Iran Oil Co. Taking Steps to Build Closer Ties With Int’l Firms

EghtesadOnline: The best way to augment the oil industry is to establish good rapport with the international community, says a senior oil official.

News ID: ۷۴۱۷۵۷

28 May 2017

Ali Kardor, deputy oil minister and chief executive officer of the National Iranian Oil Company, made the statement while addressing a conference on 'Annual Planning and Risk Management' in Tehran on Saturday, NIOC's news portal reported.

"Our officials are determined to develop the industry," he said, adding that concluding contracts with multinationals such as Spain's Tubacex Group is one example of the will and determination to take effective measures to expand the oil and gas sector.

Spain-based industrial group Tubacex recently secured a deal with the NIOC to provide  knowhow to produce corrosion resistance alloys used in manufacturing oil and gas pipelines, according to Financial Tribune.

Pointing to the contract, Kardor noted, "Establishing relations with foreign firms can pave the way for the transfer of technology as it is one of the priorities of the Oil Ministry."

The petroleum industry has taken a leap toward utilizing state-of-the-art technologies in oil and gas fields to boost recovery rate and production.

Pointing to the low rate of crude extraction in Iran compared to its massive hydrocarbon reserves, Kardor said the problems emanate not only from lack of funding but also due to being deprived of modern drilling equipment from overseas.

"Plans call for developing oil and gas fields under long-term deals and foreign contractors will have to increase the recovery rate over a specific period," he said.

"Iran needs modern technology for drilling new wells or extracting crude from so-called 'dead wells' which have remained idle for long," Kardor said, noting that the country was deprived of much-needed knowhow and advanced equipment to expand upstream oil exploration/production after international financial and trade curbs were tightened in 2011 and 2012.

According to Kardor, given the aging oil technology and dilapidated infrastructure, Iran can maintain its current output level of 4 million barrels per day for a maximum period of two years.

"The 5.2 million-bpd production level envisaged in the sixth five-year economic development plan (2017-22) will not be possible without modern technology that naturally should be imported along with investments by multinationals and oil majors," said the NIOC chief.

Although there is potential to further increase oil output, NIOC is boosting production levels gradually and with caution. A top priority is to safeguard the oilfields, he said, admitting that the company does not have access to advanced oil recovery technology.