Transfer of Technology Integral to Iran's New Oil Deals

Transfer of technology is an indispensable part of Iran Petroleum Contract, the new model of oil contracts for developing Iran's oil and gas fields, as the country needs cutting-edge know-how and equipment to offset the natural decline in extraction from aging oil and gas reservoirs, deputy for engineering and development at the National Iranian Oil Company said.

"Acquisition of advanced technology should and will be an integral part of IPC-based deals and as soon as new contracts are clinched, not only domestic contractors and manufactures but also universities and exploration firms will be able to upgrade their operational and managerial know-how," Gholamreza Manouchehri was also quoted as saying by NIOC's news portal on Thursday.

He made the statements in a panel discussion on "Innovation and Technology Management Challenges in Oil and Gas Sector" in the Seventh International Conference on Management of Technology (IRAMOT 2017) held in Tehran on Thursday.

"Domestic research and development centers will observe oil and gas fields' development process regularly," he added.  

Attaching great importance to having access to cutting-edge technology that the country was deprived of during sanctions, Manouchehri said, "Based on the terms of new agreements, technical committees as well as managers and experts are obliged to attend apprenticeship programs to be gradually trained on state-of-the-art technology."

Pointing to a recently signed contract between NIOC and French energy giant Total S.A. to develop Phase 11 of the South Pars Gas Field in the Persian Gulf, the official said the contract clearly stipulates the 20,000-ton platforms needed in the field must be built in a domestic yard.

Iranian contractors are also poised to manufacture a 32-inch subsea pipeline for the Phase 11 project under Total's supervision, which will improve domestic producers' knowledge to international levels.

According to the official, new deals within the framework of IPC oblige main contractors to hold domestic tenders among engineering, procurement and construction firms and oil service companies to implement operations, which can be a unique opportunity for Iranian companies to thrive.

"IPC-based agreements are long-term deals, as oilfield development plans cannot be completed in four or five years," he said.

"Hydrocarbon reservoirs are like living creatures whose behavior should be controlled over a long period with the help of reservoir engineering techniques—a branch of petroleum engineering concerned with oil and gas reserves and finding the most efficient way to extract underground resources."

Asked about the provision of financial resources for the new contracts, he said neither the government nor the Central Bank of Iran will be in charge of funding that is provided by main contractors.

"All loans and financial supports will be settled after fields start to generate revenues."

The official noted that enhancing oilfields' recovery rate with the help of international energy majors tops the ministry's agenda for the next four years.

Referring to the country's recoverable oil from hydrocarbon reserves, standing at 157 billion barrels, he noted that boosting the recovery factor by 10% can help the country extract 70 billion more barrels, which would generate $3.5 trillion based on a rate of $45 for each barrel of oil.  

The IRAMOT annual conference, held on 29-31 August in Tehran, is the largest gathering of leading representatives from industry, academia and policymakers in the fields of innovation and technology management in the Middle East, bringing together more than 700 participants. The conference is a leading platform for information exchange, networking opportunities and new business development.