Iran Oil Braces for Fresh Investment 

Holding several conferences introducing investment opportunities in the oil industry since the beginning of the current calendar year (March 2025) indicates that the Ministry of Petroleum has embarked on a new path — one aimed at moving beyond crude exports and toward balanced development across the oil, gas, and petrochemical value chain. These conferences are no longer merely symbolic gatherings; they have become practical roadmaps for attracting investment, transferring technology, and enabling active participation of the private sector in major energy projects.

For instance, Iran’s petrochemical industry, with an investment of $92 billion, has now reached an installed capacity of 100 million tonnes (mt). This capacity is expected to rise to 131mt by the end of the 7th Five-Year National Development Plan. Moreover, based on the planned roadmap and the introduction of new petrochemical projects within a ten-year horizon extending to 2033, the industry will require an additional $42 billion in investment. What makes this sector attractive to investors is not only its annual foreign currency revenue of $24 billion, but also the fact that the projects being presented for investment already possess environmental permits, land-use and spatial planning approvals, and passive defense certifications — and their developers are ready to begin implementation.

In the gas sector as well, there are significant opportunities available to investors. National Iranian Gas Company (NIGC), as the world’s third-largest gas producer, has so far introduced 68 investment projects in the areas of gas processing, transmission, and efficiency improvement, with a total value of $42 billion under the 7th Plan. These projects are considered among the most attractive short-term investment opportunities in Iran’s energy industry.

In the oil sector, recent financial reforms have also created a new environment of confidence for investors. Setting the internal rate of return (IRR) for upstream contracts in the range of 20% to 23%, along with guaranteeing a minimum foreign currency return of 12%, were among the most important approvals by the Economic Council last calendar year (to March 2025). In addition, the introduction of crude oil commodity deposit certificates, establishment of the Petroleum Industry Guarantee Fund with an initial capital of €300 million and a guarantee capacity of up to $6 billion, and the ratification of the Public-Private Partnership (PPP) regulation offering a 10-year tax exemption, have altogether created a secure and competitive framework for private sector participation.

The new orientation of the Ministry of Petroleum is founded on three key principles: transparency, diversification of financial resources, and genuine privatization. With these reforms, Iran is positioning itself as one of the most attractive energy investment destinations in the region — a place where investors are not merely financiers, but true partners in creating added value.

Iran Proposes GECF Restructure to Organization

Mohsen Paknejad, Iran’s petroleum minister, offered key initiatives during the 27^th ministerial meeting of the Gas Exporting Countries Forum (GECF), held in Doha on 23 October, to highlight the central role of Iran as the founder of the Forum.

He also reiterated Iran’s readiness to materialize the common goals of GECF during this meeting and invited member countries to invest in Iran’s oil and gas projects. He further proposed the formation of specialized working groups to examine these collaborations. Additionally, the Iranian representative appointed as the chair of the GECF Executive Board at the meeting.

GECF Restructure

Paknejad proposed upgrading the GECF from a Forum to an “Organization of Gas Exporting Countries” in order to strengthen its structure in line with the growing policy and technical needs of its members. He emphasized that, given the current transformations in the energy market and the rising uncertainties surrounding investment in the gas industry, such a Forum could enhance policy coordination and the international influence of gas-exporting countries. This proposal, as a step toward increasing GECF’s impact in global energy forums welcomed by member states.

The Iranian minister also proposed an initiative to establish a mechanism for high-level dialogues between natural gas producers and consumers. The philosophy behind this mechanism is to enhance stability and security in the global gas supply and demand markets. Referring to the adverse impact of restrictive policies such as sanctions, Paknejad called for greater coordination to reduce market volatility and described this initiative as a means to strengthen regional and international cooperation.

 “I firmly believe that the Forum, through solidarity, dialogue, and cooperation, may play a key role in developments within the global energy market,” he said, adding that the Islamic Republic is ready to strengthen its active and constructive participation in achieving the common goals of the GECF.

GECF vs. OPEC

GECF and OPEC are intergovernmental/international bodies aimed at coordinating the policies of energy-exporting countries; however, they have significant structural and functional differences. Founded in 1960 and celebrating its 65^th anniversary this September, the Organization of the Petroleum Exporting Countries focuses on crude oil supply management. By setting production quotas, it exerts a direct influence on the global oil market.

OPEC comprises 12 full members and controls over 40% of the world’s oil production. In contrast, GECF, founded in 2001 with Iran as one of its founding members, focuses on coordinating policies for the production and export of natural gas. Unlike OPEC, however, it does not implement production quotas systems; instead, it emphasizes technical cooperation, information exchange, and promoting the role of gas in the global energy mix. The GECF members — comprising 12 full members and several observers — hold more than 70% of the world’s gas reserves, account for 39% of production, 40% of exports, and 51% of LNG exports worldwide.

OPEC, due to its long history and direct influence on oil prices, holds a stronger position in the global markets. However, GECF, by focusing on natural gas — recognized as a clean fuel of choice and key fuel in the energy transition — is gradually strengthening its influence. Iran’s proposal to transform the GECF into an organization represents an effort to align its structure more closely with that of OPEC and to enhance its authority in the global energy decision-making. Unlike OPEC, which has often faced political challenges and internal disagreements, GECF — due to its cooperative nature and focus on sustainable development goals — provides a greater sense of solidarity among its members. Iran plays a key role in both bodies, but within the GECF, it has demonstrated greater influence thanks to its founding role and recent initiatives.

Natural Gas Role

Underscoring the pivotal role of natural gas in the energy transition era, Paknejad stated: “Natural gas, as a clean, reliable, and flexible energy source, is part of the solution to energy supply challenges and climate change.” Citing the declaration of the 7^th GECF Summit held in Algeria on 2 March2024, he added that promoting the use of natural gas and strengthening its role in achieving sustainable development goals, eradicating energy poverty, and facilitating the energy transition are among the key areas of cooperation within the Forum.

Referring to the GECF Secretariat forecast of a 32% increase in global gas demand by 2050 — raising its share to 26% in the global energy mix — Paknejad proposed that member states increase their supply to the global market with the goal of reaching a 30% share for gas by 2050. He warned against extreme policies aimed at eliminating fossil fuels, stating: “Such policies pose serious risks to gas demand, while natural gas may, in fact, help reduce GHG emissions and achieve climate goals.”

Countering Sanctions

Paknejad noted that the manner in which new technologies are developed and utilized for the sustainable production of natural gas, will play a decisive role in the development of the gas industry at both the national and international level. He added that these issues could serve as key areas of cooperation among GECF member states and as main focal points for the GECF Secretariat expert activities over the next decade.

He said in addition to the aforementioned uncertainties, there are other challenges as well, adding: “Today we are witnessing that the dynamics of the global energy market are increasingly being undermined and threatened by the imposition of unfounded sanctions under various pretexts against countries possessing vast oil and gas reserves.”

Touching on the impact of unilateral sanctions on the energy market, Paknejad said: “Sanctions, by undermining market stability and delaying timely investment, increase the cost of energy supply. Despite the intensification of sanctions, we remain determined to continue our natural gas production expansion programs and energy efficiency improvements by relying on domestic capabilities and strengthening regional and international cooperation.”

He invited member countries to invest in Iran’s oil and gas projects and proposed the establishment of specialized working groups to explore these potential collaborations.

On the Zionist Regime’s aggression of Iran and Qatar earlier this year, he said: “Four months have passed since the Zionist Regime’s 12-day war of aggression against Iran’s territorial integrity, which ended in the invaders’ retreat due to the resistance of the Iranian people and armed forces. By repeating this unlawful act of aggression against Qatar, the regime has once again demonstrated that it adheres to no rules, mechanisms, or international norms in pursuing its illegitimate objectives.”

He called for solidarity among GECF members in condemning these actions, which threaten the security and stability of energy markets. This stance reflected in the final statement, which condemned the attack on Qatar on 9 September 2025.

New Generation of Technicians

On the sidelines of the GECF Ministerial Meeting, the Iranian minister also held bilateral meetings with the energy ministers of member states. In his meeting with Saad Al Kaabi, Qatar’s Minister of Energy, Paknejad emphasized the need to train a new generation of specialists familiar with international structures and technological developments in the energy industry. He proposed educational programs and academic partnerships to prepare the workforce for the future of energy and highlighted the brotherly relations between Iran and Qatar in the energy sector.

In his bilateral meetings with the energy ministers of Algeria, Libya, and Nigeria, Paknejad focused on expanding technical cooperation and joint investments in the gas and petrochemical sectors. During his talks with Mohamed Arkab, Algeria’s Minister of Energy, Iran’s achievements under sanctions were praised, and an invitation was extended for investment in Iran’s oil and gas projects. In his meeting with Khalifa Rajab Abdulsadiq, Libya’s Minister of Oil, technical cooperation discussed, while in talks with Ekperikpe Ekpo, Nigeria’s Minister of Gas Resources, the petrochemical and gas potentials of the two countries were highlighted.

Achievements

The election of Philip Mshelbila from Nigeria as the new Secretary-General of GECF, effective January 2026, was one of the key decisions of the summit. Paknejad emphasized that the Secretary-General should be a competent and capable individual committed to advancing the collective interests of the member states. Iran, along with other GECF members, played a central role in shaping the Forum’s policies.

Since its establishment, the GECF has had four Secretaries-General. The first was Leonid Bokhanovsky from Russia, who served two terms from 2010 to 2014. He was succeeded by Mohammad Hossein Adeli from Iran, who led the Forum for two consecutive terms from 2014 to 2018. The third Secretary-General was Yuri Sentyurin from Russia, serving two terms from 2018 to 2022. After him, Mohamed Hamel from Algeria has been serving as the fourth Secretary-General of the GECF since 2022.

Oil Output Up 120,000 b/d, Exports Hit Record

Minister of Petroleum Mohsen Paknejad has said Iran has managed, over the past year, to bring its crude oil exports to favorable levels despite restrictions caused by sanctions. He said exports hit records in some cases.

The minister said Iran had raised its crude oil output by more than 120,000 b/d, adding that the snapback mechanism would not cause any new worries for Iran’s oil sales.

“Over the past several years, and especially since June 2024, with the passage of the SHIP Act, we have faced very severe restrictions. However, through appropriate measures, we managed to effectively circumvent these sanctions and continue oil sales successfully. Therefore, the implementation of the snapback mechanism is not expected to impose stricter restrictions than those we have already experienced. Of course, the enforcement of these sanctions may have certain side effects, but the necessary measures will be taken at the appropriate time to address them,” he said.

Pazan Development

In early October 2025, Iran announced the discovery of new gas reserves in the Pazan field. Paknejad explained how the Pazan field would help counter the energy imbalance, especially during the cold season:

“Based on the latest studies, and with the addition of 10 tcf of new in-place reserves to the field’s previous reserves, it has been planned that, after the completion of development operations, this field will produce more than 20 mcm/d of gas. This is a significant figure and can play an important role, particularly during peak winter periods when we need to manage gas supplies to industries and power plants.”

“An important point is the utilization of the financial and technical capabilities of major energy-intensive industries. The investor in one of these industries is a petrochemical holding company that is investing in this field. In addition to securing its own gas requirements, it will also supply part of the produced gas to the national network to help compensate for the shortages that typically occur during the cold season,” said the minister.

Flare Gas Capture

Paknejad touched on the amount of gas flaring, stating that both short-term and long-term plans have been developed to reduce flared gas. He explained: “In the short term, the private sector is expected to participate in flare gas recovery projects—even with a base price of zero—and extract these gases. Depending on the type of relationship and cooperation established with National Iranian Oil Company (NIOC), these gases will be converted into high value-added products.”

According to him, in the long term, the implementation of NGL projects—such as the one recently inaugurated while President Masoud Pezeshkian attended—will continue. Referring to Pezeshkian’s emphasis on accelerating these projects, he said: “By the end of the 7^th [National Economic] Development Plan, the majority of associated petroleum gas will be captured.”

Paknejad emphasized that associated petroleum gases are valuable national resource that are currently being flared, adding: “Therefore, we must, at any cost, put all our efforts into capturing these gases and creating value from them in the shortest possible time.”

He continued: “Given the President’s repeated emphasis on the necessity of collecting associated petroleum gas, it is essential to further shorten the timeline for implementing these projects as quickly as possible. The President has also stated that, to facilitate this process and accelerate the achievement of results, every necessary form of support and cooperation will be provided.”

Technically speaking, Paknejad said, certain portions of flare gas—particularly in gas refineries where operations are ongoing—must, under specific conditions (for example, during maintenance work), be directed to flaring for safety reasons. He added: “We are doing our utmost to ensure that these gases are collected as soon as possible.”

Power Plants Fuel

Paknejad referred to the concerning state of liquid fuel reserves in power plants and in the storage facilities of National Iranian Oil Products Distribution Company (NIOPDC) at the beginning of the 14^th Administration’s term. He said: “Thanks to the efforts made by my colleagues at the National Iranian Oil Refining and Distribution Company (NIORDC) and the dedicated staff working in petroleum product imports, the fuel oil reserves for our power plants have increased by more than 127% compared to the same period last year.”

He added: “This increase means that during the cold days of the year—when natural gas must be prioritized for residential and commercial consumption, and we have to impose restrictions on gas deliveries to power plants—we can substitute this diesel fuel for gas. God willing, this will help prevent power outages during the winter season.”

Touching the record levels of gasoline consumption during this summer, he said: “Unfortunately, gasoline consumption has increased significantly. We are making every effort not only to ensure a stable fuel supply but also, with the cooperation of the public, to take the necessary measures to manage demand and optimize usage in order to reduce the consumption of this energy carrier to some extent.”

He recalled the consumption of around 200 ml/d of gasoline on the first day of the 12-Day War, saying: “During that period of the imposed war, the people had confidence in the oil industry. As a result, they trusted that there would be no disruption in this sector, and gradually—through the measures that were taken—the production and distribution of fuel were managed effectively.”

Energy Management

Referring to the implementation of Article 44 of the 7^th Development Plan—which pertains to the establishment of the Comprehensive Smart Energy Management System—the minister said: “The Office of Deputy Minister of Petroleum for Supervision of Hydrocarbon Resources under which the Directorate General for Export Supervision also operates, is responsible for coordinating among various sectors to implement smart energy and measurement projects. In coordination with this Office, numerous projects have been defined across different areas according to present conditions and have been designed and scheduled in such a way that we can achieve the quantitative goals set forth in the 7^th Development Plan.”

Diesel Imports Ended

He went on to explain why diesel imports had been halted over the past year, saying: “The increase in domestic production, along with significant progress in demand management and efficient use, led to a reduction in diesel consumption by up to about 5 ml/d at one point. Part of this success was achieved through curbing the smuggling of this product with the assistance of other relevant institutions, and another part resulted from an increase in refinery feedstock.”

“Reducing crude oil exports and converting crude into higher value-added products has long been a shared aspiration for all of us. However, through certain measures taken to improve refinery processes, we have also been able to increase diesel production—so that, unlike last year, we are no longer facing the heavy levels of diesel imports we once did,” he said.

Paknejad’s remarks indicate that the core policies of the Ministry of Petroleum under the 14^th Administration are based on three main pillars: first, increasing oil production and exports; second, developing gas infrastructure and new fields to ensure the stability of the gas network; and third, reducing resource waste through the collection of associated petroleum gas and efficient use. Alongside these approaches, the strategy of smart energy management and fuel smuggling control has also charted a new course for enhancing efficiency in Iran’s oil industry.

New Finds Add 10 tcf to Iran Gas Reserves

Minister of Petroleum Mohsen Paknejad on October 5 announced the discovery of massive gas and oil reserves in the Pazan field, located in the southern part of Fars Province and extending into Bushehr Province. He said that exploration activities would increase Iran’s gas reserves by 10 tcf. The discovery strengthens Iran’s position as one of the world’s leading gas powers. It could attract both domestic and foreign investors to develop the country’s energy infrastructure.

With about 150 known oil and gas fields and nearly 33 tcm of proven reserves in place, Iran ranks as the world’s second-largest holder of natural gas reserves after Russia. The South Pars gas field — the largest gas field in the world — is shared by Iran and Qatar. Over recent years, the development of the South Pars field has played a major role in Iran’s economic growth, welfare improvement, and stabilization of its position in the global energy market. Currently, natural gas accounts for over 75% of Iran’s energy mix, highlighting the vital role of this energy source in the Iranian economy. Moreover, natural gas — as a clean source of energy — has been of consistent global interest over the past two decades. Given its vast proven reserves, Iran holds a unique position in this global energy market.

Given that Iran is one of the world’s richest countries in terms of hydrocarbon reserves, it has consistently focused on exploration activities to maximize its geological potential. Over the past 45 years, the success rate of Iran’s oil exploration activities has been 100%, and around 79% for gas exploration—significantly higher than the global average. The exploratory drilling operations in the Pazan field have also been carried out for strategic, economic, and operational reasons, as well as to strengthen Iran’s position in the global energy market.

Pazan Field

The Pazan field was discovered in 2015. After the first exploration well was drilled there, operations came to a halt for eight years. But under the 14^th Administration, drilling of the second exploration well started. Now, Iran’s minister of petroleum has announced new finds in this reservoir.

Just one week after the announcement of Iran’s increased gas reserves, journalists visited the site of the second exploration well in the Pazan field for the first time. The field is located near the village of Samangan, along the Zagros mountains range. The northwest-southeast extension of these mountains has shaped the region’s geological structure, facilitating new discoveries.

Drilling of the first well in the Pazan field was carried out in 2015 to a depth of 3,800 meters, leading to the initial discovery. However, operations were halted due to technical challenges. According to Mohioddin Jafari, director of National Iranian Oil Company (NIOC) exploration, after several years the same location was once again selected as an exploration target, and drilling of the second well continued to a depth of approximately 4,600 meters.

In this well, two new hydrocarbon layers—one oil-bearing and one gas-bearing—were discovered. In Upper Dalan Formation, oil traces were identified, with oil-in-place estimated at a minimum of 200 million barrels. Additionally, in Fahliyan Formation, one of the oldest geological formations in Iran, a new gas-bearing layer was discovered.

Jafari said test operations started last March with petrophysical results indicating high production capacity.

Drilling of the third well will soon begin to determine the precise boundaries of the oil, gas, and water zones and to assess the final size of the reservoir.

Thus, taking into account the initial discovery and the newly added reserves, a total of 10 tcf of gas has been added to the country’s resources. According to Jafari, the Pazan field, with 29 tcf of sweet gas, now holds the largest onshore gas reservoir in Iran, surpassing the Tabnak, Kangan, Homa, Varavi, Shanul, and Shahini fields.

Based on the calculations conducted and considering the global average gas price of 30 cents per cubic meter, the economic value of the Pazan field has been estimated at a minimum of $100 billion. This figure, however, may vary depending on domestic and export gas pricing.

Exploration drillings are not yet over in this reservoir. Jafari said the Pazan field is the largest onshore field in Iran, whose deposits are expected to increase after a third well is drilled there.

