Iranian petroleum Minister Zanganeh, while evaluating current oil market conditions as satisfactory, said the country’s oil revenues will mount to 41 billion dollars in the present Iranian year.

Speaking to an IRIB TV, Bijan Zanganeh touched upon roots of the halt in gas imports from Turkmenistan while highlighting that the volume of gas purchase from the neighboring country had been negligible.

The official said National Iranian Gas Company had been put in charge of pursuing the issue of termination in gas imports from Turkmenistan asserting that Oil Ministry or the Government would not follow up the issue.

He stressed that Islamic Republic of Iran pursued the policy of holding friendly relations with all neighboring states; “existing dispute between NIGC and Türkmengaz need to be resolved.”

Later into his remarks, Zanganeh recalled that 11 new South Pars phases had come on stream over the past three years or will become operational in the present year; “phases 17, 18, 19, 20 and 21 will be inaugurated by the end of the current Iranian calendar year (to end March 20).”

The senior oil official further referred to the boost in production at West Karun joint oilfields saying “parallel with the rise in oil and gas production, implementation of Resistance Economy policies has been also put on the agenda of Oil Ministry.”

“Accordingly, gas transmission to villages is being undertaken,” highlighted Bijan Zanganeh adding that the gas transfer pipeline to Zahedan will be completed within months as promised earlier by the President.

He estimated that revenues from sales of crude oil and gas condensate will climb to about 41 billion dollars by the end of the ongoing Iranian year; “about 24.7 billion dollars of oil revenues were received in the first nine months of the present year.”

Oil Minister of Iran predicted that each baller of oil will be sold at 55 dollars adding “commitments of OPEC members to cap output became operational as of January 01.”

Zanganeh reassured that OPEC and non-OPEC members would meet their obligations as a result of which surplus of oil will be removed from the market giving way to a balance between supply and demand as well as to higher crude prices.

He recalled that oil prices were already enjoying an upward trend; “the present uplift in prices is rooted in effects exerted on market psychology by the freeze deal though more tangible outcomes are yet to be revealed once all partied curtail production.”

Oil minister deemed current market conditions as satisfactory and one the right path reiterating that “prices are not falling as even consumers would not favor very low figures.”

“Ultimately, producers and consumers have reached the consensus that low crude prices are contrary to interests of global economy, sustainable supply of energy and even production of new energies.”

At the end of his remarks, the official disavowed the claims that Iran’s oil revenues were blocked by certain countries concluding that “all profits from the sale of oil are being received smoothly.”

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Iranian oil minister has announced that Russia’s Lukoil is seeking to launch crude oil swap with Iran.

On cooperation between Tehran and Moscow over oil swap projects, Bijan Zanganeh said no talks were conducted in this regard during the recent visit to Iran of Russian Energy Minister Alexander Novak though relevant negotiations are underway with Lukoil company.

He further touched upon gas swap with Russia asserting “Gazprom is taking measures to join hands with Iran for gas swap purposes.

“During the recent visit of a Russian delegation to Tehran, talks were held over development of some Iranian oil fields and agreements were also signed.”

The official underlined that Russneft firm was seeking to collaborate with the Headquarters for Execution of Imam Khomeini’s Order (EIKO) to develop four oilfields including South Azadegan.

During visit of Russian economic and oil delegation, headed by Novak, to Tehran last week, the MoU for studying two oil fields of Cheshmeh Khoshk and Chenguleh in west of Iran were signed.

Accordingly, Iran’s Oil Minister Bijan Zanganeh reported on signing research and development MoUs with Russia for expansion of seven Iranian oilfields.

Russian Lukoil will be engaged in study on Mansouri and Ab Teimour, Russian Zarubezhneft will study Aban and West Paydar and Tatneft will study the Dehloran , while Gazprom will study Cheshmeh Khoshk and Chenguleh oil fields.

Meanwhile, one joint project likely to be implemented by the two sides is oil swap deal which has not reached conclusion and based on primary talks 150,000 barrels per day oil is slated to be swapped though the figure will eventually hit 500,000 barrels per day.

