Tehran Bemoans Shortcomings in Boosting Recovery Rates

EghtesadOnline: The pace of drilling operations in Iran is half of that of international firms with access to cutting-edge technology, the National Iranian Oil Company said on Saturday.

News ID: ۷۳۹۹۳۴

20 February 2017

“Raising the rate of recovery from oil and gas fields, which is an overriding priority for the NIOC, is largely contingent on access to advanced drilling technology,” Gholamreza Manouchehri, deputy chief of the company was quoted as saying by Shana.

Under the new model of contracts for Iran's oil and gas projects, known as Iran Petroleum Contract (IPC), foreign firms are required to work alongside domestic companies and gradually hand over their cutting-edge drilling and exploration knowhow to their Iranian partners.

"So long as our drilling companies don't cooperate with foreign majors in overseas contracts, they will lag behind firms whose operations are two times faster than ours," Financial Tribune quoted him as saying.

Pointing to the low rate of crude extraction in Iran compared to its rich hydrocarbon reserves, Manouchehri said the problems and challenge lie not only in funding constraints but also in being deprived of modern drilling equipment.

"Plans are in place to develop oil and gas fields under long-term deals and foreign contractors will be obliged to increase the recovery rate over a specific period."

Criticizing those who often question the IPC, Manouchehri said the new model offers unprecedented opportunity to domestic companies to benefit from modern technology that by foreign companies have for enhancing the recovery rate both in onshore and offshore fields.

"The average rate of recovery from Iran's oilfields is around 25% but should reach 40%," he said without giving a timeframe.

Manouchehri pointed to some oilfields that are past their peak production period, stressing the need to implement enhanced oil recovery techniques to draw the most from crude reservoirs before their permanent decline.

--- Focus on Onshore Gas Projects

According to Mehdi Mir-Moezzi, the managing director of Pasargad Energy Development Company (PEDC), entering Iran's upstream oil sector is becoming increasingly competitive as international oil prices look set to hold above $50 a barrel for the rest of the year.

"Over the past 10 years most petroleum projects were offshore natural gas initiatives," Mir-Moezzi said, adding that roughly two-thirds of the fields planned to be developed in the next few years are onshore.

PEDC is in agreement with the NIOC to study three oilfields in the southern regions. It is active in offshore drilling, general contracting (oil and gas exploration and production) and pipe manufacturing.