Technical Data of Exploration

With the recent discovery, the in-place gas reserves of the Pazan field have increased from previous estimates to about 10 tcf (approximately 283 bcm). The field’s crude oil reserves are estimated at 200 million barrels, which Iran has accessed for the first time through horizontal drilling.

The field’s crude oil is light, with an API gravity of 32, and its reserves are estimated at around 200 million barrels. The Pazan field’s gas condensate, with an API gravity of 46-50, amounts to more than 237 million barrels of oil- in -place, 74 million barrels of which being recoverable.

If we assume an average gas recovery factor of 70% for Iran’s gas fields, the recoverable volume from this field would be around 7 trillion cubic feet, equivalent to 7,000 days of production from one phase of South Pars—or about 17 to 18 years of output from a single South Pars phase.

20-Year Development

Following the drilling of the first exploratory well in the Pazan field, a development contract for the Pazan and Gordan fields was signed in May 2025 between NIOC and a consortium consisting of Bakhtar Group, Petro Farhang Holding, and Energy Gostar Hana. The contract was concluded under the Iran Petroleum Contract (IPC) model with an investment value of $948 million.

The contract duration is 20 years, and the maximum production from the fields is expected to reach about 31.5 mcm/d of gas, with an estimated cumulative production of 179.5 bcm of gas and 58.19 million barrels of condensate over the course of the contract.

The operational plan for the Pazan field includes working on one existing well, drilling 10 new wells, as well as drilling one appraisal well and one combined appraisal-production well.

The recent discovery in the Pazan field does not affect the implementation of the existing field development contract. Paknejad noted that operational activities will begin soon, adding that it is estimated production from the field will be possible within about 40 months.

Iran Energy Status

The recent discovery further strengthens Iran’s position as the world’s second-largest holder of natural gas reserves after Russia. Moreover, given that a significant portion of Iran’s gas reserves lies in the joint South Pars field with Qatar, this new independent field increases the diversity of Iran’s gas resources and reduces dependence on a single field for gas production and supply. Therefore, this discovery represents a strategic advantage for Iran.

On the other hand, increased gas production from the Pazan field may reduce pressure on older fields such as South Pars and significantly contribute to the stability of gas supply.

Additionally, with the increase in reserves and production capacity, Iran will gain greater potential for gas exports to neighboring countries such as Turkey and Iraq, as well as to more distant markets. This will further strengthen Iran’s position as a key player in both regional and global energy markets.

Gas Transmission Capacity to Surge to 1.13 bcm/d

Iranian Gas Transmission Co. (IGTC) runs more than 40,000 km of operational pipeline, 95 compressor stations and 351 compressor units, thereby operating the largest gas transmission system in the Middle East. As one of the strategic arms of the Ministry of Petroleum and playing a key role in maintaining national stable energy flow, IGTC broke gas transmission records nine times last calendar year( to March 2025). In February 2025, it transferred 880 mcm/d of sweet gas to national network. It would be no exaggeration to say that IGTC efforts have led to gas transmission reliability in Iran reaching over 99.5%, ensuring that both domestic and foreign consumers of Iranian gas have no concerns about stable supply. Peyman Khazraei, CEO of IGTC, tells “Iran Petroleum” that national transmission capacity would reach 1.13 bcm/d.

“Iran Petroleum” has interviewed Khazraei to learn about IGTC’s preparations in the run-up to cold months.

What is Iran’s position in the region in terms of the extent of its gas transmission network?

Iran currently possesses the most extensive gas transmission network in the Middle East. The operational network spans over 40,000 kilometers, covering the country from south to north. The infrastructure not only ensures a stable supply of natural gas for domestic consumption, but also is instrumental in exporting gas to neighboring countries and strengthening Iran’s position as a regional energy hub.

Where does Iran’s gas transmission capacity stand now? How much increase will it know up to the end of the current calendar year?

At present, the total length of Iran’s operational gas pipelines exceeds 40,260 km, managed under 11 operational zones. This network includes 95 gas compressor stations, 351 compressor units, and 62 pipeline operation centers. According to the development plan, by the end of the current calendar year (to March 2026), an additional 948 km of new pipelines will be added. From the beginning of the year until mid-October, 256 km of these new lines have already been commissioned, and the remaining sections are scheduled to become operational by the end of the year. With the completion of these projects, the country’s gas transmission capacity will increase to 1.13 bcm/d, ensuring safe passage through the upcoming winter and reinforcing Iran’s central role in regional energy security.

How much gas transmitted across the country in the first half the calendar year?

Last calendar year (to March 2025), sweet gas transmission totaled 281 bcm. The figure stood at 134.354 bcm in the first half of the current calendar year, roughly the same as last year when it was 134.159 bcm. Given that major maintenance operations began at the start of this year and will conclude by November, and despite seasonal limitations, gas transmission during the first half of this year has been carried out with complete stability, with no significant instances of “untransmitted gas” recorded. A review of recent years’ performance shows that Iran’s gas transmission network today stands not only as the backbone of the nation’s energy supply but also as one of the vital infrastructures underpinning the country’s industrial growth and social welfare.

How many times was Iran’s gas transmission record smashed last calendar year?

Last calendar year, the country’s gas transmission network broke gas transmission records nine times. The highest recorded volume was on 2 February 2025, when 880 mcm of sweet gas were transmitted in a single day. This record was achieved through enhanced operational capacity at gas compressor stations and the full utilization of the network’s potential, made possible by effective coordination among operational regions.

How many gas compressor stations are currently operational in the country, and what new projects are underway in this sector?

At present, 95 gas compressor stations are active within the national transmission network. According to the schedule, two new stations—Lamerd Station and Ardestan Station on the 8^th Iran Gas Trunkline (IGAT-8)—will be commissioned by the end of the current calendar year. These two projects have been implemented to enhance gas transmission capacity in the central and southern regions of the country and will play a key role in ensuring a stable gas supply to Northern provinces during the cold seasons.

Last calendar year (to March 2025), for the first time, 208 turbo-compressors were operating simultaneously. What was the reason for this decision, and will this experience be repeated in the current calendar year (to March 2026)?

During last winter, due to energy imbalance and a sudden surge in household gas consumption caused by severe cold weather and the arrival of a Scandinavian cold front, and under the operational guidance of National Iranian Gas Company (NIGC)’s Dispatching Driectorate, we decided to operate 208 turbo-compressors simultaneously. This measure was taken to maintain stable pressure and transmission volumes of gas from production sources to consumers, particularly in the northern, northwestern, and northeastern regions of the country, while also allowing for increased gas storage within the network. Although this action carried a high operational risk, through precise management and strong coordination among operational regions, the network remained fully stable across the country with no interruptions. If consumption patterns during upcoming winter are similar to that of last year, full utilization of all compressor capacity is going to be, once again, planned.

Were the required turbo-compressors supplied domestically?

Yes. The manufacturing of gas turbo-compressors is carried out by major domestic companies, including MAPNA Group and the Oil Turbo Compressor Company (OTC). The entire production process of the high-performance turbines used in the country’s gas industry—Zorya and Siemens models—is now conducted in Iran.

How many projects were commissioned by ITGC during the first half of the current calendar year, and what was their value? What projects are scheduled to come online in the second half of the year?

In the first half of the current calendar year (to March 2026), two major projects commissioned: the Dehshir Gas Compressor Station on IGAT-8, and 153 kilometers of the second phase of the Khash Project in Sistan and Baluchestan Province. Other projects, including sections of IGAT-9, the 42-inch Rasht–Chelvand line, the Chelvand-Ardabil compression line, and the 20-inch Behbahan–Gachsaran pipeline, are scheduled to become operational by the end of this year. These initiatives aim to increase transmission capacity and enhance the resilience of the network during peak demand periods. Their completion will be key to strengthening gas flow from the south to the north of the country.

Is there a need for foreign investment to implement these projects?

The development of pipelines and compressor stations is mainly financed through domestic resources of NIGC

and carried out by local contracting firms. However, collaboration with foreign investors in areas such as new technologies, advanced equipment manufacturing, and modernization of control systems is among the prospective objectives of IGTC. At present, domestic engineering and operational capabilities in Iran’s gas transmission industry meet the majority of the sector’s needs. Nevertheless, the adoption of cutting-edge technologies and specialized equipment—supported by targeted foreign investment—could significantly accelerate the pace of development.

What key measures have been taken in the pipeline and gas compressor station sectors in preparation for the cold season?

In the first half of the current calendar year, a comprehensive set of measures was implemented to prepare the network for the cold season. In the pipeline sector, more than 600 defects were repaired on IGAT-3, IGAT-4 and IGAT-8, while 500 pipeline sections in export lines and northern regions of the country were repaired, replaced, and/or renovated. Additionally, intelligent pigging operations were carried out on 902 kilometers of IGAT-6, IGAT-10 and IGAT-5 to closely monitor the internal condition of the lines. In the facilities sector, major overhauls of 26 compressor drivers were completed, and 30 additional turbine units are currently undergoing reconstruction and major maintenance. Furthermore, scheduled technical inspections of mechanical, electrical, and electronic components at gas compressor stations have been fully carried out. These actions form part of the network’s winter preparedness program, designed to ensure stable and uninterrupted gas transmission during the upcoming cold season.

Given the experience of last winter, what new measures have been taken to ensure a successful transition through the coming winter?

One of the most significant actions has been the relocation of four (3+1) 7.5-million-cubic-meter gas compressors from the Farooj Station to the Ramsar Station, replacing the older 5.5-mcm units. This measure has increased the transmission capacity of the Ramsar facilities to about 22.5 mcm/d. The entire operation was completed in less than two months, without the use of external contractors, relying solely on the expertise of the company’s domestic specialists. This achievement not only enhanced the stability of the northern gas transmission network but also eliminated the need to construct a new compressor station, resulting in substantial cost savings. Additionally, to ensure the reliability of critical facilities, several unit relocation scenarios between operational regions have been defined. For instance, at the Kheirgoo Station, one unit was strategically transferred from the Bijar Station to prevent any potential service interruptions.

What does IGTC do for upgrading its equipment?

All operational equipment is monitored according to regular maintenance and preventive repair programs. Key activities include scheduled maintenance of turbo-compressors, intelligent pigging of pipelines, continuous technical monitoring and inspections at gas compressor facilities, and the use of a computerized maintenance management system (CMMS) for the gas transmission network. In addition, the company has initiated the development of a physical asset management system aimed at extending the service life of equipment. IGTC is striving to move toward smart operation, maintenance, and full network security by adopting new technologies and collaborating with knowledge-based (tech-driven) companies, aimed at minimizing dependence on foreign services.

What challenges does gas transmission face in Iran’s diverse climate, and what solutions have been implemented to manage them?

Iran’s gas transmission network extends from the south to the north of the country and spans a wide range of climatic conditions. During the cold seasons, the sudden surge in gas consumption in northern regions places significant pressure on the network. To manage these conditions, IGTC employs integrated management of pipeline and compressor station capacities, operational maneuvering, and the use of stored gas within pipelines (linepack) to maintain system stability. On the other hand, despite sanctions and restrictions on the supply of spare parts—which pose serious challenges for timely maintenance of equipment—the company has relied on the expertise of domestic specialists and reverse engineering to manufacture essential components domestically, effectively replacing imported parts.

Oil and Gas Projects Economically Viable

Over the past seven months, the Ministry of Petroleum has organized a number of conferences aimed at introducing investment opportunities in Iran’s petroleum industry, inviting both domestic and foreign investors to participate in the implementation of oil and gas projects. During the International Conference on Investment and Financing in Oil, Gas, and Petrochemical Industry — held on 26-27 October at Allameh Tabataba’i University in Tehran — the deputy ministers of petroleum presented the available investment opportunities and outlined the outlook awaiting investors. The Ministry of Petroleum, under the 14^th Administration, has made extensive efforts to facilitate investors’ participation in the oil industry and to enhance the economic attractiveness of oil and gas projects. According to the ministry officials, over the past seven months, not only has the decision-making environment for investors become more transparent and reliable, but also have taken the measures laid the groundwork for genuine private sector participation in the oil industry.

Legal Grounds

At the opening ceremony of the conference, Mohammad Baqer Qalibaf, Speaker of Parliament, emphasized the role of legislation in strengthening the country’s economic infrastructure, stating: “The Parliament has initiated extensive reforms in the structure of financial and investment laws aimed at creating sustainable foundations for people-centered economic growth.”

Referring to the importance of the energy sector in achieving the goals of the 7^th Economic Development Plan, he added: “Without reforming the energy structure, sustainable economic reform will not be possible. The rationalization of prices must be carried out in a way that its benefits directly return to the people and production, while enhancing opportunities for investment in energy infrastructure.”

Reiterating Iran’s great potential in the capital market, he said: “The country’s capital and money markets, alongside domestic resources, may serve as a reliable foundation for the development of oil and gas projects. It is our goal to make the most effective use of the existing liquidity within the country to finance large-scale energy projects, thereby paving the way for greater growth and efficiency.”

“Under the 7^th Plan, expansion of the private sector’s share in the energy industry have been defined as key priorities. This path, through legal reforms and enhanced transparency in contracts, will help attract both domestic and foreign investors,” he added.

Gas Infrastructure

Saeed Tavakoli, the CEO of National Iranian Gas Co. (NIGC), explained the company’s plans to upgrade productivity enhance energy security and expand regional cooperation.

“Ensuring the sustainability of gas supply and optimizing resource utilization are the main priorities of NIGC’s programs for the coming years. Within the gas supply chain and refineries, two major projects have been defined under the framework of the 7^th Plan, with a total estimated investment of around $42 billion,” he said, adding: “In the current feasibility and evaluation package, efforts have been made to distribute risks rationally between the parties.  It is not our goal to transfer risk to the investor, but to ensure the return on investment based on thorough economic studies.”

Referring to the introduction of 68 investment projects in the gas industry, he added: “The full details of these projects have been published on the official information platform of NIGC. Due to their diversity, profitability, and practical approach, they offer strong appeal to both domestic and foreign investors. A significant portion of these projects are short-term and focused on continuous improvement, covering areas such as digitalization, measurement, data analysis, and data governance.”

On NIGC’s technical achievements, he said: “Iran is currently experiencing the highest level of underground gas storage in its history. Storage at the Shourijeh and Sarajeh reservoirs has reached record levels, and the country’s transmission and distribution network is fully prepared to operate at full capacity during the cold season. At the same time, liquid fuel reserves are also at an unprecedented level.”

He further stated: “A new gas consumption model has been designed with the aim of optimizing distribution and enhancing network efficiency. Alongside this, a large-scale program to modernize heating and industrial equipment has been launched.”

Reiterating the significance of energy diplomacy, he said: “Iran’s gas cooperation with regional countries, including Turkmenistan and Russia, is expanding with the goal of strengthening energy security and fostering regional synergy. The continuation of these collaborations is part of Iran’s long-term strategy to play a more active role in the Eurasian energy market.”

Financing Renovation

Amir Moqiseh, director of investment and business of National Iranian Oil Co. (NIOC), called for revision of the financing structure of the petroleum industry, saying: “The development of the oil industry hinges on reforming policy-making and investment mechanisms. In case the financing framework is not revised, a significant portion of the existing capacities will remain unrealized.”

Referring to the strategic role of crude oil in Iran’s economy, he said: “Oil has always been the backbone of national economy and one of the main pillars of the country’s energy security. Today, policy-making in the oil industry is focused on attracting investment, transferring technology, and implementing innovative financial models to enhance field productivity and ensure sustainable development in the energy sector.”

“In the coming decade, it is not merely our goal to enhance production, but to establish a reliable foundation for long-term investments and greater private sector participation in the upstream projects. Through process reforms and revisions to contractual frameworks, the path for both domestic and foreign investors has become smoother than ever before,” he said.

Explaining the recent achievements in reforming upstream contract models, he said: “Last year, a resolution issued by the Economic Council led to the stabilization of the internal rate of return (IRR) for upstream contracts in the range of 20% to 23%. This measure enhanced the economic attractiveness of oil and gas projects and brought greater transparency to contractual relations.”

“In this framework, the financing cost rate has also been defined—set at the National Development Fund of Iran (NDFI)’s rate plus a guaranteed minimum foreign-currency return of 12% for investors. Thus, for the first time, the profitability of the oil projects has been formally and predictably established within a legal framework,” added Moqiseh.

Referring to the new guidelines for financing upstream contracts, he said: “This directive has moved beyond traditional restrictions, and allows investors to utilize the assets they create until full repayment is completed. Additionally, the crude oil commodity deposit certificate has been introduced as a new financing instrument, enabling investors to leverage their receivables in the capital market.”

Referring to the first practical achievement of this plan, he added: “Under this guideline, approximately $150 million has so far been financed through certificates of future oil contract proceeds. The Central Bank has also communicated this directive to the national banking network, and the Securities and Exchange Organization ( SEO) has begun accepting instruments based on these certificates.”

Moqiseh also highlighted the drafting of the Public–Private Partnership (PPP) bylaw as one of the fundamental steps forward, explaining: “According to this bylaw, partnership projects will benefit from a ten-year tax exemption, and executive bodies are required to guarantee the fulfillment of their obligations through official guarantees. These new regulations make the decision-making environment more transparent and reliable for both managers and investors.”

“The philosophy behind these measures is to create a reliable foundation for the genuine private sector’s participation in upstream projects. Today, more than 400,000 barrels of crude oil processing capacity have been allocated to domestic investors under BOT and BOO contracts, and the development of these projects is continuing,” he said.

Moqiseh also touched on the establishment of Petroleum Industry Guarantee Fund, saying: “The fund will be established with an initial capital of €300 million and will have the capacity to issue guarantees of up to $6 billion dollars. The goal of creating this fund is to support private companies active in the upstream sector and to strengthen their financing capability.”

Emphasizing the need to develop large private companies in the energy sector, he stated: “The upstream economy is a playing field for major companies. To achieve sustainable growth, we must support medium and small enterprises so that they may progress toward maturity and participation in large-scale projects.”

Moqiseh concluded: “The new orientation of NIOC is based on transparency, diversification of financial resources, and strengthening the role of the private sector. Our goal is to align the contractual and financial systems of Iran’s oil industry with international standards, enabling both domestic and foreign investors to enter this sector with greater confidence.”

Value Chain

Hassan Abbaszadeh, the CEO of National Petrochemical Co. (NPC), said: “Petrochemicals represent the most important value-adding link in the oil industry chain and play a decisive role in job creation, foreign exchange generation, and sustainable economic growth. Today, this industry not only meets a large portion of domestic needs but also makes a significant contribution to non-oil exports and the country’s foreign currency revenues.”

He added: “The installed capacity of Iran’s petrochemical industry has now reached around 100 mt /y, with nearly $92 billion of investment made in this sector so far. With the implementation of new development programs, the growth of production capacity and the diversification of petrochemical products have entered a stable trajectory, outlining a bright outlook for the future development of this industry.”

