National Iranian Oil Company is ready to sign contracts with domestic companies and conglomerates to develop small- and medium-sized oil and gas fields, provided they are equipped with not only advanced technology but also risk management techniques, managing director of NIOC said on Saturday.
“As long as Iranian enterprises use cutting-edge techniques, have adequate funding and accept project risks, NIOC will welcome them to play a major role in development projects in partnership with foreign contractors,” Ali Kardor was quoted as saying by Shana.
Stressing that companies should be well-equipped with risk management techniques to identify, assess and prioritize risk in order to effectively minimize, monitor and control the risk, Kardor noted that cooperation with such domestic firms tops NIOC's agenda.
According to the official, risk taking is an indispensible part of upstream oil sector and unfortunately, as the contractor, NIOC had to accept the risks, which in most cases was to its disadvantage as it had to shoulder the expenses and wrong policy incurred massive debts.
Upstream Projects
The upstream oil sector, aka the exploration and production sector, includes searching for potential underground or subsea crude oil and natural gas fields, drilling of exploratory wells and subsequently operating the wells that recover and bring the crude oil and/or raw natural gas to the surface.
Underscoring the fact that NIOC cannot bear enormous risk-related expenditure anymore, the official said, “Based on the new model of contracts for Iran's oil and gas projects, known as Iran Petroleum Contract or IPC, NIOC will select companies that can accept project risk, including uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters, and overly aggressive competition. ”
Criticizing those who question IPC, Kardor said IPC would also give a unique chance to domestic companies to take advantage of modern technology possessed by foreign enterprises. "NIOC will always preserve its supervisory role as a contractor under the new contract model not to let international companies abuse natural resources," he said.
"Cooperation with foreign firms does not mean that domestic enterprises' ability has been undermined."
The NIOC chief attached great importance to using enhanced oil recovery techniques to raise output from mature fields.
Pointing to Iran's new policy of purchasing other refineries' stake or building refining complexes overseas, the official noted that construction of refineries in foreign states will help us not only produce oil byproducts such as gasoline, but also export them to target destinations regardless of distance.
Iran approved eight domestic companies and conglomerates for partnership with foreign contractors in its new oil and gas projects that are expected to be tendered this summer.
The list includes Petropars, Oil Industries Engineering and Construction, Dana Energy Company, Petroiran, MAPNA Group, Khatam-al Anbia, the Industrial Development and Renovation Organization of Iran and the Execution of Imam Khomeini's Order.
