NIOC Subsidiaries Sign Cooperation MoU

NIOC Subsidiaries Sign Cooperation MoUNIOC Subsidiaries Sign Cooperation MoU

In line with plans to make the best use of facilities and capacities, the Exploration Department of the National Iranian Oil Company and the Iranian Offshore Oil Company, one of the biggest subsidiaries of NIOC, signed a cooperation memorandum of understanding on Wednesday.

The MoU was signed by Seyyed Saleh Hendi, the head of Exploration Department, and Hamid Bovard, managing director of the Iranian Offshore Oil Company, in Tehran, NIOC's news portal reported.

“The two sides will exchange information and technical know-how to conduct comprehensive surveys on oilfields,” Hendi said.

Highlighting the two firms' access to geology data essential for drilling operations, Hendi noted that based on the terms of MoU, the two enterprises will exchange experience and data on a range of fields, namely health, safety and environment (HSE) management systems, training and petroleum engineering.

According to the official, for carrying out quality operations in the shortest possible time, NIOC subsidiaries have been categorized to undertake a wide range of assignments based on their capacity. Nonetheless, should they cooperate with one another, they can definitely maximize their output.

"NIOC subsidiaries should play a more active role in developing national projects," Hendi said, adding that such MoUs can help domestic firms form a taskforce to exchange the know-how to get involved in more initiatives.

"I am positive that the MoU will help us establish a workgroup to develop guidelines for standardization of activities and launch more profitable joint ventures," Bovard said, noting that should internal firms join hands and share know-how, projects can be implemented in a more cost-effective ways.

"Projects range from construction and drilling to operational works and services associated with oil and gas projects," he said.

  Cooperation With Domestic Firms

According to Ali Kardor, managing director of NIOC, the state-run company is willing 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.

"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," Kardor said.

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 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 massive debts arising from wrong policies.

Stressing that NIOC cannot bear risk-related expenditures anymore, the official said, "Based on the new model of contracts for Iran's oil and gas projects, known as Iran Petroleum Contract, 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."

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