04 Business with Iran

Business with Iran
Petroleum upstream and downstream market
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Iran petroleum at a glance
Crude oil production
3.117 Million pbd (used to be more than 5 million)
Crude oil export
1.109 Million bpd
production of natural gas
212,796 Million cu. m
Refinery capacity
1.781 Million bpd
Exports of petroleum products
470,000 bpd
Value of petroleum exports
$ 53,6 Billion
Proven crude oil reserves
157.530 Billion barrel
Proven natural gas reserves
34.020 trillion Cu. m
Oil and gas market at a glance
• Second (or even first) country in the gas
reservoirs
• Many non-developed gas reservoirs
• Becoming the main Europe gas supplier
• 4’th rank in the oil reservoirs
• A huge number of downstream projects
• Sharing the largest gas reservoir with Qatar
• Many non-discovered fields
Oil ministry of Iran
President/ Head of government
NIOC
Ministry of oil
NIGC
NIPC
Domestic market
Getting private
Iranian Offshore Oil Company (IOOC)
Iranian Central Oil Fields Company (ICOFC)
National Iranian South Oil Company (NISOC)
National Iranian Gas Export Co. (NIGEC)
Khazar Oil Exploration and Production Company
Pars Oil and Gas Company (POGC)
Petroleum Engineering and Development Company
(PEDEC)
National Iranian Drilling Company (NIDC)
National Iranian Oil Terminals Company
…
Iran oil and Gas reservoirs
• South Pars
• IOOC
• NISOC
• ICOFC
• KEPCO
Iran oil and Gas reservoirs
GAS
OIL
South Pars
• The largest gas field entire the world shared with
Qatar about 58.9×1012 cu ft (1.67×1012 m3)
• A couple of development phases have been defined
in which some of them have not been started and
some of them are under construction
• Each phase(s) contain offshore, pipeline to shore
and onshore gas refineries.
• Operational phases need maintenance,
development and extensions
• Total started the gas development in Iran
Refineries
Abadan Refinery (NIOC), 450,000 bbl/d (72,000 m3/d)
Arvand oil refinery (Private), 120,000 bbl/d (19,000 m3/d)
Arak Refinery (NIOC), 250,000 bbl/d (40,000 m3/d)
Tehran Refinery (NIOC), 225,000 bbl/d (35,800 m3/d)
Isfahan Refinery (NIOC), 265,000 bbl/d (42,100 m3/d)
Tabriz Refinery (NIOC), 112,000 bbl/d (17,800 m3/d)
Shiraz Refinery (NIOC), 40,000 bbl/d (6,400 m3/d)
Lavan Refinery (NIOC), 20,000 bbl/d (3,200 m3/d)
Meraat Arya Refinery (MAGOD) (Private), 20,000 bbl/d (3,200 m3/d)
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• Bandar Abbas Refinery (NIOC), 335,000 bbl/d (53,300 m3/d)
• Kermanshah refinery (NIOC), 21,000 bbl/d (3,300 m3/d)
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Petrochemical industries
• More than 30 operational
petrochemical complexes in south,
south west, west and center of Iran
• Many sort of petrochemical products
from the operational complexes
• 73 Petrochemical Project Under
Implementation in Iran
• 30 Complexes for investment
Pipelines
• Crude oil pipelines
• Refineries
• Swap
• Gas pipelines (sour and sweet)
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Consumers
Injection
Turkey- Europe
Pakistan- India
• Ethylene pipeline
• West petrochemical plant feed
Foreign petroleum investment timeline
Concession
Joint venture in E&P
FIPPA (Buyback, BOT, …)
Iranian Petroleum Contract
(IPC)
1st generation: 1990
2nd generation: 1995
3rd generation: 2003
1872
Oil discovered
1951
Nationalization
of petroleum
1979
Forbidden Ownership for
foreign companies
Iranian Petroleum Contract vs Buy back
• More flexibility in the contract (the rates are fixed in buyback)
• Long term contract 15-20 years instead of 5-7 years
• Covers all exploration, development and production phases
• Joint venture agreement between NIOC and IOC
• No fixed Capital and capital return scheme
• Marketing is possible by IOC
Iranian Petroleum Contract vs Buy back
Term
25+ years (versus 5-10 Y in case of buy-backs).
JV
In buy-backs the NIOC subsidiaries acted as the Owner. In IPC the IOC, Local Partner and NIOC
subsidiary form a JV and jointly develop the field.
Capex
Capex is not preset anymore. JV will create the master development plan and has provisions to allow
changes in Capex if needed. A yearly budget and work-plan will be developed and approved by the JV.
Complexity
Factor
Risk-reward factors linked to the complexity of each field are included. These factors allow higher fees
paid to IOC for ‘high risk’ fields compared to ‘low risk’ ones.
Remuneration Cost recovery plus fee per barrel; in cash or in-kind.
Asset LifeCycle
Allows smooth transition over various stages of the reservoir i.e. exploration, development, production
and EOR/IOR without retendering.
Marketing
Allows IOC to market products if they choose to.
SCR
Encourages IOC to undertake civil and other social projects (e.g. hospitals) in oil-producing regions.
Transparency Higher financial transparency to reduce risk of corruption.
Local content
Although more than 51% of project budget need to be expended locally, but share of IOC and Local
Partner in a project may vary, based on the size of investment and type of project.
IPC projects forecast
Media - Oil
Media - Gas
Media - Refineries
Media - Petrochemical