Ending Flaring, Turning Point for Green Economy

Less than a month ago, in a symbolic yet practical move, 12 contracts for flare gas capturing were signed while President Masoud Pezeshkian attended. This signing was not merely an administrative formality; rather, it served as an approval for the 14^th Administration’s determination to transform one of the country’s greatest environmental and economic challenges into a historic opportunity. It is a project that forges a strategic link between social responsibility, economic efficiency, and commitment to future generations.

Before the current Administration took office, the flare gas capturing capacity stood at 330 mcf/d. However, under the new horizon, the figure would jump to295 mcf/d by March 2027, and is planned to reach 44 mcm/d by the end of the 7^th National Five-Year Economic Development Plan. These figures are not mere statistics; they represent a major transformation in the management of hydrocarbon resources.

The Ministry of Petroleum has rightly highlighted the importance of implementing these projects, and Petroleum Minister Mohsen Paknejad has invited both the private and public sectors to invest. The invitation rests on a solid economic rationale: high returns on investment combined with government support. These projects are no longer merely cost-intensive initiatives; they are profitable investments that simultaneously reduce the social responsibility burden on both the government and the private sector. Investing in this field means linking economic interests with environmental ethics, an approach that lies at the heart of green economy.

However, the significance of this initiative goes beyond figures and profitability. Reducing environmental pollutants today is not a choice; it is an obligation. Every step taken toward extinguishing these flares is a step toward protecting the health of today’s children and guaranteeing the right of future generations to breathe clean air. This effort puts the concept of “social responsibility” into practice on a national scale. We cannot speak of sustainable development while vast amounts of valuable resources are being burnt and pollution is being generated.

Achieving the goal of flare gas capturing will undoubtedly mark a turning point in the history of Iran’s petroleum industry. This step demonstrates that the country’s oil sector may move beyond the traditional model of mere extraction of crude oil and its sales, toward maximum efficiency and environmental stewardship, and play a key role in the transition to a green energy economy.

Annual Flare Gas Capture Target Set at 25.7 bcm

The flare gas recovery project, is considered the most important environmental and economic mission of the 14^th Administration in the petroleum industry, has entered a new phase of implementation. This plan, which is expected to extinguish a large share of flares in oil-producing regions by the end of the 7^th Economic Development Plan and return that gas to the production cycle, is regarded as a symbol of the oil industry’s transition from an era of energy waste to one of efficiency, institutional transparency, and sustainable development.

Once the goal of flare gas recovery is achieved, Iran will take a major step toward a green energy economics. This transformation could generate billions of dollars in economic value annually, while turning one of the most polluting processes in the oil industry into an environmentally compatible one. At the same time, this project is not merely a technical plan; it is a sign that Iran’s oil industry can move along the path of sustainable development without sacrificing its economic interests.

Mohsen Mohammadpour, head of Flare Gas Capture Task Force, told Iran Petroleum: “We’ve been assigned the mission to capture 43 mcm/d of flare gas by March 2028.”

This figure is equivalent to 15.7 bcm /y— a target whose achievement in less than three years would mark the end of the era of wasteful flaring of associated gas in Iran. According to Mohammadpour, this initiative represents a major step toward accelerating, increasing transparency in, and facilitating the entire chain of associated-gas recovery projects across the country.

Streamlining Bureaucracy

Asked when and why the task force was established, Mohammadpour said: “The formation of the task force took place directly following the instruction of President Masoud Pezeshkian, during the inauguration of the Dehloran flare gas recovery project (NGL 3100). At that event, the President told the Petroleum Minister that the process of flare gas recovery must be accelerated. In response, the Petroleum Minister established the task force as a dedicated facilitation unit. The main mission of the task force is to remove obstacles, accelerate the projects, and ensure coordinated follow-up of associated- and flare gas recovery plans.”

In fact, the task force, with its “facilitator” nature, seeks to eliminate the bureaucratic structures that had previously hindered the progress of the projects. The consolidation and synergy of decision-making among National Iranian Oil Company (NIOC), the gas and petrochemical sectors, the private sector, and contracting companies could form a new model of inter-organizational management in the country’s energy projects.

Five National Projects

Referring to the classification of flare gas recovery projects, Mohammadpour divides them into long-term and short-term projects as follows: “First is the Dehloran NGL 3100 project, which captures associated and flare gas in the areas operated by the Iranian Central Oil Fields Company (ICOFC) in Ilam Province. Second is the NGL 3200 project, also known as the Hoveyzeh Persian Gulf Gas Refinery, which captures flare gas in the West Karun region within the operational area of Arvandan Oil and Gas Company (AOGC). Third is the flare gas recovery plan carried out by Maroon Petrochemical Company for the Ahvaz and Marun fields. This project not only captures the gas but also improves combustion efficiency and reduces flare emissions until the full recovery process is completed.”

“Fourth is the major flare gas recovery project at the Bidboland Persian Gulf Gas Refinery, which captures nearly 17 mcm/d of gas from the flares of the Marun, Aghajari, Rag-e Sefid, Gachsaran, and Bibihakimeh fields. The fifth project concerns the offshore sector, which captures about 8 mcm/d of gas from the Forouzan field and other offshore fields,” he added.

Mohammadpour also emphasized short-term projects for flare gas capturing, saying: “A number of smaller projects have been defined at the Assaluyeh gas refineries (South Pars Phases 1 and 2), which altogether will capture around 7 mcm/d of flare gas. For the transition period until the full commissioning of these long-term projects, the Ministry of Petroleum has also implemented short-term plans that, through temporary auction and sales contracts, capture and process flare gas so that not even a single cubic foot of gas is wasted.”

Among the projects introduced by Mohammadpour, the Bidboland Persian Gulf Gas Refinery captures a large volume of gas per day, which reflects the massive industrial scale of this initiative. Overall, the combination of these projects indicates Iran’s gradual and steady shift from a pattern of crude burning and energy waste toward a gas-efficient economy—an approach that, through private-sector investment, also reduces the government’s financial burden and is becoming a model for other energy projects in the country.

Environmental Benefits

One of the most important functions of flare gas capturing, beyond reducing environmental pollution and preventing the accumulation of economic losses, is generating profit for the country. In this regard, Mohammadpour said: ‘The economic value of the captured gas is extremely high. If we take the global gas price (about 30 cents per cubic meter) as the benchmark, every single day of delay in capturing flare gas amounts to millions of dollars in losses for the national economy. Moreover, this gas, whether as dry gas, condensates, or other saleable components, will serve as a resource for downstream industries, petrochemical plants, and the national gas network, contributing to the alleviation of the country’s energy imbalance.”

“From an environmental perspective, the importance of this project is even greater. The Ministry of Petroleum has launched flare optimization programs to ensure that flares burn with a blue, smokeless flame by providing sufficient air and separating heavy components. One of these projects has now been implemented in the Ahvaz field, where flare smoke has been completely eliminated. This measure not only reduces pollutants but also improves the health of residents in oil-rich areas,” he said.

Mohammadpour describes flare gas capturing as a national initiative based on the three principles of assisting national economy, improving energy balance and protecting the environment.

From an economic standpoint, the flare gas-capturing project not only prevents losses but also may strengthen the energy value chain by converting the captured gases into feedstock for refineries and petrochemical plants. Environmentally, the reduction of pollutants and elimination of flare smoke may improve the quality of life in oil-producing areas, an initiative that will also bring long-term social and health benefits.

Future Vision

One of the important and sensitive aspects of the project concerns its future within the framework of the 7^th Development Plan. Referring to this point, Mohammadpour said: “We are committed to achieving the 7^th Development Plan’s targets for associated gas capturing within the next two years.”

He added: “We are confident that by March 2028, we will witness the shutdown of a significant portion of the country’s oil flares. an event that will mark a turning point in the history of Iran’s petroleum industry.”

Taken together, Mohammadpour’s remarks show that flare-gas collection is no longer a peripheral program on the margins of oil production, but has become a national, multidimensional mission, one that simultaneously strengthens the country’s energy economy, curbs pollution, and transforms the landscape of oil-producing areas. If flare-gas collection is fully realized, Iran will take a historic step toward aligning its petroleum industry with green development and a low-carbon economy.

Flare Gas Capture Yields $600mn

Since the beginning of the 14^th Administration’s term in office, one of the main pillars of Iran’s industrial and environmental policies has been the containment of flare gases and the optimal management of energy. This approach reflects a fundamental shift in the government’s perspective toward environmental protection and economic efficiency in the energy sector.

To that effect, on November 1, while President Massoud Pezeshkian and senior petroleum industry managers were in attendance, 12 contracts for capturing flare gases in the areas run by National Iranian South Oil Co. (NISOC)- worth about $800 million-were signed via videoconference. The implementation period for these contracts is set at two years, and once completed, it is expected that by extinguishing 32 flares, more than 295 mcf of gas will be prevented from flaring. During the ceremony, Minister of Petroleum Mohsen Paknejad stressed that efforts were underway to attract investors and fun projects for capturing associated petroleum gas in other parts of the country. He invited all companies active in the oil, gas, and knowledge-based sectors to join this initiative.

Moreover, the implementation of projects for flare gas recovery represents a significant step toward capping GHG emissions and improving environmental conditions in oil-producing regions. At the national level, this initiative is also viewed as part of Iran’s international commitments to reduce pollutant emissions and as a response to the growing public demand for environmental protection.

Flare Gas as Capital

For years, gas flares have symbolically represented waste within Iran’s oil industry. The constant flames in fields such as Ahvaz, Gachsaran, and Rag Sefid not only signify the loss of national wealth but also contribute to the environmental degradation. Within this framework, the new contracts cover the Rag Sefid 1 and 2, Bibi Hakimieh 1, Bangestan-Kupal, Ahvaz 1, 3, and 4 Asmari, Golkhari 3, Lali, Haft Shahidan, Zilaei, and Karun fields. According to the Petroleum Ministry officials, implementation of these contracts will result in the extinguishing of 32 active flares and prevent the daily loss of 295 mcf of gas. In addition, the projects are expected to produce 800,000 tonnes of gas liquids annually and inject 200 mcf/d of light gas into national distribution network. Economically speaking, these projects will generate an estimated annual revenue of between $550 million and $600 million for the country and create direct and indirect employment opportunities for around 2,000 persons.

The implementation of these projects will prevent the daily emission of approximately 30,000 tonnes of GHG—a remarkably significant figure that will greatly help reduce pollution in Khuzestan. This amount is equivalent to a reduction of about 5,700 tonnes of carbon emissions per day.

Paradigm Shift

Addressing the ceremony, President Pezeshkian heaped praise on the Ministry of Petroleum and National Iranian Oil Co. (NIOC), adding the Administration is prepared to remove any operational obstacles to accelerate the process of flare gas recovery. He stated that collecting these gases not only ensures a return on investment but also prevents environmental pollution, adding that the sooner the implementation of these projects can be completed, the more beneficial it will be for the country.

The president’s emphasis on “accelerating implementation” and “removing barriers to private-sector investment” can be seen as a sign of a shift in the government’s approach to energy projects—moving from a purely state-run structure toward hybrid mechanisms that integrate the public sector, the private sector, and foreign technologies.

Minister Paknejad stated that in recent years, preventing the burning of associated petroleum gas (APG) and extinguishing flares has consistently been one of the major concerns in the oil industry. He noted that, with a clear understanding of this concern and a firm determination, concrete steps have been taken to inhibit gas flaring and prevent the waste of national resources.

He added that capturing flare gases is an effective measure to reduce air pollution, protect the environment, and help address part of the country’s energy imbalance. From an economic standpoint as well, he said, it is a highly valuable initiative that prevents wasting national wealth.

The minister said that, accordingly—and with the goal of further reducing gas flaring—the implementation of flare gas recovery programs, both short-term and long-term, has been prioritized and is being pursued with full determination through the participation and investment of non-governmental and private sectors.

He also referred to the efforts of previous administrations in flare gas capturing, noting that in the years leading up to the beginning of the 14^th Administration, the capacity for collecting gases sent to flares was only about 330 mcf/d. However, with the recent projects, this capacity is now rapidly increasing.

“Based on the objectives set out in the 7^th National Economic Development Plan, NIOC and NIGC are required to capture 1.5 bcf/d of flare gas by the end of the plan’s period. With the implementation of the recently signed 12 contracts, the volume of flare gas recovered is expected to increase by about 295 mcf/d by March 2027,” he said.

Paknejad noted that since the beginning of the 14^th Administration’s term, several key projects under NIOC have been

completed — including APG gathering from Rag Sefid and Gachsaran 1 and 2, commissioning of the NGL 3100 plant, the short-term sour gas project at Marun 5, activation of compressors at the NGL 1000 plant, and the inauguration of the Haftkal station. He added that by next March, the operation of some subsidiary projects under the Bidboland and Marun contracts is also expected to be completed.

Paknejad noted that with the continuation of this process and the implementation of the planned projects, by the end of the 7^th Plan, flare gas recovery is expected to reach a progress level of 44 mcm/d — the quantitative target set in the plan.

He added that the country is now witnessing a new phase of valuable initiatives marked by the active participation of the private sector and the dedicated efforts of managers and specialists in the oil industry. These efforts, he said, will accelerate the effective utilization of the nation’s energy resources.

Paknejad said that efforts are underway to attract investors and allocate projects for the collection of APG in the remaining regions as well. He said: “I invite all companies active in the oil, gas, and knowledge-based sectors to participate in this endeavor.”

Paknejad added that upon the implementation and completion of these projects, in addition to an increase of about 180 mcf/d in the country’s production of light gas, annual revenues of around $600 million will be generated through the sale of rich gas, processing activities, and completion of the value chain of related products.

He noted that by capturing flare gas, the feedstock required by petrochemical plants will also be supplied, thereby contributing to the completion of the value chain. The Minister said implementation of these projects will create direct and indirect employment opportunities for about 2,000 persons in the region.

90% Flare Gas Capture

In the new plan, the private sector plays a key role. Five Iranian private companies are responsible for executing these projects. This collaboration is designed not only to provide financing but also to facilitate technology transfer in areas such as mini-NGL plants, compression stations, and advanced processing equipment.

According to Hamid Bovard, the CEO of NIOC, the first mini-NGL plant in Iran will be constructed in Ahvaz in cooperation with a foreign company. The company has committed to installing the equipment within six months and bringing the plant into operation within ten months. In addition, a new refinery with a capacity of 45 mcf/d of gas is currently under construction in Masjed Soleiman.

Elaborating on the ongoing projects, he said: “Under the 7^th Plan, there are three key objectives: increasing crude oil production to 4.5 mb/d, boosting natural gas production to about 1.3 bcm/d, and achieving complete capturing of flare gases. With the participation of the private sector and the attraction of both domestic and foreign investment, it is projected that by March 2028, more than 90% of the country’s flare gases will be recovered.”

“To implement these programs, in addition to the resources provided by the government, we have made extensive efforts to engage the private sector so that, by leveraging the capabilities of both domestic and foreign investors, we can achieve these three important objectives,” he said.

Touching on oil output hike, he said: “In the area of oil production enhancement, we intend to increase crude oil output by 250,000 b/d. In addition, 12 contracts are underway to boost oil processing capacity by 520,000 b/d, contributing to overall production growth. These projects have been awarded under the Build-Own-Operate (BOO) model.”

On gas production increase, he said: “As part of the gas production enhancement projects, contracts worth approximately $1.6 billion were signed in October with three major private-sector groups, including large energy consumers such as petrochemical and steel companies. In addition, contracts related to the Gordan and Pazanan fields have also been signed.”

Bovard expressed hope that by next March, three to four additional contracts in this field will have been signed with the support of the private sector.

He said a series of contracts have been finalized for the capturing of 520 mcf of flare gas, adding that 5 projects have been already completed, 6 are currently under construction, and 12 more contracts were signed during this ceremony.

Bovard said continuation of cooperation with the private sector, noting that 18 new investment packages will be finalized by December. He invited private companies to participate in the flare gas capture tenders, which will be offered with a base price of zero for liquefied gas. “The door is open to all investors, and preliminary negotiations have already been conducted,” he said.

Bovard added that the contract implementation periods are relatively short—ranging from 6 to 18 months—which represents a key advantage in accelerating the process of flare gas recovery.

70 Projects in NISOC-Run Area

Ebrahim Piramoun, the CEO of NISOC, said flare gas gathering in the NISOC-run areas would mark a turning point in optimal exploitation of national resources.

“Plans have been made to capture the entire flare gas in NISOC-run areas, and these projects will be implemented as large-scale initiatives to be assigned to petrochemical companies and the private sector,” he said.

“Complete capture of flare gases in the NISOC-run areas includes a total of 70 large and small projects, 40 of which have been signed and allocated to the private sector as part of investment packages. Progress in the petrochemical-related projects has exceeded 75%, and the majority of them are expected to become operational by March 2027. Some projects will also be completed by March 2028 and 2029,” he added.

He referred to the capturing of 520 mcf/d of gas by the five NISOC subsidiaries, noting that these projects mainly target scattered, remote, and small-scale flares, although large flares are also included in the plan. The main objective, he emphasized, is to prevent gas flaring and to ensure the economic utilization of these valuable resources.

Piramoun stressed that flare gas represents an opportunity for generating national wealth, boosting economic growth, and creating jobs. He added that flare gases could become a valuable resource for promoting sustainable development in the oil-producing provinces.

The 14^th Administration’s program to curb flare gases stands as a symbol of the intersection between industrial development and environmental sustainability. The president’s emphasis on swiftly removing obstacles to gas recovery, along with the petroleum minister’s invitation to private and foreign investors, reflects the government’s deep commitment to this cause. If pursued with consistency and effective oversight, the effort will guide Iran toward smart energy efficiency and the realization of green economy.

