notes that only 2 percent of military spending is currently within the kingdom and aims to raise this to 50 percent by the end of the next decade.

Saudi Arabia will still remain a crucial customer for arms makers in the United States, the United Kingdom and other countries, and it is an important destination for a range of other goods and services exports.

But beyond the high-profile signing ceremonies, it may not be quite the fabulous cash cow for which western political leaders are hoping.

 

Global Oil and Asian Product Market, May

Crude prices decreased on average during May compared to April. Global oil demand weakened after a strong start to the year 2017. Crude stocks were edging up despite OPEC and non-OPEC efforts to reduce production and draw down inventories. US, European and Japanese stocks rose and caused crude prices decreased its lowest since January 2017. Moreover, the market was down on concerns about rising Libyan and U.S. production. According to a Reuters report, there was lower compliance to the OPEC production cut agreement. OPEC's compliance with the output cuts fell to 90 percent in April from a revised 92 percent in March, according to a Reuters survey. Earlier, the survey showed compliance in March was 95 percent. OPEC and other producers, including Russia, plan to meet on May 25 and are widely expected to keep output limits for the rest of the year.

OPEC oil output fell for a fourth straight month in April, OPEC monthly report showed. According to secondary sources, OPEC crude oil production decreased by 18 tb/d from the previous month to average 31.73 million b/d in April. Crude oil production declined in UAE, Libya, Iraq and Iran I.R., but increased in Angola and Saudi Arabia. However Libyan production is announced to be increased.

Asian Product Markets

All products  cracks – products prices versus Dubai prices- decreased during May except fuel oil.

Light Distillates (gasoline, naphtha)

Naphtha cracks – the differential between naphtha and Dubai crude prices- reached its lowest since January 2017. This was as a result of continuous weakness in the gasoline market on the back of weakness in the regional demand. On the other hand, LPG prices continued to be more attractive than naphtha for petchem players, limiting naphtha demand. Additionally, some pressure came from expectations that arbitrage flows from the West will be higher in June than May (Reuters). Meanwhile, India’s BPCL has started offering naphtha out of its Kochi refinery (Reuters), which is currently ramping up a new 120,000 b/d CDU, along with several secondary units. Looking ahead, with the Middle Eastern cargoes also set to come to the market over May-June, supply in Asia should remain ample, limiting the market.

Asian Gasoline market weakened during May. High US inventories and Atlantic Basin pressure on Asian market moved the market downside. On the regional level, there were mounting supply-side pressure as secondary units were coming back online. Going forward, it is expected gasoline market to remain under pressure as the Asian balance is likely lengthening in June. However, healthy demand amid the Golden Week holiday in Japan and the beginning of Ramadan should help limit the downside.

Middle Distillates (gasoil)

Asian Gasoil market weakened during May, although it was still slightly higher compared to last year. Fundamentals have weakened significantly on ample supply, which has been reflected in price forwards with the Singapore Gas oil flipping into its widest contango in three months according to reports by PVM Data Services. On the supply side, Taiwan's CPC has offered barrels of gas oil, loading in June, amid two refineries in the country having recently returned from maintenance. On the demand side, strong demand from Southeast Asia helped Singapore stocks to decrease slightly. Looking ahead, it is expected regional Asian supply to increase. 

Fuel Oil

Fuel oil cracks extended gains during May. Onshore inventories in Singapore dropped to their lowest level since early January. Low fuel oil yields in the region together with the restart of secondary units are likely providing supply-side limitation. Additionally, we expect that bunker demand continue to have healthy growth, partly because sales in Singapore had been very strong since the beginning of the year. With strengthening fundamentals, backwardation in Singapore fuel oil M1/M2 forwards steepened to its widest since early January. Going forward, it is expected fuel oil cracks to remain strong. However, with a decline in ARA (Amsterdam-Rotterdam-Antwerp) stocks, there will be an uptick in fuel oil barrels going to Singapore.

South Pars Soccer Team Reaches Iran Pro League

Amir Sadeqi-Panah

The latest honor in sports in the Iranian Ministry of Petroleum was in football. The soccer team of Pars Jonoubi Jam managed to make its way into the football pro league for the first time and to everyone's surprise.

The Pars Jonoubi Jam surprise win came at a time while many top football teams in Iran in the first league were striving for a jump. But Mehdi Tartar's players changed the equations and celebrated their victory by setting precedents. The team run by Tartar played 34 matches in the last season's first league. It won or tied 23 matches, which is a good record.