Referring to the 7^th Plan’s targets, he said: “As part of this program, 66 new petrochemical projects with a total investment value of about $26 billion are currently under implementation, with an average progress rate of around 60 percent. In addition, for the next decade, 46 other projects have been defined and are ready for investment, with an estimated total value of approximately $44 billion. All necessary permits — including environmental, land allocation, and civil defense approvals — have already been obtained.”

“Currently, the annual revenue from domestic sales and exports of petrochemical products amounts to about $24 billion, nearly two-thirds of which comes from exports. By channeling part of these resources into development projects, a significant step may be taken toward strengthening the value chain,” said Abbaszadeh.

Referring to innovative financing tools, he said: “Iran’s petrochemical industry is moving toward utilizing the potential of the capital market and domestic financial instruments. The design of project-based funds, construction bonds, and long-term financing models are among the solutions that may accelerate investment flows in this industry.”

Emphasizing the importance of a stable and predictable environment for attracting investment, he added: “The petrochemical industry is inherently long-term and capital-intensive, and stability in policies, regulations, and financial relations is the key prerequisite for success in this field. We aim to work with the country’s economic and financial institutions to create a secure and transparent platform for both domestic and foreign investors.”

“With synergy between the government, the private sector, and financial institutions, Iran’s petrochemical industry is ready to enter a new phase of growth and global competitiveness.  It is our goal to strengthen the value chain, enhance efficiency, and solidify Iran’s position as one of the key players in the global petrochemical market,” he said in conclusion.

Financial Instruments

Hamid Reza Ajami, director of investment at NPC, touched on the strategic status of the petrochemical industry in Iran’s economy, saying: “Petrochemicals are not only a key pillar of the oil industry’s value chain but also a driving force behind the country’s industrial development and a main source of non-oil foreign exchange revenue. This industry accounts for nearly 25% of Iran’s non-oil exports and, through its connection to knowledge, technology, and employment, plays an indispensable role in achieving sustainable economic growth.”

Referring to the need to modernize financial instruments for development, he stated: “Sustaining investment in the petrochemical industry requires a transformation in financing methods. Utilizing the potential of the capital market, project-based funds, and specialized participation bonds may help diversify and stabilize investment flows.”

Ajami added: “Given the ongoing limitations on foreign resources, our approach focuses on leveraging domestic capacities and modern financial technologies. One innovative path in this area is the tokenization of assets, which enables small investors to participate in large-scale projects and may play a key role in democratizing investment.”

He highlighted the potential of digital assets in Iran, stating: “Estimates indicate that Iranians collectively hold more than $10 billion in digital assets. Designing local, transparent, and secure platforms to channel part of these assets into industrial projects presents a new opportunity for financing development initiatives.”

He reiterated the importance of synergy between the government, the private sector, and universities, saying: “Developing innovative financial instruments is impossible without a solid legal framework and technical expertise.  It is our goal to create an integrated ecosystem connecting financial institutions, science-based companies, and the production sector to establish a sustainable and long-term financing pathway for the petrochemical industry.”

Ajami concluded: “As a facilitating and policy-making institution, NPC is ready to cooperate with both domestic and international investors. Our focus is on creating an effective link between the real economy and the country’s financial system so that Iran’s petrochemical industry may achieve a more prominent position in the global energy value chain.”

The conference was held with the goal of creating a platform for interaction among legislators, economic actors, and the private sector—an event that, according to participants, could mark the beginning of a new chapter in financing large-scale energy projects in Iran.

The shared emphasis of the speakers on themes such as diversifying financial instruments, expanding private sector participation, facilitating domestic and foreign investment, and moving toward value-chain development in the oil and petrochemical industries reflects the emergence of a new consensus in the country’s energy policymaking.

Experts believe that synergy among the government, parliament, major energy companies, and financial institutions may pave the way for attracting domestic and international investment, developing energy infrastructure, and solidifying Iran’s position in the global oil and gas market—a path for which this conference aimed to outline the roadmap.

$42bn Private Investment Envisaged in Gas Sector

Iran’s gas industry, as one of the largest economic value chains in the country, is close to a major transformation. During the first Symposium on Investment in Gas Industry (24 October 2025), National Iranian Gas Company (NIGC) unveiled a series of attractive investment packages for the private sector. These packages are designed to attract $42 billion in investment by the end of the 7^th National Economic Development Plan (2030), creating an unrivalled opportunity for both domestic and foreign investors. Saeed Tavakoli, the CEO of NIGC, underscored the importance of attracting investment, stating: “Under the present economic circumstances, investment is no longer a choice but an unavoidable necessity, and the only path forward is to make full use of the private sector’s potential.”

Profitability Opportunity

Mansoureh Raam, head of the Investment and Business Division at NIGC, said the gas industry would need $42 billion in investment to expand infrastructure and overcome imbalance.

She went on to say: “This investment includes $18 billion for refinery projects, $11 billion for the expansion of transmission pipelines, $1.6 billion for network reinforcement, $1.4 billion for storage development, and $10 billion for digitalization and distribution development.”

“The feasibility reports for these projects have been finalized and will be presented to investors in a comprehensive booklet, organized into eight investment categories,” she said.

These figures not only reflect the vast scale of the projects but also promise a secure opportunity for return on investment. “We are seeking investments that, in addition to providing financial resources, bring innovation, networks, and managerial expertise into the gas industry,” Raam said.

Broad Infrastructure

With its extensive network consisting of 351 turbo compressors, 40,260 km of high-pressure pipelines, 470,000 km of distribution network, 62 operational stations, and 20 active refineries, NIGC provides services to 31 million customers. This vast infrastructure allocates natural gas annually to key sectors as follows: 30-35% to power plants, 30-36% to industries, 22-26% to the residential sector, and 4-7% to public transportation.

Tavakoli said: “The fact that 80-83% of gas consumption in Iran’s thermal power plants contrasts sharply with the global average of 23% highlights a vast potential for efficiency improvement. Through targeted investment in optimization, gas resource efficiency could be enhanced by up to 50%.”

These statements position the gas industry as a profitable platform for investors, where participation in efficiency projects may yield substantial and sustainable returns.

Guaranteed Return

NIGC’s investment packages have been designed based on comprehensive feasibility studies, focusing on profitability and risk management, making them highly attractive to investors. Tavakoli stated: “Our approach is not to transfer all risks to the investor. By designing mechanisms for risk management and sharing, we aim to build mutual trust and confidence.” He also invited investors to participate in the contract development process, adding: “Such participation will make the contracts more precise and effective.”

Regarding financing, Raam said: “In the past two to three years, instruments such as commodity deposit certificates and gas trading on the Iran Energy Exchange (IRENEX) have been introduced; however, we are now seeking new hybrid and partnership-based structures that may ensure investor profitability.”

These packages are designed not only to finance projects, but also to create opportunities for the introduction of advanced technologies and managerial expertise, which may multiply investment returns.

Why investment in gas industry is attractive

1. Massive market scale: With 31 million subscribers and extensive infrastructure, Iran’s gas industry represents one of the largest energy markets in the region.
2. Guaranteed profitability: Detailed feasibility studies ensure a secure return on investment.
3. Risk management: Risk-sharing mechanisms minimize investor concerns and enhance confidence.
4. Macroeconomic impact: Investment in this industry not only generates profits but also contributes to energy security and national economic growth.

Practical Step for Long-Term Ties

The symposium was more than just an event—it marks the beginning of investment engagement in NIGC’s operational programs. Highlighting the company’s strong commitment, Tavakoli stated: “This meeting should serve as a beacon, illuminating a new path for investment. Its outcomes will be translated into actionable plans.” Given the $42 billion investment requirement, it is expected that the private sector will provide up to 70% of the funding—an opportunity that could yield substantial profits for investors.

Raam also expressed gratitude for the strong presence of economic stakeholders, stating: “Your participation reflects confidence in the gas industry. We believe that without trust and solidarity, no investment can truly take shape. This meeting can mark the beginning of long-term, sustainable cooperation.”

Vision: Regional Energy Hub

NIGC, focusing on enhancing efficiency, strengthening resilience, and expanding strategic partnerships, aims to transform Iran into a regional energy hub. Investment in this sector not only ensures financial profitability but also allows investors to become partners in achieving a strategic national goal.

“Pursuing innovative financing methods will bring sustainable benefits to the industry, investors, and the people,” Raam said.

Interested investors may explore project details and profitable opportunities by referring to the comprehensive investment project booklet published by NIGC. This excellent opportunity opens the doors of Iran’s gas industry to smart and future-oriented investments.

Northeast Gas Fields Output at 65 mcm/d

Vahid Ziaei Bitaraf

The Khangiran field, known to be the largest gas source in northeastern Iran, serves as the primary supplier of natural gas to the eastern Iran. The field consists of three major reservoirs: Mozdouran, Shourijeh B, and Shourijeh D. The gas extracted from these reservoirs is among the world’s sourest gases—a toxic and highly corrosive type of gas. The presence of hydrogen sulfide not only complicates the production process but also poses severe risks, as even the slightest leakage may endanger workers’ lives. Ali Reza Kamizi, acting head of East Oil and Gas Production Co. (EOGPC), has said 65 mcm/d of gas would be withdrawn from northeastern fields during next winter.

In the heart of the Sarakhs region, where summers are marked by scorching heat and winters by piercing cold, a journey to the northeastern gas fields of Iran offers a truly distinct experience. Anyone who sets foot in this area is first met with the silence of vast deserts and the sweep of hot, sand-laden winds.

The route to the region, located not far from the Turkmenistan border, is not an easy one; the Mashhad-Sarakhs road is among the most dangerous and accident-prone in the country. After undergoing the required refining and sweetening processes, gas produced from the Khangiran field is distributed to six provinces—Khorasan Razavi, North Khorasan, South Khorasan, Golestan, Mazandaran, and Semnan—supplying the needs of more than 14 million residents in these areas.

In addition to producing millions of cubic meters of gas daily, Khangiran also hosts Iran’s largest natural gas storage facility: the Shourijeh D reservoir. During the warmer months of the year, gas from the national grid is injected into its underground layers, to be withdrawn once again in the cold days of winter and delivered to households across the region.

Breaking down the 65 mcm/d gas to be withdrawn from the northeastern fields, Kamizi said the Mozdouran field would produce 45 mcm/d, Shourijeh B 1.4 mcm/d, Shourijeh D nearly 18 mcm/d, and the Gonbadli field 0.6 mcm/d. After processing at the Shahid Hasheminejad Gas Refinery, the produced gas is fed into the national grid, supplying the energy needs of six northern and northeastern provinces of the country.

Self-Sufficiency

Khangiran is considered one of the most extensive operational zones in Iran’s oil and gas industry. The distance between wells, facilities, and installations is so vast that it offers ample opportunity to take in and record the sights and sounds of the field—covering an area of roughly 50 by 70 square kilometers.

One of the managers showed us a facility gathering two-thirds of Khangiran’s gas, saying: “All the new phases have been commissioned by the Iranian specialists. Despite widespread assumptions that the Iranians would not be able to resume gas production in this region without the presence of foreign experts, we successfully accomplished it on our own.”

He was right; I had read about this earlier. Production from the Khangiran reservoirs, which began in 1974, was at that time under the full management of foreign companies. After the victory of the Islamic Revolution, all these companies—including SCADA, which was responsible for managing the control systems—immediately left Iran, effectively bringing gas extraction from the field to a halt.

When asked how gas production in this region continued after the Revolution; he replied: “At that time, many systems could not be remotely controlled, and we had virtually no access to information. During the presence of foreign companies, all data was classified, and the Iranians were not given any meaningful access. After the Americans, Italians, and even Indians, we were placed at the very bottom of the information hierarchy. Nevertheless, the Iranian engineers and technicians, by directly working at the wells and facilities and taking on significant risks, managed to update the systems and resume gas production. Today, as you can see, we have reached a point where we are able to commission new phases entirely on our own, from A to Z.”

Overhaul

Our visit to Khangiran coincided with the final days of annual overhauls in this operational zone. These overhauls begin each year during the warmer months, when gas demand is lower and the facilities can be prepared for the peak shaving. However, maintenance operations in Khangiran involve unique challenges. Every component—each valve and pipeline—must be inspected with precision, as even the slightest weakness could disrupt the flow of gas during the harsh winter months.

Referring to the challenges to the overhaul of Khangiran, Abol Qasem Irani, director of operations at EOGPC, said: “We began the overhaul operations on April 6, and fortunately, all activities progressed according to schedule. Working under these climatic conditions is associated with its own difficulties, as HSE protocols require maintenance work to be halted in certain situations—such as when shifting sands pose safety risks—, which in turn affects timelines. Nevertheless, during this period, more than 170,000 persons-hours of work were completed, and, fortunately, with no accidents.”

He also recalled the 12-Day War, saying: “During that period, welding, maintenance, and security teams were dispatched to different locations to ensure rapid response in case of any issues. Every morning, crisis meetings were held to monitor the groups’ performance and assess progress. Various facilities—including both the old and new phases—were managed separately, each with its own specialized teams. Thanks to these efforts, the major overhaul operations were carried out without interruption, while the flow of gas production remained stable throughout.”

Perseverance

I stepped away from the officials and managers to sit and listen to the stories of the workers—the sunburnt faces that told everything without words. At first, they were reluctant to speak, but after some conversation, they began sharing. They spoke of sandstorms so intense that the sky darkens and visibility drops to only a few meters. They described the searing summer heat, with thermometers climbing close to 50°C, making it difficult even to breathe. Winter, however, brings an entirely different challenge: a bone-chilling cold that tests both body and spirit. These conditions have made working in Khanqiran far from ordinary; it is a constant test of patience, expertise, and endurance.

“Here, we deal with toxic gases every single day. Even the smallest leakage could put our lives at risk. And yet, we show up to work every day—because we know that meeting the nation’s energy needs depends on what we do,” said one.

Another worker, who is part of the welding team, spoke about the hardships of his job in the region’s extreme climate: “Sometimes in the middle of the summer, we have to weld for hours under the scorching sun, wearing thick work clothes and safety masks. The shifting sands often find their way into the equipment, making the job even harder. But there’s no other choice—the work has to go on.”

These accounts reveal that behind every cubic meter of gas produced lies a story of effort and sacrifice—work carried out mostly in silence, far from the public eye. The workers of Khangiran know that their labor is not just about supplying energy to a single city or province; it plays a decisive role in the nation’s energy security. Every cubic meter of gas produced or stored translates into warm houses, functioning industries, and the comfort of millions of Iranians.

Khangiran is not merely a gas field; it is a symbol of relentless effort in the heart of a harsh climate. Its workers, in the blistering heat of summer and the bitter cold of winter, labor quietly and without recognition so that the homes of millions of the Iranians remain warm during the coldest days of the year. However, their hardships are a small part of the immense endeavor of the oil industry family—an industry that bears the backbone of the nation’s energy supply and, despite all challenges, continues to beat tirelessly.

Overhaul of 35 South Pars Platforms Ends

The gas production capacity of the massive South Pars gas field has now exceeded 715 mcm/d. This field supplies more than 70% of Iran’s gas consumption, underscoring its crucial role in meeting the country’s energy needs. Pars Oil and Gas Company (POGC), which is responsible for gas production from South Pars, carries out annual overhaul at the field’s platforms to ensure maximum gas production capacity during the winter. Ali Reza Sarmadi, director of production and logistics at POGC, tell “Iran Petroleum” that maintenance work was completed on 35 platforms, out of a total 37, to make arrangements for maximum supply during winter.

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

When did you start overhauling South Pars platforms and when did you finish the work? How much work was done?

The overhaul of 35 out of 37 South Pars platforms took place over a six-month period, from mid-April to 31 October 2025. During this time, a total of 136,000 persons-hours of work and 12,700 work orders were recorded. Considering that around 1,000 to 1,200 persons are employed on the platforms, they participated in the operations according to the specific needs of each platform. A key feature of this project was the high level of safety maintained despite the large scale of offshore operations. Thanks to precise planning, all platforms successfully returned to production after the maintenance period without any major issues.

What are the key measures successfully taken during this year’s overhauls?

Many notable actions accomplished. Those actions that had a significant impact on production and platform safety are replacement of emergency shutdown valves on platforms 9 and 10, replacement of the worn-out uninterruptible power supply (UPS) systems on the platforms, designed and manufactured domestically by knowledge-based companies.  They were completed within 7 to 8 days, implementation of a pressure equalization system on the platforms of phases 4, 5, 6, 7, and 8, which reduced the time required for wells to return to production from 12-24 hours to just 1-2 hours. The implementation of these projects, achieved through coordinated management and in the shortest possible time, strengthened gas production stability and led to an increase in overall output at South Pars.

Do the overhauls require any special technology, or can domestic manufacturers handle them?

Although certain aspects of the platforms’ control systems may require specialized technology, the sanctions have, in fact, strengthened domestic knowledge-based companies and local contractors. As a result, nearly all the platforms’ needs are now met domestically, and Iranian companies have successfully replicated and developed control system technologies. At present, we rely entirely on domestic companies and contractors of National Iranian Oil Company (NIOC) across all areas of operation.

In terms of safety, given the large volume of work carried out over six months, what measures did you take?

HSE teams continuously, and especially during the overhaul period, developed specific plans for each platform and managed potential risks. Daily safety training sessions were provided to all personnel involved in the maintenance operations. These measures ensured a high level of operational safety despite the extensive scope of work.

During the overhaul period, the 12-Day War broke out. Did this event cause any interruption in the overhaul operations?

The 12-Day War could have posed a major challenge to gas production and the country’s energy supply. However, thanks to precise planning, there was no disruption in the overhaul process. The maintenance operations continued without interruption—even for a few hours—and the production platforms remained active. This effective management ensured the uninterrupted supply of energy throughout the country.

Over the past year, what measures have been taken to increase production from the field, and what results have they yielded?

As we approach the second half of South Pars field’s operational life, we are gradually facing the natural decline in reservoir pressure. For this reason, several projects have been launched in recent years to enhance gas recovery from the field. The first phase of this plan includes drilling 35 infill wells in collaboration with four domestic contractors. This phase began last year, and several new wells have already been brought into production. Once this stage is completed, the second phase of the program will be implemented to compensate for a significant portion of the production decline caused by pressure loss. In parallel with these efforts, acidizing of older wells and other development projects are also being carried out simultaneously to sustain and boost production levels.

Cheshmeh-Khosh Desalter, New Surge in Iran Oil

As one of the longtime oil and gas producers, Iran holds the title of the world’s largest owner of these underground reserves. For this reason, Iran’s unique position in economic and geopolitical equations is undeniable. The country’s oil production capacity and its vast energy reserves are not only an economic advantage but also a strategic tool in international relations that can shape the future of its political and economic interactions. This position has not diminished over the years with the use of resources; rather, it has been reinforced day by day through the adoption of new methods—such as the launch of mobile desalter units that boost oil production—further strengthening Iran’s role in the global energy market.