Aghar and Dalan; Summer Suffering vs. Winter Warmth

Vahid Ziaei Biatarf

In the heart of the mountains of southern Fars Province, nestled among dry plains and scattered villages, the Aghar & Dalan operational region shines like a gem upon the vast expanse of soil and stone. A narrow road winds through the heights to reach the main production platform — a place where the silence of the plain is broken by the steady rhythm of compressors and the flicker of flare flames. These days, the air is hot and heavy; a scorching wind blows from Khuzestan, carrying with it the smell of sulfur that lingers around the refinery. And yet, in this harsh climate, hundreds of engineers and workers labor tirelessly, ensuring that the flow of gas rises from the depths of the earth to warm the homes of the people.

The operation of the Aghar & Dalan region managed by South Zagros Oil and Gas Production Company (SZOGPC). It is one of the three main subsidiaries of Iranian Central Oil Fields Company (ICOFC). Its activities span a vast area, from the scorching plains of Fars to the humid coasts of Bushehr and the rugged mountains of Hormozgan. According to Mahmoud Mir-Baqeri, CEO of the SZOGPC, more than 162 mcm/d of natural gas, 48,000 b/d of gas condensate, and 17,000 b/d of crude oil are extracted from this extensive region. This volume of gas is roughly equivalent to one-fifth of the country’s total daily gas consumption during the cold season.

In fact, SZOGPC serves as the lifeline of Iran’s natural gas production in the south, comprising six major operational zones: Sarvestan and Saadatabad and Khesht, which focus on oil production, as well as Naar and Kangan, Aghar and Dalan, Parsian, and Sorkhoun and Gashui Jonoubi, which specialize in gas and gas condensate output. Within this vast territory, there are 13 active fields and over 220 oil and gas wells in operation — nearly 80% of which are currently producing natural gas.

Operating across such a vast expanse is no simple task: roads stretching for hundreds of kilometers, routes winding through narrow mountains and scorching valleys, and an unbearable heat that turns summer into one of the most challenging seasons for work.

Amid these demanding conditions, the Farashband gas refinery, located near the Aghar & Dalan fields, serves as a beating heart, processing the extracted gas from the Aghar & Dalan reservoirs to make it ready for delivery to consumers. The gas that emerges from deep limestone formations and underground reservoirs undergoes a series of complex refining processes — including refining, desulfurization, and condensate separation — before entering the national gas network, transforming it into sweet, consumable gas. It is noteworthy that while the gas extracted from the Dalan field is naturally sweet, certain processing steps are still required before it can be distributed.

52 mcm/d Output

The role of this operational region in supplying the country’s energy goes far beyond gas production. According to Kamal Bolandparvaz Jahromi, head of the Aghar & Dalan Operational Zone, stabilized gas liquids are transported via an eight-inch pipeline from the Farashband refinery to the Shiraz oil refinery, making a significant contribution to the quality of gasoline produced there.

The Farashband refinery is considered one of the key centers of technical self-sufficiency in Iran’s gas industry — a site where the majority of maintenance, equipment overhauls, and development projects are carried out relying primarily on domestic expertise and manpower.

Given the ongoing energy imbalance crisis, the officials of the Aghar & Dalan Operational Zone took a significant step last year (to March2025) by initiating production at the Dey field, located in Farashband County — an achievement that set a new gas production record for the region. According to Nourali Mofateh, Operations Director of SZOGPC, “one of the fields developed in recent years through the efforts of domestic experts is the Dey field. This field became online in early winter last calendar year (to March 2025) with a production capacity of 2.5 mcm/d of gas. This calendar year (to March 2026), with the commissioning of a new well, we aim to further enhance gas extraction from this field.”

The efforts of oil and gas industry workers to ensure stable production during the upcoming cold season have been ongoing in this region, just as in other operational zones across the country. According to the officials of the Aghar & Dalan region, major overhauls were carried out over a 42-day period — during the hottest days of the year, coinciding with the 12-day shutdown period — and all facilities and equipment are now fully prepared to produce 52 mcm/d of gas in this region.

Wartime Maintenance

In those days when the alarming news of the 12-Day War was circulating across social media, and the sound of distant explosions could occasionally be heard, many people chose to travel with their families to escape the tense atmosphere. Yet, the workers and engineers of the Aghar & Dalan Operational Zone took the long and difficult mountain roads to reach their workplaces, remaining committed to keeping the flow of gas uninterrupted.

Workers came from distant towns — traveling entirely by land once flights canceled — to reach the site. One of the welders, with sunburned face and weary eyes, said: “While my family in Mashhad was worried during those very days, we were here — working under the blazing sun, determined to finish the major overhauls so that no home would be left without gas in the winter.”

No Recklessness Against Sanctions

The conversation among the workers had just started to warm up when a young engineer, his eyes gleaming with pride, began to speak about a major task he and his colleagues had accomplished: “In this region, the pipeline stretches for long distances, and we need a lot of these safety valves you see here. The imported ones had lasted 20 to 30 years — but, like all equipment, they have an expiration date and eventually lose their efficiency. Once, a critical valve in one of the units failed its spare parts were imported, but due to sanctions, we could not source them, and there was no way to repair it. Therefore, we carefully spread out the schematics, and through reverse engineering, built the exact same component ourselves. Honestly, we didn’t even expect it to pass the safety inspection — those are extremely strict — but in the end, it was approved. Now, we have produced several more of the same valve model.”

He says this with a smile of quiet satisfaction — a smile that speaks louder than a thousand words. This story is not just about a successful repair; it is a testament to the spirit that has long flowed through the veins of Iran’s oil and gas industry — a spirit of commitment, ingenuity, and selfless dedication shown by the men who, in anonymity, keep the vital wheels of the nation’s energy turning.

Commitment Valuable

The story of Aghar & Dalan is the story of patient men who, far from the tumult of the cities, have traded the suffering of summer for the warmth of winter. Through countless hardships — with wisdom, creativity, and perseverance — they have guaranteed nonstop production. Here, in the heart of scorching plains of Fars, somewhere between mountains and sunlight, some men whose names are rarely heard are active. However, the trace of their presence glows in every warm flame that heats homes across the country in winter.

What occurs in Aghar & Dalan is not merely gas production — it is a narrative of endurance. The story of men who, under relentless heat, through days of war and crisis, and with limited means, continue to sustain the nation’s energy cycle. Their efforts form a small yet vital part of the greater portrait of Iran’s oil and gas family that quietly and steadfastly, guards the energy security of their homeland.

How South Pars and Independent Fields Guarantee Witner Gas Supply

Houri Qasemi

Iran continues to grapple with the challenge of energy imbalance, i.e. consumption is growing faster than production. The oil industry is taking strong steps toward ensuring a stable fuel supply by focusing on the development of gas fields, major overhauls, and enhanced recovery operations.

Although Iran holds the world’s largest combined oil and gas reserves, various factors across the production-to-consumption chain have placed the country among those with the highest energy intensity. However, despite not having direct responsibility for reforming consumption patterns, the Ministry of Petroleum is working to offset this imbalance through development programs in oil and gas fields.

This report takes a look at Iran’s recent achievements in gas production—from record-breaking output at South Pars to the strengthening of independent gas fields across the Zagros region and the northeast.

Gas Production Records

Hamid Bovard, the CEO of National Iranian Oil Co. (NIOC), has said gas production record smashed seven times during the first year in office of the 14^th Administration. These achievements are the result of ongoing development programs in the country’s oil and gas fields. Natural gas accounts for more than 70% of Iran’s energy mix, making its sustainable production—particularly from shared fields—an even greater priority. The South Pars field alone accounts for about 70% of the country’s total gas production, equivalent to meeting 50% of Iran’s primary energy needs. Located in the heart of the Persian Gulf, South Pars—with its 37 production platforms—plays a vital role in providing electricity for the summer and heating for homes and industries during the winter. NIOC remains primarily focused on the development and maintenance of this field to ensure maximum production ahead of the cold season.

Overhaul Arrangements

More than 20 years after the development of South Pars—the world’s largest shared gas field—major overhauls of its facilities have become essential. Extensive platform maintenance began in mid-April and up to mid-October, 29 out of 37 production platforms were overhauled. The remaining maintenance work will soon be completed to ensure the field is fully prepared for maximum production ahead of the winter. These overhauls not only help maintain stable production but also strengthen domestic capabilities, create jobs, and promote transfer of knowledge and technology. In addition, development of supporting industries and creation of job opportunities in the areas surrounding the field are among the secondary benefits of these activities.

SP11: 80% Output Hike

Phase 11, the final phase of the South Pars gas field, has now been fully brought into production. Gas recovery from this phase reached 800 mcf/d (or 22 mcm/d) in September 2025, up from 450 mcf/d in August 2024. This phase covers both sites: 11A and 11B. Drilling began in 11B in 2020 with four wells coming online in August 2023. Five new wells have been added there, bringing the total output to 377 bcf (10.7 bcf), i.e. 7.2 times higher than in August 2024. In 11B, three more wells remain to be completed, one of which would be completed by January and the other two by September 2026. At location 11A, a four-legged jacket structure is ready to be transported offshore, and the drilling of 15 wells is set to begin in the winter. Once the first six wells are completed within two years, production is expected to start in the fall of 2027. These developments will ensure sustained and stable gas recovery from this phase.

Pipe Renovation

The pipeline renovation project for Phase 16 of South Pars was undertaken as one of the most strategic initiatives in Iran’s oil and gas industry, given the condition of the old pipeline connected to this platform. This project not only led to restoration of stable production from the Phase 16 platform but also brought about remarkable technical and managerial achievements for the country’s petroleum sector.

The old 32-inch offshore pipeline of Phase 16 had faced recurring issues and production shutdowns over the past years. Each production halt required considerable time to restore operations, resulting in the loss of part of the South Pars field’s gas output. Therefore, the construction of a new pipeline was placed on the agenda. This 32-inch pipeline, with a total length of 115 km, is a strategic transmission line that starts from the SPD-16 platform riser flange and ends at the sixth refinery. It spans 110.4 km offshore and 4.6 kilometers onshore. The offshore pipeline and new valve pit for Phase 16 had already been commissioned in 2023 as part of the early production plan, bringing the system into operation ahead of schedule.

With the completion of the 4.6-kilometer onshore pipeline section between the new valve pit and the 6^th refinery, the new line was commissioned on August 22, 2025. This marked the final link in the renovation chain of the pipeline connecting the SPD-16 platform riser to the sixth refinery, fully restoring stable gas transmission from Phase 16.

Infill Wells

To compensate for the natural pressure fall-off in the South Pars field, the drilling of 35 infill wells in less-depleted reservoir layers has been planned. This vital project — aimed at boosting short-term production and reducing the gas supply imbalance — is progressing well and will be completed within the next two years. So far, three wells have come online, and six more are expected to be ready by the end of the year. These wells play a key role in maintaining stable gas production during the upcoming winter.

SP14 Refinery

The Phase 14 refinery of South Pars — the thirteenth refinery of the field — was officially handed over to South Pars Gas Complex (SPGC) as of September 2025. This transfer strengthens centralized management of refinery operations across South Pars and provides greater assurance for nationwide gas supply during peak demand periods. Responsibility for completing the remaining units and rebuilding the damaged train still lies with POGC; and is progressing according to the schedule.

South Zagros

Iranian Central Oil Fields Company (ICOFC) — responsible for production from independent onshore gas fields — has delivered an outstanding performance in this sector. During the first six months of the current calendar year (to March 2026), the average actual production from the ten fields of the South Zagros region reached 113.6 mcm/d, achieving 108% of the planned target after accounting for mandated reductions. Key actions include finalizing comprehensive field studies for Aghar, Dalan, Tabnak, Shanul, and Varavi; constructing gas compression stations and reconfiguring compressor systems; developing new fields such as Pazan, Madar, Khartang, Gordan-Dey, Sefid Zakhor, Shayegan, Eram, Sefid Baghoun, Dang, and Phase II of Aghar.

Northeast; Sustainable Gas Supply

East Oil and Gas Production Company (EOGPC), operating the Khangiran–Mozdouran, Shourijeh B, Shourijeh D, and Gonbadli fields, plays a vital role in supplying energy to northeastern Iran. Preparation of facilities, comprehensive overhauls before winter, and maximum extraction from the shared Gonbadli field are key measures to strengthen energy security in the region. According to NIOC commitments, gas production during the cold months of this year will reach 65 mcm/d, distributed as follows: 45 mcm/d from Mozdouran, 1.4 mcm/d from Shourijeh B, 18 mcm/d from Shourijeh D, and 0.6 mcm/d from Gonbadli. All processed gas at the Shahid Hashemi-Nejad Gas Refinery is injected into the national pipeline network, supplying six northern and northeastern provinces of Iran.

Iran Route

While energy imbalance remains a serious challenge for Iran’s economy, the progress in developing joint fields, boosting production from new South Pars phases, modernizing infrastructure, and drilling infill wells are clear signs of Iran’s steady move toward sustained gas production and enhanced energy security.

This trend, along with reliance on domestic capabilities and technology transfer, can further pave the way for foreign investment in Iran’s gas projects, as the future of regional energy security continues to pass through the Persian Gulf and Iran’s gas fields.

With these achievements, Iran’s oil and gas industry is not only countering the energy imbalance but also strengthening the foundations of energy stability for the upcoming winter.

Iran Strategic Standing in Gas Industry

Pooneh Torabi

Owing to its massive gas reserves, sophisticated transmission and distribution infrastructure and unrivalled geopolitical position, Iran has great potential to become the regional energy hub. Gas self-sufficiency in 2017, expansion of gas transmission network and increased supply over recent years have turned Iran into a key player in the energy market. The present report reviews gas supply infrastructure, production achievements, export projects, high-end technologies, challenges and vision of Iran’s gas industry.

Gas Self-Reliance

Iran signed a gas agreement with Turkmenistan in 1995 to import gas with a view to supply gas demand in Northern provinces. However, Turkmenistan’s disruption of gas flow to Iran in winters 2007, 2008 and 2017 due to price disputes pushed Iran towards gas self-sufficiency. Inauguration of the Damghan-Kiasar-Sari-Neka gas pipeline in August 2017 was a turning point in gas transmission. The 170-km-long pipeline to transmit 40 mcm/d of gas has guaranteed gas supply stability in the provinces of Mazandaran and Golestan. It has 12 inline valve stations, 8 branching stations, 3 cathodic protection stations, 1 pig dispatch station, 1 pig receipt station and 1 CGS station. Completion of this pipeline has minimized dependence on gas imports, apart from showing Iran’s ability in designing and implementing sophisticated infrastructure projects.

Gas Supply Infrastructure

Iran’s gas transmission network is one of the most extended and most sophisticated systems in the Middle East. It has been developed since 1965. Today, it has 40,680 km of national trunkline, 92 compressor stations and 338 turbocompressors. This network can carry 950 mcm/d of gas to supply household, industrial, power plant and export needs. National Iranian Gas Co. (NIGC) also runs 21 refineries with refining capacity of 1,075 bcm/d, storage capacity of 3.4 bcm/d and an urban/rural distribution network 453,000 km long.

Last winter, Iran’s unprocessed gas production reached 1,106 bcm/d, a record. Up 35 mcm/d year-on-year, it was the result of massive investment in gas fields, particularly South Pars, and optimizing processes of production and transmission. Expansion of storage infrastructure like the Shourijeh and Sarajeh storage facilities has facilitated restoration of 30 mcm/d of stored gas to upgrade energy supply stability in cold seasons.

Gas Storage

Iran sits atop 33 tcm of natural gas reserves, i.e. 17% of the world’s total. It comes third, just behind the United States and Russia, in terms of natural gas production. At the current consumption rate of 250 bcm a year, these reserves may supply national needs for more than 130 years. The preliminary discovery of gas hydrates in the Gulf of Oman, much bigger than South Pars, bolsters the production vision. Iran has also more than 20 discovered gas fields with approximate reserves of 8,000 bcm, whose development may add 500 mcm/d to national production capacity. However, commercialization of unconventional reserves like gas hydrates and shale gas is conditional on cutting edge technology, major investment and new infrastructure. Development of these resources can double Iran’s production capacity and strengthen Iran’s standing in the global gas market.

Gas Exports

Iran is exporting roughly 20 bcm/y of gas to Turkey and Iraq. The agreement for gas exports to Iraq was extended for another five years in 2024, indicating Iran’s commitment to maintain its export markets. The Iran-Pakistan gas pipeline is a key project for increased gas exports. The Iranian section of this pipeline has been constructed, but the Pakistani side has faced financial and political barriers. Negotiations for gas export to Kuwait and Oman are in the initial phases. Geopolitical challenges, financing issues and new infrastructure remain to be resolved.

Iran shares border with 15 countries, 10 of which needing gas. The country has also 6,000 km of land and 2,700 km of water borders, offering great potential for expanding gas exports via pipeline and in LNG form. Gas swap with Republic of Azerbaijan has begun in limited volumes, but its expansion would require development of transmission infrastructure and regional agreements. Joining the Nabucco pipeline (also referred as Turkey-Austria gas pipeline) was studied in the past, but was halted on political grounds. Reviving this project may give rise to new markets for Iran in Europe; however, it would require complicated negotiations and big investment. Article 44 of the 7^th National Economic Development Plan targets exporting 40 bcm and importing 20 bcm of gas with a view to turning Iran into the regional gas hub.

Technology and Innovation

Iran has made efforts over recent years to make its gas network smart. Using digital technologies, such as real-time monitoring systems, advanced sensors, and optimization software, may increase the efficiency of the transmission network and reduce gas losses. For instance, installing smart sensors in compressor stations allows for the detection of leakages and optimization of operations. Furthermore, development of technologies for extracting unconventional resources, such as gas hydrates, may significantly enhance production capacity. Research projects have been initiated in this area, but their progress depends on cooperation with international companies, access to state-of-the-art technologies, and foreign investment. Renovating turbocompressors and improving cathodic protection systems are also technical priorities to increase the network resilience.

Challenges

Despite achievements, Iran’s gas industry faces numerous challenges:

International Sanctions: Financial and technological restrictions have made it difficult to develop new fields, renovate infrastructure, and attract foreign investment.

