As ILNA reported, six of the mentioned wells are going to be drilled in the onshore exploration sites while the other two will be offshore.

“The drilling operations for yet another five exploratory wells which were started in the previous calendar year (ended on March 19) will also continue in the current year,” Hendi said.

Explaining about the two offshore wells, the official noted that one of these wells is located in Siri region, which is being drilled independently by the Exploration Department, and the other in the Yalda field for which the drilling operations started this week in collaboration with Pars Oil and Gas Company (POGC).

According to the official, the Exploration Department has identified and prioritized all of the country’s sedimentary basins, and each of these basins is carefully studied and modeled with new methods.

Last year, a total of 18,000 meters of exploratory wells were dug through 60 rigs, meaning that an average of five drilling rigs were active each month, he noted.

Earlier in March, Mohammadreza Hor, the deputy director for technical affairs at NIOC’s Exploration Directorate, announced that the mentioned directorate had seven active drilling rigs in the said month and according to the development plans the number of the rigs was planned to increase to eight in the coming months.

He had also announced the completion of drilling operations of three wells in Forouzan, Mansouri and Deng fields after conducting preliminary tests in February, saying: “Currently, operation trials are underway for Arman exploration well in the region.”

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According to Shana, Mohammad Al-Khamis, the company’s drilling operations deputy, said that the record was registered since the beginning of the current calendar year, which began on March 21, and entailed 96 wells.

Among the wells were 35 development/appraisal wells, 2 exploration wells and 59 workover operations.

He said 70 wells were spudded in the fields operated by the National Iranian South Oil Company (NISOC), 13 were drilled in offshore field operated by the Iranian Offshore Oil Company (IOOC), 2 wells were ordered by the Iranian Central Oilfields Company, 3 were ordered by the Petroleum Engineering and Development Company (PEDEC), 6 were drilled as projects and 2 others were ordered by the Exploration Department of the National Iranian Oil Company (NIOC).

“In the past 10 months, as a result of the efforts and synergy with the applicant companies, the NIDC’s employees drilled 9 oil and gas wells 89 days ahead of the plans,” he said

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The record was gained amid US President Donald Trump’s threats to pull out of the deal that was struck between Tehran and the P5+1 group of countries to curb parts of Iran’s nuclear activities in exchange for eased sanctions on the OPEC member’s vital economic sectors.

The National Iranian Oil Company (NIOC) exported an average of 2.877 million barrels per day of crude oil and gas condensate during the month to Asian and European markets which was an unprecedented figure since implementation of the JCPOA.

Iran’s traditional oil customers, China, India, South Korea and Japan, bought over 60% of its petroleum cargoes during the month.

China and India alone imported roughly 1.4 mbd from Iran during the month.

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“Parallel talks have started with other multinationals to undertake the megaproject,” said Karim Zobeidi, the head of a special department at NIOC that oversees the performance of reservoirs, ISNA reported.

Pointing to the $7.45 billion deal between the French energy major Total and the Copenhagen-based giant that was concluded last month, Zobeidi said, “Because Total has purchased Maersk’s oil and gas business, we should follow the talks more prudently.”

According to the official, the French giant is carrying out operations on Qatar’s oil layer in the joint oilfield with Iran in the Persian Gulf that is why NIOC ought to conduct negotiations with tact so as to not lose ground to the Arab state.

A POGC official has reported on the signing of a contract with a French firm for conducting pressure drop studies in South Pars joint gas field.

Maersk has already drilled more than 300 wells and extracted more than 1 billion barrels of oil for Qatar from the Qatari section of South Pars, which is known as the North Dome. According to reports, French energy major Total S.A. took over drilling and production operations in the North Dome from Maersk last year.

Highlighting the importance of collaboration with foreign firms to develop the second and third development phases of the field’s oil layer, the official noted that the layer’s complicated geological structure necessitates qualified companies to implement enhanced oil recovery techniques from the beginning of their operation.

“Pars Oil and Gas Company, as the contractor of South Pars oil layer, has held talks with a number of international companies, yet no agreement has been signed,” Zobeidi said, adding that Schlumberger Ltd, the world’s leading oilfield services provider, was also reportedly interested in drilling the South Pars oil layer, but it failed to reach agreement with NIOC.