Output Capacity at 4mb/d

Sitting atop 160 billion barrels of oil and more than 34 tcm of gas, Iran is one of the leading suppliers of energy in the world. Under the 14^th Administration, despite serious challenges such as sanctions, energy imbalances, and war, Iran’s oil industry has managed to set new records in oil and gas production. The escalation of more than 120,000 b/d of crude oil and the unprecedented recovery of 1.105 bcm of raw gas last winter highlight the vital role of this industry in ensuring the stability of national economy.

Minister of Petroleum Mohsen Paknejad said Iran has increased its oil production on average 127,000 b/d. According to the quantitative targets set in the 7^th Development Plan, Iran’s oil production capacity must reach about 4.58 mb/d, and the planning carried out is aimed at achieving this goal.

Desalter Effect

Therefore, one of the constant objectives pursued in Iran’s economy is to enhance the capacity and volume of oil production, and multiple strategies are employed to achieve this goal. The launch of the first mobile desalter unit in Iran’s oil industry is part of this effort, marking the beginning of a new path for boosting production capacity and facilitating the processing of salty crude in oil fields. This is because the equipment and expertise of this unit can be transferred to other oil fields, as well.

This unit was launched on September 24 in the Cheshmeh-Khosh, Dalpari, and East Paydar oil fields. The Cheshmeh-Khosh oil field, located in Dehloran, Ilam Province, is part of the development plan of Petroleum Engineering and Development Company (PEDEC). With its high crude oil production capacity, along with the East Paydar and Dalpari fields, it is considered one of the country’s important oil fields. Its development plays a significant role in increasing Iran’s national oil production and safeguarding hydrocarbon reserves.

In this regard, the mobile unit, due to its mobility and rapid deployment capability, carries out the desalting process and separation of water from oil before transfer to the main facilities, playing a key role in enhancing efficiency and accelerating production. The purpose of launching this unit is to facilitate the processing of salty crude and bring about 30,000 b/d rise in the oil production capacity of these fields.

Hamid Bovard, the CEO of National Iranian Oil Company (NIOC), also highlighted technology transfer as one of the key advantages of oil projects, stating: “For the first time, modern processing and desalting technologies have been implemented in this region. Based on the results of these projects, such technologies will be applied in other oil fields as well.”

According to Majid Najjarian, the project manager for the development of the Cheshmeh-Khosh, Dalpari, and East Paydar oil fields, the operation of the mobile desalting skid accelerates the integration of new wells into production and enables optimal management of salty crude. After the completion of the 110,000-b/d Cheshmeh-Khosh desalting plant, this unit can be relocated to other fields at the discretion of NIOC, preventing time loss and efficiency reduction.

The pace of installation and flexibility of this equipment, particularly in shared oil fields, is considered a strategic solution, and the commissioning of the first mobile desalting unit ushers Iran’s national oil industry into a new phase of flexible and targeted operations. This technology not only optimizes the processing structure but also provides the ability to adapt to changing operational conditions, marking an effective step toward sustainable production growth, especially in border fields.

Moreover, with the launch of the mobile desalting unit in the Cheshmeh-Khosh field, daily production in this field increased by 14,000 b/d to 114,000 b/d, which is projected to rise to 120,000 b/d by next March.

This unit plays a vital role in processing salty crude and boosting sustainable production capacity. With a capacity of 30,000 b/d, its launch has not only facilitated the production process but also enabled an upsurge of around 30,000 b/d of crude oil production capacity of the Cheshmeh-Khosh field.

Overall, new projects such as the Cheshmeh-Khosh desalting unit not only contribute to the production growth and technological advancement but also serve as a model for application in other oil fields across the country.

Foreign Investment

Another feature of the Cheshmeh-Khosh field development project is the presence of a foreign investor; the Russian company ZN Vostok began its implementation in 2020. The contract is valued at

around $3.1 billion, and so far, with an expenditure of nearly $550 million, production in this field has increased from 100,000 b/d to 114,000 b/d.

Azamat Smagilov, the CEO of ZN Vostok, described the commissioning of the mobile desalting unit in the Cheshmeh-Khosh field as a significant achievement and the result of close cooperation with NIOC. He stated that with the commissioning of this unit, the production constraints in this field have been resolved.

Highlighting the great value of this project for Iran, he said: “Over recent years, all our efforts have been focused on delivering the best performance. Along this path, close cooperation with NIOC and PEDEC has led to major achievements.”

He added: “One of our main challenges was the surface facilities, but thanks to the round-the-clock efforts of our colleagues and the support of officials, we managed to overcome it, and today we have reached a production level of 114,000 b/d”.

Referring to the necessity of expanding processing capacities in the Cheshmeh-Khosh field, he said: “One of the main needs of this field was the launch of the mobile desalting unit, which, fortunately, was commissioned through the joint efforts of contractors and client companies, successfully eliminating the production constraints.”

Technical Features

The Cheshmeh-Khosh oil field desalter unit is mobile and rapidly deployable, having been installed and commissioned in a short period of time with reliance on domestic capabilities. Moreover, with the cooperation of universities and knowledge-based companies, essential steps will be taken in the coming year toward the full indigenization of its manufacturing technology. This will not only address immediate operational needs, but also pave the way for self-sufficiency and the advancement of local technical expertise.

Its mobility and rapid deployment capability make it possible to perform desalting and separate water from oil at any oil facility where needed. This feature accelerates the integration of new wells into production and ensures optimal management of salty crude. Therefore, beyond the Cheshmeh-Khosh field, this unit can in the future be relocated to other fields as well, preventing time loss and productivity decline.

Faster installation, high flexibility, and lower costs compared to fixed facilities have made this project a strategic solution, particularly in joint oil fields. This experience may serve as a model for the development of other oil fields in the country. The Cheshmeh-Khosh field, together with the Dalpari and East Paydar fields, form an integrated development cluster. The establishment of such infrastructure will contribute to the long-term preservation of hydrocarbon reserves and the sustainable increase of production capacity.

National Achievement

The commissioning of the mobile desalter unit in the Cheshmeh-Khosh oil field is a strategic step toward achieving the objectives of the 7^th Development Plan and expanding the country’s oil production capacity. With a capacity of 30,000 b/d, this unit not only facilitates the processing of salty crude and supports sustainable production but also accelerates the integration of new wells into production, and enables optimal management of salty crude.

The features of mobility, rapid installation, and transferability to other fields make this unit a new model for flexible exploitation of the country’s oil resources. The operation of this facility has not only increased daily oil production in the Cheshmeh-Khosh field and achieved new records, but also paved the way for safeguarding hydrocarbon reserves and enhancing efficiency in the oil industry.

From a broader perspective, such projects strengthen Iran’s position as one of the world’s leading energy producers, and play a key role in achieving the target of 4.58 mb/d of oil production set in the 7^th Plan. For this reason, the Cheshmeh-Khosh desalting unit is not merely a technical project, but a national achievement on the path toward expanding production capacity, ensuring energy security, and sustaining the country’s economic stability.

Petchems Make Up 25% of Nonoil Exports

The head of Investment Division at National Petrochemical Company (NPC) has underscored the strategic role of the industry in national economy, saying: “Despite sanctions, the sector remains competitive and currently provides half of the country’s foreign currency needs and accounts for about 25% of non-oil exports.

“According to the statistics from the Ministry of Industry, Mine, and Trade, more than 19% of the country’s industrial added value is generated in the sector. Currently, 76 active plants with a total capacity of over 96 million tonnes (mt) are operating in the country, some of which are located in the Special Economic Zones. This capacity has solidified Iran’s position among the countries of the region,” said Hamid Reza Ajami.

“These very characteristics have enabled Iran’s petrochemical industry to remain competitive and resilient even under sanctions,” he said.

Referring to the successful experiences in domestic and foreign partnership, Ajami said: “In collaboration with National Development Fund of Iran (NDFI), 19 projects have so far been introduced that require $8 billion in financial resources. In addition, negotiations and joints agreements have been conducted in the downstream value chain, which could lead to the development of complementary industries and extensive job creation.”

“Since the years following the Islamic Revolution up to 2022, about $87 billion has been invested in the petrochemical industry. Around 19% of this amount came from foreign financial resources from Asian and European countries, more than 11% from NDFI and other domestic and foreign sources, and the remainder from shareholders’ equity, other foreign and local bank facilities, and the sale of complexes. In the past two years, this figure has exceeded $90 billion,” he recalled.

NIOC, NDFI Cooperate for Oil, Gas Surge

The CEO of the National Iranian Oil Company (NIOC) Hamid Bovard announced development of a new model of cooperation with National Development Fund of Iran (NDFI), featuring diverse investment methods to increase oil and gas production.

Bovard on September 28 stated that in the new model agreed upon with NDFI to boost oil production by 250,000 barrels, various investment methods have been planned. He added that the Fund is assured of a guaranteed return on investment so it can utilize its resources for other projects, as well.

He said the goal is to transform the petroleum industry—and consequently the entire country—into a large workshop, adding: “Numerous projects are currently underway at NIOC. Among hundreds of active projects, three of them are of special importance for the company. One of these projects focuses on increasing production in oil and gas fields, which, fortunately, is being implemented in most of the country’s fields through the revision of traditional development models.”

Noting the planned development of the Azadegan oil field, as well as other West Karoun fields, Bovard said: “The area is considered one of the shared oil fields with Iraq, and the company’s goal is to increase its oil production to 1 mb/d ; a target which will be achieved through the introduction of new development models and intensive, dedicated efforts.”

He said one of  the NIOC’s priorities was the compression project at the giant South Pars gas field, adding: “The implementation of this project is vital for the country, as more than 70% of Iran’s gas supply comes from this field. If the reservoir pressure continues to decline, the country will face severe challenges. Although preliminary steps have begun and limited funds have been injected, the project requires much larger-scale investment.”

Low-Salinity Water Injection for Bangestan Reservoirs

The pilot project for low-salinity water injection in the Bangestan reservoir of the Ahvaz field was officially inaugurated and put into operation. The project, aimed at enhancing the oil recovery factor, reducing reservoir risks, and utilizing advanced enhanced oil recovery (EOR) technologies, officially launched in the presence of Hamid Bovard, the CEO of the National Iranian Oil Company (NIOC).

The project has been implemented aimed at ensuring the reservoir’s long-term injectivity capacity, gaining a better understanding of the reservoir area, reducing uncertainties and potential risks, assessing field and operational challenges of water injection, estimating the initial potential for increased production, and providing solutions to support decision-making for field development through water injection.

The development of Bangestan reservoirs based on water injection technology is one of the NIOC’s main priorities for maintaining production, preventing reservoir pressure fall-off, increasing recoverable reserves, and consequently enhancing production capacity.

Among the most important activities and technologies employed in this project are conducting injection logging tests and comparing them with production logs to analyze and evaluate layers with injection potential; performing long-term well testing in Bangestan reservoirs characterized by very low permeability and long pressure buildup; and using a wellhead separator to eliminate wellbore storage effects.

Additionally, reservoir-specific injectivity simulations, the design and execution of advanced enhanced oil recovery (EOR) experiments under reservoir conditions, and online monitoring of injection and production through the installation of downhole equipment are among the key technologies utilized in this project.

Other advantages of this method compared to conventional approaches include lower costs relative to gas injection, no need for highly advanced equipment, and the ability to utilize existing facilities.

Iran, Russia Companies Share Technology

Deputy Minister of Petroleum for Engineering, Research, and Technology Omid Shakeri has said Iranian experts and companies possess capabilities in many fields that may be transferred to the Russian side, while Iranian companies, in turn, will benefit from Russian technologies in areas where they are needed.

On October 15, Shakeri, speaking on the sidelines of the 8^th Russian Energy Week International Forum in Moscow, said: “In addition to participating in the event’s programs, we have also held bilateral meetings with the Russian side, and our goal is to improve the level of bilateral cooperation.”

He, who traveled to Moscow on behalf of the Ministry of Petroleum as the head of the Iranian delegation to the Iran-Russia Joint Economic Cooperation Commission, noted: “There are currently ongoing collaborations between the Iranian and Russian companies; both we and the Russian side believe that the level of cooperation could be further expanded.”

Referring to his meeting with the Russian Deputy Minister of Energy and head of the Russian side of the Iran-Russia Joint Economic Cooperation Commission, Shakeri said: “In this meeting, we discussed and exchanged views on ways to expand cooperation, and both sides expressed their willingness to achieve this goal—especially as Western sanctions against Iran and Russia have brought the two countries closer together.”

“The determination of officials from both countries is to enhance mutual support and ensure that our cooperation yields tangible results — including contributing to growth and development in the oil industry,” he said.

Shakeri noted that Iran and Russia have signed several favorable contracts for the development of oil fields, the implementation of which is progressing well. He added that in the meeting with the Russian side, discussions were also held regarding certain contracts that may face challenges during execution, as well as proposals for signing new agreements.

He said cooperation between the two countries is expected not only to boost Iran’s oil and gas production but also to facilitate technology transfer between both sides, adding that Iranian experts and companies possess capabilities in many areas that could be shared with the Russian side. Meanwhile, Iranian companies, in turn, will benefit from Russian technologies in fields where they are needed.

Pars Oil Products Pipeline Contract Signed

An agreement for the construction of the Pars petroleum products pipeline (Mehraran-Fasa-Shiraz) was signed on October 14 between Mohammad Meshkinfam, the CEO of the National Iranian Oil Engineering and Construction Company (NIOEC), and Abdolreza Abed, head of Khatam al-Anbiya Construction Headquarters.

The signing ceremony held, while Mohammad Sadeq Azimifar, the CEO of the National Iranian Oil Refining and Distribution Company (NIORDC) attended. The pipeline will have a transfer capacity of 73,000 b/d, with a total investment of €150 million.

Azimifar described the Pars pipeline project as an effective step toward reducing dependence on tank trucks and saving tens of thousands of billion in Iranian rials in fuel transportation costs. He added that this year, the overall situation across various segments of the oil refining and distribution chain is favorable.

He identified the increase in the fuel storage capacity of power plants as one of the key indicators for evaluating the performance of the refining industry, adding that the total diesel fuel reserves for power plants in Fars Province have now reached 186 million liters — equivalent to 87% of the usable storage capacity. The figure represents a 2.5-fold increase compared to the same period last year and about a 40% growth compared to two years before.

Referring to an 83% increase in the storage of products such as gasoline and diesel in fuel distribution depots across Fars Province compared to last calendar year (to March 2025), he added that this serves as a major support for ensuring stable fuel supply both in the province and nationwide.

Azimifar noted that the Shiraz Refinery is one of the key centers of the refining industry in Fars Province, adding that through constant efforts over the past year, the refinery has achieved significant milestones — including the commissioning of the isomerization unit. This development has made it possible, for the first time, to produce and distribute Euro-grade gasoline in the city of Shiraz. He also mentioned that the Shiraz Refinery’s DHT (Diesel Hydro-Treating) unit, which can convert all of the refinery’s diesel output into Euro-5 diesel, is currently being commissioned.

He referred to the development of the petroleum products’ transportation infrastructure in the country, stating that currently, nearly 17,000 tank trucks, about 3,000 tank cars, and 15,000 kilometers of pipelines are being used for fuel transportation. The biggest challenge in this sector, he noted, is the heavy reliance on road tankers and their high operating costs. Therefore, expanding petroleum product pipelines is one of the main priorities of the NIORDC.

Azimifar noted that over the past year, nearly 1,000 kilometers of crude oil and petroleum product pipelines, with an investment of around €800 million have commissioned. He added that chief among these projects are the Bandar Abbas–Rafsanjan pipeline, the Sabzab-Shazand pipeline, and the Goreh-Jask branch pipeline to Bandar Abbas, all of which have been launched during this period.

“Of the total fuel consumption in Fars Province, only one-third is produced locally at the Shiraz Refinery, while the remaining two-thirds are supplied via tank trucks from Hormuzgan Province and Bandar Abbas — imposing significant costs on the government. Therefore, with the commissioning of the Pars pipeline (Mehraran-Fasa-Shiraz), the annual consumption of approximately 60 million liters of vehicle fuel used by tank trucks will be reduced,” he said.

“The Pars pipeline project, spanning 400 kilometers with a capacity of 73,000 b/d, will result in annual savings of over 4 trillion tomans. The construction investment amounts to €150 million, and the project is set to be implemented by Khatam al-Anbiya Construction Headquarters under an EPCF (Engineering, Procurement, Construction, and Finance) contract over a period of 36 months,” he added.

The Pars petroleum products pipeline, approximately 400 kilometers long, branches off from the main Bandar Abbas–Rafsanjan pipeline at the Mehraran pumping station, located in the northwest of Hormuzgan Province. It passes through Darab, Fasa, and Sarvestan counties in Fars Province, ending at the existing terminal adjacent to the Shiraz Refinery.

This 14-inch-diameter pipeline, with a transmission capacity of 73,000 b/d (approximately 12 ml/d of petroleum products), includes the construction of two pumping stations located in Mehraran and Fasa, a terminal in Shiraz, and an oil storage facility in Fasa with a total storage capacity of 80 ml.

Jofair & Sepehr Development Accelerates

The CEO of the Petroleum Engineering and Development Company (PEDEC) emphasized the necessity of accelerating the development of the Sepehr and Jofair oil fields in line with the objectives of the contract.

On October 6, during the 23^rd Joint Management Committee (JMC) meeting for the Sepehr and Jofair oil field development project, Nasrollah Zarei stressed the importance of strengthening the country’s drilling rig fleet, the full support of the National Iranian Oil Company (NIOC) for this policy, and expediting the development process of these fields in accordance with the contractual goals.

Abbas Goudarzi-Arjmand, project manager for the development of the Sepehr and Jofair fields, stated that developing this formation requires the use of modern enhanced recovery technologies. He added that, in this context, hydraulic fracturing operations are being carried out in well No. 10 of Jofair, and the results—based on pre- and post-operation testing—will serve as the basis for decision-making regarding the long-term development of the Ilam formation and its possible application to other fields in the West Karun region.

He stated that one of the key topics discussed in the meeting was the NIOC’s plan to enhance the country’s drilling rig fleet capacity, recognizing it as a crucial factor in accelerating upstream development. Goudarzi-Arjmand added that the Sepehr and Jofair field development project is a pioneer in this regard, and within the framework of the guaranteed drilling rig purchase plan, a 2,000-horsepower drilling rig has been procured by the contractor. The finalization of this purchase was completed during the same meeting, and the rig will soon be deployed in the project.

Referring to environmental requirements, he stated that according to the NIOC’s policies and HSE (Health, Safety, and Environment) regulations, development projects are required to supply a portion of their energy consumption—about 5% at the full operation stage—from renewable sources, particularly solar power plants.

Elites Invited to Assist in Oil, Gas Technology

The head of Research and Technology Affairs at the Ministry of Petroleum announced the release of the first public call for the participation of elites, researchers, and technology companies in enhancing oil and gas production technologies.

The initiative is part of the activities of the “Oil and Gas Production Technology Enhancement Working Group,” established under the instruction of Minister of Petroleum and led by the Office of Deputy Minister of Petroleum for Engineering, Research, and Technology.