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National Iranian Oil Company (NIOC) will sign into three accords with France’s Total and Royal Dutch Shell over development of three oil and gas fields of Iran.

Following the signing of an Agreement in Principle (AiP) with France’s Total S.A. company on development of South Pars Phase 11, the French firm will seal two more agreements today with NIOC.

One contract to be inked between the two sides today on Wednesday December 07 pertains conducting studies and development of Azadegan joint oilfields.

The accord follows an earlier meeting in December between Iran’s Oil Minister Bijan Zanganeh and Chairman and CEO of Total Patrick Pouyanné held on the the sidelines of OPEC summit in Algeria where the two sides mulled over venues to develop South Azadegan oil field.

NIOC and France’s Total had also sealed a confidential disclosure agreement in March in order to develop Iran’s South Azadegan joint oilfield with Iraq and the French side was required to present its technical bid in six months’ time.

Earlier, the Project Director of the Development Project of South Azadegan Seyyed Mahmoud Mar’ashi estimated that the required volume of investment for the project will be less than five billion dollars in order to reach a daily production of 300 to 320 thousand barrels of crude oil.

In the current time, about 50 thousand barrels of crude oil is being extracted from the joint oil field while completion of the first developmental phase will raise the output to 100 thousand barrels per day by the end of the current year.

In addition to the deal on Azadegan, another agreement is slated to be signed with Total over expansion of Kish gas field as one of the NIOC Recent Discoveries which was discovered in 2006.

A total of 12 wells have so far been drilled in Kish gas field, which is a giant independent field close to Kish Island in the Persian Gulf, and three developmental phases have been defined to realize five billion cubic feet of gas.

The third contract, however, will be endorsed today between NIOC and Royal Dutch Shell on development of Yadavaran joint oilfield. It remains noteworthy that the first phase of development in the Iranian field has been carried out by Sinopec of China.

With completion of Phase 1 of North Azadegan oilfield, in collaboration with China National Petroleum Corporation International (CNPCI), the production at Yadavaran joint field has also surged to 115 thousand barrels per day as a result of cooperation with Sinopec.

Oil production at the joint oilfield with Iran has currently reached 115 thousand barrels which exceeds the initial commitment made for the first developmental phase by approximately 30 thousand barrels.

Yadavaran oilfield has a reservoir of 17 billion barrels and a potential to produce 300-400 thousand bpd of crude.

Iran’s Oil Minister Bijan Zanganeh had previously said the MDP of phase II of North Azadegan and Yadavaran oilfields has been approved by Chinese contractor SINOPEC and China National Petroleum Corporation (CNPC) under an initial contract, adding “Iran is ready to hold multilateral negotiations with Chinese companies within its accepted framework.”

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Minister of Petroleum Bijan Zanganeh says Iran’s crude exports reached 2.44 million barrels per day as of October.
Addressing a televised debate, Zanganeh said Iran’s oil production hit almost four million barrels per day in October.

He dismissed the “sheer lie” report that he had met Egyptian counterpart Tarek El Molla and said, “I have had no plan or contract in that connection.”

To a question whether such a meeting will be held in the future, he said, “That there might be a meeting is a separate topic. We will hold talks with anybody except Israel if so wishes.”

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Minister of Petroleum Bijan Zanganeh said on Tuesday that Iranian oil industry needs $130 billion investment to meet the Sixth Five-Year Economic Development Plan (2016-21) targets.
Zanganeh told a televised interview, “We use different methods for financing and there is not the possibility for attraction of all the needed capital through contracts.”

On the contract for export of Iran’s LNG to Korea, Zanganeh said as for the LNG exports contract package it should be said that it should be the kind which would envision completion of the LNG factory and repayment of the costs to the contractor out of LNG extraction revenues. “Of course, the Koreans are not the only party in the contract, rather the Germans and Japanese are the other parties.”

He then pointed to the oil output of one to one and half a million barrels out of the new model of oil contracts.

The Minister said diversion of funds out of the domestic sources and the National Development Fund is also on agenda, though it should be born in mind that the fund sources are not unlimited and there are many volunteers for it.

