Plans to Increase Overseas Drilling Projects

Plans to Increase Overseas Drilling ProjectsPlans to Increase Overseas Drilling Projects

Iran is ready to transfer technical and engineering services and expertise in oil and gas drilling and exploration to regional markets, with Iraq pinpointed as a priority, an official at the National Iranian Drilling Company said.

"We have started negotiations on transferring drilling knowhow to Iraq. NIDC is also considering projects to expand operations in north and south of Iraq," Mohammad Reza Takaidi was quoted as saying by Shana on Sunday.

The state-owned company is anticipated to land new drilling contracts in Iraq over the next few months to help the Arab neighbor tap into its huge hydrocarbon reserves, with negotiations underway between NIDC and the state-run Iraq National Oil Company.

NIDC is also negotiating drilling projects in Turkey, potentially on the basis of turnkey contracts, under which it will complete a project and hand it over in fully operational form to the client, which needs to do nothing but "turn a key".

Iran's presence in Iraq's potentially lucrative energy market, however, will be under the shadow of the so-called Islamic State militant group's presence, which has established a self-proclaimed "caliphate" in the swaths of lands it holds in the war-ravaged country.

In January 2014, the militant group took control of the city of Fallujah in the western Anbar Province. It also seized large sections of Ramadi in central Iraq and has a presence in a number of towns near the Turkish and Syrian borders.

Tehran and Baghdad also have signed the biggest gas export contract, under which the Islamic Republic will supply up to 35 million cubic meters of gas a day via a pipeline through its western borders.

Iran was expected to begin gas supply in summer, but officials said the project was delayed due to Iraq's political turmoil and insecurity.

  Overseas Markets

Takaidi said NIDC has signed memoranda of understanding with Italian oil and gas majors Eni and Saipem to expand cooperation in the post-sanctions period.

"NIDC is ready to implement drilling projects overseas in cooperation with two Italian companies," he said. Takaidi said the National Iranian Oil Company has held meetings with representatives from a well-known German company on investment and transfer of technology.

Eni is one of Europe's leading companies in the drilling sector. It has reportedly developed a deepwater drilling technology that allows it to significantly reduce the exploration and extraction costs of offshore oil and gas wells.

Last month, senior Eni executives said in a conference in Tehran that development of Iranian oil and gas fields is a top priority for the Italian giant. He added that the German company has reached a preliminary agreement to cooperate in drilling operations and modernize oil and gas production installations.

The landmark July 14 nuclear agreement between Iran and six world powers and the anticipated removal of sanctions by early 2016 have spurred major European companies to rush to the Iranian capital Tehran over the past few months to consolidate a place in the country's energy sector.