Mehdi Ahmadkhan-Beigi, explaining the objectives of the call for participation by elites, researchers, and technology companies in enhancing oil and gas production technologies, said: “The call has been issued based on the general policies of the Resilient Economy aimed at achieving self-sufficiency in energy technologies. It seeks to identify and attract indigenous and innovative technologies capable of addressing real challenges in oil and gas production — from improving reservoir recovery to the digitalization of operations.”

He stressed that this initiative will serve as a bridge between the Ministry of Petroleum and the country’s scientific community, enabling the transformation of academic ideas into practical projects in oil fields. He added that this approach represents a paradigm shift in addressing technological challenges — focusing not merely on purchasing technical knowhow, but on developing indigenous and applied knowhow.

Noting that the main focus would be upon upstream oil and gas production, Ahmadkhan-Beigi said: “This section represents the core of hydrocarbon production operations, where innovation has a multiplied impact across the entire value chain.”

He added: “The call focuses on the localization and development of key technologies, increasing oil recovery rates, optimizing and digitalizing operations, reducing production costs, and commercializing research outcomes. It specifically targets key areas such as enhanced and improved oil recovery technologies (EOR/IOR), intelligent and data-driven monitoring systems, and the development of specialized materials and equipment for reservoirs and drilling operations.”

Touching on the interdisciplinary nature of most of these technologies, he said: “Achieving deliverable outputs from these projects will enable their results to have an impact downstream and even across the petrochemical industry value chain. Plans are also underway to issue similar calls for participation in other sectors.”

“One of the strengths of this call is its multi-stage evaluation structure, designed to ensure the practicality of the proposed projects. The selection and screening process includes initial registration and categorization, followed by technical and expert assessments conducted by specialized committees,” said the official. “The evaluation focuses on three main dimensions: alignment with the technological needs of the oil fields, feasibility of implementation in operational environments, and the project’s added value and competitive advantage.”

PGSOC Claims Top IRENEX Spot

The CEO of the Persian Gulf Star Oil Company (PGSOC) Vahid Qaneifard announced that the company has achieved the top ranking in Iran’s Energy Exchange (IRENEX) export market.

Qaneifard said the company has secured the top position for exporting three key products in the IRENEX export market. He emphasized that the Persian Gulf Star Oil Refinery, as the world’s largest gas condensate refinery and one of the main pillars of the country’s energy supply, plays a fundamental role in the development of petroleum products and in creating added value for national economy.

In a bid to maintain transparency, competitiveness, and genuine price discovery, he said, all of the company’s export sales processes are conducted through IRENEX (for all products except sulfur) and Iran Mercantile Exchange (specifically for sulfur transactions). He added that this transparent mechanism has not only increased international buyers’ confidence but also enhanced the company’s commercial credibility and brought greater order to the export process.

Qanaeifard noted that the company’s export sales are conducted through both land and sea routes, emphasizing that this diversification in sales methods has enhanced the company’s flexibility in meeting the diverse needs of target markets and has created a significant competitive advantage.

He stated that, based on official transaction data, the Persian Gulf Star refinery has, over the past year, exported more than 2.2 mt of petroleum products through the international ring of IRENEX, capturing a 47.1% share of the country’s total export market. He added that the refinery complex has achieved the top market ranking in three key export products: light naphtha, with the largest share of national transactions; white naphtha, with a 99.7% share; and full-range naphtha, with a 69.7% share.

Qaneifard said this remarkable performance is the result of precise supply planning, strategic participation in commodity exchanges, diversification of export destinations, quality enhancement based on international standards, and the development of logistical infrastructure. He stressed that this path will continue through diversifying the export portfolio, expanding new markets, and deepening international cooperation — ensuring that the name of the Islamic Republic of Iran continues to shine among the leading energy producers and exporters in the region, overcoming the hostile sanctions imposed by global powers.

13 South Pars Refineries Overhauled

The CEO of the National Iranian Gas Company (NIGC) Saeed Tavakoli has announced the achievement of a remarkable record in the early completion of major overhauls at 13 South Pars refineries.

He stated that the accomplishment is a symbol of synergy, precise planning, and confidence in domestic capabilities.

He added that the major overhauls of the complex’s 13 refineries, which began in April 2025 and concluded on October 18 this year with the completion of work at the second and twelfth refineries, represent an outstanding example of science-based management, meticulous planning, and the tireless dedication of skilled personnel.

Tavakoli noted that the main objectives of these overhauls were to ensure stable gas production during the cold season, enhance safety, and improve unit efficiency. He said that, fortunately, through the efforts of all personnel, this national mission was completed without any delays and with exceptional quality — to the extent that even during the critical 12-day period affected by the Zionist Regime war, operations continued uninterrupted.

He said during this year’s overhaul operations, all stationary and rotary equipment, valves, and electrical and instrumentation systems at the refineries were inspected, refurbished, and upgraded to improve efficiency and performance.

Tavakoli added that 100% of the equipment requirements were met through domestic sources, with more than 15,000 specialized process items and pieces of equipment manufactured and supplied by local producers. This initiative, he noted, not only reduced dependence on imports but also improved quality; and lowered operational costs.

He highlighted the role of science-based companies in this achievement, noting that more than 130 such firms and first-time manufacturers actively participated in specialized maintenance operations and the production of critical components. He said this broad collaboration reflects NIGC’s overarching policy of supporting domestic production and developing indigenous technologies.

He stressed that the successful completion of the major overhauls at South Pars refineries stands as a symbol of synergy, meticulous planning, and confidence in domestic capability — an accomplishment that plays a vital role in ensuring stable gas production and strengthening the nation’s energy security during the cold season.

Shazand Refinery Output Up 30%

Mohammad Sepehri-Rad, head of Maintenance at the Shazand Oil Refinery, announced that $60 million has been spent on extensive major overhauls at the facility.

“This operation has not only boosted production by at least 30% but also significantly enhanced the reliability of the units, ensuring the continuation of high-quality production for the next four years without concern,” he said.

He stated that this round of major overhauls differed significantly from the previous ones, as it involved not just maintenance but also the reconstruction of several units. He added that one of the most important undertakings was the refurbishment of the RFCC unit’s reactor section — carried out for the first time in Iran after 10 years — which provided a highly valuable experience for both the refinery’s staff and domestic manufacturing companies.

He noted that this round of major overhauls not only enhanced the company’s technical expertise and domestic capabilities, but also achieved significant success in sourcing locally manufactured parts and equipment, saying a total of 5,000 skilled personnel were involved in the recent overhaul projects across various units, of whom 3,000 were domestic specialists.

Sepehri-Rad emphasized that one of the key achievements of this round of major overhauls was the increased reliability of the units and a significant reduction in emissions. He stated that as a result, the Shazand refinery will be able to continue operations over the next four years without any concerns regarding production quality.

He also referred to the most challenging part of this overhaul cycle, noting that the separation of the reactor head was one of the most time-intensive and technically demanding operations — successfully and safely completed.

“The TGT (Tail Gas Treatment) unit is one of the key units of the Shazand refinery, playing a significant role in reducing regional pollution. After 13 years, the unit underwent major overhauls for the first time,” he said.

Noting that this large-scale major overhaul was carried out at the refinery for the first time in 10 years, Sepehri-Rad said the scope of overhaul operations had never been this extensive before, noting that during this cycle, 100% of the refinery’s equipment underwent maintenance, including major overhauls of 50% of the units and equipment — the first such work performed in a decade.

Plastic Chemical Recycling Share to Hit 45%

The head of downstream development at National Petrochemical Co. (NPC), Mohammad Mottaqi, has underscored the need to expand chemical recycling to achieve a circular economy and reduce pollution, saying that estimates indicate the share of landfilling and incineration of plastic waste will decrease between 2040 and 2060, while the share of chemical recycling is expected to rise to 45%.

Speaking on October 26 at the Responsible Production in the Plastic Value Chain Conference, he referred to the global state of plastic production and consumption, saying: “Currently, total global plastic production amounts to 431 mt, of which more than 54% is consumed in Asia, particularly in China, a country that alone accounts for nearly 34% of global consumption. Despite this massive scale of production and use, only 10% of produced plastics enter the recycling cycle, while the vast majority still remain outside the process of circular recovery.”

He stated that the highest polymer consumption in Iran relates to high-density polyethylene (HDPE), with an annual usage of about 1.5 mt, and added: “Iran’s polypropylene production capacity stands at around 1.45 mt, of which nearly 850,000 tonnes are produced and supplied to the downstream market for consumption.”

Referring to the fact that the total polyethylene production capacity in Iran is about 5.5 mt — a figure expected to increase with upcoming development projects — Mottaqi added: “The highest demand for polyethylene is in the packaging film sector, which accounts for about 35% of total domestic consumption. This is followed by the blow molding sector with 12%, and the injection molding sector with 11%. In the polypropylene group, injection molding grades hold the largest share at 32.8%, followed by film and sheet applications with 25.2%, and raffia and fiber with 20.8%.”

He touched on the plastic recycling market in Iran and said that plastic waste is classified into the four main categories of low-molded waste, production process waste, industrial waste, and general waste.

He said unfortunately, a significant portion of this waste is still not properly collected and recycled, adding: “Studies show that the average market price of plastic waste last year was about 60% of the price of virgin materials, and this ratio varied between 50% and 70% for some materials such as polypropylene, which indicates that recycling can be economically viable.”

Referring to global trends in the plastic waste management and the shift toward a circular economy, Mottaqi said: “In 2020, about 75% of global plastic waste was either landfilled or incinerated, while only 10% was mechanically recycled. According to the current industry trends, it is projected that between 2040 and 2060, the share of landfilling and incineration will decline, while the share of chemical recycling will rise from zero to 20% and then to 45%.”

$100bn Investment Licensed in Petchem Sector

The petrochemical industry holds a strategic position in national economy and is viewed as one of the leading sectors of Iran that has maintained its competitiveness despite international sanctions. It accounts for approximately 50% of the country’s foreign-currency earnings and about 25% of non-oil exports. At present, nearly 19% of the total value-added in the industrial sector is generated solely by petrochemicals.

Meanwhile, the petrochemical industry functions as a critical intermediary between upstream resources and a wide spectrum of downstream industries, thereby serving as a major driver of entrepreneurship and employment creation. In essence, this sector represents a concrete example of passive defense within the economic sphere, as it is capable of sustaining growth and addressing national needs even under adverse conditions.

Hamid Reza Ajami, director of investment at National Petrochemical Co. (NPC), said in an interview with “Iran Petroleum” that 144 projects, valued at $100 billion, have received license.

Detailing out the project, he said: “Out of the total projects, 20 projects, representing a total investment of $11 billion and a production capacity of 15.5 million tonnes (mt), have achieved over 70% physical progress. Additionally, 32 projects, with a combined investment of $22 billion and a production capacity of approximately 29 mt, have reached between 20% and 70% physical progress. Furthermore, 92 projects—with an aggregate investment of about $67 billion and an estimated production capacity of 86 mt—have recorded less than 20$ physical progress.”

Half-Century Investment

From 1979 to 2022, about $87 billion has been invested in the petrochemical sector. This investment has been structured through a specific combination of sources, including internal resources of the industry, National Development Fund of Iran (NDFI), and domestic commercial banks. Given the nature of each of these institutions, the volume of investment from each source has varied. According to Ajami, approximately 16% to 17% of the total investment has been foreign, secured through external financial resources from Asian and European countries via financing agreements, off-take contracts, or the provision of equipment and technical know-how. More than 11% has been provided by NDFI along with other domestic and foreign sources. The remainder has been financed through shareholders’ equity, additional foreign currency and local facilities, loans from banks, or proceeds from the sales of petrochemical plants.

Moreover, the planned investment for the petrochemical industry under the 7^th National Development Plan amounts to approximately $22 billion, of which nearly $12 billion is currently underway. The associated projects are at various stages of progress and are approaching the commissioning phase. Preparations are also being made to secure the remaining required funds, ensuring that the other projects will be completed within the scheduled timeframe.

Iran Petchem Standing

Referring to challenges posed to investment in the industry, either internally or externally, Ajami said “Although these challenges reflect the dynamism of the industry and its international interactions, the Iranian petrochemical industry continues to hold a distinguished reputation and position in the global arena. In particular, its decades of experience in international markets attest to the country’s reliability and commitment in financial matters. For this reason, certain foreign companies remain willing to maintain their cooperation with Iran, despite difficult circumstances and ongoing sanctions.”

Another critical factor in the development of projects, profitability, and the growth of the petrochemical industry pertains to feedstock supply. To address the existing challenges in this area, it is essential to implement the proposed strategies, such as expanding the use of domestic feedstock resources, diversifying the feedstock mix, and, if necessary, importing liquid feedstock.

Doors Open to Development

Ajami said NPC has responsibilities with regard to all sectors of the petrochemical industry in Iran.

“In line with this responsibility and the broader development of the industry, we have identified specific factors and are striving not only to facilitate investment conditions and processes but also to ensure that investments are directed purposefully toward creating value-added for the sector. Naturally, issues such as the market demand, access to feedstock and its composition, availability of domestic and foreign capital, technical expertise, market logistics, and environmental considerations must also be taken into account in project planning,” he said.

“Among the priorities of the petrochemical industry are value-chain development projects, gas flaring reduction initiatives aimed at environmental protection and sustainable development, projects aligned with the 7^th Plan, the completion of semi-finished projects, and initiatives with high foreign-currency earnings and value-added potential. Although initial studies draw on the full range of consulting, academic, industrial, and other expertise, certain opportunities may still be overlooked. Therefore, we remain open to receiving more strategic and impactful proposals for development-oriented investment,” he added.

Market Share

On 10May 2025, Hassan Abbaszadeh, the CEO of the NPC, announced that 15 new petrochemical projects, valued at $6 billion, would commission by March 2026, thereby bringing the industry’s production capacity to 107 mt. According to Abbaszadeh, the petrochemical sector is fully prepared to attract investments of varying scales—from as little as $20 million to large-scale projects worth up to $2 billion—and has the capacity to absorb such capital.

For his part, Ajami emphasized attracting investment into the petrochemical sector, saying “Our approach in the industry is to capture, by every possible means, the projected share of international financial markets. Based on scientific calculations and the accepted principles of financial and economic management, if a company relies solely on its internal resources to generate growth, such growth will be extremely limited and insufficient to maintain competitiveness and vitality. Therefore, we must plan for raising capital from external sources, while recognizing the inherent risks and regulatory frameworks associated with this approach.”

“At the same time, we must remain mindful of competitors, who continue to advance relentlessly in international markets. Altogether, these factors compel us to pursue greater levels of investment attraction in order

to sustain growth and competitiveness.”

In this context, he said, one of NPC’s meetings held with the Organization for Investment, Economic and Technical Assistance of Iran (OIETAI), during which it agreed that the organization would serve as the main authority responsible for attracting foreign investment in all its forms. Given the petrochemical industry’s strong foreign currency generation, growth potential, and reliability in securing returns on investment, it was also decided that, at international events where OIETAI is present, petrochemical investment opportunities would be prioritized as one of the country’s key strategic sectors.

Ajami said there would be no other option than viewing the petrochemical industry’s plans from an international perspective.

He said: “We are striving to allocate a significant share of foreign investment attraction to the petrochemical industry by leveraging opportunities for cooperation and utilizing platforms such as BRICS and the Shanghai Cooperation Organization (SCO). During this period, several projects have also been introduced to benefit from foreign credit lines, amounting to several hundred million dollars.”

Investor Protection

Currently, Iran produces about 30% of the Middle East’s basic petrochemical products, and it is projected that this share will increase to 45% by the end of the 7^th Plan. At the same time, the industry is planning to expand the production of higher value-added products to strengthen and further capture its market share. Presently, Iran’s petrochemical industry accounts for approximately 2 to 2.5% of global production, a figure expected to surpass 4 percent by the end of the 7^th Plan.

These points demonstrate that Iran’s petrochemical industry is internationally recognized, even under current conditions. According to Ajami, when a foreign investor enters this sector, the key consideration is the set of measures adopted to ensure their retention, thereby enhancing the country’s international standing. To this end, it is essential to provide assurances regarding feedstock supply, production growth, and revenue generation.

 “Conditions must be established that allow investors, regardless of the size of their capital, to enter the industry and, whenever they wish, withdraw their principal and profits. The industry’s ongoing production and revenue, its pipeline of projects under development, research and development efforts, science-based innovations, contracting and engineering capacities, domestic equipment manufacturing, procurement systems, skilled and cost-efficient workforce, extensive network of research and science-based institutions, access to high seas, an attractive domestic consumer market, and proximity to 15 neighboring countries—all indicate the sector’s appeal,” said Ajami. “Foreign Investment Promotion and Protection Act (FIPPA) provides the required guarantees such as equal treatment with domestic investors, project and capital security. It also guarantees that there would be no restrictions on foreign partners’ equity shares, and there would be protective coverage for foreign investors, facilitation of visa delivery and residency for foreign employees and their families, removal of barriers, and customs exemptions in free trade and special economic zones, among many other incentives.”

Investment Protection

Abbaszadeh recently said the Minister of Petroleum Mohsen Paknejad had emphasized the removal of challenges in the way of the private sector and accelerating projects to enhance the production capacity of petrochemical plants.

“In the governance sector, NPC would offer all kinds of support to private investment,” he said.

This issue was underscored by Ajami, who said: “Even in cases where investors face challenges, our team engages in negotiations and provides viability regarding project progress and foreign exchange generation. Another incentive mechanism involves establishing joint working groups with NDFI, through which we present the economic and technical analyses of projects, leading to the allocation of capital. Such supportive measures not only resolve project-related uncertainties but also enhance investor confidence in the security of their investments. This support continues through the stages of project commissioning and production expansion.”

The most important factor for any investor in any industry is the timing and the profitability of their investment. In industries of considerable scale, the associated financial and economic calculations naturally become more complex. While the vast scope of the petrochemical sector may pose certain challenges, it also provides greater assurance for investors. Indeed, many choose to invest in this industry with a long-term perspective.

Although fluctuations in petrochemical product markets are inevitable, the financial returns on investment in Iran’s petrochemical industry remain high. At times, profitability in a particular product may decline; however, this does not necessarily translate into losses—provided that feedstock supply is sustained and the entire value chain, from inputs and internal processes to outputs, functions effectively.

Regarding the use of domestic market potential for financing projects, Ajami said “Last calendar year, banks issued $210 million in Murabaha bonds for the petrochemical industry. In the current calendar year, bonds totaling IRR 120 trillion have been issued for projects of the Persian Gulf Petrochemical Industries Company (PGPIC), along with IRR 10 trillion for another private sector project. It is further projected that, by the end of the current calendar year (20March 2026), more than IRR 80 trillion will be raised through supply-chain financing mechanisms for petrochemical projects.

Regional/Int’l. Cooperation

Neighboring as well as European and Western countries have shown strong interest in cooperating with Iran’s petrochemical industry. According to Ajami, several joint ventures have already been established in this sector. Notable examples include Arya Sasol Polymer Company, Karun Petrochemical Company, and Mehr Petrochemical Company within Iran, as well as NPC Alliance, commonly known as Philippines Petrochemical, abroad.