Regional Rivalry: Qatar, with its advanced LNG infrastructure, and Russia, with access to European markets, are tough rivals for Iran.

Need for Investment: Commercializing unconventional resources and expanding export infrastructure would require billions of dollars in investment, which is challenging under the present circumstances.

Technical Challenges: Improving the efficiency of turbocompressors, reducing gas loss, and establishing a smart network would require sophisticated technology access to which is limited.

Political Relations: Bolstering energy diplomacy depends on improving ties with neighboring countries, particularly in the Persian Gulf. Regional tensions may complicate export talks.

Future Vision

Relying on its massive reserves, advanced infrastructure and geopolitical position, Iran can play a pivotal role in the energy market in the region and the world. Development of non-conventional reserves like gas hydrates and shale reserves may double the country’s production capacity. Smart network including using digital technologies for detection and optimization may increase the resilience and efficacy of infrastructure. Article 44 of the 7^th Plan emphasizes the formation of a steering committee for regional energy trading, thereby clearing way for Iran to become a gas hub. This target includes reaching 40 bcm of exports and 20 bcm of imports a year of gas. However, success of these plans is conditional upon sanctions lift, foreign investment attraction, and regional cooperation upgrading and modern technologies development. Expanding LNG infrastructure and upgrading gas swap can turn Iran into a key player in global markets.

Conclusion

Iran has stabilized its standing as a key player in the energy market thanks to its significant achievements in gas self-sufficiency, infrastructure expansion and increased production. An extended gas transmission network, massive reserves and strategic position potentially make Iran a regional gas hub. However, overcoming political, economic and technical challenges is necessary for this vision to come true. Investing in modern technologies, upgrading energy diplomacy, expanding export infrastructure and improving regional relations may ensure a stable and strong future for Iran’s gas industry.

Sarakhs Gas Refinery Output at 58 mcm/d

The Shahid Hasheminejad gas refinery in Sarakhs is the sole gas supplying facility in northeastern Iran, thereby playing a strategic role in sustainable energy supply to Khorasan provinces and some parts of northern Iran.

The facility, which receives its feed from the Khangiran field and surrounding reservoirs, injects up to 58 mcm/d of gas into the transmission network during winter, which is equivalent to 7% of national gas production. The CEO of the Shahid Hasheminejad refinery has stated that the complex aims to become, by 2029, one of the leading companies within Iranian Gas Refining Company (IGRC) in the areas of gas storage and stable production. “The future path of the Shahid Hasheminejad refinery will be pursued on the basis of sustainable production, technological development, and reliance on Iranian engineers,” said Yahya Feizi.

Sustainable Supply

The refinery, as the main support point for the gas supply network of the four provinces of Khorasan Razavi, North Khorasan, South Khorasan, and Golestan, carries a significant share of meeting the energy demand of Iran’s northeast. The climatic conditions of this region, with winter temperatures dropping below -20°C, create an operating environment very different from other gas refineries in the country. Because most of the processing equipment is installed outdoors, their resilience against freezing is the primary requirement for uninterrupted production. The sweetening units, process towers, transmission lines, and compressor complexes across the refinery’s 221-ha area are all maintained under a strict upkeep regime to ensure that production continues even under the harshest weather conditions.

“All operational units of the refinery passed through last winter without any reduction and/or disruption in production, and the major overhauls have also been completed according to schedule by” last September, Feizi said.

He said the gas produced by this refinery in cold months is mainly supplied to Khorasan Razavi, adding: “With proper storage during the warm months and full preparation of all units, we are entering the winter in a better condition than last year.”

He said the refinery is set to become the most excellent refining facility in gas storage, sustainable production and development of tech-based products by 2029, adding: “Therefore, the future path of this refinery relies on sustainable production, technological development and relying on Iranian engineers.”

Storage Capacity Development

One of the most important elements of the Sarakhs refinery’s role in the national gas network is its position in gas storage. The Shurijeh D reservoir, as the main underground gas storage center in the northeast, carries the largest share of injection during the warm months of the year. According to Feizi, during the first eight months the current calendar year, a total of 2.131 bcm of gas was injected into this reservoir, up 341 mcm year-on-year. This rise significantly enhances the withdrawal capacity during peak-demand days.

As part of the ongoing development programs, the Tous reservoir will also enter operation before March 2026 with a capacity of 3 mcm, serving as a backup source that plays an effective role in reducing operational pressure on units during winter. Alongside these projects, the Mozdouran reservoir, the refinery’s oldest feed source, has maintained a withdrawal capacity of 45 mcm/d, despite 42 years having passed since it was commissioned. This capacity matches the original design and, according to statements, its continuity is the result of scientific reservoir pressure management by East Oil and Gas Production Company (EOGPC).

Explaining the process of modernizing storage equipment, Feizi said that in Phase 2 of the Shurijeh project, all compressors, gas generators, and processing equipment will be entirely manufactured domestically. The implementation of this phase has been assigned to MAPNA Group, while Iran Gas Engineering and Development Company (IGEDC) is responsible for engineering and technical supervision. The approach is considered an important step toward strengthening the domestic supply chain and reducing dependence on foreign equipment.

Higher Productivity

Improving efficiency at the Sarakhs refinery has been pursued as one of the main management priorities in recent years. According to Feizi, the initial design of the plant allocated about 3.9% of the incoming gas for internal consumption; a figure that has now been reduced to 2.5% through the implementation of a series of corrective and optimization projects. Given the high volume of incoming feed, this reduction results in significant savings at the national scale.

A similar trend has been pursued in water consumption. Daily water use, which previously stood at 4,000 cubic meters, has now decreased to around 2,500 cubic meters. This reduction has been achieved despite the increase in the number of projects and equipment compared to the time of the original design. This accomplishment is the result of water recycling, improvements to cooling systems, and the use of new energy-management technologies.

Feizi also emphasized that through the use of digital systems and smart monitoring, a 1.5% to 3% reduction in energy consumption has been recorded across various units over the past three years. This reduction, in the fuel-gas segment alone, has resulted in approximately IRR 500 billion in annual savings.

Equipment Localization

In recent years, the indigenization process at the Sarakhs gas refinery has gone beyond a simple support program and has evolved into a structural strategy—one that now connects various repair, production, and support divisions to a unified network of domestic capabilities, creating a remarkable model of self-sufficiency and reduced reliance on imports within the gas industry.

According to Feizi, a significant share of the refinery’s equipment is now not only manufactured domestically but is also produced with a level of quality and durability that ensures stable operation under the harsh climatic conditions of Sarakhs. This progress has been achieved through the focused efforts of the self-sufficiency committee and collaboration with Ferdowsi University of Mashhad and specialized domestic companies. As a result, the refinery has reached 100% self-sufficiency in mechanical equipment, a figure that effectively means complete independence in one of the most complex areas of the gas industry. In the field of electrical equipment, reliance on domestic production has surpassed 90%, and in instrumentation, with domestic capability exceeding 88%, the refinery is now on the verge of completing the full localization chain.

A prominent example of this progress is the installation of the first fully Iranian-made turbine in one of the refinery’s main units, a turbine that replaced a Ukrainian model and delivered performance beyond expectations in its initial operating cycle. The use of this turbine is not merely a hardware substitution; it symbolizes the expansion of operational confidence in domestic manufacturing capabilities, confidence that has now extended to the Shurijeh storage development projects as well. In Phase Two of this project, all compressors and major equipment will be entirely manufactured at home, with domestic firms participating in every stage from design to implementation.

Alongside this hardware progress, the refinery’s technology ecosystem has also reached a point where it can be regarded as one of the most successful models of industry–university synergy within National Iranian Gas Company (NIGC). The refinery’s innovation and incubation center, which began operating in 2017, now hosts a diverse range of specialized start-ups—companies that, built around the real operational needs of the refinery’s units, have delivered products and services that meet full industrial standards. So far, five start-ups have reached maturity and stable revenue generation, while 17 other teams are active in fields such as chemical materials, instrumentation equipment, energy optimization, and environmental technologies.

Among these companies, one team succeeded in producing Texapon, a chemical component that had previously been fully imported. The refinery became the first purchaser of the product, paving the way for its integration into the operational cycle. Today, the product not only meets the needs of the refinery, but also is being used in other gas refineries across the country, effectively replacing imports.

These initiatives demonstrate that indigenization at the Sarakhs refinery has evolved into a sustainable, long-term process, one that has simultaneously neutralized the pressure of sanctions, significantly reduced maintenance and procurement costs, and established a fully domestic value chain. Today, a substantial share of maintenance projects, equipment design, and technology development is carried out not by foreign companies, but by specialists from Khorasan Province and domestic knowledge-based firms. This trend has positioned the Sarakhs refinery as one of the leading national models of practical reliance on local capabilities within Iran’s gas industry.

Flare Reduction

One of the refinery’s most significant achievements in recent years has been its flare-reduction project. According to the managing director, the volume of gas sent to the flare, once 24,000 cubic meters per day, has now been reduced to just 700 cubic meters, a level required only for safety and minimum operational needs. This major accomplishment has been achieved through three key measures: Separating and recovering sweet gas for reuse within the plant; designing and implementing a dedicated Flare Gas Recovery (FGR) unit to treat and reinject sour gases; and carrying out extensive maintenance of the main flare valves.

In parallel with the flare-reduction project, the environmental impacts of sulfur stockpiling have also been fully addressed. In the past, nearly 2.5 million tonnes of sulfur had accumulated in mountain-like piles within the refinery’s premises. However, through a new management approach and close collaboration with the private sector, four downstream plants are now operating adjacent to the refinery, converting molten sulfur into solid, export-grade products. This initiative has not only created 150 direct job opportunities, but has also minimized transportation costs to Bandar Abbas and reduced reliance on raw sulfur sales, becoming a successful example of implementing Article 44 of the Constitution in practice.

Feizi further explained that the refinery’s environmental strategy is built upon five fundamental pillars, saying: “Eliminating air pollutant emissions, removing all wastewater discharge, reducing waste incineration, increasing energy recycling, and completing the sanitary sewage treatment cycle constitute the five core principles of the refinery’s environmental policies.”

Digitized Refinery

Digitization is one of the refinery’s major strategic priorities. Upgrading control systems, implementing intelligent platforms, and developing data-analysis tools have driven a set of structural changes across the processing units.

Feizi said: “Over the past three years, with the help of energy-management systems and digital monitoring, energy consumption has decreased by 1.5% to 3%, and in the fuel-gas segment alone, about IRR 500 billion in annual savings have been recorded.”

This reduction in consumption, in a refinery with such extensive operational dimensions, demonstrates the direct role of technology in improving efficiency and reducing costs.

Upgrading the distributed control systems (DCS) in the main units, developing the production-management system, deploying online monitoring tools, and using data-driven decision-making platforms have now become an integral part of the operation process. In addition to improving the precision of operational control, these tools have helped enhance production stability under harsh climatic conditions and enabled better energy-consumption management.

Thus, the digitization approach at the Sarakhs refinery is not limited merely to modernizing control systems; it is steering the organization toward becoming a digital refinery and enhancing the level of safety, efficiency, and reliability in day-to-day operations.

Corporate Social Responsibility

The CEO also touched on social measures undertaken at the refinery for empowerment instead of periodical financial support.

Empowerment in the field of employment is a prominent aspect of this approach. The refinery’s systematic cooperation with Technical and Vocational Organization (TVO) has enabled unskilled workers to become skilled technicians, and has led to the formation of local contracting companies. Many of these contractors, who initially participated only in small-scale projects, are now executors of major maintenance projects within the refinery itself and even in large refineries across the country, including the Fajr refinery. This empowerment chain has made it possible for a significant portion of the refinery’s overhauls, specialized maintenance, and key projects to be carried out by local personnel, something that has a direct impact on increasing operational speed, reducing costs, and strengthening production stability.

In line with this very approach, the refinery’s innovation center has become one of the most active innovation ecosystems in the gas industry. These combined efforts have shaped a different model of industrial social responsibility at the Sarakhs refinery, one that, instead of pursuing showcase projects, focuses on strengthening the region’s human and economic infrastructure and has been recognized as one of the successful examples within the Ministry of Petroleum.

Over recent years, the Sarakhs gas refinery has been able to advance a set of new records, environmental projects, optimization plans, employment initiatives, and technology localization efforts simultaneously. Recording a production of 58.42 mcm/d, increasing storage capacity, reducing gas flaring to nearly zero, raising self-sufficiency to over 90%, and expanding science-based activities have made this complex one of the most successful operational models within NIGC.

Digital Transformation and Data Governance, New Path for Energy Investment

Digital transformation is one of the defining trends shaping the future of the global energy industry—a movement that has wiped out the boundaries between technology, management, and investment, paving a new path toward efficiency, sustainability, and intelligent governance of energy resources. Within this framework, Iran’s Ministry of Petroleum has, over recent months, initiated a new approach to managing energy infrastructure—particularly in the gas industry—by emphasizing on the expansion of science-based collaborations. This approach aims not only to adopt digital tools but also to reinvent the governance model across the entire energy value chain, from production to consumption.

The “Conference on the Development of Science-Based Cooperation for Digital Transformation in Gas Industry,” held November 2-3, also reflects the Ministry of Petroleum’s altering approach toward digital transformation in the gas sector. Saeed Tavakoli, the CEO of National Iranian Gas Co. (NIGC), said digital transformation would secure the future of the energy economy, noting that the company is pursuing implementation of a new governance system in Iran’s gas industry based on this principle.

New Corporate Governance Regime

In line with global developments toward digital transformation, NIGC has sought to implement a new system of governance and management by leveraging digital capabilities and the expertise of knowledge-based companies.

Addressing the conference, Tavakoli underscored that “digital transformation is not a showpiece”. He added that moving in this direction marks the beginning of a structural transformation that will reshape the future of the gas industry.

According to Tavakoli, the main goal of the NIGC in pursuing this path is to create a foundation for data-driven decision-making and process automation—a foundation that will be realized through the capabilities of domestic knowledge-based companies and by relying on local infrastructure.

Offering an overview of the past two years, he said: “In the first phase, 29 items of strategic technological products were introduced, many of which — including intelligent control and measurement systems — have now reached the stage of domestic production. In the second phase, the design of locally developed, world-class platforms was launched, and we are now witnessing the deployment of advanced digital systems in refineries and transmission pipelines without foreign dependency.”

Although sanctions have created numerous constraints for Iran’s oil industry, these restrictions have not prevented the implementation of industrial projects. Referring to the challenges in procuring equipment caused by the sanctions, Tavakoli said: “Our reliance on domestic capabilities and local innovation is not a slogan, but a necessity.”

Close cooperation between knowledge-based companies and the engineering sector of the NIGC in refinery complexes and the national transmission network has led to the design and implementation of digital systems. For instance, at the South Pars gas refinery, projects for the digitalization of pressure reduction stations and digital measurement systems have been successfully carried out. Moreover, at satellite stations, complex hardware and software control systems have been installed and commissioned without any interruption in operations.

Tavakoli said one of the NIGC’s priorities in the current calendar year (to March 2026) would be to develop smart metering systems.

“These projects, which did not previously exist in the country, have now reached the stage of full localization. The available tools now meet our operational needs, and most of the earlier concerns regarding the accuracy and security of data transmission have been resolved,” he said.

Underlining the need to establish a permanent digital transformation secretariat within the NIGC, he said: “Creating a permanent secretariat may serve as a communication bridge between executive managers and technology firms, ensuring that digitalization projects do not face disruptions. Experience has shown that wherever knowledge-based projects have been implemented with a focus on the private sector, the results have been achieved faster and at lower cost. This secretariat should become a stable platform for professional dialogue and the attraction of technological investments.”

“Digital transformation in Iran’s gas industry is a long-term journey. Relying on domestic expertise, smart investment, and data-driven governance; we may move step by step toward building a digital NIGC—an organization that not only ensures the sustainable supply of the nation’s energy, but also serves as a platform for technological advancement and investment development,” he added.

Tech Investment

Mazloum Farsibaf, R&D director at the NIGC, said: “Digital transformation is a strategic necessity, not a choice. Like other global megatrends, it will continue for decades and will reshape the structure of energy production, transmission, and consumption.”

He stressed countries that failed to recognize the path of technological change in time have been pushed out of the global competition. Therefore, Iran must develop a “national roadmap for digital transformation” based on a precise assessment of its technological assets and opportunities.

According to Farsibaf, this path includes several key phases as follows: Building organizational belief among managers, assessing the current situation, mapping digital assets, implementing low-risk pilot projects, and finally, scaling up the projects.”

“When this process is accompanied by human resource training and the enhancement of the organizational culture, it may lay the foundation for a knowledge-based economy within Iran’s gas industry,” he said.

He also highlighted the importance of cybersecurity as the cornerstone of digital transformation’s sustainability, warning: “Data centralization without secure design increases system vulnerability. Therefore, the design of digital infrastructures must, from the outset, be approached with a focus on resilience and security.”

Referring to the role of cybersecurity in the digitalization process, Farsibaft added: “The experience of the 12-Day War showed that cyberattacks are a global threat. The more data becomes centralized, the greater the importance of protecting it. Hence, digital transformation must be designed from the beginning with a secure and resilient approach to ensure the required stability against cyber threats.”

Data Governance: Foundation of Future Energy Economics

In another part of the conference, Saeed Pak-Seresht, the head of Corporate Planning at the NIGC, described digital transformation as a “strategy for the survival and advancement of organizations.”

“Digital transformation is not merely about purchasing software; it is about redesigning the system of decision-making and data management. Data becomes valuable only when it is analyzed in an integrated and intelligent manner across the entire energy value chain — from production to consumption,” he said.

Referring to the existing challenges, he added: “During the revision of the gas pricing system, we realized that consumption data is stored in isolated databases across different institutions. To achieve effective data governance, it is essential to establish secure and logical connections between the information systems of ministries and organizations, so that consumption patterns may be accurately analyzed.”