Iran needs 70 billion dollars for the downstream sector development plans

“Securing necessary financial sources to attain the Sixth Five-Year Plan objectives, including 130 billion dollars, for the upstream and about 70 billion dollars for the downstream sector is a very difficult job,” he said.

Zanganeh commented on the latest condition of the Persian Gulf Star refinery and said for the time being, kerosene and gasoil are transferred in the refinery but high quality gasoline production at the refinery will start as early as 2017.

Sessions are regularly held to follow up the Persian Gulf Star refinery project and works are going on well, he added.

The minister said petrochemical revenues of Iran have now reached 25 billion dollars from one billion dollars in 1997.

He added that plans are underway to raise value of the petrochemical products by five billion dollars by end of this year (to end on March 20) to more than 30 billion dollars.

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Iranian oil minister has announced that the country’s crude production will rise to 4.5 million barrels per day (bpd) in the current Iranian calendar year (began March 20).

Speaking at the second oil and energy congress in Tehran, Oil Minister Bijan Zanganeh described priorities of the industry in the post-JCPOA era adding “crude production capacity of Iran will hit four million barrels per day in the present year while the overall figure, including gas condensate, will exceed 4.5 million bpd.”

“Production capacity for gas condensate will also reach about 688 thousand barrels a day,” highlighted the Iranian minister estimating that the figure will hit one million bpd by 2018 upon implementation of new South Pars phases.”

Iran’s gas output will be increased to approximately 900 million cubic meters per day by the end of the current year

The member of the Iran cabinet noted that gas output will be increased to approximately 900 million cubic meters per day by the end of the current year; “on the basis of developmental plans in gas industry, the production capacity is expected to go over one billion cubic meters by the end of the upcoming year.”

Iran oil industry investment plan

Zanganeh further touched upon the plans to attract investment in oil industry explaining “the Sixth National Development Plan requires that 134 billion dollars of financial resources be absorbed in the upstream petroleum sector.”

He pointed to the plan to attracting around 52 billion dollars of financial resources in petrochemical industries recalling “a 15-billion-dollar investment has been envisaged for expansion of Iran’s refinery industry while an aggregate total of about 200 billion dollars need to be attracted to the country’s oil, gas and petrochemical industries.”

Oil Minister Zanganeh went on to enumerate three top developmental priorities of oil industry including expansion of South Pars gas field, development of West Karun joint fields as well as increasing recovery factor; “Phases 17, 18, 19, 20 and 21 of South Pars will come on stream in the present year and Iran’s daily production volume will equal that of Qatar in the coming year.”

Developmental contract for Phase 11 of South Pars

“A developmental contract for Phase 11 of South Pars will also be inked in the coming months,” stressed the oil official underscoring that the country’s overall gas production capacity will reach more than one billion cubic liters in the year to follow.”

Zanganeh said gas supply to villages, increased exports and development of LNG sector remain as three strategic aims pursued in the Iranian gas industry; “the share of oil products in the feedstuff of Iranian power plants has declined from 18 per cent a year ago to less than 10 per cent in the current year.”

Iran Petrochemical production

“Petrochemical production will rise by five million tons in coming months,” emphasized the official saying “in time with development of downstream sector, oil production will begin form oil layers of South Pars field for the first time ever.”

“A developmental contract for the second phase of South Pars as well as an agreement to increase recovery factor of the joint field will be sealed in the ongoing year.”

Oil minister of Iran reiterated that “given the increased share of gas in the country’s energy basket, Iran has turned into a major exporter of oil products as a daily average of approximately 20 million liters of gas oil is being deployed to global markets.”

Referring to operation of the first phase of Setare Khalij Fars Gas Condensates Refinery and the halt in gasoline imports as of the next year, Bijan Zanganeh concluded “Iran’s oil refining capacity will soar to more than three million barrels per day by the end of the Sixth National Development Plan.”

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An oil official has announced that Vitol S.A. of Switzerland is likely to purchase Russian crude to be swapped through Iran’s largest oil terminal in the Caspian Sea.