These partnerships are driven by the diverse, international, technologically advanced, and innovative nature of the petrochemical industry, which ensures both business continuity and long-term security.

Ahmad Jalilianfard, director of projects at NPC, said 19 petrochemical projects would become operational by the end of the current calendar year(20March 2026), adding that they included 15 production and 4 feedstock supply projects.

For many years, sanctions have loomed over Iran; however, industries—particularly those linked to the oil sector—have continued their path without interruption, finding ways to sustain growth and development.

Ajami said: “We are compelled to find solutions within limitations through creativity and our own capabilities. Sanctions do not mean that we should remain stagnant or inactive. In fact, by the end of the current calendar year (20March 2026), several petrochemical projects will be inaugurated, for which the required measures have been carried out through a combination of domestic and foreign resources. This includes the use of foreign currency funds and external financing. While the extent of international cooperation may not fully meet our expectations, progress has not come to a halt. Moreover, long-standing economic relations with several influential countries in the international arena have enabled access to their credit lines, which can be leveraged for the development of the petrochemical industry.”

According to the statistics published in September 2025; from September 2024 to September 2025, net domestic sales of petrochemical products reached 16 mt, valued at $9.6 billion. During the same period, exports amounted to 26.6 mt, worth $11.6 billion, bringing the total net sales to 42.6 mt with a value of $21.2 billion.

These figures are more than mere numbers; they highlight the significant role of Iran’s petrochemical industry in the national economic development. The sector not only continuously generates added-value but also remains firmly positioned as a driver of exports and foreign-currency earnings—even in the face of extensive sanctions and international pressure.

Iran Oil Refining Capacity Up 550,000 b/d

Pooneh Torabi

The quantitative increase in petroleum products, alongside maintaining their quality, has been a priority for National Iranian Oil Refining and Distribution Company (NIORDC) since the early days of the 14^th Administration’s term in office. Accordingly, since September 2024, the company’s approach has shifted from mere construction to targeted optimization and development. In this context, NIORDC has been examining various strategies — including increasing refinery feedstock, launching early-start projects, removing bottlenecks, and improving production processes — to boost gasoline and diesel output.

One year on, reviews indicate that these measures have been effective, leading to an average increase in the country’s gasoline and diesel production between September 2024 and June 2025 by 7% and 4%, respectively, compared to the same period last year. In fact, the combined annual increase in gasoline and diesel output — achieved without any decline in quality — amounts to 12 ml/d.

In addition, in the field of improving the quality of petroleum products, daily production of both gasoline and diesel increased by 5 ml/d each, following a 100,000-barrel increase in refinery feedstock, the start-up of the hydrocracking unit at the Abadan oil refinery to enhance diesel quality, and the commissioning of the light naphtha isomerization unit at the Shiraz oil refinery to improve gasoline quality.

Refining Capacity

In line with the goal of strategically expanding the nation’s refining capacity, NIORDC has reviewed and prioritized 27 licensed refinery and petrochemical refinery development projects. Ultimately, seven projects — including Adish-e Jonoubi, Mehr Khalij-e Fars, Makran Bakhtar, Pishgaman Siraf, Ghadir Hormozgan, Javid Energy Parto, and Pars Behin Qeshm — were shortlisted for prioritized completion, with a total investment of €3.1 billion. The commissioning of these projects by the end of the 14^th Administration’s term in office is expected to add 550,000 b/d to national refining capacity.

Regarding upgrading and improving the quality of products from existing refineries, seven priority projects across five refineries are scheduled to come on stream by the end of the tenure of the current administration. In addition, the installation and enhancement of metering systems at refineries, oil depots, and jetties are being implemented as one of the key programs of NIORDC. In this regard, five projects — including four at the Mahshahr export terminal and one at the Shazand refinery — have already begun with an investment of $10 million, while similar operations are underway at seven other locations by Iranian Oil Pipeline and Telecommunications Company (IOPTC). Other sites, comprising four projects with 18 work packages, are currently in the design and licensing stages.

Pipeline and Infrastructure

Another key initiative undertaken by NIORDC over the past year has been the expansion of petroleum product pipelines. The early commissioning of the 26-inch Bandar Abbas-Rafsanjan product pipeline, stretching 456 kilometers, in the autumn of 2024 increased the capacity for transporting petroleum products from the south to central regions of the country by 13 ml/d, while reducing the movement of 500 tanker trucks.

Furthermore, in September 2025, a total of 1,000 km of pipelines were inaugurated — including the full operation of the Bandar Abbas–Rafsanjan line (455 km), the Sabzab-Shazand crude oil pipeline (330 km), and the Tabriz–Khoy–Urmia line (220 km) — with the aim of strengthening the transportation of crude oil and petroleum products, increasing transfer capacity, and enhancing fuel security nationwide. Additionally, a 37-kilometer branch pipeline from the Goreh-Jask line, designed to supply 300,000 b/d of feedstock to the Bandar Abbas Refinery, had already been commissioned in 2024, resulting in annual savings of about $80 million in transportation costs.

At the beginning of the 14th government’s term, 23 power plants were connected to the petroleum product pipelines. As a result of recent measures, six additional power plants — including Sarv Yazd (Chadormalu), Kashan, Khorram, Azarakhsh, Hengam, and Isin Bandar Abbas — have now been connected to the product transfer network.

Projects Under Way

Given the rising gasoline consumption in Iran, increasing production of this fuel has remained a consistent priority. In this regard, the commissioning of the isomerization unit at Shiraz Refinery — which boosted Euro-grade gasoline production by 1.6 ml/d — was one of the key measures taken to expand refinery output. This unit has raised the gasoline octane number from 87 to 91 and reduced benzene content to below 1%, while lowering environmental pollutants. Additionally, projects aimed at increasing gasoline production are underway at the Mehr Khalij-e Fars Refinery, the gasoline production unit of the Tehran refinery, the Makran Bakhtar Refinery, and part of Phase 2 of the Abadan refinery.

The hydrocracking project at the Abadan Refinery has also led to an increase of 1.7 ml/d in Euro-grade diesel production. In addition, the implementation of DHT (Diesel Hydrotreater) projects at the Shiraz, Adish-e Jonoubi, Mehr Khalij-e Fars, and Makran Bakhtar refineries, as well as the RHu unit at the Isfahan refinery — which together will add another 2 ml/d of Euro-grade diesel — and the Siraf refinery project, are currently under development to further boost refinery diesel output.

Gasoline Up 5ml/d

Process optimizations and the adoption of new technologies at refineries — which have increased crude oil feedstock delivery by 100,000 b/d — have raised the average refinery gasoline production to about 103 ml/d between September 2024 and July 2025. This figure represents an increase of 5 ml/d compared with the same period a year earlier. Over the past year, the country has recorded unprecedented growth in refinery gasoline output, with production rising from an average of around 98 ml/d during the first five months of the current calendar year (March to August 2024) to approximately 105 ml/d in November 2024, up 8 ml/d year-on-year.

Record Gasoline Supply

According to the latest assessments, the past year has seen successive records in gasoline production across the country’s refineries. In the second half of last calendar year (20March 2025), the Persian Gulf Star refinery achieved a new milestone by increasing its gasoline output by 4 ml/d, reaching 42.6 ml/d. According to the refinery’s CEO, this success was made possible through improvements in gasoline production processes, higher operating pressures in production units, and the commissioning of new compressors — measures that not only boosted output but also reduced waste and helped save $70 million. The refinery’s processing capacity also rose from 420,000 b/d to 450,000 b/d.

At the Tehran refinery, an increase of 2,000 b/d in feedstock capacity raised gasoline production from 6.3 ml/d to 7.5 ml/d. This achievement was mainly due to the utilization of idle capacity in gasoline production units and the supply of feedstock from the refinery’s internal resources. At the Isfahan refinery, expanding refining capacity from 390,000 b/d to 430,000 b/d boosted gasoline output from 11 ml/d to about 13 ml/d — a record that has made it one of the country’s largest fuel suppliers, with an approximately 20% share of total supply. Meanwhile, the Abadan refinery recorded a 20% increase in gasoline production last calendar year, adding around 3 ml/d. The refinery now produces 17.8 ml/d of gasoline, playing a significant role in the national supply of gasoline, diesel, and fuel oil.

Diesel Output

Diesel production has also experienced remarkable record-breaking growth under the 14^th Administration. According to the latest statistics, the average diesel output rose from 111 ml/d during the first five months of the current calendar year to 116 ml/d by August 2025, up 5 ml/d over the course of a year.

In December 2024, diesel production reached a record level of 121 ml/d, up 8 ml/d year-on-year. This upward trend continued through January and February 2025, with production rising to 123 and 122 million liters per day, respectively, representing a 14% increase over the same period of the previous year.

SPGC Products Valued at $75bn

South Pars Gas Complex (SPGC) was launched 27 years ago in Assaluyeh. This complex, developed alongside the expansion of the South Pars gas field—the world’s largest gas field with 1,800 tcf of gas reserves in place—has now become one of the most important pillars of Iran’s industrial development. When SPGC began operations in 2001, Iran was receiving 50 mcm/d of gas from South Pars platforms. Today, the complex’s gas intake capacity has surpassed 650 mcm/d.

Gholam Abbas Hosseini, the CEO of SPGC, has said that value of the complex’s production last calendar year, based on the free-market exchange rate, was about $75 billion, highlighting the vital role of the South Pars gas field in generating hard-currency revenue and driving economic growth.

Industrial Civilization

Based on the International Energy Agency (IEA) and international estimates, the South Pars gas field- shared by Iran and Qatar- estimated to hold at around 1,800 tcf (approximately 51 tcm) and contain about 50 billion barrels of gas condensate in place. This amount represents nearly one-third of the world’s total gas reserves and is equivalent to more than 13 years of global gas consumption. Iran’s share of this 9,700-sq km gas field is 3,700 sq km. Although Qatar began gas extraction from this field earlier than Iran, Iran has managed to enhance its production capacity from South Pars by implementing 24 development phases on its side of the field. From 2002 to 2024, Iran has extracted a total of 2,820 bcm of rich gas from the field, with an economic value exceeding $520 billion.

However, SPGC has played a key role in gas recovery from this field. The construction of South Pars refinery complexes began in the 1990s alongside the development of the South Pars offshore platforms. This initiative was launched by the Ministry of Petroleum to ensure that the sour gas extracted from the offshore platforms would be processed and sweetened before being injected into the national gas network.

The first official production of SPGC began in 2001 at the second refinery, when it received 50 mcm/d of sour gas from the offshore platforms of South Pars and produced about 45 mcm/d of sweetened gas.

“Since the start of operations, our production has continuously increased. With the development of new phases and the completion of additional refineries, the gas processing capacity has grown from 45 mcm/d at the beginning to over 600 mcm/d today, while the gas feed received from offshore platforms has risen to about 650 mcm/d,” Hosseini said.

South Pars has been developed in 24 phases, and the gas produced from these phases is transported to the Persian Gulf coast, where it is processed and sweetened in 13 refineries of SPGC. This plant now accounts for approximately 73% of Iran’s total gas production.

In addition, the complex supplies feedstock for 65% of national petrochemical plants, 45% of its gasoline production, and fuel for about 65% of Iran’s power plants. According to Hosseini, these figures have “made South Pars the main pillar of Iran’s gas-based economy and the backbone of the country’s energy network stability.”

Over its 27 years of operation, SPGC has produced more than 3.4 billion barrels of gas condensate and has supplied over 35.6 million tonnes of ethane as feedstock to petrochemical plants such as Jam, Morvarid, Kavian, and Arya Sasol.

Hosseini further stated: “Our estimates indicate that the value of the complex’s production last calendar year, based on the free market exchange rate, was around $75 billion. This figure clearly demonstrates South Pars’s vital role in generating foreign currency revenue for the country and sustaining economic growth.”

Output Up 4 bcm

According to Hosseini; last calendar year, the complex increased gas production and delivery to the national grid by 4 bcm. This growth was driven by the commissioning of Phase 14 (the 13^th refinery) and the installation of two new turbines in a record time of just 21 days — an achievement that boosted production capacity by 12 to 15 mcm/d.

“Each turbine normally requires about a month to install, but our specialists managed to bring two units online in less than three weeks. This achievement was equivalent to supplying the entire country’s gas needs for eight days during peak winter cold,” Hosseini said.

The second refinery also set a new record by producing 39 mcm/d of gas, compared to its usual production level of around 26 mcm/d after resolving technical issues with its compressors.

Maintenance Over

Major overhauls at SPGC are one of the key processes for maintaining production stability and increasing equipment reliability during the cold seasons. This process is carried out annually prior to the onset of winter, aiming to maintain operational units, fix technical issues, and ensure continuous production.

Underscoring the significance of overhaul work, Hosseini said: “Given projections of an early cold season and the need to ensure stable gas supply nationwide, we decided to begin the overhaul operations from the beginning of calendar year — unlike in previous years — so that all refineries would be fully operational and ready before winter begins.”

In this operation—carried out within a tight yet well-organized schedule—between 500 and 700 technical and specialized personnel worked simultaneously in each refinery every day.

“All planned programs were completed not only on schedule but even ahead of time,

and fortunately, no incidents occurred during the process,” Hosseini said.

With the successful completion of maintenance operations by the end of October, all processing units underwent inspection, component replacement, and equipment upgrades. As a result, all 13 refineries of the complex are now fully prepared to handle peak winter gas demand.

Flaring Down

Every year, about 150 bcm of gas is flared—burned off at the tops of oil wells around the world—turning into pollutants. According to the World Bank statistics, this amount equals one-third of the total gas consumption in Europe. Until 2018, Iran ranked third globally in gas flaring, after Russia and Iraq. Based on available data, Iran’s flared gas volume decreased from 17 bcm in 2018 to 13.78 bcm in 2019. According to international environmental commitments, Iran’s oil industry has pledged to mitigate GHG emissions by 4% unconditionally and by 8% conditionally by 2030. To fulfill these commitments and reduce environmental pollution, the Ministry of Petroleum has taken severe steps toward capturing associated gases. According to Mohsen Paknejad, the Minister of Petroleum, by March 2029, with the completion of all gas recovery projects, the country will have ended gas flaring.

Based on the quantitative targets set in the 7^th National Economic Development Plan, the flare gas recovery capacity must reach 16 bcm/y —equivalent to 44 mcm/d—by the end of the plan.

For this reason, enhancing this capacity has been identified as one of the core priorities of the Ministry of Petroleum under the 14^th Administration. At the beginning of this administration, national flare gas recovery capacity stood at 9.3 mcm/d. However, with the launch of the first phase of the East Karun flare gas recovery project, the reduction of flare gas in South Pars refineries, and the commissioning of the NGL 3100 plant in Dehloran, the flare gas recovery capacity has now increased to 19.9 mcm/d.

Within this framework, the SPGC has also played a significant role in achieving these goals by implementing phased flare reduction projects and modernizing equipment. Hosseini explained the progress as follows: “Over the past four years, the average flaring volume at South Pars has decreased from 9.7 mcm/d in 2020 to 6 mcm/d in 2025. According to our plans, this figure will be reduced to around 3 mcm/d by 2026 —a level that meets global standards for emergency conditions.”

He added: “To control pollutants, mercury removal systems have been installed in the complex’s refineries with an investment of over IRR 10 trillion to prevent the release of toxic vapors.”

Ceaseless Work

During the recent 12-Day War, which put parts of the country’s energy infrastructure under threat, Iran’s oil and gas industry—relying on domestic expertise and adhering to passive defense principles—successfully maintained uninterrupted production, refining, and energy export operations. Amid these events, SPGC, known as the beating heart of Iran’s gas network, played a central role in sustaining energy flow stability. During this period, the thirteenth refinery of South Pars was targeted in an attack; however, thanks to the efforts of specialists and operational teams, it returned to production just eight days after the incident. Meanwhile, the other 12 refineries of the complex remained fully operational, continuing gas production, delivery to the national network, and export of byproducts without interruption.

“During the conflict, LPG exports not only continued without interruption but, within a 15-day period, reached volumes equivalent to 45 days of normal exports. This success was the result of coordinated teamwork, precise implementation of passive defense protocols, and operational readiness at all levels of the complex,” said Hosseini.

The resilience of SPGC under crisis conditions demonstrated the strength and reliability of its technical and managerial infrastructure against external pressures. This experience has become a model of national resilience in the energy sector, reaffirming South Pars’s vital role in ensuring the country’s energy security.

Future Perspective

Today, South Pars stands not only as one of the largest gas refining complexes in the world, but also as a symbol of Iran’s engineering capability, management strength, and industrial self-reliance. The complex’s future roadmap is built on continued development, ongoing equipment optimization, pollution reduction, and enhanced energy efficiency. By stabilizing the current capacity, adopting advanced technologies, and investing in complementary projects, South Pars will remain the central pillar of Iran’s energy security and the driving force behind the country’s non-oil exports in the coming decades. Twenty-seven years after the first gas flame was lit in Assaluyeh, South Pars continues to serve as one of the main pillars of the nation’s energy supply.

Nigeria Boosts Oil Output, Drilling Activity 

Nigeria’s oil sector is showing renewed momentum under recent reforms, with production rising to between 1.7 and 1.83 b/d, and active drilling rigs increasing from 31 in January to 50 by July 2025. 

Much of this stems from President Bola Tinubu’s “Project One Million Barrels,” launched in October 2024, aiming to lift output through both reform and investment. 

Central among the reform measures is the Petroleum Industry Act, which aims to offer clearer regulatory frameworks, greater transparency, and more investor-friendly conditions. 

The Minister of State for Petroleum Resources has pointed to several final investment decisions (FIDs) by international oil companies that in total represent more than $5.5 billion and will add roughly 200,000 b/d to Nigeria’s output. 

These developments have both domestic and regional implications. Domestically, increased drilling and production support employment, improve public revenues, and reduce dependence on imports. On the regional/ global side, Nigeria’s boosted output may help ease supply tightness, especially in markets dependent on light sweet crude similar to Nigeria’s grades.

Challenges remain: infrastructure deficits (pipelines, refineries), security risks in some oil-producing areas, and ensuring environmental and social safeguards as activity increases. Also, oil price fluctuations continue to affect the economics of new investment.

Overall, though, Nigeria appears to be moving from potential to performance in its oil sector. The reforms are yielding measurable results, and if sustained, could reposition the country as a more stable and reliable supplier.

TotalEnergies Plans $7.5 Billion in Cuts 

TotalEnergies, one of the Europe’s major integrated energy companies, has announced cost-cutting plans totaling US$7.5 billion by 2030, driven by concerns over declining oil prices. 

The cuts include trimming capital expenditure (CAPEX) by $1 billion annually, with plans to moderate investments in renewable assets; for example, renewable energy investment in 2025 will be about 20% lower than in the previous year. 

Share buybacks are being scaled back and the firm is targeting maintenance of dividend payments even as it aims to reduce its debt. Its net debt-to-equity target is set below 20%, though currently it hovers near that mark. 