According to Roham Qasemi, managing director of Petroiran Development Company, cumulative crude oil output from the field’s oil layer has surpassed 2.5 million barrels over roughly six months.

Iran began to extract crude oil from South Pars in March using FPSO Cyrus, a floating production storage and offloading vessel in March. The FPSO was reportedly built in Singapore and cost $300 million.

“Maersk’s operational capacity and know-how to drill horizontal oil wells as deep as 10,000 meters are key to its success in developing the South Pars oil layer, as we are still deprived of such expertise,” Qasemi said.

Underscoring the country’s domestic capacity to develop the project’s first phase, he added that Iranian experts drilled 39,000 meters of offshore well in addition to installing a 2,500-ton platform.

Asked about employing another FPSO in the second phase, Qasemi noted that Petroiran, POGC and the Danish conglomerate are holding technical talks about the issue.

Iran aims to stabilize production from the SP layer at 25,000 barrels per day and gradually boost output to 55,000-60,000 bpd.

NIOC plans to employ enhanced oil recovery methods to boost the extraction rate in fields by 35%. South Pars oil layer is located 130 kilometers off Iran’s coast in the Persian Gulf with an estimated 7 billion barrels of oil in place, but it is hard to put an accurate estimate on the volume unless more exploratory wells are drilled.

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Nouroddin Shahnazizadeh, the managing director of the Petroleum Development and Engineering Company of Iran, told the domestic media that the leading European bidders for the project include Total (France), Shell (UK/Hollande), Eni (Italy), Wintershall (Germany), Rosneft (Russia), OMV (Austria) and Maersk (Denmark).

Shahnazizadeh added that several Asian companies including CNPC and Sinopec (China), ONGC (India), Pertamina (Indonesia), Petronas (Malaysia) and PTTP (Thailand) would also participate in a tender over South Azadegan.

The official said officials from the bidding companies had visited Iran for three days to become fully aware about the conditions of the project. Almost a dozen of them, he added, had been even taken to visit the project site.

Nevertheless, Shahnazizadeh did not indicate when the tender over South Azadegan would be held.

Iran has repeatedly postponed the tender over the giant field which it jointly shares with Iraq.

Reuters quoted an unnamed Iranian official as saying in June that the bidding over the project had been delayed by another few months.

This, the unnamed official told Reuters, was meant to allow energy companies more time to study the field.

Iran discovered Azadegan oil field in 1999 in what was the country’s biggest oil find in decades. The country accordingly teamed up with Inpex to push the project toward development. However, the Japanese company later quit the project in what appeared to be the result of US sanctions against Iran.

The NIOC later divided the project into South Azadegan and North Azadegan and both were awarded to China’s CNPC when Iran’s former president Mahmoud Ahmadinejad (2005-2013) was in office.

The media reported in 2014 that Iran’s Oil Minister Bijan Zangeneh had sidelined CNPC from South Azadegan due to its protracted delays in developing the field.

South Azadegan is believed to hold an in-place oil reserve of about 33.2 billion barrels and its recoverable resources estimated at about 5.2 billion barrels.

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Manouchehri has a brilliant background in companies like Petropars and Iranian Offshore Engineering and Construction Company (IOEC), both involved in the development of South Pars gas field.

He is now serving as the deputy managing director of National Iranian Oil Company (NIOC) for development and engineering.
The exclusive interview he has granted to “Iran Petroleum” is as follows:

Q: How do you see the future of South Pars gas field?
A: Except for Phase 11, other phases of South Pars are forecast to have been completed within two years or at most 30 months. Phase 11 development is expected to be finished in four years. South Pars will definitely play a major role in the supply of gas and condensate in the country. After remaining phases are developed in South Pars, gas condensate production in this jointly owned field will reach 1 mb/d.
Q: Could you name the future challenges to the South Pars development?
A: The pressure fall-off in gas and gas condensate will be one of the main challenges in this field.

