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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The first major Western energy investment since sanctions against Tehran were lifted will cost up to $5 billion, with production expected to start within 40 months, an Oil Ministry source said, Reuters reported.

The US and other world powers lifted sanctions after the country pledged to roll back its nuclear program.

With the 20-year deal, Total is now returning to Iran, where it first began operating in the 1990s. Total CEO Patrick Pouyanné said in a statement on Monday that the investment would be “in strict compliance with applicable national and international laws”.

The US still has restrictions in place that block most American companies from investing in Iran. And some Western companies have been reluctant to jump in since Iran still faces sanctions that prevent firms from transacting with Iran in US dollars.

Total estimates the first phase of the project will cost around $2 billion. It is taking a 50.1 percent stake in the South Pars project. CNPC will own 30 percent while the other 19.9 percent will go to Petropars.

The project will have a production capacity of two billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, according to Total.

Iran’s Oil Ministry predicts the project will eventually produce gas products worth $54 billion based on current prices. The gas will start flowing into the Iranian market in 2021.

Iran has significantly ramped up its energy production since the sanctions were relaxed.

Figures from OPEC show Iran has boosted its daily crude oil production by more than 33 percent since 2015.

Iran sits on nine percent of the world’s proven oil reserves and 18 percent of the planet’s natural gas, according to data from BP’s Statistical Review of World Energy.

Iran and Qatar share the South Pars field.

Iran has signed a flurry of deals with Western companies over the past year since the easing of international sanctions on Tehran after an accord was reached over its nuclear program.

Iran needs foreign investment to repair and upgrade its oil and gas fields. It also seeks the transfer of technology to its oil industry after a decade of sanctions.

Iran has named 34 companies from over a dozen countries as being eligible to bid for oil and gas projects using the new, less restrictive contract model.

The firms include Shell, France’s Total, Italy’s Eni, Malaysia’s Petronas and Russia’s Gazprom and Lukoil, as well as companies from China, Austria, Japan and other countries.

Russia’s Zarubezhneft signed an MoU to conduct feasibility studies on two joint fields in the west of the country.

Norway‘s International Aker Solutions Company signed an MoU to modernize Iran’s oil industry.

In May 2016, Austria’s OMV signed an MoU for projects in the Zagros area in western Iran and the Fars field in the south.

South Korean Daewoo Engineering and Construction (Daewoo E&C) signed an MoU to construct an oil refinery in Bandar Jask, on the southern coast of Iran.

Italy’s Saipem signed MoUs to cooperate on pipeline projects, upgrading of refineries and development of Tous gas field in the northeastern province of Khorasan Razavi.

Norwegian oil and gas company DNO said it was the second Western energy company after Total to sign a deal with Iran under which it agreed to study the development of the Changuleh oilfield in western Iran.

Lukoil, Russia’s second biggest oil producer, hopes to reach a decision on developing two new oilfields in Iran.

Germany’s Siemens AG signed an MoU in May to overhaul equipment and facilities at Iran’s oil operations and refineries.

BASF’s Wintershall oil and gas exploration subsidiary signed an MoU with the National Iranian Oil Company in April 2016.

President Rouhani:
Developing South Pars Phase 11 not only an economic contract, but also a scientific, technological, management cooperation

President Rouhani met with the Chairman and CEO of France’s Total company and described South Pars region as an important centre for developing international cooperation with Iran in the field of energy-technology.

In the meeting that was held on Monday in Tehran, Dr Rouhani told Total’s Patrick Pouyanné: “Due to the good potentials and hard-working young men in Iran, the contract of developing Phase 11 of South Pars is not only an economic one, but also a scientific, technological and management cooperation”.

Total CEO: We seek a long-term cooperation with Iran

“The Islamic Republic of Iran and France have always had good relations and cooperation with each other,” he continued saying.

Referring to France’s position in economy and energy technology, he added: “The signing and execution of this contract will be a significant step in development of economic and technological cooperation between the two countries”.