Notably, despite the cuts, TotalEnergies is maintaining its $20 billion LNG project in Mozambique, with a scheduled launch in 2029. 

The backdrop includes predictions that crude oil may decline to or below $50 per barrel, putting pressure on margins across the oil & gas industry. 

For TotalEnergies, this means balancing its energy transition ambitions with short-to-medium term profit pressures.

These developments reflect a broader shift in the sector: many energy companies are recalibrating expectations, scaling back greenfield renewable projects, or postponing investments, in response to lower commodity prices and economic slowdowns. At the same time, debt levels and investor expectations (especially around returns) are forcing discipline.

If these actions succeed, TotalEnergies could emerge leaner and more robust; if oil prices fall further or geopolitical risks materialize, even these measures may not insulate it fully. The tension between maintaining an energy transition agenda and preserving financial strength is defining much of the sector in 2025.

Kazakhstan Accelerates Petchem Development 

Kazakhstan is pushing hard to strengthen its petrochemical base. In early/mid-2025 the government unveiled a roadmap spanning 2024-2030 with around US$15 billion of major projects in petrochemicals.

These include units to produce polypropylene, polyethylene, PET, urea, synthetic rubber, alkylates etc. 

In 2024, petrochemical production leapt: up about 50% year-on-year, partly thanks to new units like a paraxylene production unit at the Atyrau refinery; that added around 33,800 tons of output. Exports of chemical products exceeded $ 2 billion, up 13% from 2023. 

To support this growth, a dedicated petrochemical technopark is under development, registering multiple projects, improving infrastructure, and offering legislative support: new laws are being drafted to improve raw material access, taxation, financing. 

The projects are expected to generate over 3,500 permanent jobs plus some 16,000 temporary ones during construction. 

Challenges include securing capital, ensuring environmental standards, building domestic downstream capacity (to avoid just exporting raw or semi-finished goods), and integrating with global value chains.

But Kazakhstan’s strategy is increasingly clear: shift from exporting crude to higher-value chemical products, to broaden economic base, increase resilience to oil price swings, and create a more diversified industrial economy.

BP: Geopolitics Slowing Energy Demand

Spencer Dale, BP’s chief economist, has warned that increasing geopolitical fragmentation is likely to damp global energy demand. 

As nations focus more on self-reliance — reducing dependence on imported energy — trade flows and supply chains may become less efficient, and GDP growth could be suppressed. 

In many cases, fragility or conflict is inducing countries to build redundancy or reshuffle sourcing, even if that means higher cost or less optimal efficiency. Policies that prioritize security over cost may slow the pace of energy consumption growth, especially in sectors that rely heavily on imported fuels or components.

For example, industrialized importers of gas might invest more in local or renewable sources, or in storage capacity; exporters may find markets more volatile and have to adapt to changing trade alliances.

Regulatory risk also increases: sanctions, shifting policies, and trade restrictions could alter energy project viability.

This does not necessarily mean demand will collapse, but growth may be more uneven: stronger in some regions able to mobilize domestic resources or with favorable trade relationships; slower in others more exposed to disruption. Carbon policies, clean energy investments, and renewables may benefit from some of the same forces (e.g. energy security favoring local renewables), yet investment risk may rise.

Overall, the analysis suggests that companies and policymakers should prepare for energy demand trajectories that are less predictable, more regionally fragmented, and with increased emphasis on resilience and policy risk management.

Oxy to Sell OxyChem to Berkshire Hathaway

The Houston oil giant Occidental Petroleum agreed to sell its petrochemicals arm in a nearly $10 billion deal to Berkshire Hathaway, the holding company of investment billionaire Warren Buffett. 

Oxy and Berkshire Hathaway confirmed the $9.7 billion all-cash transaction. The transaction is expected to close by the end of the year. 

The deal is Oxy’s latest effort to pay down debts that have dogged the company since its $38 billion acquisition of Anadarko Petroleum in 2019 — a deal boosted with $10 billion from Berkshire Hathaway.

Berkshire is already Oxy’s largest shareholder, according to S&P Global Market Intelligence.

According to the companies’ joint announcement, Oxy plans to put $6.5 billion from the sale toward reducing its debts. This would put the company’s principal debt below $15 billion, the company said in its statement. 

“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade,” said Vicki Hollub, Oxy’s chief executive. “OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”

As part of the agreement, an Oxy subsidiary will retain OxyChem’s legacy environmental liabilities. These liabilities include environmental clean-up costs near two of its facilities in New Jersey and Pennsylvania, both of which have been cited for contamination issues. 

The company’s petrochemical arm has been active since its founding in 1987. OxyChem manufactures and sells chemicals for use in fields such as water purification, battery recycling and creating building materials. 

The purchase by Berkshire Hathaway comes as a growing number of the world’s largest energy companies – including Exxon, BP, and Shell – roll back their involvement with the chemicals industry following years of disappointing revenues.

The acquisition of OxyChem would be Berkshire’s second major acquisition in the chemicals business. It bought specialty-chemicals company Lubrizol in 2011, for around $10 billion.

Ardian Acquires Irish Utility Energia 

French investment firm Ardian has struck a deal to acquire one of Ireland’s largest energy utilities, in a major bet on one of the power providers expected to fuel the booming artificial intelligence sector.

Ardian will acquire Energia Group from its existing owner — infrastructure investment firm I Squared Capital — in a deal that values the Dublin-based firm at more than €2.5bn, according to people familiar with the deal.

Energia was acquired by I Squared in 2016, when the utility was known as Viridian, for about €1bn. The company provides power to more than 900,000 homes and business across the Republic of Ireland and Northern Ireland. It owns a large portfolio of renewable energy operations, including 16 onshore wind farm sites, and has also entered into a partnership to develop and power a 165 megawatt data center in Dublin.

Infrastructure funds are clamoring to get exposure to the AI sector’s rising energy demands. In the US, BlackRock-owned Global Infrastructure Partners is nearing a $38bn deal to buy utility group AES, in what would be one of the largest infrastructure takeovers of all time.

Ardian has been a big investor in infrastructure, including a transaction earlier this year that increased its stake in London’s Heathrow airport, in which it is the largest shareholder, and it has also invested in German utility EWE.

Energia represents Ardian’s first deal in Ireland, the group’s co-head of infrastructure Juan Angoitia said in a statement. He added that Energia “has ambitious plans to grow, driven by secured capital projects and increasing energy demand . . . We have been impressed by Energia’s strong growth and resilience in the context of a volatile energy market.”

Ardian managing director William Briggs said in an interview that the investment firm will “be supporting a multibillion-euro capital expenditure program to build new renewables and improve the efficiency of flexible generation assets in Ireland.

“Energia is a pioneering example of how to unlock growth by a novel approach of co-development of data centers and renewables,” he added.
For I Squared, the deal offers a big windfall as its largest ever asset sale. The Miami-based specialist infrastructure investor, which manages more than $50bn in assets, is led by Sadek Wahba, a former

World Bank economist who became a top executive at Morgan Stanley before founding the firm in 2012.

Under its near decade of ownership, the group has taken a €540mn dividend while investing in the company’s expansion and reducing its debt load. I Squared has invested in other European assets including acquiring the operator of London’s famous red buses in 2023.

Under I Squared’s ownership, Energia’s growth “was organic, predominantly around pushing the renewable agenda,” rather than acquisitions, said I Squared senior partner Mohamed El Gazzar in an interview.

“One of the big growth drivers will also be that data center coming on that will even further increase the ebitda [earnings before interest, tax, depreciation and amortization].”

Global Renewable Energy Investment Hits $bn

Despite efforts made by Donald Trump’s White House to roll back low-carbon initiatives, global investment in renewable energy continues to climb. In the first half of 2025, funding for renewable technologies and projects surged to a record $386 billion, about 10% higher than during the same period last year.

Overall energy investment worldwide is projected to reach $3.3 trillion this year, with fossil fuels still set to attract over $1 trillion. Yet low-carbon energy is expected to draw in double that amount, roughly $2.2 trillion, underscoring the sector’s growing dominance. A new report from Zero Carbon Analytics shows the momentum has held steady, with renewable investment rising 12% between 2023 and 2024, following a 17% increase the previous year.

Investment alone cannot deliver the transition; people with the right expertise must match it. Paolo Buoni, Director of the Renewable Energy Institute, emphasizes that building professional skills is essential if today’s record levels of investment are to create clean energy systems of tomorrow.

Driving this surge in renewable energy investment depends not only on capital but also on knowledge, expertise and strategic planning. The Renewable Energy Institute supports this effort through its internationally accredited training programs, equipping specialists worldwide with the skills needed to plan, deliver and sustain projects effectively. By strengthening professional capacity, the Institute helps ensure that rising global investment translates into long-term, sustainable success for the renewable energy sector

Joanne Bentley-McKune, a research analyst at Zero Carbon Analytics, noted that the sector continues to demonstrate resilience, with growth rates aligning with the 3-year average despite some slowdown. She emphasized that this reflects the underlying strength of renewable energy investment. In the first half of 2025, financing for onshore and offshore wind rose by about 25%, reaching £126 billion, with

China and Europe leading offshore wind markets. Since January, at least $470 billion in future clean energy funding has been announced, around three quarters of which is earmarked for energy grids and transmission, a critical development for governments aiming to cut GHG emissions and overcome the long-standing challenges of outdated grid infrastructure.

A new report shows that major companies are pressing ahead with climate commitments despite pushback from Donald Trump’s administration and some high-profile rollbacks. Data from the Net Zero Tracker, a consortium of researchers and academics, reveals that firms representing about 70% of the revenue of the world’s top 2,000 listed companies are actively pursuing net zero plans. In the US, 19 states remain committed to net zero, and 304 large companies now have targets, up from 279 last year, together accounting for nearly two thirds of  the US corporate revenue, or about $12 trillion globally.

PG Oil Firms Turn Up Petchem Investment

National Oil Companies (NOCs) in the Persian Gulf are increasingly shifting investment toward petrochemicals, seeking higher value from their oil & gas output, particularly as growth in crude demand slows. The strategy is: build processing, refine feedstock, produce chemicals and polymers — thereby capturing more margin and reducing dependence on raw oil exports.

According to the International Energy Agency (IEA), the petrochemical industry is expected to account for one third of global oil demand growth by 2030, and almost half by 2050. Leading Persian Gulf players like Saudi Aramco and ADNOC are at the forefront. Aramco aims to increase petrochemical production capacity by up to 4 mb/d (in terms of feedstock throughput) by 2030, via complexes both domestic and abroad. Adnoc has established an $80 billion investment arm focusing on lower-carbon energy and chemicals, and has merged or expanded its chemical output businesses (e.g. Borouge). 

Notable projects include: the UAE’s ~$45 billion Ruwais complex, which is set to triple certain chemical capacities to 14 million tonnes annually by 2026. Saudi projects include Aramco and partners in

Asia (Malaysia, China, South Korea) and in refining + petrochemicals complexes. 

Challenges include: petrochemicals’ sensitivity to feedstock costs (price fluctuations, supply constraints), environmental/regulatory pressures (especially over plastics, waste, emissions), and global trade & demand uncertainty especially if economies slow. Also, carbon emissions from petrochemical processes are under increasing scrutiny.

But the upside is strong: rising demand (especially in Asia), ability to leverage cheap hydrocarbon feedstock, and improved margins if operations are efficient, and if value chain integration is done well. Persian Gulf NOCs are betting on petrochemicals to be a central pillar of their energy transition and revenue diversification strategies.

Petchems to Remain Key Driver of Oil Demand 

Petrochemicals will remain a key component of oil demand through to 2050, according to the latest forecast published by OPEC.

The World Oil Outlook forecasts that demand from the petrochemicals sector will significantly increase, by 4.7 million barrels a day, from 15.5 mb/d in 2024 to 20.2 mb/d in 2050.

The sector is set to account for 16% of total oil demand in 2050, from 14% in 2024, with 90% of that growth coming from the Middle East and China as new capacity comes on stream.

Petrochemicals demand for oil will predominantly be as a feedstock, as more competitively priced fuels such as natural gas remain viable alternatives.

While natural gas and biomass are expected to increase their shares as a source of feedstock, naphtha and liquefied petroleum gas (LPG) will remain more suitable products for many downstream materials.

Petrochemicals oil demand in the OECD will likely mirror tight oil production in the US, which produces LPG and ethane as feedstocks in that market.

“Accordingly, demand in this sector is expected to grow until around 2035 and then start a slow decline for the rest of the forecast period,” the report said. This would see offtake from OECD countries reach 7.7 mb/d by 2050, close to its level in 2024.

Overall demand is driven by expected GDP growth, rising population and income levels, and expanding industries and technologies that these products use, including renewables, electric vehicles (EVs) and construction.

“It is assumed, however, that this growth potential will be partly constrained by regulations and actions linked to environmental concerns,” the report advised.

“These relate to commitments to reduce the sector’s carbon footprint, the push to increase recycling, restrictions on disposable plastics, implementing “Extended Producer Responsibility” schemes, an increasing penetration of bioplastics and improved circularity of petrochemical products.”

The outlook cautioned that uncertainty surrounding the US trade tariffs could also weigh on the chemicals market dynamics and downstream products.

Naphtha demand is expected to grow from 2.8 mb/d in 2024 to 3.1 mb/d in 2030 in OECD countries, and remain around this level for the entire forecast.

OECD ethane/LPG demand is expected to rise by more than 600,000 b/d in the medium term before softening, partly because of a decline in petrochemical demand but also on LPG substitution in other sectors.

The outlook expects aviation to be the only segment that will show growth over the entire forecast period, with even this experiencing some limitations, adding around 1 mb/d between 2024 and 2050.

China remains the dominant country for oil demand, peaking at 17.7 million barrels of oil equivalent a day (boe/d) in 2035, driven by petrochemical growth and heavy transportation, but subsiding to 17.1 million boe/d, in part due to increased EV use.

Oil consumption growth in India is expected to rise from 400,000 b/d in 2024 to 1 mb/d in 2050, with naphtha used as the primary feedstock.

Petrochemical demand from non-OECD countries will be particularly strong as a result of population growth and an increasing middle class. In response, oil consumption is expected to rise to 12.5 mb/d in 2050, from nearly 8 mb/d in 2024 – an incremental increase of 4.6 mb/d.

Demand for ethane/LPG from non-OECD countries will increase by more than 4 mb/d between 2024 and 2050, while naphtha will add another 2.4 mb/d to incremental demand during the same period.
The global population is predicted to rise by around 1.5 billion people, from 8.2 billion in 2024 to almost 9.7 billion by 2050, mainly in non-OECD countries.

Saudi Signs $8.3bn Renewable Energy Deals 

Saudi Arabia has signed power purchase agreements (PPAs) worth $8.3bn for seven renewable energy projects with a total capacity of 15 GW, representing the largest capacity globally signed for renewable energy projects in a single phase.

ACWA Power leads the consortium as main developer, partnering with the Public Investment Fund-owned Water and Electricity Holding Company (Badeel) and Aramco Power, a subsidiary of Saudi

Aramco, in the presence of Energy Minister Prince Abdulaziz bin Salman.
The projects include five photovoltaic solar plants: the 3,000-MW Bisha project in Aseer, a 3,000-MW development in Madinah, the 2,000-MW Khulais project in Makkah and the 2,000-MW Afif 1 and

Afif 2 projects in Riyadh.

Wind energy projects comprise the 2,000-MW Starah development and the 1,000-MW Shaqra project, both in Riyadh region.

The agreements form part of Saudi Arabia’s National Renewable Energy Program, with Principal Buyer, the state-owned power procurement company, responsible for preparing feasibility studies and tendering electricity generation projects.

Principal Buyer has launched renewable electricity generation projects with 43,000 MW of total capacity, signed PPAs for 38,000 MW of projects and connected 10,200 MW to the national grid.

Grid-connected capacity is expected to reach 12,700 MW by the end of 2025 and exceed 20,000 MW by the end of 2026.

ACWA Power operates across 14 countries in the Middle East, Africa, Central and Southeast Asia, with a portfolio of 101 power generation and water desalination projects worth approximately $107.5bn.

The company aims to triple its assets under management to $250bn by 2030, including plans to invest up to $30bn in China’s renewable energy market.

Saudi Arabia targets building up to 130,000 MW of renewable capacity by 2030 as part of its economic diversification strategy under Vision 2030.

Renewable energy generation in the Middle East is forecast to grow approximately 14% annually until 2027, with its share of the overall energy mix rising from 5% to 7%.

Qatar LNG Opportunities and Challenges

Shuaib Bahman

Intl. Affairs Analyst

Liquefied natural gas (LNG) constitutes one of the most important energy sources in the world, playing a key role in meeting the energy needs of both developed and developing countries. Qatar, benefiting from the North Dome, the largest natural gas field in the world, has become one of the main players in the global LNG market over the past few decades. With its current production capacity of 77 million tonnes per year (mt/y) and ambitious plans to increase this capacity to 142 mt by 2030, Qatar has not only consolidated its position as the third-largest LNG exporter, but, through smart strategies, is also moving toward dominating the global gas market. The present article aims at analyzing the available data to examine Qatar’s current position, its strategies for gaining dominance in the LNG market, the challenges and opportunities ahead, and the country’s outlook in the energy industry.

Production Capacity and Development Strategies

The global LNG market has witnessed significant developments over recent decades. The rising demand in Asia and Europe, coupled with geopolitical shifts and the transition toward low-carbon energy sources, has turned this market into one of the most dynamic sectors of the energy industry. Leveraging its vast gas reserves, low production costs, and strategic geographic position, Qatar has managed to play a central role in the market.

With a production capacity of 77 mt/y, Qatar supplies around 10% of the global LNG market. Through its North Dome expansion projects (NFE, NFS, and NFW), it aims to increase its capacity to 142 mt by 2030. This 85% increase, combined with low production costs (ranging from $0.3 to $2 / mmBtu), makes Qatar one of the most competitive LNG producers in the world.

Long-term contracts ranging from 15 to 27 years with major companies such as Shell, Totalenergies, Eni, Sinopec, and CNPC, along with international shareholders participation (including a 5% equity stake allocated to Chinese companies), ensure stable demand in the Asian and European markets. This strategy not only reduces financial risks, but also enhances Qatar’s resilience against competitors—particularly the United States, which employs more flexible pricing mechanisms—through price flexibility, such as lowering the Brent-linked slope to 6-7%.

OPEC-Style Impact

With natural gas reserves of 23.8 tcm, Qatar has the potential to become a regulatory force in the global gas market. Adopting strategies such as oversupplying the market—similar to OPEC’s 2015 approach aimed at pressuring US shale producers—Qatar may influence prices and drive high-cost competitors out of the market.

It is projected that by 2030, Qatar will account for around 25% of global LNG supply. This dominance, combined with long-term contracts and a shift toward gas hub–based pricing, enables Qatar to act as a key regulator of supply and pricing in the Asian and European markets. However, the gas market’s decentralized and regional nature and its lower geopolitical sensitivity compared to oil pose challenges to achieving OPEC-like influence.

