Untapped hydrocarbon reserves are huge and encouraging the private sector to enter this key sector should be a priority.
Seyyed Saleh Hendi, the head of National Iranian Oil Company's Exploration Department made the proposal Sunday after signing a memorandum of understanding with Tenco Exploration & Production Corporation to study Toudaj oil and gas block in Fars Province, IRNA reported.
Tenco, which specializes in drilling, seismic, refinery and upstream projects, is among the 11 conglomerates approved by the NIOC to develop oil and gas fields in the framework of Iran Petroleum Contract, Iran’s new model of tendering oil and gas projects.
As per terms of the agreement, Tenco, which has played an important role in developing the South Pars Gas Field, should submit the results of its geological and drilling surveys to the NIOC in six months.
Underscoring the potential role and need of private enterprise in the oil industry, Hendi said it is high time for private contractors to play a bigger in upstream energy projects.
Energy experts believe exploration and development projects demand massive financial resources of which the government is now deprived; therefore, they should be handled by private firms.
The official said NIOC can start with commissioning small projects and gradually move on to bigger deals.
Referring to the experience of other countries, Hendi said unconventional liquid hydrocarbons like shale oil and gas in different parts of the world namely in the US, are being expanded with the help of private companies and have delivered.
"The sole responsibility of government organizations, like the Oil Ministry, should be providing infrastructure and the rest should be the function of the private sector."
He said the oil industry is in dire need of a structural change to be able to perform efficiently and produce the desired results.
