Oil Minister Bijan Namdar Zanganeh underlined on Saturday the importance of competitiveness and research in the oil industry’s development.
“With competition and research, products should be manufactured at lower price and higher quality,” he was also quoted as saying by Shana, the Oil Ministry’s news agency.
Referring to some brands, such as Nokia, that have lagged behind in the global market’s rivalry, Zanganeh noted that “serious and ruthless” competition is the development’s engine.
The latest report by World Economic Forum titled “The Global Competitiveness Report 2017–18” shows Iran’s Global Competitiveness Index has moved up by seven notches.
As a result, the country now ranks 69th out of the 137 countries surveyed. Iran’s rankings in 2014, 2015 and 2016 were 83rd, 74th and 76th respectively.
Switzerland retained its top spot in the widely followed annual ranking of business competitiveness, while Yemen, torn by civil war and poverty, came last.
“Once a former Japanese ambassador in Tehran told me that a fellow countryman had said people in Japan expect the quality of goods to go higher and their prices to go down every year. But what does Iran do in the oil industry that expects higher oil revenues?” the minister said.
Interrelated Ties
According to Zanganeh, competitiveness does not improve, unless technology improves.
The minister said the poor relationship between the industry and the universities in Iran has been linked to problems such as small research budget or the officials’ lack of interest in the issue.
“However, I think the final answer is competition. It encourages research and technology development and creates many businesses,” he said.
Underlining that moving toward competitiveness and technology development is a “life-and-death” decision, Zanganeh said officials at global oil giants focus on reducing costs by taking advantage of modern know-how, instead of expecting high oil prices, to gain more revenues.
The introduction of the new model of oil contract, dubbed Iran Petroleum Contract, marks a turning point in the way oil and gas industry can acquire the much needed know-how and technology to develop oil and gas fields.
According to the terms of IPC, foreign companies should have an Iranian partner in exploration and production projects and transfer know-how, as Iran aims to establish large E&P companies with technical and operational competence.
Close Scrutiny
According to Zanganeh, serious talks are being held with Indian oil and gas officials regarding Farzad-B Gas Field development plan and the two sides have reached agreements on how to launch the whole initiative, yet technical issues need closer scrutiny.
OVL, the overseas arm of state-owned Oil and Natural Gas Corp, had last year proposed to spend $11 billion in expanding the Farzad-B Gas Field in the Persian Gulf as well as in building the infrastructure to export the gas, but Iran delayed awarding the rights of the field to the Indian firm owing to discrepancies over investments and price of gas.
"The company has now agreed to only undertake the upstream field’s development, leaving the marketing of the fuel to Iran," he said.
As had been agreed during the visit of Iranian President Hassam Rouhani earlier this month, a team of OVL officials is expected to visit Tehran soon to talk about the modalities of upstream development.
Asked about Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, the minister said the venture is unlikely to take off and even if it does, it will not pose a challenge to a postponed plan for exporting Iran's natural gas to Pakistan.
"It is an extremely difficult and demanding task to mend ties between Pakistan and India," he said, playing down the prospects of partnership between the two states whose relations are overshadowed by mistrust and war.
Commenting on NIOC's negotiations with Denmark's major offshore explorer Maersk Oil for developing the oil layer of the giant South Pars Gas Field in the Persian Gulf, Zanganeh said the Danish firm has been merged with French oil and gas major Total, that is why finalizing a deal will take longer.