Pak-Seresht also highlighted the necessity of establishing a “Permanent Digital Transformation Secretariat,” saying: “This body may serve as a communication bridge between NIGC, knowledge-based firms, and research centers — helping to prevent operational disruptions and facilitate the attraction of technological investment.”

From Science to Capital

Omid Shakeri, deputy minister of petroleum for research and technology, said digital transformation only gains true meaning when it leads to synergy between knowledge and capital, adding: “knowledge-based companies may, by entering the gas industry’s value chain, not only create technology but also play a role in the industry’s investment structure. This path will define the future of the energy economy.”

He also highlighted the importance of effectively organizing the vast body of technical expertise in software, hardware, and data analytics, noting that this effort may form the foundation for the intelligent transformation of the gas industry. He added that the government and regulatory bodies are responsible for creating transparent contractual frameworks to enable broader participation of these companies in major projects.

Shakeri said integration of local knowhow with modern investment models represents a milestone in the gas industry’s transition toward a science-based economy.

Data Governance Panel Discussion

In the specialized panel titled “Data Governance, Integration, and Upstream Documents,” held as part of the conference, senior managers and experts from various organizations discussed the technical and governance dimensions of the topic.

Emadoddin Fatemizadeh, head of the Secretariat of National Artificial Intelligence Development Committee, referred to “National AI Division of Labor Program”, saying: “According to the new document, the establishment of five data operators and a national data marketplace has been planned. Each industry must design its own specific model for data management, and for the gas industry, this includes data cleansing, secure storage, and data sharing within transparent contractual frameworks.”

Hadi Karimi, Deputy for Technical Affairs at National Cyber Defense Authority, also warned: “Cybersecurity is the beating heart of digital transformation. Many attacks originate from compromised domestic equipment; therefore, equipment authentication and data encryption must be considered key trust criteria in all projects.”

Alireza Seraji, head of IT at the NIGC, also announced the integration of digital infrastructures within the company, saying: “The GIS systems, smart emergency services, pipeline networks, and customer databases now operate on a unified platform — an integration that has made decision-making faster and more accurate.”

At the conclusion of the conference, the attending executives emphasized that the future of Iran’s gas industry will rest on three main pillars:

1. A deep integration of data and artificial intelligence as the driving force of innovation;
2. Full establishment of cybersecurity and the localization of key technologies;
3. Development of legal and operational frameworks to enable the participation of science-based companies.

They believe that the combination of these three elements may open a new path for technological investment and the formation of a modern data governance system in Iran’s gas industry- a path that, if pursued with managerial determination and institutional continuity, could position Iran among the leading nations in the intelligent energy economy.

State Bodies Fully Ready for Winter

President Masoud Pezeshkian has reaffirmed state bodies’ full readiness to get through the coming winter.

He stressed that if each person, household, or organization saves just 10% in energy consumption, it will be possible to store between 800,000 b/d and 900,000 b/d.

Addressing the annual conference of Iran’s capital market, he noted that the imbalances in the areas of water, electricity, and gas are real.

“We are trying, by any means necessary, to provide the energy needed by industry so that industrialists and producers can continue their work. In this regard, we are seeking to control and reform energy consumption patterns through public outreach and dialogue.”

Noting that proper consumption is a necessity and that measures related to energy efficiency need to be reconsidered, he said: “Fortunately, significant steps have been taken in this area, but we still need to make further efforts. With such savings, part of the people’s livelihoods will improve, and the path to development will make sense.”

Pezeshkian, advising people to use energy efficiently and with quality, said: “Compared to previous periods, we have been able to enhance electricity and energy production through solar panels and other renewable sources by 200 times, and this figure will reach 700 times by the end of the current calendar year (to March 2026).”

Underlining the importance of protecting the environment and reforming consumption patterns, Pezeshkian added: “We promise that this calendar year we will experience the lowest amount of power outages, and full preparedness has also been achieved for the winter. While in previous periods we faced fuel shortages, a satisfactory amount of fuel has now been stored, and in the coming winter our people will not be threatened by any danger in this regard.”

He said although Iran produces 180 billion barrels of oil and gas annually, it still faces inflation and high prices.

“To improve these conditions, we hold monthly meetings with producers, investors, traders, and economic officials to find solutions for remedying the current situation and overcoming these challenges,” the president said.

ICOFC Key to Energy Supply Security

The head of production at Iranian Central Oil Fields Co. (ICOFC) has announced the precise and timely implementation of overhaul and maintenance programs,

“The company plays a key role in producing and supplying winter fuel and ensuring the country’s energy security,” said Ali Rezaei.

Referring to ICOFC’s achievements, he said: “The whole of technical and operational activities carried out, has made it possible to fully achieve production plans and ensure a stable supply of feedstock for gas refineries, industries, and the household sector.”

Outlining these measures, he said: “Overhauls in the Khangiran, Tabnak, Tang-e Bijar, Nar, and Kangan gas fields, overhaul operations using coiled tubing units, downhole logging operations, and sourcing spare parts have been among the most important programs carried out this year.”

Rezaei also touched on gas storage, saying: “Gas injection operations in the Shourijeh D and Sarajeh Qom fields began in March-April. Through measures such as following up on upstream repairs, reviewing and upgrading equipment working pressure, especially in the Sarajeh field, and managing the injection rate, the company managed to record the highest amount of underground gas storage since the beginning of the current calendar year (to March2026).”

On the Khesht oil field, he said: “This field, with five production wells from the development projects, has entered a stable and continuous operational phase since 2024 with a production of 3.289 million barrels of crude oil. The installation and construction of its desalting facilities are currently underway and, according to the planned schedule, will be commissioned by the end of the current calendar year (to March 2026). Based on projections, the field’s current production is expected to increase by about 4,000 b/d.”

Private Sector Highlighted in 7^th Plan

Vice President for Executive Affairs Mohammad Jafar Qaem-Panah has considered the policy of the 7^th National Five-Year Economic Development Plan to be strengthening the private sector for the country’s development.

“Handing over industry and production to the private sector paves the way for progress,” he said.

Speaking at the official inauguration ceremony of the Kimia Sanaye Dalahoo and Kimia Sanaye Petro Entekhab Esfahan petrochemical plants, he highlighted the role of the private sector in national development.

“Everyone works for Iran and in the name of Iran. I am pleased that we have a capable private sector — the one that can build the country. The Supreme Leader has repeatedly emphasized that the economy and production can be managed by the private sector, and Masoud Pezeshkian, the President, holds the same view,” he said.

Pointing out that the policy in the 7^th Development Plan is to strengthen the private sector for building a better Iran, Qaem-Panah added: “The experience of many countries has indicated that handing over industry and production to the private sector paves the way for progress. If we continue to rely on state-owned industries and are unwilling to transfer industry and production to the private sector, we will not succeed in improving production quality or improving efficiency. When a genuine private sector is active, it means we distance ourselves from rent-seeking and corruption and use all the country’s resources for development.”

Stressing that the government’s policy and the Supreme Leader’s directive are to give the private sector greater freedom, he said: “The Administration is tasked with policymaking and safeguarding the rights of the people. Therefore, we must set policies and ensure that the social security system provides comfort and security for workers and for everyone who works.”

Qaem-Panah stressed the need to link science and industry, saying: “Production is effective only when the brilliant minds of this land are engaged alongside it. If science and industry stand together, we will become increasingly capable, higher in quality, and more remarkable day by day. Moreover, for sustainable progress, we should make use of the capacities of universities and scientific centers, especially the universities of this very region.”

Referring to main challenges in the country, he said: “Unemployment, poverty, and high prices are three serious enemies of the nation. Creating job opportunities, the petrochemical industry is fighting against unemployment. Moreover, via generating wealth, it helps reduce poverty. Social problems diminish in a country that produces wealth, and creates jobs.”

The Kimia Sanaye Dalahoo project, with an annual production capacity of 120,000 tonnes of general-purpose and high-impact polystyrene and an investment of $56 million dollars, and the Kimia Sanaye Petro Entekhab Esfahan polystyrene project, with a production capacity of 50,000 tonnes of general-purpose polystyrene and an investment of $32 million, were inaugurated in Bushehr Province.

 

Flare Gas Capturing Requires Urgent Action

President Masoud Pezeshkian has said that not even a single day should be overlooked in accelerating the completion of various parts of the flare-gas recovery project.

The latest progress of the Azadegan oil field development projects, the rapid 250,000-barrel increase in oil production, flare-gas capturing, compression in the South Pars gas field, and several other major energy and infrastructure projects reviewed in a meeting chaired by President Masoud Pezeshkian. The Ministers of Petroleum; Cooperatives, Labor, and Social Welfare; and Economic Affairs and Finance, as well as the head of the Plan and Budget Organization and a number of senior officials, including the governors of several national banks attended the meeting.

Accordingly, the process of implementing the Azadegan oil field development plan was first reviewed. To accelerate its progress, Pezeshkian had requested at the previous meeting that the relevant ministers and government officials, as well as the directors of several national banks that are shareholders in the project, attend the meeting.

The existing obstacles were examined, appropriate decisions were made to resolve them, and it was decided that these measures would be implemented and reported on soon.

Speaking about controlling flare gas, Pezeshkian said no official should remain indifferent to the burning of the nation’s wealth and resources in this manner, which also causes severe air pollution.

Noting that the procurement of equipment for this project and others should not get stuck in bureaucratic obstacles, he said: “Although sourcing domestically manufactured equipment has priority over foreign procurement, the quality and cost price of the machinery and equipment should be carefully taken into account by suppliers. In addition, the production capacity of domestic manufacturers, and whether these items are truly produced at home, or whether their parts are imported and merely assembled here and then offered at a higher price should be taken into account by them.”

“By creating an online dashboard, the technical and visual monitoring of the progress of associated gas capture projects should be made available to the president in his personal office as soon as possible, so that he can follow it personally and on a daily basis,” he said.

14^th Administration Mulls Gasoline Import Halt

Vice President Mohammad Reza Aref has said that quitting gasoline imports was among the strategies pursued by the 14^th Administration.

“For at least seven months, an expert and distinguished task force was formed to work on the new gasoline resolution. Various decisions were examined and revised, and it was decided that initial and minimal actions should be taken with the strategy of reducing imports,” he said.

Addressing the meeting of gasoline task force, Aref stated that from the very first days of its work, the 14^th Administration has acted within the framework of the approved programs in the 7^th National Economic Development Plan, upstream documents, national policies, and the President’s campaign promises. He said: “Structural reform has been seriously placed on the agenda since the start of the administration, and our strategy in this process is to ensure that the government’s structure becomes limited to what is necessary, efficient, dynamic, and highly productive, while also bringing about a relative stability in the country’s economic conditions.”

He noted that in all structural and pricing reforms, preventing harm to people’s livelihoods and implementing compensatory mechanisms such as commodity vouchers were included in the government’s economic plans. He added: “Reducing and containing inflation and increasing economic growth, despite the conditions at the start of the administration and the imposition of a brutal war by the Zionist regime in cooperation with the United States, have been on the government’s agenda alongside structural and pricing reforms, and we have taken good steps in this direction.”

Speaking about the 14^th Administration’s strategy regarding gasoline, emphasized that the question now being raised is whether we should import gasoline at 60 cents per liter and sell it for IRR 15,000. “Gasoline has been framed in society in such a way that many costs in the country have become tied to this fuel, and if sufficient care is not taken in this regard, an emotional decision could lead to irrational inflationary effects and put pressure on the people,” he said.

He referred to the engagement with experts, specialists, and all relevant agencies for issuing the gasoline decision, and said: “After the Administration made its decision on the gasoline measure, it was reviewed again in government meetings and then presented to the society. The government is prepared, within the gasoline task force and during the implementation of this plan, to make any necessary adjustments if needed.”

Noting that the gasoline decision concerns government-allocated vehicles, luxury and high-priced imported cars, free-trade-zone vehicles, and newly registered domestically manufactured cars, Aref added: “We have maintained the main gasoline quota of 60 liters per month at IRR 15,000; and 100 liters per month at IRR 30,000. The prices are based on domestic gasoline production, and those who need more than their quota will purchase the additional amount at IRR 50,000.”

He stressed that the government’s gasoline plan has no connection to the plan for importing premium gasoline.

“In the 7^th Development Plan, permits have been issued for premium gasoline to be supplied by the private sector at market rates. This plan is carried out based on the final cost and a fair profit for the people,” he added.

Aref stated that, in order for its decisions to be reasonable, the government gathers public feedback in implementing the new gasoline plan and will make adjustments if necessary. He added: “The gasoline resolution task force, which includes senior economic and relevant officials, has the required authority to make revisions, or such authority will be granted to them by the government if needed.”

Diesel Storage for Power Plants

Vice President for Executive Affairs Mohammad Jafar Qaem-Panah has announced massive storage of diesel for power plants as a key initiative under the 14^th Administration.

Qaem-Panah, speaking to reporters on the sidelines of his visit to the South Pars Gas Complex (SPGC), highlighted the important role of the South Pars gas field in supplying the country’s energy,

“Over 73% of the country’s gas is supplied by South Pars, and timely overhauls along with the efforts of the offshore platform crews have ensured the stability of the gas network in recent months,” he said.

Touching on diesel storage, he said: “In the current calendar year (to March 2026), it has reached about 3.5 billion liters, which has played a decisive role in reducing power outages.”

He referred to the government plans to address the energy imbalance, saying: “By expanding solar power plants and increasing the production of renewable energy, especially in suitable regions, we are working to ensure that the country does not face an energy imbalance next calendar year.”

Qaem-Panah considered completing the petrochemical production chain one of the government priorities, adding: “If a stable feedstock supply is provided to the petrochemical plants, these industries may operate at full capacity, creating conditions for increased exports and greater added value.”

2 Petchem Projects Come on Line

The CEO of the National Petrochemical Company (NPC) Hassan Abbaszadeh has said the petrochemical industry places special value on the private sector’s role in this field,

“Attracting genuine public investment is one of our main policies; therefore, we need to facilitate and support their efforts to make the investment path smoother,” he said, addressing the inauguration of the Kimia Sanaye Dalahoo and Kimia Sanaye Petro Entekhab Esfahan petrochemical plants in Bushehr Province.

The Kimia Sanaye Dalahoo project, with an annual production capacity of 120,000 tonnes of general-purpose and high-impact polystyrene and an investment of $56 million dollars, and the Kimia Sanaye Petro Entekhab Esfahan polystyrene project, with a production capacity of 50,000 tonnes of general-purpose polystyrene and an investment of $32 million, inaugurated in Bushehr Province.

“The petrochemical industry and our colleagues have performed satisfactorily in the 7^th Development Plan, in such a way that in the first year of this plan, the petrochemical sector was able to fully achieve all of its targeted programs, reaching 100% fulfillment,” Abbaszadeh said.

He said commissioning of 19 petrochemical projects and provision of feedstock for their operation had been planned for the second year of the Seventh Development Plan (the current calendar year to March 2026), but, in the first six months, nine of these projects were completed, although they have not yet entered official operation.

He added: “In addition to these projects, several other major projects are also in the pre-commissioning stages, and will be put into operation by the end of the current calendar year.”

Regarding investment in the petrochemical industry, he said: “Of the roughly $92 billion invested in the petrochemical industry from its inception until now, the share of the genuine private sector has been only about 15%.”

Abbaszadeh emphasized that even this 15% participation by the private sector is highly valuable and noteworthy,

“The Entekhab Group is one of the successful and commendable instances among private-sector investors. This group had previously made a major investment and brought a production unit into operation, and today two new units are being added to its activities,” he said.

He referred to the Entekhab Group’s investment in the PDH project, valued at about $700 million, saying: “The project has been defined in cooperation with the Plan and Budget Organization within a staged financing framework, and its investment process is progressing at a faster pace.”

“The private-sector groups active in this field, including the Entekhab Group, have entered the petrochemical industry with a smart approach, beginning their activities in the downstream sector and independently producing the products they require.”

The official said that Entekhab is among those that have succeeded in exporting to Europe and entering international markets in a focused, professional, and competitive manner.

“The group’s continuous efforts to achieve maximum efficiency at the lowest cost are also commendable, and we hope they continue to achieve even greater success along the way,” he said.

Abbaszadeh also touched on challenges facing private investment, saying: “One of the most important obstacles ahead of the private sector in the petrochemical industry is the lengthy administrative processes and bureaucracy.”

“Unlike large funds and major management entities that can endure long waiting periods, the private sector does not have such capacity, and it is natural for it to expect that after investing capital, the implementation process, decision-making, and removal of obstacles will move forward more quickly,” he said.

Stressing that this path is the natural course of industrial development, he said: “One of our main policies is attracting genuine public investment — a matter emphasized by the Supreme Leader, the President, and the Petroleum Minister. Accordingly, it is essential to resolve the private sector’s challenges so that, through facilitation and support, we can smooth their investment path.”

National Grid to Receive Khar Tang Gas

The 5 mcm/d gas production from the Khar Tang field, achieved through the round-the-clock efforts made by operational crews and aimed at ensuring stable gas supply for the country during winter, will come online earlier than scheduled, the CEO of National Iranian Oil Co. (NIOC) Hamid Bovard said.

He referred to the difficult production conditions in this hard-to-access region, saying: “The staff of Iranian Central Oil Fields Co. (ICOFC), despite enduring many hardships, extract gas from the rocky terrain, and the people’s efficient use of gas is a way of appreciating these efforts and this national blessing.”

Describing energy storage as a “strategic support”, he said: “The sustainability of the gas flow in winter is not the result of just one season’s work, but the outcome of months of planning, continuous technical operations, and the presence of specialized personnel in the harshest climatic conditions.”

Bovard said development of the Khar Tang gas field is an instance of the teamwork of engineers, drillers, operators, and staff who, away from the spotlight but with precision and dedication, keep the pillars of the country’s energy supply standing.

