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Iran a Huge Market for Oilfield Services Firms
Energy

Iran a Huge Market for Oilfield Services Firms

A recent update from Rystad Energy, an oil and gas data provider, contains optimistic news for the oilfield services sector, underlining Iran as a resurging market with huge potential.
The Oslo-based firm said in its recent analysis that low oil prices “have not affected closed and emerging markets to the same degree” as other markets during the global pricing crisis, providing opportunities for service companies.
Iran is expected to have the largest growth in terms of investment in oil and gas fields, increasing its purchases by more than $6 billion from 2014 to 2018 to realize its production targets, Offshore Oil and Gas Magazineý reported.
After western sanctions were lifted in January 2016, the country’s oil and gas industry has been gradually opening up again for foreign services companies, unlocking a large market potential.
"The easing of sanctions has resulted in a sought for market for a service industry searching for growth opportunities," Rystad said.
Iranian officials say they would take investments of $85-120 billion in the upstream sector during 2016-20 to increase crude production, according to their ambitious plans.
In total, $150-185 billion, or 50 upstream and midstream projects, could be committed before 2020.
The analyst firm foresees that production growth will face challenges due to investment hurdles and decline in existing fields, with around $100 billion of investments needed in the upstream sector from 2016 to 2020.

  Offshore Market
Approximately half of the $100 billion spending purchases will be directed toward the offshore market, which is expected to be at $9 billion this year and grow to $11 billion in 2020. The majority of the market consists of engineering, procurement, construction and installation contracts.
Five new platforms will be commissioned in 2017 at South Pars Gas Field's phases 20 and 21, and more to follow at the $4-billion Phase 11 as well as at the massive Farzad-B field discovered by an Indian consortium.
An increased number of active platforms, together with aging facilities that have lacked investments during the sanctions, will force a rise in the maintenance and operations purchases.
Demand for drilling contractors as well as services and commodities is picking up in the coming years since many of the offshore projects under development will go into pre-drilling.
Roughly 25% of the investments are well-related costs. With 22 wells to be drilled over the next 30 months at South Pars Phase 14 and additional infill drilling to commence at the producing field, these services will rise in the next few years.
Rystad Energy expects a $30 billion growth from 2014 to 2018 to be realized for 20 countries.
There are several exciting potential growth opportunities in more than 20 countries, it said.
Saudi Arabia is making purchases in most segments, except EPCI contracts, to maintain production capacity, and Mozambique’s purchases will ramp up as the country prepares for offshore gas developments.
Egypt and Turkmenistan’s purchases are mainly driven by field development at Zohr, West Nile Delta and Yolotan.

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