Opportunities and Challenges

To strengthen its influence in global gas markets and play a role similar to that of the OPEC, Qatar faces several key opportunities, including:

1. Low costs and strategic geography: Qatar’s low production costs (ranging from $0.3 to $2 / mmBtu) and its strategic geographic location for exports to the Asia—, which is expected to account for 52% of global demand growth by 2050—provide the country with a significant competitive advantage.
2. Strategic partnerships: Long-term contracts with major partners and investments in LNG shipping capacity (with a fleet of 128 vessels) help secure stable demand and strengthen Qatar’s market position.
3. Energy diversity: Investing in solar energy (with a planned capacity of 4 gigawatts by 2030) and in carbon capture and storage (CCS) technologies aimed at reducing the carbon intensity of LNG by 25-35% by 2035, Qatar is aligning itself with global energy transition trends.

Despite these opportunities, Qatar’s efforts to play a leading role in the global gas markets also face several constraints and challenges, the most significant of which include:

1. Oversupply: Forecasts indicate that the third wave of LNG expansion (2025-2030) may result in supply exceeding demand by 6-13%. This imbalance could reduce the share of long-term contracts from 73% in 2027 to 34% in 2035, thereby threatening profitability.
2. Competition: The US, with its more flexible pricing mechanisms, and Australia, with comparable production capacity, represent serious competitors for Qatar. Moreover, environmental regulations—such as the EU Methane Regulation (adopted in August 2024) and carbon taxes—may increase operational costs.
3. Energy transition: The global shift toward renewable energy and the projected 15% decline in LNG demand by 2050 pose a threat to Qatar’s long-term investments in the sector.

Vision

Leveraging its vast natural gas reserves, low production costs, and smart strategies—including long-term contracts and infrastructure investments—Qatar is steadily moving toward dominance in the global LNG market. Having withdrawn from the OPEC in 2018, the country has since shifted its focus entirely to natural gas, aiming to expand its influence through strategic partnerships with major companies such as Shell, Totalenergies, and Sinopec. With plans to enhance its production capacity to 142 mt by 2030, Qatar is poised to control nearly 25% of global LNG supply.

Qatar’s potential to exert OPEC-like influence in the global gas market is considerable. Although the gas market is less centralized than the oil market, Doha’s centralized control over LNG production gives it the ability to influence prices. However, challenges such as oversupply, competition from other producers, and the global shift toward renewable energy require careful management. Combining low-carbon LNG production with diversification of its energy portfolio, Qatar may maintain its position as a key power in the global energy market.

OPEC at Crossroads: Oil Market Dynamics and 2026 Outlook

Fereidoun Barkeshli 

Senior Energy Analyst 

OPEC+, and particularly the eight alliance members that have contributed to production cuts since November 2023, met on 5 October 2025, to review their market stabilization policy. The group decided to add a modest 137,000 b/d to production limits—a symbolic move compared to the earlier 1.65 mb/d voluntary cuts. Another meeting is scheduled for2 November to assess and decide the next steps.

This decision reflects a deeper philosophy: OPEC’s continuing struggle to balance price stability with market share in a shifting global landscape.

By late 2025, the global oil market is delicately balanced yet volatile. Brent crude has hovered in the mid-$60s per barrel, reflecting weaker-than-expected demand growth, a gradual easing of OPEC+ discipline, and rising inventories. OPEC+ output stood near 28.4 mb/d in September 2025, a modest increase that softened prices and hinted at a pivot toward defending market share.

OECD commercial stocks are now about 60 million barrels above the five-year average—clear evidence of surplus conditions. Futures curves have flattened, signaling weaker expectations of tightness ahead. The International Energy Agency (IEA) warns that a supply surplus exceeding 2 mb/d could emerge in 2026 if voluntary cuts are reversed too quickly. OPEC remains more optimistic, arguing that sustained investment in long-cycle projects will underpin future demand.

Demand Prospects to 2026

Global oil demand continues to grow, though at a slower pace. After expanding by more than 2 mb/d since 2023, demand growth in 2025 has slowed to below 1 mb/d. Forecasts for 2026 range between 1.0 and 1.4 mb/d, driven mainly by Asia.

China remains the largest growth engine, expected to add about 500,000 b/d despite slowing GDP growth. India may contribute around 300,000 b/d, driven by transportation and industrial sectors use. Both nations are also expanding refining and product export capacity, meaning not all imports are destined for immediate consumption. China continues to import oil for inventory buildup—a trend accelerated by strategic caution since the U.S. adopted a more confrontational trade stance under President Trump. India, too, is increasing imports from Russia and Iran to build reserves ahead of potential tariff pressures.

By contrast, OECD economies show little or no growth. Efficiency improvements and rising electric vehicle (EV) adoption continue to erode the oil’s share in transportation. However, OECD demand for liquefied natural gas (LNG)remains strong, particularly in Europe, where winter reliance on fossil fuels persists amid unreliable wind and solar generation.

Overall, global demand is projected to reach 104.5 mb/d in 2026, up from 103.2 mb/d in 2025. The IEA warns that faster EV uptake could trim road fuel demand by as much as 600,000 b/d by 2026, while slower Chinese growth could weaken petrochemical demand. The OPEC’s forecast is slightly higher—105 mb/d—reflecting its belief that hydrocarbons will remain central to the energy mix for decades.

Supply Dynamics

OPEC+ remains the market’s balancing mechanism. Saudi Arabia, the only producer with significant spare capacity (1.5–2 mb/d), continues to act as the swing producer. Its voluntary cuts—often exceeding 1 mb/d—have stabilized prices, but at a fiscal cost. With a breakeven price near $80/b, prolonged restraint strains the kingdom’s budget and Vision 2030 projects.

Russia, constrained by sanctions and infrastructure limits, views OPEC+ as both a stabilizing framework and a diplomatic necessity. Compliance is uneven, yet participation shields Moscow from volatility and legitimizes its oil policy.

Beyond OPEC+, supply continues to expand.

• The U.S. shale and conventional oil production stands around 13.3 mb/d, more disciplined than in previous cycles but still responsive to prices above $65.
• Brazil and Guyana are adding nearly 800,000 b/d of offshore output between 2024 and 2026.
• Iran has pushed exports around 1.8 to 2 mb/d despite sanctions. Iran has added more barrels to exports and oil products.

Together, non-OPEC supply could grow by 1.5 mb/d in 2026, potentially offsetting demand growth and forcing OPEC+ to defend prices through coordinated restraint.

The alliance is set to meet again in December 2025, for a final month of the year to decide on 2026 production strategy. Within OPEC, only Saudi Arabia and the UAE hold meaningful spare capacity. Other members largely operate at capacity or within symbolic quotas, leaving the burden of market stabilization to the few Persian Gulf producers.

Inventories and Market Balance

Stocks remain a clear barometer of market balance. After drawing down sharply in 2022–2023, OECD inventories have risen steadily since mid-2024, reaching around 2.85 billion barrels by late 2025. Projections suggest that without extended OPEC+ cuts, 2026 could see an additional 200–300 million

barrels of stock builds, pushing levels far above the five-year average.

Such an oversupply would pressure refining margins, particularly in Europe, and could shift futures curves into contango (where future prices exceed spot prices).

Regional differences persist. Asia’s inventories remain tighter than Europe’s or North America’s, reflecting robust import demand and localized supply constraints. This has sustained price premiums for Middle Eastern grades delivered to Asia. Meanwhile, freight disruptions in the Red Sea and Black Sea have forced cargo diversions via the Cape of Good Hope, adding up to $1.50/b in extra transport costs on some routes.

Europe, once heavily dependent on Russian oil and gas, is now rapidly building inventories and importing record LNG volumes from the U.S. and Qatar. The war in Ukraine underscored Europe’s energy vulnerability and accelerated its diversification away from Russia.                                                                                          

Saudi Arabia and Russia: The Strategic Core

The Saudi–Russian axis remains the foundation of OPEC+ 
Saudi Arabia, with ultra-low lifting costs ($4–5/b, seeks to maintain a price floor that secures fiscal stability. Russia, with a breakeven near $50-55/ b, depends on oil for over 30% of state revenue. Despite sanctions, Moscow exports 4.3 mb/d, mostly to Asia at discounted prices.

The October 5 online meeting exposed familiar tensions. Saudi Arabia pushed for higher output to regain market share, while Russia preferred tight supply to support prices under sanctions. The compromise—an additional 137,000 b/d—was modest but symbolically important. It recalled the 1980s Iran–Saudi rivalry, when debates over price versus market share divided OPEC.

Both nations recognize that an uncoordinated market-share war, like the one in 2020 that briefly sent Brent below $20/b, would be disastrous. Coordination remains fragile but essential. As mentioned at a time of political isolation for Moscow, friends such as Saudi Arabia and Iran within the OPEC+ framework is a blessing for Russia.

Transitioning World

In the longer term, OPEC faces an important challenge: the global energy transition. Conservative forecasts suggest oil supply will peak in the early 2030s. The strategic imperative for OPEC members is to monetize reserves before structural decline erodes their supply leverage. However, IEA and environmentalists suggest that the world will face demand peaks of 2030’s in contradiction with the OPEC estimates.

Saudi Arabia is diversifying into petrochemicals, renewables, and non-oil industries while using oil revenues to fund transformation. Russia, constrained by sanctions and limited economic diversification, remains even more dependent on hydrocarbons.

OPEC’s power may be shifting from absolute control to conditional influence if not together with other oil producing countries. The group without alliance can still manage short-term balances through coordination, but its ability to stabilize prices will be eroding in a market increasingly shaped by non-OPEC producers, International Oil Companies and energy transition policies. By 2026, OPEC+ will remain a key actor—but one operating within tighter margins and greater uncertainty. At a point not too far away, the IOCs may have to give a hand to the OPEC+.

Market Outlook and Risks

The 2025–2026 oil market will be defined by structural transition, geopolitical risk, and the durability of OPEC+ cooperation. Prices are likely to remain within the $60–70/b range, with volatility on both sides. A resilient Saudi–Russian partnership will be vital to market stability.

Analysts see a WTI price floor near $60/b, favored by China as the world’s largest importer. At this level, China can sustain domestic investment in upstream projects without jeopardizing economic efficiency.

However, logistical pressures are mounting. Tanker rates have doubled between early and late 2025, with further increases expected in 2026–2027. Sanctions imposed on Iran, Russia, and Venezuela have boosted demand for older tankers, raising insurance costs and complicating trade flows. Meanwhile, oil majors guard their reserve data closely, adding opacity to global supply assessments.

Uncertainty dominates the horizon. New projects are under development, but few details are public. Geopolitical risks—from Middle Eastern tensions to global sanctions—outweigh stabilizing forces. As 2026 approaches, all eyes remain on OPEC+, the institution capable of preventing disorder in an increasingly fragmented market.

An In-Depth Story of Oil

(Part I: Iran Oil Concessions and Europe Industrial Revolution)

Elaheh Baqeri

In the vast realm of the Persian Empire, whose borders stretched from the land of Sind and beyond the Amu River in the east to the countries of Sardis and Egypt in the west, numerous oil seeps flowed naturally on the surface of the earth. The people of this land, without waiting for the discovery of modern oil extraction methods in America, made various uses of this God-given wealth that was readily available to them.

As time passed, human skill and knowhow advanced throughout the world, and one invention after another was registered in various countries. In 1698, Thomas Savery invented a machine for pumping water, and in 1712, Thomas Newcomen registered a more advanced version of it. Later, James Watt, the Scottish inventor, made improvements to Newcomen’s machine. With the modifications he introduced, Watt can be regarded as the inventor of the first steam engine and, in fact, the father of the Industrial Revolution in Europe. At the same time as this Industrial Revolution in Europe, in 1859, the first oil well was drilled by Edwin Drake in the state of Pennsylvania, USA. At that time, the young Western industry was still dependent on coal for power generation.

These developments soon spread to the Middle East and shaped several pivotal moments in Iran’s history. The first was the painful separation of Baku from Iran. After that came the discovery of oil in Masjed Soleyman, which led to the D’Arcy Concession, the 1933 Concession, and eventually the nationalization of the oil industry — a movement that represented the peak of the struggle to free Iran’s oil from colonial control. This movement ultimately culminated in the coup d’état of 19August1953, and, in the end, the Consortium Agreement.

Baku, First Lost Oil

According to historical records, Baku was the first place where human beings managed to extract oil. The world’s first oil well was manually dug in Balakhani, Baku, in 1593, to a depth of 35 meters. This date corresponds to the reign of the Safavid kings, when Baku was still part of the Iranian territory. Based on what Marco Polo wrote in his travelogue in 1273 AD, it seems that oil was obtained in this region even earlier than the digging of wells. In his account, the famous traveler put it as follows: “On the border of Armenia and Georgia, there is an oil spring from which large quantities of oil are obtained, enough for a hundred ships to be loaded at one time. This oil is not suitable for eating, but it is used for lighting, burning, and medicinal purposes.”

The oil of Baku remained under Iran’s control until the Qajar dynasty. In the early 19th century, the Qajar government lost its connections with the Central Asian regions, and in 1806, the Russians occupied the area. Following the first Iran-Russia war and under the Treaty of Gulistan, Baku was separated from Iran, and its oil resources fell into Russian hands. To underscore the importance of this region’s oil, it would be enough to note that Baku was the world’s first oil producer. Moreover, after the Sassanid era, Iran’s oil was extracted and exported from the Baku fields.

Europeans Coming to East

Gradually, the American oil reached Europe, and the Europeans began turning eastward in search of new oil sources. In 1872, German engineers were prospecting for oil in Mousel and Baghdad, and in the same year, the Reuter Concession granted in Iran. The dire state of the country and the Russia’s advances in Turkmenistan led Mirza Hossein Khan Sepahsalar to believe that by entrusting all of Iran’s affairs to a British businessperson, he could persuade Britain to place Iran under its military protection — while also bringing a large amount of money into the country. In practice, however, negotiations with British officials proved that he had been mistaken.

It could be argued that the second major phase of negotiations and dealings over Iran’s natural resources — including oil — began with the Reuter Concession of 1872. In that year, Mirza Hossein Khan Sepahsalar, the Qajar prime minister of Persia, granted a concession to Baron Julius Reuter, giving the British entrepreneur exclusive and special rights to explore, extract, and operate mines of coal, iron, copper, lead, petroleum (oil), and any other minerals he deemed suitable throughout the entire territory of Iran for the duration of the agreement.

The Reuter Concession was so colonial in nature that it sparked widespread protests — even drawing criticism from British diplomats such as Lord Curzon. Curzon stated: “When the Reuter Concession was published, its contents revealed a complete and extraordinary surrender of all the country’s industrial resources to foreigners — something that has never been granted even in a colony.”

Ultimately, due to massive public opposition led by prominent clerics such as Haj Molla Ali Kani and Seyyed Saleh Arab, Naser al-Din Shah accepted the resignation of Sepahsalar, and the Reuter Concession was annulled.

The first Reuter Concession was annulled according to an official declaration issued by the Iranian government in Ramadan 1290 AH. The text of the declaration was as follows:

“Since Baron Julius Reuter, in regard to the contract concerning the construction of the railway and other obligations concluded with the Government of Iran, has failed to fulfill the explicit promises contained in the said agreement and has not commenced the necessary operations within the stipulated time, the Government of Persia — by virtue of the right it had reserved for itself under the terms of the contract — hereby annuls and declares the said agreement null and void. The decision of the exalted government has been formally conveyed to Baron Reuter’s representative, who is currently residing in the capital.”

Although oil extraction formed only a small part of the Reuter Concession, this agreement can nevertheless be regarded as the first sign of the exploitative oil contracts in Iran’s history.

First Oil Concession

After that, the first company and individual who attempted to reach Iran’s oil was an Englishman named M. A. Hotz. He had founded the British company Hotz & Co., which was engaged in export and import activities. The company’s main area of operation was the Persian Gulf, with its office located in the city of Bushehr. In 1884, Hotz succeeded in obtaining a concession from the Qajar government for oil extraction.

Hotz & Co. received the right to extract oil on Qeshm Island and in the Dalaki region, and began drilling wells there. After several attempts, however, the company failed to find oil. Due to the high costs involved, it transferred its concession to the Persian Mining Rights Corporation. Interestingly, this company continued Hotz’s efforts in those two regions for about three more years, but ultimately achieved nothing. In 1893, it ceased operations, and six years later, i.e. in 1899 the Iranian government revoked its concession, ending the matter.

D’Arcy Brought Explorers In

The third — and perhaps the most significant — agreement concerning Iran’s oil was the D’Arcy Concession of 1901. Under this contract, Iran granted William Knox D’Arcy, a British entrepreneur, the exclusive right for 60 years to explore, extract, and exploit oil and natural gas throughout the entire country, except for the northern regions near the Russian border.

To understand the background that led to the signing of the D’Arcy Concession, we must look a bit further back. At that time, three oil fields — in Shushtar, Qasr-e Shirin, and Dalaki (near Bushehr) — were active. From these, bitumen and oil were extracted and exported for various purposes: applying to camel hides to prevent skin parasites, waterproofing wood and fishing boats, and producing salves or “black oil” used for treating boils. The central government would lease these oil fields to private individuals.

Despite the existence of these early oil sources, the spark that led to the D’Arcy Concession was lit in 1891, when Jacques de Morgan, a French archaeologist who had spent years excavating ancient ruins in Susa, noticed traces of crude oil on the ground during a trip to Qasr-e Shirin. He later published a detailed report on the presence of oil in western and southwestern Persia in the Annual Mining Report of 1892.

This news caught the attention of Antoine Kitabchi Khan, an Iranian-Armenian politician and businessman who served as the head of Iran’s Customs Administration during the reigns of Naser al-Din Shah and Mozaffar al-Din Shah. After reading de Morgan’s report, he began searching for investors and eventually reached an agreement with William Knox D’Arcy.

In 1900, D’Arcy signed a preliminary agreement with Sir Henry Drummond Wolff and Antoine Kitabchi Khan for oil exploration in Iran. Their negotiations with Mozaffar al-Din Shah Qajar culminated in the D’Arcy Concession of 1901. Under this contract, D’Arcy paid £20,000 for the right to explore oil over an area of 1.2 million square kilometers for a period of 60 years. In return, the Persian government was to receive 16% of the annual net profits.

The signing of the D’Arcy Concession between D’Arcy and Mozaffar al-Din Shah opened the door for oil explorers and drillers to enter the western and southern regions of Iran. In 1904 (1283 Solar Hijri), drilling operations began in the Chia Surkh area near Qasr-e Shirin. However, the amount of oil extracted there was not sufficient to be economically viable, so operations were halted, and the drilling team moved toward Ramhormoz.

The efforts there were also unsuccessful, and the team ultimately proceeded to the Naftun field in Masjed Soleyman — the very place where, in 1908 (1287 Solar Hijri), oil gushed from the first well. The dark drops that shot into the sky that day would go on to write the future history of Iran.