By Sadeq Dehqan & Farzam Vanaki
Iran hosted an important conference in Tehran during November 28-29 to present 50 oil and gas projects for development through foreign investment which is expected to trickle in following the lifting of Western sanctions.
Titled 'Tehran Summit', some 250 representatives of 137 companies from 33 countries attended the conference during which Iran also introduced a new contract format with better incentives to investors than the erstwhile buy-back deal.
Foreign firms represented in the event included Repsol, BP, Royal Dutch Shell, Total, Technip, Schlumberger, Eni, Enel, Rosneft, Lukoil, Gazprom, Inpex, Statoil and Daewoo.
Foreign companies are excited at the prospects of big business in a country which possesses the world's largest oil and gas reserves combined, when sanctions are lifted in early 2016 as per July-14 nuclear accord.
Iran plans to boost oil and gas production to 5.7 million barrels and 1.4 billion cubic meters per day, respectively, by 2021. The projects include a combination of brown and green fields as well as exploration blocks up for development.
In exclusive interviews with Iran Daily on the sidelines of the conference, representatives of some foreign companies commented on new Iran Petroleum Contract (IPC) and their plans for future cooperation.
Win-win situation
IPC contracts will provide Iran and other countries an opportunity to expand cooperation in oil and gas industry, said Carlos Borde, a member of the Board of Directors of Kensel Smith company based in Abu Dhabi, the UAE.
He added currently, Iran accounts for 3 percent and 18 percent of the global oil output and reserves, respectively.
"Iran is required to use the present opportunity [provided by IPC] to establish effective and strong partnerships with international as well as local companies and improve its manufacturing and technical capabilities to claim its rightful place within the international oil and gas industry."
Kensel Smith's activities are focused on upstream operations and production, he said, adding, it is also an integrated oilfield services company.
On the advantages of cooperating in Iranian oil and gas industry, he said, "Iranian contracts are long-term. In the next 50 years, global demand for energy will double. Every single fuel source will count in the future be it hydrocarbons, nuclear, hydro-electric or thermo-electric."
He disclosed that at present, competition among oil producers has intensified, adding consequently, oil customers will gravitate towards the lowest-cost producers in the region.
"Currently, Iran is presenting opportunities which, most probably, are not going to be repeated in a very long time anywhere in the region. Iran is a low-cost producer open to work with foreign investors. The country is doing its best to create a win-win situation in oil trade with other countries."
He added Kensel Smith does its best to study all aspects and strike a type of contractual agreement which is attractive to all parts.
On the amount of their outlay for Iranian projects, Borde said, "That will depend on the opportunities to be suggested; but we are well-positioned to ensure that we can bring substantial capital and technical capability to the ventures."
He noted Kensel Smith has already established a good partnership with a number of Iranian oil companies and looks forward to expanding cooperation with them. He added, "We seek to increase our presence in the Iranian market and build up our relationships with Iranian firms until both sides become important regional and, eventually, global players."
On the changes in Iran's oil and gas exports following the removal of the sanctions, Borde said the lifting of the embargoes will not happen overnight, adding nevertheless, Iran will undoubtedly increase its exports of hydrocarbon reserves and share of the global market in the post-sanctions era and will become a substantial player in the global oil and gas industry.
Iran, an exciting market
Headquartered in Aberdeen, Scotland, LR Synergy company is an integrated exploration, production and energy services consultancy which provides technical expertise to a broad global client base of operators, investors and energy vendors, said the chief executive officer of the firm.
James McCallum said Iran has substantial hydrocarbon reserves and huge potentials in oil and gas industry which make it an exciting market for foreign firms in the post-JCPOA era.
"At present, we are just looking for good partners in Iran with which we can work and share our international expertise and experiences."
Following the removal of the sanctions, Iran will be able to access modern international technologies and capabilities finding an exciting opportunity to accelerate its economic development, he said.
McCallum disclosed that the lifting of the embargoes will enhance the prospects of cooperation in Iran's oil and gas production for international companies.
"In the post-sanctions era, foreign oil and gas companies will be able to expand their presence in Iran's attractive market."
India keen on Farzad oilfield
India-Iran Chamber of Commerce and Industry aims to promote business between the two countries and strengthen trade ties, said the chamber's vice-president.
Pervinder Singh Chandhok added India has a very positive attitude towards the new Iranian government and is a hundred percent positive to participate in the implementation of joint projects.
"The two countries have long-standing and friendly relations and a large number of bilateral trade contracts. At present, Iran has $10 billion in India which cannot be transferred to the country due to the banking restrictions. Given the proximity of the two countries in terms of distance, they can easily expand trade cooperation and business."
He noted India is interested in investing in upstream, midstream and downstream Iranian oil projects for all the three sectors demonstrate great potentials.
Chandhok added Iran is also interested in funding Indian oil, gas and refinery projects.
"India is doing its best to win the tender for the development of Farzad oilfield. If this happens, private Indian firms expect the two governments to set up a joint fund, using the Iranian money left in India, out of which a business of $5 billion services cooperation could be created for both countries."
He said although the sanctions had a number of negative impacts on Iran, they helped the country become more self-sufficient in some fields, adding Iranians need to be praised for their marvelous achievements during those years.
"Nevertheless, following the removal of the embargoes, particularly those on Iran's banking system; there will be a massive inflow of credit lines into the country."
Huge reserves
Headquartered in the Netherlands, Just 4 Ocean company is manpower organization involved in the knowledge industry, said Justus Dalenoord, the founder and owner of the company.
He added the company has more than 40 years of experience in oil and gas industry and is willing to share it with Iran.
Dalenoord noted Iran is among the world's top five countries in terms of hydrocarbon reserves and can explore this potential and huge advantage to further accelerate the country's economic development, adding the country is also very stable.
"We are interested in investing in the upstream sector of Iran's oil and gas industry and help improve the experience and knowledge of Iranian human resources. We have also signed an MoU with an Iranian university in the field of petroleum engineering."
On the impacts of the removal of the sanctions on Iran's oil and gas exports, Dalenoord noted it gives the country an opportunity to begin, expand or resume cooperation with international companies and increase exchange knowledge and experience with them.
Commenting on the future of the oil and gas market, he said, "The industry is gradually dying. We will run out of hydrocarbon reserves in the not too distant future and, therefore, will have to change our energy resources if we want our children to have the same convenience and planet. To this end, we have to steadily move towards boosting production and promoting use of renewable energies."
On the future of the international oil prices, Dalenoord said in the long-run, they will rise, adding, however, the present prices will not witness a remarkable growth in the next two or three years.
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