Despite the seven-year hiatus in oil swaps among Caspian Sea littoral states through Iran’s route, the process has not been resumed yet though negotiations are still underway with countries like Russia, Turkmenistan, Kazakhstan and Azerbaijan Republic.

Meanwhile on Thursday, a Swiss delegation comprising representatives of Vitol S.A. visited facilities and infrastructures of Neka Oil Terminal as Iran’s largest crude terminal in the Caspian Sea.

The visit aimed to resume oil swaps especially in view of the fact that the Swiss firm held cooperation with the National Iranian Oil Company (NIOC) before the halt in crude swaps.

BP (British Petroleum) is yet another company looking forward to resumption of oil swaps between Caspian Sea stated and the Islamic Republic of Iran.

Hamidreza Shahdoust, a local Iranian Oil Terminals Company (IOTC) official in the city of northern city of Neka, confirmed the visit of Vitol delegation to Neka Oil Terminal adding “experts at the oil trader giant Vitol made a visit to the Iranian terminal aiming to resume oil swaps.”

The official estimated that oil swaps will be resumed from Neka terminal within the next 7 to 14 days as all facilities at the Iranian terminal are prepared for the mission.

“Neka Oil Terminal enjoys a total storage capacity of 120 thousand barrels per day in its 12 tanks,” underlined Shahdoust maintaining “moreover, the project to increase oil swap capacity to 2.5 million barrels per day has kicked off.”

Oil Minister Bijan Zanganeh, while pointing to Iran’s readiness for oil swap with Russia, had earlier noted “the Russian side has also voiced willingness for swapping a portion of its oil production through Iran’s route and relevant negotiations are underway.”

“The capacity exists for a maximum swap of 150 thousand oil barrels per day,” underlined Zanganeh stressing “the process would boost Iran’s market share since the replacement is delivered to customers in the Persian Gulf.”

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Director of Iran’s National Petrochemical Company (NPC)’s Projects says with several new projects going operational, the country’s petrochemical production capacity is going to increase significantly in the current Iranian calendar year (started on March 20).

“In the year of “Surge in Production”, the petrochemical industry is trying to benefit from the most of the domestic capabilities and with new petrochemical projects being inaugurated, the production capacity in this industry will increase significantly,” IRNA quoted Ali-Mohammad Bosaqzadeh as saying.

He said the petrochemical industry is now the center and pillar of the country’s economic development and is in close collaboration with all industrial sectors, adding that injecting resources into the productive sectors and prohibiting the waste of national resources can lead to the second and third leaps in the petrochemical industry.

Noting that the balanced development of the petrochemical industry is of particular interest among NPC strategies for the current year, he said: “In this regard, the development of downstream petrochemical industries is going to prevent the sale of raw materials and will result in the production of products with higher added value.”

He further noted that most of the underway projects in this industry are currently using domestic equipment, licenses and technological knowledge of Iranian experts.

Considering the undeniable significance of the petrochemical industry in Iran’s resilient economy in the sanctions era, the Iranian Oil Ministry and the country’s National Petrochemical Company have been taking major steps to facilitate further development of this industry in recent years.

Back in September 2019, Bosaqzadeh noted that Iran‘s annual petrochemical output, which is currently at nearly 70 million tons, is planned to reach more than 100 million tons by the Iranian calendar year of 1400 (ends on March 2022) and to 130 million tons or nearly doubled) by 1404 (ends on March 2026).

Also in August 2019, Oil Minister Bijan Namdar Zanganeh had announced that the country’s annual petrochemical output is expected to reach more than 100 million tons by 2021, despite U.S. sanctions.

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Iran’s Persian Gulf Star Refinery in the southern province of Hormozgan is the first of its kind designed based on gas condensate feed-stock recovered from South Pars gas field which Iran shares with Qatar in the Persian Gulf.

Construction of the refinery started in 2006, but the project was delayed as the result of some  financial limitation due to the sanctions against Iran.

Planned to have a total crude oil processing capacity of 360,000 barrels per day, Persian Gulf Star is projected to be complete by the end of the next Iranian calendar year 1397 (March 20, 2019).