The Pars Jonoubi club has a good experience in sports and training teams, but its football team started in 2011. It started at a lower level and when it was underestimated by many, the club managers decided in 2014 to reach the pro league through a three-year plan. They were playing in Iran's second league two seasons ago. In the final week of matches they failed to reach the first league due to less goals scored. When it was in the second league, the club was given to Mehdi Pashazadeh. This young coach managed to drive the club into the first league. Before entering the first league, the club managers did not reach agreement with Pashazadeh for continued cooperation and Mehdi Tartar succeeded him. Again nobody was taking this soccer team seriously. However, after three years, the club found its way into pro league. The club managers are currently making plans for a strong presence in the pro league.

South Pars, Largest Gas Reservoir in World

Pars Jonoubi Jam belongs to South Pars where is located the world's largest gas reservoir. Jam is a small town with a population of 17,000. Residents of Jam are now supporting a team that found its way into pro league through endeavors and under the aegis of Pars Special Economic Energy Zone (PSEEZ), affiliated with the Iranian Ministry of Petroleum. PSEEZ, which is the main owner of Pars Jonoubi, has been throwing its weight behind this football team and most workers in Assaluyeh are among fans of Pars Jam. As a result, this team is enjoying large popular support. People in Bushehr, who were disappointed after Shahin slid back, have joined the fans of Pars Jam in a bid to show off their power at Takhti Stadium.

Forward-Looking

Pars Jonoubi Jam does not have a long record in Iran's football, but it has fared well in providing support to adult team through proper and precise planning.

The city of Jam is home to brilliant talents in football and they could turn into big soccer stars for Iran in the near future.

Pars Jam has established a football academy bringing together 500 footballers of different age groups. The interesting point is that most of these footballers are locals in the region, and they will become important figures in the future. Aside from that, Pars Jonoubi Jam established its women's team some time ago to run in state competitions. Therefore, one can imagine a bright future for this newly-born club.

Precise Planning for Asian Championship

Although Pars Jonoubi is facing some hardware problems in Jam for presence in the pro league, the club managers are determined to demonstrate an honorable play in the matches. Takhti Stadium is yet to become ready to host pro league matches. However, senior managers of the club plan to resolve the problems. Unlike most teams that find their ways from the first league into pro league, Pars Jam is not pursuing short-term goals. According to planning made, this team will be focusing on survival in the first year and after a new three-year plan which is being drawn up by the club managers this team is expected to find its way into the Asian champions' league.

Interview with Mehdi Tartar, Pars Jonoubi Jam Head Coach:

We Seek Berth in Asian Champions League

Mehdi Tartar was instrumental in the promotion of Pars Jonoubi Jam team to pro league. Tartar is a young coach who was speaking of promotion to pro league ever since he joined the Pars Jonoubi team. There were those who did not take his words seriously, but Tartar proved that when there is a will there is a way, and success could be achieved with standard facilities and without high costs if planning is precise.

The team led by Tartar recorded remarkable results. One week before the start of championship matches, he celebrated along with players their promotion to the pro league.

In an interview with "Iran Petroleum", Tartar speaks about the difficulties ahead of reaching pro league and his future.

Q: Perhaps nobody imagined that you would be the first team going to pro league after the end of the first league matches. Would you please tell us about this?

A: First of all, I offer my congratulations to hospitable people in the province of Bushehr and in the city of Jam because this success belongs to nobody but to them. The day I decided to become the coach for Pars Jam some friends were trying to dissuade me, but I made my mind and that was my first experience in league matches. I feel happy as everything has been going ahead as I wished, and the hospitable people of Bushehr Province achieved a big success.

Q: Did you ever imagine to reach the pro league stage?

A: To be honest, I had no other objective since the very beginning. First, the club managers were not hopeful but conditions improved gradually. Of course, the club chief executive was very supportive and finally what we reached our goal and we celebrated a historic promotion.

Q: Some say the Pars Jam promotion was just by chance. What do you think of that?

A: I suppose certain people intend to undermine our success and championship. How can one emerge winner in 23 matches just by chance? How can one break the record of scored goals in the first league? It's not good to say such things and I hope that those who failed to reach their targets and intend to justify their mistakes would take into account their conscience.

Q: You've apparently reached agreement with the club managers to extend the contract.

A: Yes, I am accustomed to this people and I like to stay with them. Good agreements have been reached. God willing, we will be able to reach the Asian championship league through proper planning and make our fans happy.

Q: Anything else to say?