Farokh Alikhani, NIOC director of corporate planning, said three wells in the Khar Tang field were ready to come online, He said that 4-5 mcm/d of gas would be fed into national network.

He noted that according to the initial planning, this level of production was supposed to be achieved by 21 June 2026, but due to the country’s energy imbalance, and through the round-the-clock efforts of colleagues, 5 mcm/d of gas from Khar Tang will come online in the production grid in January 2026.

Peyman Imani, the CEO of the ICOFC, said eight wells were planned to be drilled in the first development phase of Khar Tang.

“The drilling of four wells is underway, and the wellhead facilities for two of them have been installed,” he said.

“The value of this production chain will be completed with the construction of the field’s 40-kilometer pipeline, a pipeline that will transport the produced gas to the Kangan separation center and help offset part of the country’s energy imbalance,” Imani said.

Strategic Step in Gas Grid Resilience

The CEO of the Iran Gas Engineering and Development Company (IGEDC) Behnam Mirzaei announced successful completion of the hydrostatic testing operation for the 16-inch pipeline connecting the upstream Sarajeh manifold to the gas processing facilities at the Sarajeh underground gas storage site in Qom.

Mirzaei said that achieving this milestone is an effective step toward advancing technical expertise and strengthening domestic capability in operating high-pressure infrastructure.

“The 16-inch pipeline of the Sarajeh underground gas storage project in Qom, approximately five kilometers long, underwent a static pressure test after the completion of construction and the execution of cleaning and gauging pigging operations. It was tested at 8,250 psi for 24 hours and received final approval without any signs of leakage or pressure drop,” he added.

He announced that the 16-inch pipeline of the Sarajeh underground gas storage project in Qom was built using X-60 steel with a thickness of 28.5 millimeters, and that was tested at such a high pressure for the first time in IGEDC.

“This achievement, from both technical and operational perspectives, is considered one of the rare records in high-pressure projects within the country’s oil and gas industry,” he said.

|The 16-inch pipeline of the Sarajeh underground gas storage project in Qom, as part of the field’s underground gas storage development plan, is capable of bidirectional operation. In this way, during the first eight months of this year, gas is injected from the compression facilities into the wells and the reservoir, and in the final four months of the year, with the flow direction reversed, the gas produced from the wells is transported through the same pipeline to the dehydration and processing units.” Mirzaei said.

Saeed Rajabzadeh, project manager for underground gas storage projects at IGEDC, also explained the importance of this achievement, saying: “The result is not merely a technical advancement, but an effective step in strengthening the injection-and-production cycle of the Sarajeh reservoir and improving the reliability of the country’s gas storage network. This plays a vital role in enhancing the nation’s energy resilience, especially during the cold season and peak shaving periods.”

Smooth Path for NIDC Development

The CEO of the National Iranian Oil Co. (NIOC) Hamid Bovard said National Iranian Drilling Co. (NIDC) was playing a strategic role in national oil and gas production.

“Increasing drilling efficiency, reducing non-operational downtime, and moving toward greater agility are among the main expectations of the oil industry,” he said.

He noted the efforts made to remove NIDC from the privatization list and added: “This action has alleviated employees’ concerns and has created the conditions needed for implementing development programs.”

He said that the initial stages of modernizing the drilling fleet have begun. He added: “This process must move forward at a faster pace so that the company’s operational capacity increases and waiting times are reduced.”

Bovard noted that increasing drilling efficiency, reducing non-operational downtime, training specialized human resources, and moving toward greater organizational agility are among the key expectations of the petroleum industry. He underscored the need to employ young managers, use modern management methods, lower the final cost of projects, and expand cooperation with subsidiaries of the NIOC.

He stated that making use of the capacities of science-based companies and universities to develop drilling technologies, supporting domestic manufacturing, paying attention to HSE standards, and adhering to civil defense requirements are essential for improving efficiency. He added: “These measures strengthen the role of NIDC within the framework of the country’s resilient economy policies.”

Noting that managerial changes are natural, he said: “Morteza Fouladi, with his extensive experience in NIDC, National Iranian South Oilfields Company (NISOC) and NIOC, may strongly continue the company’s upward trajectory.

Expressing appreciation for the services of Mehran Makvandi the outgoing CEO of NIDC, Bovard said: “His 35 years of managerial experience and expertise is a valuable asset to the oil industry and has played an important role in advancing NIDC programs. This valuable capacity will be used purposefully and effectively in other sectors of the NIOC, and the required planning to utilize his specialized capabilities is underway.”

For his part, Fouladi said: “Experience in various sectors of the oil industry, along with the background of the Petroleum University of Technology, serves as a foundation for pursuing the company’s development goals.”

He touched on the use of modern technologies an unavoidable necessity, and added: “Whenever technology has been placed at the forefront of operational plans, the pace of projects and the company’s productivity have increased.”

Gasoline, Diesel Output up 9mn

A deputy CEO of the National Iranian Oil Refining and Distribution Co. (NIORDC) announced a 9-million-liter increase in the total production of gasoline and diesel from the start of the 14^th Administration’s term until last September.

“The total increase in gasoline and diesel production during this period is equivalent to the output of a 100,000-barrel-per-day oil refinery,” Mohammad Ali Dadvar said.

Referring to the increase in gasoline and diesel production: from September 2023 to September 2024, Dadvar said: “According to the refinery performance reports, since the beginning of the 14^th Administration, gasoline and diesel production has increased by 4.3 ml/d and 4.7 ml/d respectively year-on-year.”

He announced that from September 2022 to September 2023, motor gasoline production was 98 ml/d. He added, “From the beginning of the 14^th Administration until last September, the figure has increased to 102.3 ml/d. Diesel production, as well, was 111 ml/d from September 2022 to September 2023, and this figure rose to 115.7 ml/d from September 2023 to September 2024.”

Dadvar compared gasoline and diesel production level in the first six months of the current calendar year with the same period last calendar year. He said: “Gasoline production in the first six months of last calendar year was 98 ml/d, which with an increase of half a million liters, reached 98.5 ml/d in the first six months of the current calendar year.”

He announced that gasoline distribution increased from 124.5 ml/d in the first six months of last calendar year to 133 ml/d in the same period this calendar year, reflecting an 8-million-liter rise in consumption. He added: “Diesel production also rose from 112 ml/d in the first six months of last calendar year to 115 ml/d in the first six months of the current calendar year.”

Dadvar touched on another measure taken in Iran’s refining industry since the start of the 14^th Administration, i.e. the increase in refinery feedstock.

“Refinery feedstock from September 2022 to September 2023 was 2.287 mb/d, which from September 2023 to September 2024, increased by 72,000 b/d to reach 2.359 mb/d,” he added.

He explained the status of refinery feedstock in the first six months of the current calendar year compared with the same period last calendar year, saying: “Refinery feedstock in the first six months of last calendar year was 2.302 mb/d, which increased to 2.321 mb/d. in the first six months of the current calendar year.”

Referring to the overhaul of the RFCC unit at the Shazand refinery, he said: “In the RFCC unit of the Shazand refinery, only emergency repairs had been carried out over the past 13 years, and as a result, its gasoline and diesel production level had faced a significant and noticeable decline in recent years.”

 “Despite the pressures on the supply side: high consumption during the first six months of the current calendar year caused by extra demand for gasoline in Nowruz and summer holiday and the 12-Day War; the RFCC unit of the Arak refinery, especially all internal and external components of its reactors, underwent a complete and thorough overhaul to prevent the permanent shutdown of the unit,” Dadvar said.

Makran, New Energy Horizon for Petchem Development

The Makran coast in southeastern Iran has been defined as one of the main axes of the Iran’s energy policy; an area with direct access to the Gulf of Oman, which in recent years has hosted major projects in oil transmission, storage, and the establishment of petrochemical parks, with the prospect of becoming the country’s third petrochemical hub.

As Iran seeks to diversify its export channels and reduce its reliance on the Persian Gulf, the Ministry of Petroleum has turned its focus to the Makran coast. Stretching along the Sea of Oman, this underdeveloped shoreline has been earmarked as a strategic alternative to Persian Gulf terminals. Since 2023, Makran has seen the launch of major oil transfer, storage, and petrochemical projects. Its geography offers Iran a direct gateway to markets in the South and Southeast Asia, as well as East Africa, boosting the country’s competitive edge against its Persian Gulf neighbors.

Strategic plans of the Ministry of Petroleum indicate that Makran will not only serve as a new export route but also emerge as Iran’s third petrochemical hub. While Assaluyeh and Mahshahr have been developed as the first and second hubs over the past two decades, Makran is now joining them with a series of petrochemical projects and infrastructure investments.

The Ministry of Petroleum has implemented diverse policies to utilize the Makran coast as an alternative route to  the Persian Gulf terminals for energy exports. At the heart of this effort is the Negin Makran Petrochemical Park in the Chabahar Free Zone. Spanning more than 1,200 hectares, the complex is rapidly taking shape, with investors having secured over 70% of the available land.

The 1,000-kilometer-long Goreh–Jask pipeline project is the most significant initiative consolidating Makran’s strategic position. Starting in Bushehr Province and extending to the shores of the Gulf of Oman in Jask, the pipeline has a transfer capacity of 1 mb/d of crude oil. The project was designed to reduce dependence on the Persian Gulf export terminals and enable direct exports via the Gulf of Oman.

In August 2025, Petroleum Engineering and Development Company (PEDEC) announced the completion of crude oil storage tanks in Goreh with a total capacity of 4 million barrels. These facilities are part of the comprehensive storage plan for the Jask terminal and central to enhancing the country’s export flexibility. The tanks were designed in compliance with civil defense standards, enabling improved management of oil export flows under varying market conditions.

Jask Terminal

The Jask export terminal, designed as the final destination of the Goreh-Jask pipeline, includes storage tanks and offshore crude loading facilities. With a designed capacity of approximately 10 million barrels, the terminal project is being implemented under a BOT contract with an investment of around €604 million.

In 2024, the onshore section of this project was nearly completed, and in 2025 the installation and commissioning of offshore facilities continued. According to the Pars Oil and Gas Company (POGC) officials, the offshore section of the terminal has made satisfactory progress, and the installation of single-point mooring (SPM) buoys will be completed by the end of 2025.

With the full operation of the Jask terminal, Iran will be able to export crude oil without passing through the Strait of Hormuz. This development not only reduces geopolitical risks, but also lowers transportation costs and provides a shorter route to the Asian customers.

Energy Infrastructure

In September 2025, the first phase of the Makran Petrochemical Park gas power plant, with a capacity of 183MW, came online. The plant is part of a three-phase project with a final planned capacity of around 500MW. Investment in the first phase is estimated at nearly €300 million. In addition to supplying electricity, the plant provides steam required for under-construction petrochemical units, while surplus power is fed into the national grid, helping plug the country’s electricity imbalance.

In the first half of 2025, the gas supply project for the hydropower plant in Makran was completed. The pipeline and decompressor station have a capacity of 300,000 cubic meters per hour, ensuring stable gas supply for power plants and petrochemical plants. This gas supply not only secures reliable feedstock for power generation, but also facilitates regional economic development by connecting local industries to dependable energy.

Petchem Projects

According to the National Petrochemical Company (NPC), approximately $10 billion has so far been invested in Makran, with projections indicating this figure will reach $25 billion in coming years. The defined plans for the petrochemical park include the construction of methanol, urea, and ammonia units, as well as downstream projects linked to these facilities. The designed capacity of these projects exceeds 10 million tonnes (mt) of products annually, the majority of which will be allocated for export.

The feedstock for these units is planned to be supplied through regional NGL projects and sour gas resources. The Iranshahr-Chabahar pipeline project has also been initiated to support petrochemical feedstock supply. In addition, the country’s first MTO (methanol-to-olefins) unit will be established in Makran, reflecting a shift toward completing the value chain and producing higher value-added products.

Major infrastructure, including water supply, export jetties, and access roads, is also under development.

Geopolitics and Economics

Hassan Abbaszadeh, the CEO of NPC, emphasized the importance of Makran, noting that the region has been designated as the ‘third petrochemical hub’ and holds significant potential for development. He stated that approximately $90 billion has been invested in Iran’s petrochemical industry to date, of which about $10 billion has been allocated to the Chabahar area, enabling production capacity of over 10 mt of petrochemical products. In this context, the investment required for preparing the infrastructure of the Makran Petrochemical Park is estimated at around $3 billion, part of which has been provided with the support of “Shasta Holding”.

Makran, with direct access to the Sea of Oman, plays a strategic role in reducing the geopolitical risks of Iran’s energy exports. Exports via this route bypass the Strait of Hormuz, lowering the country’s vulnerability to regional developments. Its proximity to international transport corridors further reduces export costs and enhances the region’s attractiveness for investors.

From an economic perspective, the development of Makran not only increases export capacity but also creates extensive employment opportunities in southeastern Iran. Estimates indicate that the full implementation of the planned projects will generate tens of thousands of direct and indirect jobs. Beyond its economic effects, this process will also have social and security implications, contributing to the stability in the region.

Development of Makran as an industrial and economic hub has created a favorable environment for foreign investment. State support policies and ongoing infrastructure development have further increased the region’s attractiveness to international investors.

Development of Makran demonstrates that Iran’s energy map is being redefined. Today, the region hosts multi-billion-dollar investments and large-scale projects in oil transfer and petrochemical industries, establishing its position alongside Assaluyeh and Mahshahr. Recent inaugurations — from the 183MW power plant to the Goreh storage tanks — indicate that Makran has moved beyond paper plans and entered the operational phase. With the completion of the ongoing projects, Makran is set to become both a core pillar of Iran’s petrochemical industry and a secure route for the country’s future energy exports.

Tehran Refinery Sets 18-Day Overhaul Record

Mobina Mahinkhaki

The Tehran oil refinery, one of Iran’s oldest and most strategic refining facilities, processes 250,000 b/d of crude oil at its northern and southern plants. It receives its feedstock from the Marun and Ahvaz oil fields. Accounting for approximately 10.7% of Iran’s total refining capacity, the refinery has played a central role for over five decades in supplying gasoline, diesel, jet fuel, kerosene, naphtha, and other strategic products to the country’s central and northern regions. The continuous operation of this facility is directly linked to national energy security.

In late October and early November, the Tehran refinery completed a periodic four-year overhaul of its southern distillation complex within 18 days. The work focused on the southern atmospheric and vacuum distillation units, the southern LPG unit, and the Merox unit. The overhaul addressed routine issues to improve equipment reliability, reduce operational risks, and stabilize the refinery’s nameplate capacity. Notable features of this maintenance round included reliance on over 90% domestically manufactured equipment, the utilization of roughly 350,000 person-hours of work, and the coordination of nearly 1,500 personnel across two shifts.

Focus on Quality and Safety

The major overhaul began on October 27 and was completed within a tightly scheduled 18-day window—a significant reduction from the 23-day periods of previous years, achieved through precise planning and round-the-clock efforts. The work involved a complete overhaul of the refinery’s southern distillation complex. The primary objectives extended beyond addressing routine failures to focus on improving product quality, enhancing process performance, increasing safety, and reducing operational risks in these strategic units. All equipment and components were thoroughly inspected, cleaned, tested, and repaired or replaced as needed. This ensures the refinery’s facilities may operate at maximum capacity for at least the next four years without major issues.

The critical role of the distillation units in determining crude oil refining capacity made strict schedule adherence essential. Mohammad Ali Hashemi, director of maintenance at the Tehran refinery, emphasized this, stating, “The distillation units are directly tied to processing capacity, and every hour of delay in restarting creates a chain reaction in the supply of products. Therefore, meeting both the timeline and quality requirements are absolute obligations.”

Despite the high volume of compressed activities, technical procedures were not neglected. “All required standards for the overhaul were implemented without any leniency,” Hashemi affirmed. He also highlighted the economic importance: “Each barrel of crude oil processed in these units generates about one dollar in direct profit. With a capacity of 126,000 b/d, this unit alone creates over $126,000 in value daily. Therefore, maintaining its readiness and stability is directly tied to national interests.”

To manage the workload, many tasks were planned to proceed in parallel during both day and night shifts. This approach ensured that unit shutdowns did not exceed the predetermined limit while maintaining production capacity in other sections of the refinery.

Planning Structure

Executing this volume of work within 18 days required meticulous planning and a clear division of tasks. Initial estimates indicated that completing all operations would require approximately 350,000 person-hours. Accordingly, more than 200 operational work orders were defined across mechanics, process, piping, technical inspection, electrical systems, and instrumentation to prevent overlap and save time.

Mohammad Qorban Feizabadi, head of maintenance planning, explained, “The major overhaul of the southern distillation plant is conducted every four years. If not performed on schedule, safety and corrosion risks increase, and long-term maintenance costs rise. In this cycle, with the timeframe limited to 18 days, many activities were carried out in parallel around the clock to deliver the units back to operations according to plan.”

At the peak of operations, nearly 1,500 personnel, including both permanent staff and contractors, were involved across two shifts. Coordination among maintenance,

operations, HSE, commercial, engineering, and security departments was decisive in managing this volume of activity.

Domestic Capabilities

A key achievement of this overhaul was the significant reduction in dependence on foreign equipment and parts. Over 90% of the required consuming items and components supplied by domestic manufacturers. Only in a few limited cases, such as specialized plating or specific casting operations, were external workshops utilized.

“A significant portion of the Tehran refinery’s original equipment was supplied by American and European companies,” Feizabadi noted. “But today, the repair, renovation, and commissioning of most of this equipment are carried out domestically by Iranian engineers. The overhaul demonstrated that the supply and maintenance cycle can, to a great extent, be managed within the country.”

The refinery’s central yard served as the primary facility for in-house repairs, handling the overhaul of heat exchangers, the fabrication and restoration of metal components, the preparation of rotating equipment, and a significant portion of piping operations. Many items previously purchased from abroad were manufactured or refurbished internally using existing drawings and technical documentation, showcasing the project’s deep reliance on domestic capabilities.