Stating that the 11th administration has attempted to finalise the Joint Comprehensive Plan of Action (JCPOA) to clear the path for economic cooperation between major companies and Iran, the President said: “Fortunately, this political will from the Iranian side and among P5+1 countries paved the way for this agreements with Total”.

President also referred to his Europe and France visit after the signing of JCPOA, adding: “In Paris, there was a good political will among the authorities of both countries to develop cooperation and important agreements were signed between the two countries to deepen ties and cooperation”.

“It is our policy to cooperate with major companies such as Total,” said Dr Rouhani, adding: “Currently, projects in gas and oil worth roughly $200bn are ready to be invested on and major foreign companies can cooperate in these projects”.

“We must work hard to achieve peace and stability in the region serving economic progress and development of the region, because scientific and developmental cooperation can help us combat ignorance and poverty as the bedrocks of terrorism expansion,” he continued.

The President also expressed hope that with the new agreements and cooperation in the field of gas, oil and petrochemicals, Iran and France take considerable steps in developing ties.

During the meeting, the Chairman and CEO of France’s Total company Patrick Pouyanné also expressed happiness over meeting the President of the Islamic Republic of Iran and described the contract as a very important one, saying: “Today, we are very happy that we could finalise and execute the contract with the help of the authorities of the two countries”.

Stating that the JCPOA agreement has paved the way for further development of relations between European countries and Iran, he said: “We are optimistic about our cooperation with Iranian companies”.

“We seek a long-term cooperation with Iran,” continued Pouyanné.

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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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Following the inking of Memoranda of Understanding (MoUs) for conducting developmental studies in Azadegan oil field with France’s Total, Britain’s Royal Dutch Shell and Inpex Corporation of Japan, a cooperation agreement will be also inked in the current week between the largest Malaysian oil firm PETRONAS and the National Iranian Oil Company (NIOC) to carry out similar studies in Iran’s joint oil field with Iraq.

Moreover, NIOC will also sign into another deal with the Malaysian side in order to perform studies for boosting recovery factor in Cheshmeh Khosh field.

In recent months, NIOC has sealed several MoUs with Austria’s OMV and Gazprom of Russia aiming to increase recovery factor of Cheshmeh Khosh in the west of Iran.

The accord between NIOC and PETRONAS is scheduled to be signed on Wednesday in Tehran between officials of the two oil companies.

On the sidelines of his meeting with Minister of Foreign Trade and Industry of Malaysia Dato’ Seri Mustafa Muhammad, Iranian Oil Minister Bijan Zanganeh said Iran welcomes arrival of Malaysian firms, Petronas in particular, since they hold a long history of relations with the country’s oil industry.

Prior to sanction years, the bulk of cooperation between National Iranian Oil Company (NIOC) and Malaysia pertained to sales and exports of crude oil as Iran was deploying a daily average of 50 to 60 thousand barrels of crude oil to Malaysia’s PETRONAS under spot contracts, he continued.

One of NIOC’s most significant deals with Petronas was over the developmental project of South Pars Phase 11 which was supposed to be accomplished in collaboration with France’s Total and Repsol S.A. of Spain though the agreement was violated as a result of international sanctions against Iran.

Despite having had only a few years of activity in the oil and gas industry, PETRONAS remains among rare oil and gas companies who enjoy functionality and operational teams in both upstream and downstream oil sectors.

The Malaysian oil and gas company is currently active in numerous fields including oil and gas refining, construction of pipelines, LNG transfer, gasoline stations management, manufacturing and marketing of petrochemicals and chemicals, exploration, exploitation, drilling, production and storage of crude oil, petroleum products and natural gas.

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The deals open the way for Gazprom to carry out studies at the Cheshmekosh and Changouleh fields near the border with Iraq, according to the Shana news agency, which is linked to the Oil Ministry, AFP reported.

That adds to five other oilfields that have already been earmarked for Russian firms Lukoil, Tatneft and Zarubezhneft.

The latest deal was signed by Russian Energy Minister Alexander Novak, who is visiting Tehran with a 590-strong business delegation.