A: I feel compelled to thank the managers. Without Mr. Yousefi's support, the CEO of PSEEZ, Mr. Rezaian, the club manager, Mr. Jahani, member of the Board of Directors, and others, this important achievement would have never been made. I am also grateful to Mr. Khatib, the industrious local chief of team because he did not let us feel any shortages. I also thank Mr. Norouzi, the local governor, Mr. Zaeri, the head of City Council, Mr. Dorahaki, the head of provincial sports department and Mr. Assadi, the head of football association, for their assistance on this difficult path.

Talesh: Where Jungle and Sea Meet

Talesh is a city in the northern Guilan Province. It is home to the descendants of Talesh ethnic group. With an area of around 2,373 square kilometers, and is equal to one-fourth of Guilan. Talesh is located in the northwest of the province. Talesh neighbors Ardabil Province to the west, Astara to the north, Rezvanshahr and Masal cities to the south and the Caspian Sea and Anzali Port to the east. Talesh County consists of the cities of Talesh, Parreh Sar, Masal, Rezvanshahr and Anbaran.

Talesh also reaches Talesh Mountains, which are in continuation of Alborz Mountains, on one side and the Caspian Sea on the other. The exploration of millennia-old civilization in Talesh area has given remarkable views to this region with pleasant weather.

Talesh County enjoys natural beauty in terms of climate, flora and fauna. Every year a large number of tourists travel to this city in a bid to enjoy pleasant weather and natural symbols. Large segments of Talesh were detached from Iran under Golestan and Turkmenchai treaties and annexed to Russia.

Aq-Uler Edifice

Aq-Uler village is located near the central part of Talesh County. Ancient cemeteries in the village and a monumental edifice show how old the place is. Shir Khan Edifice, also known as Shir Khan Mosque, is located 40 kilometers from Aq-Uler village. This residential edifice housed Shir Khan and is now endowed to the mosque. The two-storey building dates from Qajar Dynasty.

Marian Bathroom

Marian village is near Aq-Uler. An old bathroom is visited by tourists who travel to Marian. It was built at the order of Nasrollah Khan (General Amjad) by a German architect on sloppy ground and on 131 square meters of land.

Salsal Castle

Salsal Gastle, which is millennium-old, is located in Qale Doush Lisar village near Talesh. In a beautiful perspective it seems that the village is carrying the castle. The castle is nearly 100 meters above sea level and locals believe that Salsal, who once ruled the area, built the castle.

Liquid Fuel Distribution in Guilan

Free zones are able to help accelerate local development by adopting approaches in favor of development of fishery, conversion, completion and packaging industry, electronic trade, establishment of markets and exhibitions, establishing contacts with enterprises, industrial clusters, parks of science and technology, as well as setting up international branches for universities and research institutes.

Anzali Free Trade-Industrial Zone enjoys such advantages as proximity to Sardar-e Jangal International Airport, location on North-South Corridor and closeness to central Iran and Caspian Sea ports. Anzali Port remains the most active port in northern Iran.

Anzali free zone can attract Central Asia's 300-million-strong market. Therefore, fuel supply in this area and particularly Guilan Province is of high significance.

Ali-Asghar Abbasi, director of Guilan branch of National Iranian Oil Products Distribution Company, said Guilan area has 117 liquid fuel and 99 CNG stations.

He said that meetings had been held with the private sector and gas station owners for branding in the province.

Abbasi highlighted the growing gas supply process and establishment of free zone in Guilan Province, saying: "These factors have led to changes in the consumption of petroleum products."

He said that premium gasoline consumption in the calendar year to March 2017 grew 19% year-on-year, reaching 48 million liters. He added that regular gasoline consumption saw a 6% increase year-on-year and total gasoline consumption in the province exceeded one billion liters.

Abbasi said gasoil and kerosene consumption had declined due to gas supply, adding: "Fuel consumption by power plants in this province stood at 650 million liters last [calendar] year, while it was 541 million liters the year before."

He referred to Turkmenistan's suspension of gas supply to Iran's Northern provinces, saying: "Our colleagues who had made necessary forecasts managed to provide fuel to all major consumers on time. For example, fuel oil consumption in the power plants increased 141% last [calendar] year."

Abbasi said more than two billion liters of fuel was consumed in the province in the calendar year to March 2016, which hit 2.15 billion liters the year after due to the entry of more cars in the free zone.

He said that the depot in that area has the capacity of storing 195 million liters of fuel, adding that the storage capacity was sufficient due to gas supply extension in the province.

Abbasi noted that it was necessary to renovate oil transport fleet in Guilan, adding that more than IRR 60 billion had been allocated to that issue this year.

He also said that every year 100,000 liters of gasoline and 500,000 liters of gasoil is distributed at Astara border station.