Q: What could be done to cope with this problem?
A: Using pressure booster compressors could be an effective measure. Furthermore, reservoir studies must be carried out more seriously and more comprehensively. Changes in the condition and behavior of reservoir and forecasting future conditions are also important. Other layers of South Pars should be also studied. Transferring gas from adjoining fields in a way to avoid a quick fall-off in the gas pressure and volume of gas condensate production is also another measure. Pressure fall-off is a natural phenomenon, but we have to try to lengthen the production plan.

Q: So South Pars will need more efforts and activities in the future.
A: That’s true. Drilling in this joint field will be based on studies in the future. The type of drilling may change. Moreover, there is much sensitivity with regard to the jointly owned parts of this field. Since the Qatari side is recovering gas along with us we will naturally see more problems.

Q: Do you think there is technology for preserving production in Iran?
A: This technology is accessible and naturally in the future we will be able to increase the share of Iranian companies in implementing such projects. The more we go ahead, the higher gas and gas condensation will cost, and we have to recognize that production costs in South Pars will go up.

Q: How much does production cost in South Pars now?
A: Implementation of each phase of South Pars under the current circumstances is estimated around $2.5 billion and our production costs stand at two or three percent of the value of investment. It is a low figure, but will increase in the future.

Q: How much do you think this increase will be?
A: It depends on the conditions of upcoming years and the amount of additional investment. But undoubtedly the costs of installations will increase. Therefore, we cannot announce any accurate figure. However, it will most probably be twice.

Q: Are you happy with the current management of South Pars output maintenance?
A: Regarding the maintenance of onshore facilities, NIOC is largely experienced and we have no serious problem in this regard. However, we need to improve standards of production, reduce flare gases and minimize environmental damage. For this purpose, we need investment. Moreover, in some refineries we need to implement a complementary procedure to eliminate flare gas.

Q: What about offshore maintenance?
A: In this sector we need to pay more attention and apply higher standards because in the offshore sector our operation models do not fully comply with international conditions. At the beginning, our platforms were designed to be unmanned, but they are manned now. Therefore, we have to take into account this fact that such facilities are exposed to more degradation and more difficult to accede. We have to run South Pars which has a 30-year to 50-year future.

Q: How do you assess South Pars’ role in empowering domestic contractors?
A: Iranian contractors became international thanks to South Pars. The fact is that South Pars has been instrumental in upgrading domestic industry and project management mechanism, development of contracting system and engineering services companies. In the past we often heard that Isfahan Steel Mill was a good model in terms of concrete pouring and molding. But South Pars has played a major role in developing EPC knowhow, petroleum engineering, refinery construction and equipment manufacturing. We cannot say that all this happened first in South Pars, but given the scale of work, many industrial plants, factories and contracting companies emerged and grew under the aegis of South Pars and then they spread across the country. I can say that South Pars improved technical standards and raised the expectations of managers with regard to the quality of work. Moreover, a valuable interaction was created between Iranian and international companies at different levels of activity.
In fact, after implementation of phases 1 to 8 of South Pars by Iranian and foreign companies, the top role in phases 12 to 16 was assigned to Iranian companies. Although we had problems with some of these projects due to high costs and delays, Iranian companies finally proved their capabilities in drilling, offshore and onshore operations and pipelaying.

Q: In case you are asked to name several Iranian companies that have been empowered through their activities in South Pars, which companies will you name?
A: Undoubtedly Petropars is at the top of them. This company managed to play the role of a developer. OIEC (Oil Industries Engineering and Construction Company) as an EPC company, IOEC in offshore EPC and some private companies are also among them. Sadra has also shown good growth although it delayed some of thes projects due to domestic problems and has so far failed to deliver platforms for phases 13, 14 and 22-24. Nevertheless, generally speaking, Iranian companies have fared well in the development of South Pars.

Q: Would you please cite some of the measures taken first in South Pars?
A: Drilling, deepwater drilling, subsea pipelaying, and project macro-management.

Q: Once South Pars phases have been completed, provided that unbridled consumption is contained, which role could Iran play in the gas market?
A: After completing South Pars phase development, we will have the chance to invest in LNG sector. Of course, it is already possible. [But] then we can enhance our gas exports to the region.

