Easier Access to Key Oil Equipment

After the easing of international sanctions and gradual normalization of trade ties with foreign firms, most of the equipment and machinery for the oil sector, held overseas, was released and delivered in Asalouyeh, Bushehr Province, managing director of Pars Oil and Gas Company (POGC) said.

“Upon the implementation of the nuclear agreement (in January 2016) with the six world powers, known as the Joint Comprehensive Plan of Action, 24 Siemens turbo-compressors that were purchased for the South Pars Gas Field were released," Mohammad Meshkinfam was quoted as saying by IRNA on Monday.

"A large number of international firms, which had stopped trading with us, have reestablished relations and we are doing business with them on a regular basis," Meshkinfam said. Due to crippling sanctions "poor quality Chinese machinery had to be installed in refineries as well as in offshore and onshore facilities."

Pointing to other negative effects of the global restrictions, the official noted, "The low quality Chinese equipment imposed huge losses on the country. Moreover, the foundations that had been laid for high-tech turbo-compressors had to be redone because of Chinese machinery, most of which did not comply with international standards."

According to Meshkinfam, mismanagement coupled with lack of economic stability forced contractors to use whatever equipment they could lay their hands on to develop South Pars phases 15-18 refineries.

He referred to the impact of the JCPOA in clearing the equipment and said all activities related to the South Pars phases and the recently-launched Persian Gulf Star Refinery had to be suspended due to the sanctions regime.

---- Raising Oil Export Capacity

In related news, Pirouz Mousavi, managing director of the Iranian Oil Terminals Company (IOTC) hailed the positive effect of the landmark nuclear deal on key oil sector.

"The agreement allowed us to effectively increase crude oil exports," Mousavi said.

According to the official, had it not been for the JCPOA, Kharg Oil Terminal's  loading capacity could not be expanded to 7 million barrels per day because most of the equipment needed for the port's overhaul had to be either unblocked or imported from back channels and middlemen at several times the price.

Kharg Oil Terminal is located on the Persian Gulf island by the same name and is 25 km off the coast of Iran. According to officials, 93% of Iranian crude export passes through this island.

International sanctions cut Iranian crude exports from a peak of 2.5 million bpd before 2011 to just over 1 million bpd. Crude output is now close to 3.9 million barrels a day and exports at around 2.6 million barrels daily.

----- Minister's Backing

According to Bijan Namdar Zanganeh, the oil minister, termination of sanctions opened a new chapter in collaboration with foreign companies, in particular Siemens.

"Oil Ministry and Siemens had effective collaboration in manufacturing a large number of gas turbo-compressors in Iran before the sanctions. We need to promote such cooperation, as Siemens' gas turbines and compressors offer long-term efficiency, availability and reliability," he said.

Pointing to the need for machinery and equipment to raise gas output, Zanganeh said earlier, "Siemens can be a perfect business partner for Iran. It is a key supplier of advanced oil and gas equipment, which explains why their investment in Iran's energy sector will yield positive results, create jobs and lead to the country's economic prosperity."