The facility is owned by Oil, Gas and Petrochemical Investment Company (49%), Oil Industry Pension Fund (33.1%) and National Iranian Oil Refining and Distribution Company (NIORDC) (17.9%).

The project is estimated to be completed at a cost of approximately $3.4bn.

Once fully operational, the refinery will add over 36 million liters of Euro-4 and Euro-5 quality gasoline to the country’s gasoline production capacity to increase it to 100 million liters per day.

When the first phase of Persian Gulf Star Refinery was inaugurated by President Hassan Rouhani on April 30, 2017, Iran said it is now self-sufficient in gasoline production.

“By inaugurating the first phase of this refinery an old dream came true. We are self-sufficient in gasoline production and in near future we will be able to export,” Rouhani said in the inaugural ceremony of the first phase.

Second phase of the refinery is scheduled to be complete by the end of the current Iranian calendar year (March 20, 2018) adding 12 million liters of Euro 5 gasoline to Iran’s capacity of the product, Alireza Sadeq-Abadi, the managing director of National Iranian Oil Refining and Distribution Company (NIORDC), announced in the inaugural ceremony of the distillation unit of the second phase on February 14.

In mid-December last year, Oil Minister Bijan Namdar Zanganeh said Iran will reach a stable status in gasoline production once the second phase of Persian Gulf Star Refinery comes on stream.

Bringing self-sufficiency for the country in terms of gasoline production, once fully operational, the Middle East’s largest processing facility for gas condensate will also play a big role to turn Iran into an exporter of gasoline.

The big job has already started as the first shipment of Euro 5 gasoline produced by Persian Gulf Star Refinery was delivered to Shahid Rajaee port in south of the country in early December last year.

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Farhad Daneshvar: President Hassan Rouhani in an addressing to the parliament on August 20, said that drawing $100 billion in foreign investment to develop Iran’s oil industry is among the oil minister’s main tasks in his second term.

“There is bad news and good news,” believes Chris Cook, a strategic market consultant, who also formerly headed the International Petroleum Exchange.

“The bad news is that the Trump administration is intent on making Iranian access to dollars — whether dollar payments or dollar investment via equity funding or debt financing — to all intents and purposes impossible, notwithstanding anything in the JCPOA,” Cook said responding to Trend query regarding the Islamic Republic’s capability to draw foreign investment to renew the country’s oil and gas industry.

“The good news is that it is completely possible for trillions of dollars worth of investment to be made in Iran and in neighboring countries without using dollars at all. This is because accounting/pricing — or keeping score — of transactions in dollars is very different from using the dollar clearing system to repay dollar debts or repatriate dollar profits on investment,” he added.

Iran’s Oil Minister Bijan Namdar Zanganeh has in recent years been engaged in updating the long-standing ‘Energy Diplomacy’, developed during the former president Mohammad Khatami’s administration, Cook reminded, adding that this ‘smart energy policy’ instrument consisted of energy swaps, such as the Caspian oil swap (flows of Caspian crude oil into northern Iran, exchanged for flows of crude oil delivered out of the Persian Gulf).

“In addition to reactivation of these and similar swaps, perhaps the most remarkable — and most important — ‘Energy Diplomacy’ was the recently contracted South Pars 11 investment by Total, through which 20 years’ investment of technology, skills and experience will be swapped for a flow of condensate. The outcome is firstly a ‘smart swap’ of intellectual value for the value of carbon fuels, and secondly, through the participation of Chinese investors the deal provides 20 years’ security of condensate demand for Iran and 20 years’ security of condensate supply for China,” Cook suggested.

“The point is that such smart swaps will — within a suitable networked market platform or ‘energy clearing union’ — enable many hundred billion dollars worth of intellectual and other resources required by Iran to be swapped for many hundred billion dollars worth of carbon fuels supplied by Iran.

“Since such swaps do not take place on the oil market platform dominated by the US, they do not require settlement in dollars through the US dollar clearing system from which Iran is effectively excluded.”

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