Intensive Maintenance

The scope of mechanical repairs covered heat exchangers, pumps, piping systems, and furnaces. According to Reza Zarei, head of the mechanical maintenance section, this made the period “one of the most intensive mechanical overhaul cycles in recent years.”

He outlined the work: “In this overhaul, 79 heat exchangers were opened and inspected, with several completely retuned. Extensive metalwork and welding were carried out on piping in units with higher corrosion levels. On some main lines, decrepit pipes were fully replaced to reduce the risk of leaks and unplanned shutdowns.”

Beyond heat exchangers and piping, the operation included repairing and refurbishing furnaces and related equipment. This involved rebuilding sections of refractory brickwork and correcting deficiencies in combustion and heat-transfer systems. These measures, combined with repairs to pumps, compressors, and other rotating equipment, will contribute to improved operational stability for the next four years.

“In this cycle, approximately 30% to 40% of the mechanical equipment was refurbished or modified. Completing this volume of work within a limited timeframe, relying primarily on domestic resources, was only possible due to our technical personnel’s expertise and the capabilities of the central workshop,” Zarei said.

Recording 40,000 Thickness Gauge Points

This year’s overhaul featured a new approach to monitoring and technical inspection. Digital-scanning equipment, imaging systems, and modern monitoring tools were used to assess pipelines, heat exchangers, tanks, and rotary equipment, increasing accuracy and reducing time.

Abdolvahab Daliri, head of  the technical inspection, reported, “Before and during the overhaul, all operational equipment—including furnaces, piping, exchangers, tanks, and air coolers—underwent thickness measurement and technical testing. In total, around 40,000 thickness gauge points were recorded and compared with data from the past five decades to identify areas with reduced thickness, which were then reported to maintenance for corrective action.”

A notable achievement was the restoration of a tank-inspection thickness gauge robot, which had been out of service for years. Domestic specialists refurbished the robot, and it was fully reactivated in November.

“Using the thickness-measurement robot reduced the inspection time for a large storage tank from about one month to less than two days. This digital method also significantly reduces the possibility of human error. Currently, the Tehran refinery is the only one in the country employing this level of robotic technology for tank inspection,” he stated.

Following mechanical and process work, all equipment underwent non-destructive tests (PT - liquid penetrant, MT - magnetic particle, and RT - radiography). These standard methods detect defects without causing damage. Only after final approval from the Technical Inspection Division, permission was granted for startup and reintegration of the units.

Environmental and Safety Commitments

Adherence to safety and environmental requirements was a key priority. Refinery managers confirmed the entire operation was completed without any injury-related incidents—a key performance indicator in the refining industry for major maintenance.

HSE teams were present at all critical stages, providing necessary safety training before each shift. Safety supervisors identified and corrected unsafe behaviors, and all wastewater from equipment cleaning was controlled through the refinery’s treatment units.

On the environmental front, alongside the distillation complex overhaul, equipment in the sulfur recovery unit was also refurbished and revamped. This improves sulfur-recovery capacity and enhances the control of sulfur-containing gas emissions, which is expected to reduce pollution from this unit in the upcoming operational period.

From a production standpoint, measures like refurbishing heat exchangers, modifying the piping system, repairing furnaces, and improving the desalting unit’s performance will reduce efficiency losses caused by aging equipment. Initial assessments indicate that after restarting, the production capacity of key products such as gasoline, diesel, and jet fuel has slightly increased, with product quality stabilized within the standards set by the National Iranian Oil Refining and Distribution Company (NIORDC).

Conclusion

The successful November overhaul of the southern distillation complex at the Tehran Refinery was more than a routine maintenance program; it was a successful example of integrated project management and the effective use of domestic capabilities. The return of these critical units to operation within an 18-day window, coupled with enhanced equipment reliability, extensive inspection testing, and the revival of dormant technologies, lays a solid foundation for safe and stable production in the coming years. This experience has strengthened the Tehran Refinery’s position as a leading unit in the refining industry, and provides a model for optimizing maintenance in future cycles.

World Bracing for Energy Transition

Ehsan Jenabi

Senior Energy Analyst

The world is on the outset of a major energy transition, which is no longer just an environmental necessity, but has become a key issue in national security, economy, technology, and diplomacy."

This is the central theme of the World Energy Statistical Review 2025, which has been recently published; presenting a clear and precise picture of the world’s challenging energy state.

The World Energy Statistical Review, published by the “Energy Institute”, is one of the most authoritative analytical resources for the world energy market. In its seventy-fourth year, the report provides a precise and comprehensive analysis of the state of the oil, gas, coal, renewable, nuclear, and key/rare mineral markets in 2024.

According to the report, which shows global trends, despite the rapid growth of renewables, fossil fuels still play a major role in energy production. Currently, in a few regions in the world the production of key metals and minerals is severely pursued.

However, the main challenge is that decarbonization is not progressing at a desirable speed. Climate pressures, the emergence of storage technologies, the growth of the hydrogen market, and competition for accessing strategic mineral resources all attest to the fact that countries around the world must view their energy policies with a more precise, engineering-oriented, and forward-looking approach.

The primary goal of the present review is shedding some more light on the latest developments in this regard.

According to experts, this era could be a unique opportunity for oil and gas –rich countries, particularly Iran.

Holding vast oil and natural gas resources, enjoying an exceptional geopolitical position and high potential for renewable energy development, Iran may play a role not only in the regional energy market but also in the global path towards clean energy technologies, mitigating GHG emissions and decarbonization.

However, realizing this vision requires deep structural reforms, innovation in engineering infrastructure, improved productivity, investment attraction, and most importantly, creating synergy between universities, industry, and policymakers.

Undoubtedly, the future of energy in Iran and the world highly depends on the bold and scientific decisions made today.

Countries that can move more quickly towards low-carbon and sustainable models will not only be safe from climate harms but will also gain a superior economic and technological position in the 21st century. Although this path is difficult and requires determination, it will be the key to redefine countries’ roles in the global energy system and materialization of sustainable development.

Total Energy and Carbon Status

In 2024, global primary energy consumption reached approximately 592 Exajoules (EJ). Although renewable energy has seen remarkable growth, about 80% of this energy is still supplied by fossil fuels.

This indicates the global economy’s high dependence on oil, gas, and to some extent on coal. Global CO2 emissions emanated from energy consumption reached around 35 billion tonnes, and considered a new record.

Increasing environmental challenges, the necessity of transitioning to clean energy, geopolitical developments, and technological advancements in the energy storage have all made the world’s energy situation more complex.

While emphasizing the role of energy in the national security, economic development, and social welfare of countries, the present report reviews the future trends and opportunities for various countries using a scientific and engineering approach.

Global Oil Production

In 2024, global oil production reached about 101 mb/d, roughly equivalent to the production levels of pre-COVID-19 pandemic. The United States remained the largest oil producer with output of around 13.3 mb/d. Saudi Arabia and Russia produced approximately 10 and 9 mb/d, respectively.

There is consensus that this increase in global production is due to the growing demand in land and air transportation, as well as high demand in the petrochemical sector.

Global Oil Consumption

Global oil consumption reached about 102 mb/d in 2024. The largest oil consumers were China, India, the United States, and the European Union.

In Asia, the main driver of increased oil consumption was growth in land and air transport and high demand in the petrochemical sector. Meanwhile, Southeast Asian countries and India remained major oil importers due to their rapid economic growth.

The average price of Brent in 2024 was around $81 per barrel. Prices fluctuated due to geopolitical crises, supply disruptions, and the OPEC+ decisions.

Reduced investment in oil field exploration and development projects, limited spare production capacity of some producers, and the necessity of sticking to the environmental issues all exerted upward pressure on prices.

Global Oil Trade

Global oil trade was affected by sanctions and the Russian mainly exported oil China and India. Although Russian oil is exported based on the price cap, it is a desirable situation for the above-mentioned countries to take benefit from the existing situation, and keep producing goods at rather low prices, which is a good advantage for the economy of China and India.   

Iran’s oil exports to China also increased, although fewer official statistics were published on these exports. Southeast Asian countries and India remained the largest oil importers, while Europe, seeking to reduce its dependence on Russia, increased oil purchases from Africa, the Middle East, and America.

Natural Gas and Coal

Natural gas, as a cleaner energy source compared to oil and coal, in 2024continued to have a major share in the global energy supply. However, natural gas was also affected by price fluctuations, limited supply, and geopolitical challenges.

The United States and Qatar remained the world’s largest natural gas producers. Due to the rising energy consumption in Asia and Europe and efforts made aimed at reducing dependence on fossil fuels, demand for Liquefied Natural Gas (LNG) increased in the above-mentioned regions.

Coal

Despite environmental challenges and global efforts to reduce its use, coal remained one of the main sources of power generation in many developing countries, as they use advanced technologies in their coal-fired power plants. China and India, as the largest consumers of coal, continued to use this fuel to generate their required power.

Nevertheless, efforts are being made by the global community to transition to cleaner energy sources in these countries.

Renewable Energy

In 2024, renewable energy became one of the most important energy sources in many countries. Despite significant growth in this sector, challenges remain in the energy storage and securing sustainable resources for renewable energy production.

In 2024, solar and wind energy saw the highest growth, and many developed countries, especially in Europe and North America, continued to invest in this area. It is noteworthy that there is a global will to foster renewables, and of course diversify energy resources.

Solar and wind energy are growing rapidly. In 2024, the installation of new solar and wind capacity set new records in many advanced countries, particularly China, the United States, and European countries.

However, energy storage capacity and the infrastructure needed to transmit renewable energy still require special attention.

Challenges and Opportunities

Despite the growth of renewable energy, challenges such as the storage and reliability of renewables persist. This is particularly more noticeable in developing countries that need stronger infrastructures.

Nonetheless, new technologies in energy storage and consumption optimization provide an opportunity to address these challenges.

Outlook and Proposed Solutions

Based on the analyses in this report, geopolitical changes, economic crises, and technological developments will significantly affect energy markets in the future. One of the most important future challenges is climate change and the pressure to reduce GHG emissions.

To address these challenges, different countries should move towards developing cleaner and more sustainable energy sources.

Proposed solutions for the future include developing new technologies in renewable energy, improving storage capacity, and strengthening international cooperation in energy. Creating supportive policies for energy infrastructure development in developing countries may help facilitate the transition to clean energy.

The report shows that despite major advances in renewable energy, the global energy market remains heavily dependent on fossil fuels. This dependence, coupled with environmental and geopolitical challenges, requires urgent and intelligent action by policymakers, engineers, and energy industries.

To address the challenges ahead, conducting R&D studies on clean energy and energy consumption optimization is essential to materialize the goals in mind.

IEA: Global Oil Demand to Peak by 2029

The International Energy Agency (IEA) has updated its outlook, stating global oil demand projected to peak by 2029 at roughly 105.6 mb/d, before entering a long-term decline by 2030 as transport electrification and energy efficiency accelerate. The agency warned that supply capacity could reach nearly 114 million bpd by 2030, implying a potential structural surplus if new demand fails to materialize. That gap is expected to be driven largely by rapid output growth outside OPEC+ — notably from U.S. shale and other non-OPEC producers — which the IEA says could supply roughly three-quarters of the additional capacity the market might need.

Market implications are immediate. Traders and producers are recalibrating, with oil prices already reflecting the risk of weaker demand. OPEC and OPEC+ members have pushed back against the IEA’s more bearish trajectory, arguing that slower adoption curves for EVs and continued industrial demand in parts of Asia keep long-run oil needs higher. The divergence between the IEA and OPEC forecasts has widened the range of risk for producers and investors: if the IEA scenario is correct, governments heavily dependent on oil revenues could face sharper budgetary pressure and investor sentiment could turn volatile.

Producers face strategic choices. Some oil majors have accelerated investments in lower-carbon fuels and energy transition assets; others continue to prioritize near-term output. For oil service companies and shale operators, the prospect of a 2029 demand peak implies pressure to improve capital efficiency and reduce break-even costs to remain competitive in a potentially oversupplied market.

The IEA’s outlook also strengthens the case for policy-makers seeking to accelerate energy transition policies — the report notes that stronger policy action could both lower demand earlier and reduce volatility. Energy companies will be watching forthcoming monthly IEA updates and OPEC+ communications closely; even small changes in guidance or quotas can move markets while investors attempt to price in a likely surplus scenario.

US Hits Record Monthly LNG Exports

The United States became the first country to export over 10 million tonnes of liquefied natural gas (LNG) in a single month — October 2025, according to LSEG data — underlining how U.S. liquefaction projects and new capacity have reshaped global gas flows ahead of the northern hemisphere winter. The 10.1 mmt total marked a sharp jump from September and was led by Venture Global’s Plaquemines and Cheniere’s Corpus Christi and Sabine Pass facilities, which together accounted for the majority of flows. Europe remained the dominant destination, absorbing roughly 69% of U.S. LNG volumes as storage top-ups and winter demand surged.

The record underscores two structural trends: (1) rapidly rising U.S. feed-gas deliveries to export plants and (2) Europe’s dependence on flexible LNG supplies to supplement pipeline shortfalls and storage needs. U.S. feed-gas deliveries to major export plants have been running at record levels in November, supporting higher monthly output and sustained tanker cargo activity. Market participants noted the consequence of abundant U.S. supply: price spreads between Europe and Asia narrowed, making cargo diversion less profitable and helping stabilize European gas prices even as winter demand increased.

For sellers and traders, the record month improves commercial confidence in U.S. gas infrastructure utilization but also raises questions about shipping capacity and seasonal storage logistics. For policy-makers, the trend highlights how U.S. export capacity now acts as a global swing supplier; geopolitical shifts or export curbs could therefore have outsized market effects. Investors will be watching near-term vessel availability, additional liquefaction start-ups, and offtake contracts that will determine whether monthly records are a new norm or a seasonal spike.

OPEC+ Production Moves and Price Stability

OPEC+’s recent behavior continues to be central to price dynamics: after earlier production increases, some members signaled a pause on further output steps in early 2026 — a move intended to stabilize prices even as global supply expands. Markets parsed the message as balancing a near-term production rise with a pledge to avoid runaway output increases, an approach that has helped keep Brent and WTI trading in a relatively narrow range amid concerns about a forthcoming supply surplus.

Traders say the OPEC+ playbook is increasingly nuanced. On one hand, production hikes from key members and stronger U.S. shale production are adding supply; on the other, OPEC+’s willingness to coordinate—either by pausing planned increases or through targeted cuts—has diminishing but still meaningful power to tighten markets. The net result over recent weeks has been "steady" oil prices that oscillate on data cues — inventories, economic indicators in Asia, and geopolitical flashpoints — rather than violent trend moves.

Economists caution that if the IEA’s forecast of a demand peak materializes around 2029, OPEC members face an enhanced urgency to manage fiscal buffers and diversify revenue sources. For oil consumers and refiners, the current stability helps with procurement planning, but the risk of sudden policy shifts (either within OPEC+ or from consuming nations) keeps hedging strategies active. Short-term signals to watch: compliance reports from OPEC, U.S. rig counts, and monthly inventory data — all of which can amplify price moves in a market already sensitive to the demand/supply narrative.

Operations Start at Indonesia Petchem Plant

Lotte Chemical said it has launched operations at its 5.7 trillion won ($3.9 billion) petrochemical plant in Indonesia, aiming to expand its footprint in the nation’s chemical feedstock-dependent market.

The company held a completion ceremony for the Lotte Chemical Indonesia New Ethylene (LINE) project in Cilegon, Banten province, Indonesia, attended by 300 key figures, including Lotte Group Chairman Shin Dong-bin, Lotte Chemical CEO Lee Young-jun and Indonesian President Prabowo Subianto.

Lotte Chemical’s LINE Project — run by its local unit, Lotte Chemical Indonesia, established in 2016 — completed the production line setup in May and began full commercial production in October. The plant is capable of producing 1 million metric tons of ethylene, 520,000 tons of propylene, 350,000 tons of polypropylene, 140,000 tons of butadiene and 400,000 tons of benzene, toluene and xylene. These chemicals are essential raw materials for a wide range of industries such as plastics, synthetic rubber, solvents and polyester fibers.

Once the company starts supplying 1 million tons of ethylene annually, Indonesia’s ethylene self-sufficiency rate is expected to reach 90 percent, up from the current 44 percent.

With the launch of the LINE Project, Lotte Chemical has established a vertically integrated production system in Indonesia, maximizing efficiency across its petrochemical operations. Adjacent to the plant is Lotte Chemical Titan Nusantara, which has an annual polyethylene production capacity of 450,000 tons and had previously depended on imported ethylene as a feedstock. Now, with ethylene supplied directly through pipelines within the complex rather than by sea, the company can significantly reduce transportation costs and streamline production.

Moving forward, the company plans to leverage Indonesia as a strategic base to accelerate its expansion into the fast-growing Southeast Asian market. With its significant domestic demand and proximity to neighboring countries such as Malaysia, Vietnam and Thailand, Indonesia is considered an ideal regional hub for petrochemical supply.

“Marking one of the largest investments made by a Korean company, (Lotte Chemical Indonesia) symbolizes the strong partnership between the two nations and a crucial foundation for enhancing Indonesia’s petrochemical sector and competitiveness,” stated Shin. “(The project) is expected to generate approximately $2 billion in economic value and contribute to Indonesia’s sustainable growth.”

Coremas Solar Park Sold

European Energy and Impact Fund Denmark have completed the sale of the Coremas solar park in the state of Paraíba, Brazil, to China Energy Overseas Investment Division in Brazil, known as CEEC Brazil – an Energy China company. The solar park comprises three entities — Coremas I, II and III — which together have a total capacity of 93.41 MW and operate under a power purchase agreement with Brazil’s Reserve Energy Auctions.

Coremas I, II and III were partially completed in 2018, with the entire solar park complex becoming operational in 2021. Impact Fund Denmark financed the projects through the Danish Climate Investment Fund, established in 2014 in cooperation with Danish pension funds and private investors.