Russia and Iran are keen to deepen their economic relationship.

Iran has announced a slew of energy deals with foreign firms in recent weeks, despite uncertainty around the incoming US administration of Donald Trump, who has vowed to take a more confrontational stance toward Tehran.

Last week, Anglo-Dutch giant Shell signed an initial accord to explore two of Iran’s largest oilfields at South Azadegan and Yadavaran, as well as the Kish gas field.

That followed an initial deal with France’s Total last month to develop part of the South Pars gas field – a project worth an estimated $4.8 billion.

But doubts persist over how these deals will be financed so long as Iran remains frozen out of the international finance system by continuing US sanctions.

The government has announced that Iran’s energy infrastructure urgently needs an infusion of foreign cash, technology and know-how.

Russia Keen to Participate in Iran’s Oil, Gas Projects
Russian Energy Minister Alexander Novak said on Tuesday that Moscow is keen to participate in Iran’s oil and gas projects.

He made the remarks in the Iran-Russia trade forum in Tehran.

Iran and Russia will continue cooperation in execution of development projects in the oil and gas sector, the official added.

He said that Iran and Russia will promote cooperation in construction of gas, electric and nuclear power plants.

Iran and Russia are keen to enhance all-out ties, Novak added.

He referred to removal of Islamic Republic’s sanctions and said the ground is now ready for Russia’s investment in Iran’s oil and gas projects.

The two countries enjoy good capacity for promotion of cooperation, Novak added.

He said that the volume of cooperation between the two states is increasing.

Iran and Russia enjoy longstanding cooperation in energy fields and they can work together in fields of construction of nuclear, electric and gas power plants, the minister added.

He said that central banks of Iran and Russia have taken good steps forward resolution of banking problems.

Russia will cooperate with Iran to develop its Bushehr Nuclear Power Plant and electrify its railroads, Novak added.

He said Moscow is ready to sell superjet planes to Iran.

National Iranian Gas Company (NIGC) and Russian Gazprom Neft on Tuesday signed a Memorandum of Understanding (MoU) for cooperation.

Managing Director of the NIGC Hamid-Reza Araqi and Deputy Managing Director of Gazprom Alexander Medvedov signed the deal in the presence of Iran’s Minister of Communications Mahmoud Vaezi and Russian energy minister.

The two sides decided to form five working group with regards to the extent of the working fields. The working groups corresponded and held talks on trade of gas, R&D, production and implementation of the joint projects and gas application.

In the meeting, the projects of investment in Iran were outlined and it was announced that Iran is ready to absorb more than 62 billion dollars investment in the NIGC projects in the coming years.

With lapse of almost one year since the first working session, the two sides signed the MoU based on outcome of their expert sessions.

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Iran’s output will be 3.797 million barrels per day per an agreement reached in the OPEC 171st ordinary meeting on Wednesday, November 30.

Hence, Iran’s average crude production level for the first half of 2017 will be 3.797 million barrels.

As of January 2017, Iran’s production will be 3.707 million per day, adding 90,000 barrels per day to the figure gradually.

Per OPEC approved table, Iran will be the only country to add to its production in the first six months of 2017: 90,000 barrels per day on the average. Iran’s average output level would not exceed 3.797 million barrels per day in the first six months of 2017.

Iran will be able to produce 3.9 million barrels per day oil in certain weeks in the first six months of 2017 but the average figure in the six-month period would not exceed 3.797 million per day.

Per OPEC agreement, Saudi Arabia should cut 486,000 barrels per day from its output to bring its output level overall to 10.058 million barrels per day.

The petroleum ministers of the Organization of the Petroleum Exporting Countries (OPEC) decided to curtail their total production by 1.2 million barrels a day.

For the first ever since 2008, OPEC will cut its production in consistency with the Algiers September 28 accord.

In accordance with the Algiers accord, the Organization’s output ranged between 32.5 million barrels per day to 33 million barrels per day.

Oil prices are predicted to rise after the November 30 agreement to 50 to 55 dollars a barrel.

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