Iran to buy 10 drilling rigs from China for $850 million

Azerbaijan, Baku, Jun.18/ Trend F.Karimov/

Iran will buy 10 drillings rigs from China at a cost of $850 million, the Mehr News Agency reported.

Despite following policies for reducing reliance on foreign technologies and attaining self-sufficiency in the oil sector, the North Drilling Company of Iran has scrapped a deal with domestic manufacturers and has signed a contract with Chinese manufacturers to build 14 onshore and offshore drilling rigs.

The deal with domestic manufacturers was signed last July, but not yet been enforced.

NDC managing director Hedayatollah Khademi said Chinese financiers will secure 80 per cent of the required fund for manufacturing the rigs. These are projected to be delivered by the end of the next two years, he added.

Akbar Torkan, the former deputy oil minister has said that brokerage is becoming rampant in the domestic oil industry, so that a drilling rig which is valued at $120 million, is sold to Iranian buyers at $140 million and even up to $170 million.

This is while Iran's Oil Minister Rostam Qasemi has warned all the contractors to avoid importing equipment that is currently being produced domestically.

All the contractors who ignore the warning will be omitted from the list of oil ministry's contractors, the Mehr News Agency quoted Qasemi as saying.

Even if the prices of Iranian-made equipment are slightly higher, the contractors should purchase Iranian goods, he underscored.

This comes as Chinese equipment has been largely imported for carrying out different oil and gas projects.

Iran's oil, gas and petrochemical contractors annually purchase 30 billion dollars' worth of equipment. Last year the amount faced a 50 per cent decrease to 15 billion dollars.

Iranian-made equipment accounted for five billion dollars of the aforementioned amount, while foreign goods and especially Chinese equipment accounted for the rest.

Iran sits on the world's second largest natural gas reserves after Russia and is trying to grow its gas production by increasing foreign and domestic investments, especially in its South Pars gas field.

Iran's total in-place oil reserves have been estimated to be more than 560 billion barrels, with about 157 billion barrels of recoverable oil.

Moreover, heavy and extra-heavy varieties of crude oil account for roughly 70-100 billion barrels of the total reserves.

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