The Coremas complex produces 172.35 GWh annually, equivalent to the electricity consumption of more than 70,000 Brazilian households. Throughout the project, European Energy and Impact Fund Denmark created local jobs and initiated several social programs, including the distribution of COVID-19 relief packages in the local area.

The investment reflects European Energy’s strategy of developing renewable energy assets that attract long-term investors committed to advancing the global energy transition.

European Energy continues to view Brazil as a key market for renewable energy development, with a pipeline of more than 600 MW in the country, encompassing both wind and solar projects. The company is also advancing opportunities in green fuels, having entered into a Heads of Agreement with Petrobras to jointly develop a commercial-scale e-methanol production facility in Suape, Pernambuco.

Global Renewable Electricity Generation Overtakes Coal

In the first half of 2025, renewable energy sources—primarily wind and solar—generated more electricity globally than coal-fired generation, marking what analysts describe as a “turning point” in the energy transition. A report by the think-tank Ember shows that renewables supplied about 5,072 terawatt-hours (TWh) versus coal’s ~4,896 TWh in the same period.

Solar output rose ~31 % year-on-year, while wind rose ~7.7 %. Renewables’ share of global electricity increased to ~34.3 %, while coal’s share dropped to ~33.1 %. What is particularly notable is that electricity demand itself grew by ~2.6% in the period. Renewables met this entire demand growth (solar + wind added ~403 TWh) and thereby enabled coal output to decline.

China and India were major drivers. China’s solar generation grew ~43% and wind ~16%, allowing it to reduce fossil fuel generation by ~2%. India’s wind rose ~29% and solar ~31%, helping it cut coal and gas use by ~3.1%.

However, the transition is uneven. The United States and the European Union both saw fossil-fuel generation rise in H1 2025. In the U.S., coal output jumped ~17% as renewable growth didn’t fully keep pace with demand. For the EU, gas and coal generation increased because of weak wind and hydro output.

Analysts say this milestone doesn’t mean fossil fuels are disappearing—but it does signal that clean power is now large enough to compete with fossil generation on a global scale. The International Energy Agency (IEA) now estimates renewables may more than double by the end of the decade.

Lukoil Halts Iraqi Operations after Sanctions

Lukoil has declared force majeure at a major oilfield in southern Iraq after Western sanctions disrupted its operations, Reuters reported, citing people familiar with the matter.

West Qurna-2, one of the world’s largest oilfields and Lukoil’s most valuable foreign asset, is located 65 kilometers (40 miles) northwest of the port of Basra and produces around 480,000 barrels per day, accounting for about 9% of Iraq’s total oil output.

According to Reuters, Iraq’s state oil authorities have frozen all cash and crude payments to Lukoil in compliance with U.S. and British sanctions imposed last month. One Iraqi official told the news agency that payments owed to Lukoil will remain frozen until Baghdad can find a way to proceed through non-sanctioned intermediaries.

Lukoil was said to have informed Iraq’s oil ministry that “force majeure conditions” prevented it from continuing normal operations at the West Qurna-2 oilfield. An Iraqi official said the contract allows such a declaration, effectively giving the company legal protection from penalties.

A senior Iraqi industry official said Lukoil could shut down production entirely and exit the project if the issue is not resolved within six months, according to Reuters. The news agency did not specify which options were available to resolve the causes of the force majeure.

In addition, it said the sanctions forced Iraq’s national oil company SOMO to cancel three crude shipments from Lukoil’s share of production recently. Around 4 million barrels of crude previously allocated to Lukoil as in-kind payment for November have been reportedly canceled.

Separately, Lukoil was said to have terminated all contracts with foreign staff at the field, leaving only Russian and Iraqi employees on site.

Lukoil first began production at West Qurna-2 in 2014, with a 75% stake in the project and one-time plans to invest more than $30 billion. 

Lukoil, Russia’s largest private oil company, has not publicly commented on the force majeure declaration in Iraq.

Exxon CEO Expects Oil and Gas Role

Oil and gas will play a critical role for a long time to come, Exxon Mobil CEO Darren Woods said, adding that the question was whether they will continue to be used as fuel.

While future technological breakthroughs might see a change in the burning of hydrocarbons, they will continue to be used for other purposes, such as in the medical sector, Woods said.

"Crude oil and hydrocarbons are going to play a critical role in everybody's life for a long time to come," said Woods.

Carbon emissions from fossil fuels such as oil and gas, but also coal, are a major contributor to climate change.

"The question is, do you continue to combust them? And that, I think, will change with time, depending on how technology develops," Woods told Reuters on the sidelines of the Sustainable Innovation Forum in Sao Paulo.

Brazil is hosting the United Nations COP30 climate conference in the city of Belem.

The UN said the world would overshoot its goal of keeping global warming below the 1.5 degrees Celsius target set at the Paris climate conference in 2015.

Woods said policymakers are making decisions without the full picture, adding that effective carbon accounting was needed to properly track emissions.

"Without a mechanism to accurately account for the carbon that's being emitted across economies, net zero is just a slogan," Woods said.

"You have to actually understand where the emissions are coming from and have a ledger-based system that gives credibility to those emissions as they occur along a value chain," he added.

Woods also said he feels good about the potential involved in the company’s return to Iraq. The company signed a preliminary agreement with the country to manage, develop, and operate the Majnoon oil field in southern Iraq.

Exxon needs to ensure the investment is favorable and negotiate with Iraq's government to make sure it's a win-win proposition, Woods said, adding that the process was in early stages.

India Russian Oil Imports Rise

India's crude oil imports from Russia are expected to have risen slightly in October from a month earlier, according to preliminary ship-tracking data from Kpler and OilX, in spite of pressure from Washington to cut purchases.

India's Russian oil imports rose to about 1.48 mb/d (bpd) in October from 1.44 million bpd in September, Kpler data showed. OilX pegged October imports at the same level and said September imports were 1.43 million bpd. The data excluded oil from Kazakhstan that was exported from Russia.

But India's Russian oil shipments are expected to slow starting in November after the U.S. sanctioned two major suppliers last month in an effort to end Moscow's war in Ukraine. This prompted Indian refiners to pause new orders and look for alternatives in spot markets.

India's Reliance Industries Mangalore Refineries and Petrochemicals and HPCL-Mittal Energy have stopped purchases of Russian oil, while other refiners are considering buying oil produced by non-sanctioned Russian producers.

"Russian oil imports will not fall until November 21, but definitely after that," Kpler analyst Sumit Ritolia said.

Fresh U.S. sanctions targeted Russia's two top oil producers, Lukoil and Rosneft. The U.S. has given companies until November 21 to stop their transactions with these Russian oil producers.

"We see higher imports in the first three weeks (of November)," Ritolia said.

Reliance has bought millions of barrels from the spot markets since the U.S. sanctions were introduced.

Mangalore Refineries and Petrochemicals bought 2 million barrels of Abu Dhabi Murban crude from Glencore via a tender to replace Russian supply in December, sources said.

Indian Oil has invited initial bids for 24 million barrels of oil from the Americas for the first quarter of 2026, according to a document reviewed by Reuters.

India emerged as the largest buyer of seaborne Russian crude after Moscow's invasion of Ukraine in 2022, importing 1.9 million bpd in the first nine months of 2025, or around 40% of Russia’s total exports, according to the International Energy Agency.

US Grants Hungary Waiver on Russia Sanctions

The United States has granted Hungary a one-year exemption from U.S. sanctions for using Russian oil and gas, a White House official said, after Hungarian Prime Minister Viktor Orban pressed his case for a reprieve during a friendly meeting with President Donald Trump in Washington.

Last month, Trump imposed Ukraine-related sanctions on Russian oil companies Lukoil and Rosneft that carried the threat of further sanctions on entities in countries that buy oil from those firms.

Orban, a long-time Trump ally, met with Trump at the White House for their first bilateral meeting since the Republican returned to power and explained why his country needed to use Russian oil at a time when Trump has been pressing Europe to stop doing so.

Orban said the issue was vital for Hungary, which is a European country, and pledged to lay out "the consequences for the Hungarian people, and for the Hungarian economy, not to get oil and gas from Russia."

Trump, aiming to put pressure on Moscow to end its war with Ukraine, appeared sympathetic to Orban's position.

"We're looking at it, because it's very different for him to get the oil and gas from other areas," Trump said. "As you know, they don't have ... the advantage of having sea. It's a great country, it's a big country, but they don't have sea. They don't have the ports."

"But many European countries are buying oil and gas from Russia, and they have been for years," Trump added. "And I said, 'What's that all about?'"

The White House official noted that, in addition to the sanctions exemption, Hungary had committed to buying U.S. liquefied natural gas with contracts valued at some $600 million.

Hungary has maintained its reliance on Russian energy since the start of the 2022 conflict in Ukraine, prompting criticism from several European Union and NATO allies.

International Monetary Fund figures show Hungary relied on Russia for 74% of its gas and 86% of its oil in 2024, warning that an EU-wide cutoff of Russian natural gas alone could force output losses in Hungary exceeding 4% of GDP.

The two men also discussed Russia's war with Ukraine.

The Fundamental Theory: Principles Driving the Transition

Three interrelated theories explain the logic behind the EU’s evolving energy model:

Theory 1: The Flexibility Advantage of LNG vs. Pipelines

Principle:

Fixed pipeline systems create vulnerability; LNG enables diversification and redirection.

Explanation:

Unlike rigid pipelines, LNG fleets can be rerouted based on price signals and supply needs, allowing Europe to source gas from the Americas, Middle East, Africa, and beyond.

Example:

The 48 bcm influx of U.S. LNG in 1H25 exemplifies how maritime flexibility prevented a deeper energy crisis.

Theory 2: Gas as a Balancing Mechanism for Variable Renewable Energy (VRE)

Principle:

As Variable Renewable Energy (wind and solar) expands, dispatchable generation becomes essential for grid stability.

Explanation:

Intermittency ("Dunkelflaute"[1]) necessitates backup power. Flexible gas-fired plants provide rapid ramp-up capability when renewables underperform.

Example:

California, a leader in VRE [2] integration, relies heavily on natural gas for balancing, mirroring Europe’s strategic use of LNG to support renewable expansion.

Theory 3: Regulatory Shaping of Future Markets

Principle:

Environmental standards will determine market access and value.

Explanation:

Upcoming EU regulations favour low-carbon gas, creating a "green premium" for compliant suppliers.

Example:

Industry initiatives like the Coalition for LNG Emission Abatement toward Net Zero (CLEAN) reflect growing emphasis on emissions reduction along the LNG value chain.

Iraq Future Role in Oil Market

Shuaib Bahman

Intl. Affairs Analyst

Iraq plans to increase its oil production capacity from around 5.5 mb/d now to 7 mb/d by the end of 2025 in order to meet global demand. To achieve this goal, the country has prioritized developing oil fields, conducting new drilling operations, restoring wells, constructing related facilities, and boosting water injection to maintain reservoir pressure.

In addition, Iraq aims to increase its oil exports and eliminate gas flaring to improve efficiency in the oil and gas industries. That reflects Iraq’s strong commitment to expanding its oil production capacity, particularly in its major oil fields, with support of international companies.

Key Projects

Iraq’s plan to increase oil production is a long-term strategy aimed at consolidating its position as a world oil power. Accordingly, some of the key projects for the development of Iraq’s oil fields are as follows:

1. The development of the Ratawi oil field in Basra Province is underway, aiming to enhance oil production capacity from 20,000 b/d to 100,000 b/d. In this context, plans are also in place to construct an oil refinery with a capacity of 200,000 b/d, along with petrochemical and fertilizer plants. These projects are intended to strengthen economic infrastructure and boost domestic production.
2. Under the Common Seawater Supply Project (CSSP), Iraq plans to treat and transfer 5 mb/d of seawater to the southern oil fields. This initiative aims to reduce the use of freshwater resources and help maintain reservoir pressure.
3. The development of four major oil fields in Kirkuk Province, for which contracts with BP have finalized, and are in the process of being signed. The implementation of these projects is crucial for enhancing oil production capacity in northern Iraq.
4. The signing of a development contract for the Majnoon oil field with the US company ExxonMobil.

In addition, the development of the massive West Qurna 1 oil field is underway with the participation of Chinese companies. This project includes the construction of essential infrastructure such as an airport and connecting roads. Moreover, refinery projects in Karbala, Maysan, and Al-Faw aim to enhance Iraq’s refining capacity and the production of petroleum by-products, thereby reducing dependence on imports. Furthermore, new licenses have been issued for 29 oil and gas exploration and development projects across 12 Iraqi provinces, reflecting the country’s broad and ambitious plan to expand its energy sector.

All these projects are being implemented with the aim of enhancing Iraq’s oil production capacity, developing its economic infrastructure, maintaining reservoir pressure, and reducing dependence on foreign resources.

They are instrumental in shaping Iraq’s oil and gas development outlook. Each of these projects specifically focuses on key oil fields and vital segments of production and refining, contributing to Iraq’s overarching goal of raising its oil production capacity to around 7 mb/d.

On the other hand, Iraq is actively developing and fully utilizing its gas fields, with the goal of achieving self-sufficiency in gas production. By 2030, Iraq’s natural gas output is expected to rise from 13 bcm in 2021 to over 44 bcm per year.

Obstacles Ahead

According to the current plans, Iraq is expected to invest around $500 billion in the energy sector and related industries by 2030. This investment will encompass the development of oil and gas fields, infrastructure, and refineries. However, the implementation of these large-scale projects faces numerous challenges and obstacles. For example, a shortage of financial and human resources has weakened Iraq’s oil industry. Overcoming this issue requires close cooperation between Iraq National Oil Company and international firms, an approach that, while necessary, could to some extent compromise Iraq’s energy independence.

In addition, the lack of essential infrastructure—such as oil pipelines, storage facilities, and adequate electricity supply in some fields—has hindered the increase in oil production. Security issues and regional instability across West Asia, particularly in northern Iraq, could also threaten the safety of the country’s oil exports.

Meanwhile, the natural decline in oil well productivity in some certain fields, including those in the Kurdistan Region and southern Iraq, calls for renewed investment and advanced technology to restore output levels. At the same time, security concerns and political–legal instability, especially regarding oil and gas legislation and the status of the Kurdistan Region, may delay foreign investment and slow down the overall progress of Iraq’s energy sector.

The International Energy Agency (IEA) expects that by 2030, Iraq will reach an oil production level of around 7 mb/d, making it the world’s third-largest oil producer, after the United States and Saudi Arabia. This increase in production capacity will position Iraq as one of the main suppliers of oil to the global market and strengthen its standing within the Organization of the Petroleum Exporting Countries (OPEC).

Saudi Energy Strategy; OPEC Leadership or Hydrogen Market?

Shuaib Bahman

Intl. Affairs Analyst

Saudi Arabia, with 17% of the world’s oil reserves and production of 11.8 mb/d, plays a central role in the global energy market. However, global pressures to mitigate carbon emissions and international commitments such as the Paris Agreement have pushed the country to rethink its energy policies. Vision 2030 and the Saudi Green Initiative (SGI) focus on economic diversification, improving energy efficiency, and developing renewable energy sources such as hydrogen. Accordingly, Saudi Arabia — as the world’s largest oil exporter and a key OPEC member — is undergoing a transition toward sustainable energy within the framework of Vision 2030. This raises an important question: does Saudi Arabia aim to maintain its leadership within OPEC, or is it seeking to become a global leader in the hydrogen market?

Saudi Arabia and Energy

Oil represents one of the most important sources of revenue for Saudi Arabia. Since the establishment of Aramco in 1938, the Kingdom has become one of the world’s leading oil exporters. In 2024, Aramco recorded revenues of $436.6 billion and a net profit of $106.2 billion, a decline compared to $121.3 billion in 2023. The country has consistently sought to maintain its share of the oil market and boost income from this sector. To that end, along with its non-OPEC allies known as OPEC+, Saudi Arabia agreed to voluntarily cut production starting in 2023 in order to help stabilize global oil markets and preserve its geopolitical influence. (Over recent months, OPEC+ members have been gradually rolling back these voluntary cuts.)

According to the latest OPEC World Oil Outlook 2025, global oil demand is projected to reach 105.1 mb/d in 2025 and around 123 mb/d by 2050. Nevertheless, the global shift toward renewable energy sources continues to accelerate — and Saudi Arabia, too, is moving in line with this global energy transition.

Meanwhile, Saudi Arabia’s Vision 2030, widely regarded as an ambitious national strategy, places strong emphasis on the development of renewable energy, particularly green and blue hydrogen. The NEOM project, with an investment of $8.5 billion, aims to produce 650 tonnes of hydrogen per day by 2025 and 4 million tons annually by 2030. Based on this plan, Saudi Arabia seeks to supply 15% of the global hydrogen market, as part of its Circular Carbon Economy (CCE) strategy. Aramco’s investments—amounting to $900 million by 2025 in early-stage ventures and pilot projects—along with international partnerships with countries such as Germany and Japan, further strengthen this goal.

Double Strategy

For Saudi Arabia, the OPEC leadership means maintaining its influence in the global oil market and ensuring a steady revenue flow for its oil-dependent economy. In 2025, the Kingdom continues to manage oil price fluctuations—such as those caused by declining demand amid the global energy transition—by adjusting production levels and cooperating with OPEC+. This strategy helps ensure short-term market stability, yet it faces growing challenges, including declining global demand and increasing pressure for decarbonization.

In this context, hydrogen serves as a “bridge” between fossil fuels and renewable energy, forming the core of Saudi Arabia’s diversification strategy. The global hydrogen market is projected to reach $700 billion by 2050, and Saudi Arabia holds a unique advantage thanks to its high solar potential (2,200 kWh/m²) and abundant natural gas resources. Key projects such as NEOM and Dumat Al-Jandal, combined with carbon capture and storage (CCS) technologies, are making blue hydrogen production increasingly cost-effective and reinforcing Saudi Arabia’s emerging role in the future hydrogen economy.