Q: What have been the challenges of South Pars in recent years?
A: Investment, project mismanagement, supply of equipment and commodities were among these challenges. But these problems have been resolved after the implementation of the JCPOA and the [ensuing] lifting of sanctions.

Q: How do you assess cooperation with foreign companies in the development of South Pars?
A: During years of sanctions, NIOC and its staff demonstrated their capabilities in developing oil and gas fields, particularly the jointly owned South Pars field. During this period, phases 12, 15, 16, 17, 18, 19, 20 and 21 were developed. Gas production capacity in South Pars currently stands at more than 480 mcm/d, which is expected to reach 580 mcm/d early next [calendar] year. As far as recovery from South Pars is concerned we have to continue producing gas and gas condensate more smartly. In order to have access to cutting edge technologies we need to cooperate with service companies and international oil companies (IOCs) so that they would bring capital, technology and management into the country.

Q: You were manager in both Petropars and IOEC and you have experience of offshore and onshore sectors. How do you assess your own performance at South Pars?
A: I thank God for my contribution to the development of these fields from the very beginning. I joined the project when Phase 1 was in its final day of development; I managed development of phases 6 to 8. I also managed development of Phase 12 half way, as I was CEO of Petropars and project manager. When I left this company all contracts had already been signed. The contract for Phase 19 of South Pars was signed when I was at Petropars. Furthermore, when I was IOEC manager, seven to eight platforms were finally completed and installed.

Q: Would you please name five influential people in the South Pars development?
A: Certainly Mr. Zangeneh (minister of petroleum) will occupy the ranks one to three. He is followed by Misters [Akbar] Torkan and [Mehdi] Mirmoezzi. But Mr. Zangeneh was the pioneer of South Pars and he was the one who brought about fundamental changes in the petroleum industry.

By Roya Khaleqi/ Courtesy of Iran Petroleum

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Speaking after a ceremony to sign a deal between National Iranian Oil Company (NIOC) and an consortium comprising Total, China’s CNPC International and Petropars in Tehran on Monday, Mr. Zangeneh said $130 billion dollars will be invested in upstream projects and the rest will be allotted to developing downstream projects in the industry.
He said over 70% of the amount can be supplied by tapping foreign resources, adding, “We need foreign investments in order to reach the envisaged 6 million barrels per day of crude oil and condensate output under the 6th development plan of the country.”
The official also said that arrangements for holding a tender for developing Azadegan Oilfield.

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Bijan Zangaeh, while pointing to continuation of talks with Maersk Group, voiced optimism that final agreements will be reached in near future.

“What’s more, Pars Oil and Gas Company Ltd. has been chosen as the contractor of the project,” he continued.

In the same line, Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manouchehri recounted on results of negotiations asserting “for the moment, talks will continue with Denmark’s Maersk until a contract is signed in near future.”

Manouchehri’s remarks come at a time when he has asked Petroiran Development Company to seek consultations from Maersk Group. Such an emphasis seems to be rooted in the fact that the Danish firm is in charge of developing South Pars Oil Layer project.

Complementing oil minister’s statements on the change in the project’s contractor, the NIOC official said “the primary contractor of the project was Pars Oil and Gas Company though the responsibility was later shifted to the Iranian Offshore Oil Company (IOOC) before returning to the former again based on recent decisions.”

“SPOL was supposed to yield 35,000 oil barrels per day on a regular basis though the output figure currently stands at 25 thousand barrels and will hopefully reach the envisaged level by the end of current year,” stressed the official.

Until a year ago, Maersk Group was in charge of development and production in the Qatari side of South Pars Oil Layer and it had managed to recover one billion barrels. Nevertheless, Total’s proposal to Qatar over the layer led the Danish firm out of the oil-rich region and marked an end to its partnership with Qataris.

Afterwards, Maersk launched more serious talks with National Iranian Oil Company (NIOC) though no final deal has been sealed yet. Several decades ago, the Danish business conglomerate held sessions with the Iranian Ministry of Petroleum though its proposals were rejected and Petroiran Development Company was put in charge of the developmental project.

