Things to Know before entering Iran Drilling Market

OPEC data put Iran’s proven oil reserves at 157.7 billion barrels and its natural gas deposits at 34 trillion cubic meters (tcm). Iran’s oil production hovered around 3.1 million barrels a day (mb/d) in 2014, which officials say could reach 4 mb/d with a year after international sanctions are lifted on the country. Iran’s current oil and gas output capacities are estimated at 3.8 mb/d and 760 mcm/d respectively. Regardless of the impact of sanctions in recent years, Iran’s oil production has diminished in recent years. Over the coming year, production boost from West Karoun fields – Yadavaran and Azadegan – will add 150,000 b/d to Iran’s oil production capacity. The “enhanced crude oil and gas condensate production capacity with focus on recovery from shared fields” plan requires Iran’s oil production to reach 5.7 mb/d by the Iranian calendar year 1396 (starting in March 2017) and the country’s gas production to hit 1 bcm/d by the calendar year 1397. Iran’s Ministry of Petroleum envisages 5 mb/d of oil, 1 mb/d of gas condensate and 1.3 bcm/d gas by early 2021 when Iran’s 6th Five-Year Economic Development Plan ends. The supergiant offshore South Pars gas field, which is a shared field between Iran and Qatar in the Persian Gulf, will make the highest contribution to Iran’s gas production. Eight megaprojects, valued at 53$ billion, are currently under construction in South Pars Field which will be started up by the end of.

Iran Upstream Oil Structure 

Iran’s oil and gas sector has a fully staterun structure, under which ownership of oil reservoirs, production, transmission and sale of oil and gas are run exclusively by National Iranian Oil Company (NIOC). Private companies can operate in exploration, development and drilling, refining, petrochemical production and selling oil and petrochemical products. NIOC has six subsidiaries that are tasked with developing and operating oil reservoirs. They are National Iranian South Oil Company (accounting for %80 of Iran’s oil output and holding several subsidiary  companies), Arvandan Oil and Gas Company (running West Karoun oil fields), Iran Central Oil Fields Company
(running oil production in central, eastern and western Iran), Iranian Offshore Oil Company (operating oil production in the Persian Gulf), Khazar Exploration and Production Company (conducting exploration operations in the Caspian Sea) and Pars Oil and Gas Company (operating South Pars, North Pars, Golshan and Ferdows fields). Meanwhile, some fields are developed under the supervision of Petroleum Engineering and Development Company on behalf of NIOC. Some oil companies directly involved in development and drilling operations are partly or fully owned by NIOC subsidiaries. Some of them are Petropars (operating in South Pars), Petroiran Development Company (active in Persian Gulf fields) and National Iranian Drilling Company (the giant drilling service provider with 72  drilling rigs). Private companies are mainly engaged in procuring drilling rigs, providing consulting services, drilling services and manpower.
Iran Upstream Projects
Iran’s oil development projects are currently focused on South Pars gas field and West Karoun oil fields including North Azadegan, South Azadegan, Yadavaran, South Yaran, North Yaran and Azar. Development in several oilfields like Forouzan, Jofeir and Sousangerd is stopped or slowed down. NIOC is still operating numerous projects related to the development of ageing and new oil fields. To that effect, NIOC has presented a list of 28 opportunities for investment, totaling 33$ billion, in exploration and development. There are other investment opportunities for the development of oil and gas fields, but either economic feasibility studies have not been carried out for  them yet or they could be awarded through direct negotiations. Since some aging fields have reached maturity, enhanced recovery, optimized production and production preservation projects through well workover are among other opportunities for investment. It’s estimated that at least 70 percent of oil wells need workover and remedial actions.

Contract Terms
Development of green fields and also well completion and workover in brown fields are often carried out under EPC and buy-back contracts. Under buy-back, the contractor finances the project is remunerated from a portion of revenues from the sale of products. Under EPC, the contractor develops the project financed by the developer. The most common framework of contract for drilling is EPD which has a turnkey basis. Drilling in most development phases of South Pars is done under EPD framework. POGC and IOOC use Integrated Drilling Services (IDS) contracts  for their projects. Iran started developing a new type of oil contract two years ago. The first draft of Iran Petroleum Contract (IPC) was unveiled in Tehran in March 2013 and the final version is to be unveiled in London in December 2015 when 50 investment opportunities will be also introduced.Under IPC, all development operations including exploration, development, production and enhanced recovery are done in an integrated manner with both contractor and developer involved. The contractor is remunerated per oil barrel produced from the field in question. This new structure of oil contracts is expected to bring about fundamental changes in drilling services required in Iran. These changes include the necessity of using state-of-the-art technology, integrated drilling services and applying new methods in workover, preservation and enhanced recovery. Some of these services could be provided by Iranian companies, but some others will necessitate the cooperation of foreign companies.

We can Provide:

The Iran Drilling Market research services details the equipment and service markets associated with the exploration, drilling, and production segments of the Iran petroleum industry. The Reports contains share and size analysis on 32 market segments. Our aim is to introduce and simplify doing business and participating in tenders in Iran, we can provide consulting to organizations wishing to have a better understanding of the Iranian drilling industry market, and help develop their business in this very different market. We construct the Oilfield Market Report using thousands of interviews and hundreds of independent data sources. Among the report’s hundreds of clients are all major oil companies, all major service companies, all major consulting firms and a host of investors.

We can provide this information in our package:

• Iran upstream oil structure specially drilling
• Iran upstream Projects specially drilling projects
• Cotract terms of drilling
• Trends and Forecasts
• Market players
• Consultancy in iran Drilling Industry Report
• Analytical Report of Iran’s Drilling Market

Total Cost : 3000 $