Opportunities and Challenges

Saudi Arabia’s dual strategy—balancing the preservation of oil revenues with investments in hydrogen—could enable the Kingdom to maintain its position as one of the world’s leading energy exporters in the future. The opportunities ahead in transitioning from fossil fuels to renewable energy sources such as green hydrogen; span the economic, environmental, social, and geopolitical spheres, offering significant potential to strengthen the country’s role in the global economy. Firstly, investing in hydrogen and renewables reduces dependence on oil. According to analyses, the hydrogen sector could create around 100,000 new jobs and contribute $50 billion to the GDP by 2030. In later stages, international partnerships—such as the agreement with Germany for hydrogen exports—and foreign investment inflows will open new financial opportunities. Given the expected surge in hydrogen demand by 2050, this market presents substantial profitability potential for Saudi Arabia’s long-term economic transformation.

However, Saudi Arabia’s efforts to implement its dual strategy—maintaining the OPEC leadership while pioneering in hydrogen—face multiple challenges. The development of hydrogen infrastructure, especially green hydrogen, requires massive capital investment. For example, the NEOM project, costing $8.4 billion, illustrate the scale of these high-cost undertakings. In addition, the CCS technologies used for blue hydrogen production remain expensive. These investments are being made while oil revenues continue to form the backbone of Saudi Arabia’s economy, and hydrogen projects have yet to reach full profitability. This financial gap increases pressure on the Public Investment Fund (PIF), which must allocate around $270 billion by 2030 to support low-carbon projects under Vision 2030.

On the other hand, extensive fuel subsidies in Saudi Arabia — amounting to $253 billion in 2022, according to IMF data — keep domestic oil demand high and reduce incentives for investment in renewables. Reforming these subsidies faces social resistance, which could slow down the energy transition. Moreover, the development of hydrogen and renewable energy sectors requires a highly skilled workforce proficient in advanced technologies. At present, Saudi Arabia remains dependent on foreign expertise, while domestic educational programs—such as those at King Fahd University of Petroleum and Minerals—have not yet reached full capacity, producing only about 303 graduates per year per university in the relevant fields. This skills gap presents an additional barrier to achieving the Kingdom’s long-term sustainability and diversification goals.

Future Vision

As the world’s largest oil exporter and a key member of the OPEC, Saudi Arabia is undergoing a transition toward low-carbon energy. Centered around Vision 2030 and major hydrogen initiatives such as NEOM, this transition seeks to balance maintaining influence in the oil market with leading in the emerging hydrogen economy. Accordingly, Saudi Arabia is pursuing a dual strategy: preserving the OPEC leadership to ensure short-term economic stability, while advancing in the hydrogen market to secure long-term leadership in a low-carbon economy. Supported by Vision 2030, this approach leverages the country’s existing oil and gas resources for blue hydrogen production, while investments in green hydrogen and renewable energy aim to strengthen Saudi Arabia’s position in the future global energy landscape.

However, the success of this dual strategy depends on overcoming financial, technical, and competitive challenges. The decline in oil demand driven by the energy transition in Europe and China threatens the OPEC’s influence. At the same time, Saudi Arabia must compete with major producers such as Russia and the United States (through shale production), while lower oil prices—around $60 per barrel in 2025—further reduce profitability. For an economy still highly dependent on oil revenues, this makes the transition to renewables particularly challenging. Therefore, while Saudi Arabia’s dual strategy presents a highly appealing and ambitious vision—one that could make the Kingdom a dual leader in both the OPEC and the global hydrogen market—it also faces significant obstacles that must be addressed to ensure its long-term success.

Iran Offshore Ambitions with Charting Deep Waters
By Reza Abesh Ahmadlou

Materials and Energy Expert

(Part 1)

The global demand for oil remains strong even as many onshore fields mature, pushing producers into ever more challenging environments. Iran, which holds the world’s third-largest proven oil reserves, is turning to its offshore frontiers in the Persian Gulf and the Caspian Sea to sustain and expand output. Deepwater drilling in these waters promises access to vast untapped hydrocarbons but entails unique engineering, economic and political hurdles.

Strategic Importance of Deepwater Deposits

Iran possesses substantial offshore potential that could buffer declines from aging fields. In the Persian Gulf, nearby countries have already tapped immense oil and gas pools; Iran’s own waters lie adjacent to giants like Saudi Arabia’s Safaniya and Qatar’s North Field.

Developing the Persian Gulf deep-water fields (in places exceeding 1,000 m depth) could significantly raise Iran’s recoverable reserves. In the Caspian Sea, Iran has remained surprisingly idle for decades. Only in 2025 did Tehran issue its first Caspian drilling license in nearly 30 years.

State oil officials estimate recoverable oil in one Caspian block could exceed 600 million barrels. To date Iran is the only Caspian littoral state not producing offshore oil or gas, even though Azerbaijan, Russia, Kazakhstan and Turkmenistan together pump over 1mb/d from the sea. Capturing its share of Caspian and Persian Gulf resources is therefore strategic: it would bolster exports and help maintain Iran’s role as a global oil supplier under sanctions and market shifts.

Challenges of Deepwater Drilling

Drilling in ultra-deep water presents formidable obstacles. High-pressure, high-temperature conditions: Subsea reservoirs often sit many kilometers beneath the sea surface. For instance, an ultra-deep Gulf of Mexico well might see formation pressures on the order of 12,000–14,000 psi and bottom-hole temperatures approaching 200 °C. Such extremes require special drilling fluids, strengthened casing materials and well-control systems. Conventional rigs and well designs must be upgraded to handle the enormous hydrostatic and geothermal stresses without failure.

Harsh marine environment:

Persian Gulf and Caspian waters pose severe weather and operational challenges. Strong currents, corrosive saltwater and unpredictable storms threaten equipment. In very deep zones (thousands of meters), rigs rely on dynamic positioning (DP) rather than anchors. For instance, modern DP drilling vessels (DP2+ class) may station-keep automatically in water up to about 3,000 m deep and drill wells down to 30,000 ft. Iran must invest in DP-capable rigs and subsea equipment since mooring chains are impractical at these depths.

Infrastructure and logistics:

Iran currently has limited deepwater infrastructure. Until recently, offshore drilling was largely focused on shallow fields (e.g. the Salman oilfield at about 30 m depth), and logistics for deepwater – such as pipelaying vessels, support ships and subsea tree installations – are underdeveloped.

Indeed, Iran paused most offshore exploration from 2019 to 2024. Only in 2025 did NIOC sign contracts to resume offshore drilling, aiming to field up to 12 rigs in the Persian Gulf. In May 2025 Iran even announced a plan to buy 15 new drilling rigs onshore (for all purposes). Building or contracting the needed floating platforms, FPSOs and subsea systems will demand huge capital and time.

Environmental and regulatory concerns:

Deepwater operations are highly regulated globally due to spill risks. A major accident may have decades of ecological impact – for example, the 2010 Deepwater Horizon blowout in the Gulf of Mexico spilled an estimated 4.9 million barrels of oil over 87 days. Iran’s own regulatory framework reflects this awareness. The Department of Environment requires an Environmental Impact Assessment (EIA) certificate before any drilling program. Operators must submit detailed safety and pollution-control plans and comply with Health, Safety and Environment (HSE) rules. Iran has also ratified international conventions (MARPOL for ship pollution, the OPRC for oil spill preparedness) and participates in the Caspian Environment Program, aligning its standards with global practice. In practice, Iran must ensure stringent spill-prevention measures (following API/ISO standards for blowout preventers and well control) and maintain rapid-response capabilities (spilled-oil booms, capping stacks, etc.) to protect the Persian Gulf’s sensitive coral reefs and fisheries, as well as the Caspian’s unique ecosystem.

Key Technologies for Deepwater Drilling

Iran must adopt cutting-edge systems to meet these challenges.

Dynamic Positioning (DP) Systems:

As noted, deep-water drill ships use DP thrusters and computer controls to hover over a well under rigors of wind and currents. This technology is mature in international fleets and prevents the need for anchors in waters beyond mooring limits.

Subsea Blowout Preventers (BOPs):

These massive hydraulic valves sit on the seabed wellhead and can seal the well in a crisis. Subsea BOP stacks (often multiple redundant units) with real-time monitoring are vital to prevent blowouts. Iran will need to procure or domestically build BOPs and train crews in their complex operation (notably to avoid a repeat of a Deepwater Horizon–type disaster).

Managed Pressure Drilling (MPD):

This technique continuously balances wellbore pressure using adjustable mud flow, gas injection or choke control. MPD allows the drilling team to precisely maintain the narrow pressure margin in deep formations, reducing risks of kicks or losses. Such intelligent drilling – often using automated sensors and control systems – is standard practice in modern deep wells.

Advanced Seismic and Drilling Imaging:

Before drilling, detailed subsurface imaging (3D/4D seismic, including sub-salt and sub-basalt imaging) is essential to map reservoirs and fault zones. Iran must leverage modern seismic surveys and processing (possibly joint ventures with service firms) to reduce exploration risk. As seen in the North Sea, high-end seismic coupled with geomechanical modeling greatly improves drilling success rates in complex geology.

Floating Production, Storage and Offloading (FPSO) Units:

In remote deepwater, pipeline infrastructure may not be immediately available. Iran may follow Brazil’s model by using FPSOs – ships converted into mobile production platforms with processing facilities and oil storage tanks. Petrobras operates FPSOs extracting oil from pre-salt wells at up to 7,000 m depth. Iran will need similar giant FPSOs to handle oil from its ultra-deep wells, including accommodation and all processing equipment on board. These platforms may moor above subsea wells, and offload oil to tankers, enabling production far from shore.

An In-Depth Story of Oil

(Part III: D’Arcy Concession)

Elahe Baqeri Sanjarie

On May 28, 1901, Mozaffar ad-Din Shah signed an agreement at Sahebqaraniyeh Palace in Tehran, granting William Knox D’Arcy the exclusive right to explore and exploit Iran’s oil resources for 60 years — an event that marked the beginning of a new era for the country.

D’Arcy, a British citizen of Jewish-Australian origin, became involved in Iran after Jacques de Morgan, a French archaeologist, discovered traces of oil in the northwest and in several areas of western and southwestern Iran. News of this discovery reached Antoine Kitabchi Khan, an Iranian-Armenian politician and merchant who served as head of the customs office during the reigns of Naser al-Din Shah and Mozaffar ad-Din Shah. Eventually, in 1900, an agreement signed between Kitabchi Khan and William Knox D’Arcy to begin oil exploration in Iran.

Following the signing of the agreement, D’Arcy dispatched two geologists — George Bernard Reynolds (commonly referred to as Berles in Persian sources) and his assistant Dalton — to Iran to conduct research on potential oil resources. After extensive geological surveys, the team submitted a promising report. They identified the regions around Qasr-e Shirin and Shushtar as highly likely to contain oil, while several other areas were also considered encouraging prospects for exploration.

These explorations reviewed by Jacques de Morgan and William Knox D’Arcy. Following the assessments, D’Arcy’s legal representative, someone named Marbot, traveled to Iran, and shortly afterward, D’Arcy himself arrived in the country. Ultimately, after a series of negotiations with Mozaffar ad-Din Shah, the concession for oil exploration, extraction, and export granted to D’Arcy in 1901. However, the process was far from straightforward. The acquisition of this concession was heavily influenced by lavish payments and the involvement of key court figures, particularly Amin al-Soltan (Atabak-e A‘zam), the powerful prime minister of Mozaffar ad-Din Shah.

As stated in The History of Oil in Iran and the Middle East, William D’Arcy faced numerous difficulties in carrying out this endeavor. He paid 30,000 British pounds as a gift to Mozaffar al-Din Shah, and in addition, granted 2,000 shares to Atabak-e A‘zam (Amin al-Soltan), 5,000 shares to Mirza Hossein Khan Moshir al-Dowleh, the Minister of Foreign Affairs, and 5,000 shares to Nezam al-Din Mohandes al-Mamalek, the Minister of Mines, in order to secure his ultimate success.

Exclusive Right

In any case, during the Qajar era, the Iranian government granted the oil concession to a British national, marking the beginning of significant domestic, regional, and international developments and conflicts. As noted in many historical accounts, there may be no other concession that had a profound impact on Iran’s twentieth-century history as the D’Arcy concession.

In the second chapter of the D’Arcy Concession, it is stated:” The holder of this concession shall have the exclusive right to lay the necessary pipelines from the sources of oil, bitumen, and the like to the Persian Gulf, as well as any subsidiary branches of the said pipelines required for the distribution and delivery of oil to other locations. He shall likewise have the right to drill oil wells, construct reservoirs, pumping stations, storage and distribution facilities, refineries, and any other installations that may be necessary.”

Under this concession, William Knox D’Arcy was granted the exclusive right to explore and extract oil, natural gas, asphalt, and ozokerite across three-quarters of Iran’s territory—an area covering approximately 1,242,000 square kilometers.

In return for this exclusive privilege, Mozaffar ad-Din Shah received £20,000 in cash (intended to finance his trip to Europe), £20,000 in company shares, and 16 percent of the annual profits.

D’Arcy Exploration

The first drilling operation led by William Knox D’Arcy began at a site called Chiah Surkh (Chah-e Sorkh), located north of Qasr-e Shirin. However, due to poor infrastructure and lack of security, the drilling progressed very slowly.

By 1903, D’Arcy’s company had spent about £500,000 on oil exploration in Iran. That summer, at a depth of 507 meters, they encountered gas and traces of oil, which encouraged the drilling of a second well in the same area. After three months, in 1904, the second well also ran dry, leaving D’Arcy disheartened and financially strained.

Meanwhile, British government experts had realized that the age of coal was ending with the emergence of oil—particularly as the Royal Navy sought to transition to oil fuel. In 1904, the Admiralty Committee took note of D’Arcy’s financial troubles and introduced him to the Burmah Oil Company, which provided both capital and technical expertise to continue his exploration efforts.

With the resumption of operations, drilling began in the Shardin region in southern Iran. In 1907, a second drilling site was chosen. The team began drilling in the Naftun field, located in the Khersun Valley near Shushtar, which later known as Masjed Soleyman. In 1908, D’Arcy’s team selected another drilling point within Masjed Soleyman, but once again, the effort yielded no success, and D’Arcy faced imminent bankruptcy.

Finally, in that same year—when the company’s funds completely depleted and its directors in London had lost all hope—the well being drilled in Masjed Soleyman struck oil. The news caused a wave of excitement in London, leading to the establishment of a new company, the Anglo-Persian Oil Company (APOC), which marked the beginning of Iran’s modern petroleum industry.

Iran Fate Tied to Oil

The first oil well in the Middle East struck on May 28, 1908 in Masjed Soleyman, Iran. This historic discovery marked the beginning of oil production in the region. From that moment onward, Iran’s destiny intertwined with oil, as the growing dependence of industrialized nations on this vital resource led to their increasing involvement in the affairs of oil-rich countries. Following this discovery, several more wells drilled and successfully produced oil in Aghajari, marking the expansion of Iran’s early petroleum operations.

In 1911, Winston Churchill became the First Lord of the Admiralty and set out to strengthen the British Royal Navy. During this period, the use of oil as fuel for large ships had just begun, creating a growing demand for petroleum. However, Churchill was unwilling to make the British Navy dependent on foreign companies such as Shell for its fuel supply. Therefore, he decided to bring AOPC under the control of the British government.

Oil Iran, Power in Britain

To achieve this goal, Churchill sent Lord Cadman at the head of a delegation to Iran. Eventually, in 1914 — just six days before the outbreak of World War I — an Act was passed and implemented in Britain under which two million shares of the Anglo-Persian Oil Company were transferred to the British government. This granted the state 50% voting rights, the power to appoint two directors, and, in all strategic matters, a right of veto. According to one clause of the agreement between the company and the government, the company undertook to supply fuel for the Royal Navy at a very low price. To secure control over Iran’s oil, the British government invested £2,200,000 — consisting of £2,000,000 in ordinary shares, £1,000 in preferred shares, and £199,000 in bonds.

Considering this figure — and taking into account that by 1923, the British government had already received about £6.5 million in taxes and dividends — it can be concluded that by that year, Britain had profited roughly £30 million in total. In return, not only had it secured new oil resources in other countries, but it had also managed, through Iran’s oil, to expand its economic and political power both in the region and across the world.

1933 Agreement

Around this period, two major turning points occurred in the history of Iran and the world. In 1918, World War I came to an end, and in 1925, with the fall of the Qajar dynasty, Reza Khan ascended to the throne and became king of Iran. Meanwhile, the former D’Arcy Company— now operating under the name AIOC — began a series of obstructive actions. Among these were delays and complications in paying Iran its agreed-upon 16% share of revenues, as stipulated in the contract. The British claimed, for instance, that Bakhtiari tribesmen had interfered with their operations, which they were entitled to compensation, or that Iranian border guards had damaged oil pipelines. Under such pretexts, the company deducted amounts from Iran’s rightful income and withheld the payments that were due to the Iranian government under the terms of the concession.

During this period, Reza Shah, who had only recently ascended the throne, repeatedly expressed his dissatisfaction with Iran’s minimal share of oil revenues. Between 1928 and 1932, he dispatched Abdolhossein Teymourtash, his Minister of the Court, several times to negotiate with the British and seek ways to increase Iran’s share. In 1931, however, Iran’s share of oil profits dropped to its lowest level ever — only £336,000 for an entire year of production — due to the global economic downturn caused by the Great Depression. This figure, officially reported to Iran the following year, infuriated Reza Shah. Seeing no tangible results from previous negotiations and angered by the meager payment, he famously burned the D’Arcy concession in rage and declared it nullified. Thus, the original D’Arcy concession ended, and a new agreement drafted. Under this new contract, Iran guaranteed a minimum annual payment of £750,000, but in exchange, the duration of the concession extended by an additional 32 years, effectively renewing it until 1993.