Several marginal issues in the drilling project and failure of Schlumberger drilling program brought about a series of unwanted events until the first Floating Production, Storage and Offloading (FPSO) unit was purchased.

Return of Maersk Group to Iran is reminiscent of the remarks made by International Petroleum Consultant and the then Director of Maersk for legal affairs and contract Pasha Ramazanpour who said “despite willingness of the Danish firm to develop the oil layer, the project has been assigned to a newly-formed Iranian company.”

A.P. Moller–Maersk Group, also known as Maersk, is a Danish business conglomerate. A.P. Møller – Maersk Group has activities in a variety of business sectors, primarily within the transport and energy sectors.

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“We are increasing our oil output which will reach the designated production level,” Gholamreza Manouchehri, National Iranian Oil Company’s (NIOC) deputy head for engineering and development affairs told IRNA.

On November 30, 2016, the Petroleum Exporting Countries (OPEC) finalized an agreement to cut its overall production by 1.2 million barrels a day and set its new production ceiling at 32.5 million barrels a day as of January 2017.

The agreement, however, allowed Iran to raise production by 90,000 bpd to nearly four million barrels a day from January this year.

Manouchehri pointed to reports that Iran’s production ceiling has increased beyond the level set by OPEC saying the rise does not run counter to the terms of the agreement.

“Iran’s average oil production must only be below the level set by OPEC in a period of six months,” he added.

The November deal — the first in eight years — also granted Libya and Nigeria, which had seen their production drop due of armed conflict, an exemption from the cut.

Oil has rallied since November amid speculations that the supply cuts would boost prices. Some market analysts say that crude prices could reach $60-$70 a barrel in the coming months if the cuts are fully enforced.

Iran oil market upbeat

Since the lifting of sanctions began in January last year, the Islamic Republic has largely increased oil exports.

Speaking on the first anniversary of the implementation of the Iran nuclear deal in a gathering in Tehran on January 16, First Vice President Es’haq Jahangiri said that the exports of Iran’s oil and gas condensates are at their highest levels since the 1979 Islamic Revolution.

Tehran and the P5+1 — the US, Britain, France, China, Russia plus Germany — signed the nuclear accord known as the Joint Comprehensive Plan of Action (JCPOA), on July 14, 2015.

Under the landmark deal, which went into force on January 16, 2016, the Islamic Republic undertook to place restrictions on its nuclear program in exchange for the removal of nuclear-related sanctions against the country.

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Deputy Head of NIOC for Development and Engineering Affairs Gholamreza Manouchehri said “a list recently published by National Iranian Oil Company was relevant to applicants from Spain, Germany, Italy, Austria, Japan, China and South Korea which had been qualified in Pre-Qualified Iran’s Oil and Gas Upstream Projects Tender Round.”

“Names of Lukoil and Gazprom from Russia were on the list,” highlighted the official asserting that a second list of qualified foreign companies will be soon released.

Manouchehri, while estimating that Russian firms, whose name were among qualified candidates, will be present in the second, underlined that NIOC has inked Memoranda of Understanding (MoUs) with Russia’s Zarubezhneft and Tatneft both of whom were absent in the first published list.

“NIOC must have approved of all firms with which a cooperation agreement has been inked,” noted the official.

He further maintained that claims on disqualification of Russian firms reiterated that Iran welcomed cooperation with credible Russian parties who held new technologies.

National Iranian Oil Company has so far sealed MoUs with seven Russian oil giants for development projects or boosting recovery factor in various oil and gas fields.

Accordingly, research and development MoUs have been signed with Russian firms like Lukoil, Tatneft, Zarubezhneft and Gazprom for expansion of seven Iranian oilfields including Mansouri, Ab Teimour, Aban, West Paydar, Dehloran, Cheshmeh Khoshk and Chenguleh.

Accordingly, Russian firms enjoy the highest rate of cooperation in upstream sector of Iran’s oil and gas industry as compared with Asian or European companies.

Nevertheless, names of Russneft, Tatneft and Zarubezhneft were missing on the recently-published list by NIOC giving rise to hypotheses that the three Russian oil giants had been disqualified.

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