Iran can develop energy sector by offering better terms

Baku, Azerbaijan, Jan. 26

By Dalga Khatinoglu - Trend:

Iran can develop both upstream and downstream oil and gas sector, but it depends on the details of the new fiscal terms, the new designed Iran Petroleum Contract, said Wood Mackenzie's senior experts.

Iran says it needs $185 billion investment in oil and gas sector by 2025.

The country introduced a new designed agreement, called Iran Petroleum Contract in November, and proposed 49 oil and gas projects to foreigners.

Homayoun Falakshahi, Middle East upstream research analyst at Wood Mackenzie, told Trend on Jan. 26 that the need for capital investment in Iran's upstream sector is high, not only in new developments but also on the older fields.

"In order to keep producing at a high level, mature fields like Ahvaz, Gachsaran or Marun, will need important capital investment to upgrade current facilities and build new capabilities," said Falakshahi. "Offshore projects are typically more capital-intensive, especially if Iran decides to go ahead with the development of the deepwater Sardar-e-Jangal field in the Caspian."

Falakshahi added that whether Iran will be able to attract enough investment will depend on the details of the new fiscal terms, the Iran Petroleum Contract.

Tehran is yet to unveil the exact mechanism of the cost recovery and remuneration fee, noted the expert.

"In a low oil price environment, companies are more capital-stretched, and some will be scrutinizing the IPC and other political and business issues before deciding to enter Iran," he noted.

He also said that considering the list of 49 oil and gas developments on offer, the National Iranian Oil Company is looking to attract around $70 billion of foreign direct investment (FDI) in its upstream oil and gas sector by 2025.

"Such investment could help the country increase its crude oil production above 5 million barrels per day from 2.8 million barrels per day in 2015. But the fiscal terms remain the key for Tehran to reach this number," he said.

Iran also has to offer tens of projects in downstream sector to foreigners, including $70 billion investment plans in petrochemical sector.

Johnny Stewart, senior downstream research analyst at Wood Mackenzie, told Trend that Iran is actively investing in upgrading its domestic refining operations over the next decade - a number of projects to existing plants are underway, including a gasoline production improvement project at Bandar Abbas, and a new refinery train project at Abadan refinery.

"We expect both projects to be on-stream before 2022 and improve the quality of oil products produced," he noted.

He added that beyond upgrades, Iran is expanding its refining capacity with a focus on monetizing domestic condensate barrels.

"The Persian Gulf condensate refinery, with processing capacity of 360 kb/d, is expected to complete mid-2017. The project, built in three 120 kb/d phases, will help move Iran to a balanced gasoline position and alleviate the use of petrochemical, or ersatz, gasoline".

Stewart added that the second project, SIRAF condensate refining park, is planned for later in the decade.

"Eight modular refineries, with 60 kb/d capacity each, are due for construction and will be funded by eight private local Iranian firms. Each company will be responsible for marketing their own oil products production," he said.

Below is the list of major investment opportunities in Iran's oil refining sector.

Projects

Capacities

Investments

Persian Gulf Star refinery

360,000 barrels of condensate

800 million euros

Pars refinery

120,000 barrels of condensate

$1.8 billion

Anahita refinery

150,000 barrels of heavy crude

3.1 billion euros

SIRAF refining complex

480,000 barrels of condensate

$2.4 billion

Jask refinery

300,000 barrels of heavy crude

$7.5 billion

Revamping Isfahan refinery

120,000-barrel distillation unit

Three billion euros

Revamping Abadan refinery

120,000-barrel distillation unit

$3.4 billion

Reducing Bandar Abbas refinery's fuel oil production

57,000-barrel unit

$1.2 billion

Reducing Abadan refinery's fuel oil production

60,000-barrel unit

$1.5 billion

Six oil transfer pipelines

One million barrels

Seven billion euros plus 23 trillion rials (about 703 million euros)

Oil transfer terminals

10 oil transfer centers and terminals

1.8 trillion rials (about $50 million)

Japan plans to recruit astronauts in 2021, first time in 13 yrs
Japan plans to recruit astronauts in 2021, first time in 13 yrs
Export of cars from Turkey to Ukraine up – Trade ministry
Export of cars from Turkey to Ukraine up – Trade ministry
Deutsche Bank: Brexit trade costs will be 'material' deal or no deal
Deutsche Bank: Brexit trade costs will be 'material' deal or no deal
Loading Bars
Latest
Sudan becomes third Arab state to set aside hostilities with Israel this year
Artillery units, command post of Armenian armed forces destroyed as result of airstrikes (VIDEO)
Jeyhun Bayramov met with assistant to President for US National Security Affairs
Military volunteers, equipment of Armenian Armed Forces destroyed in directions of Khojavend, Fuzuli (VİDEO)
UAVs of Azerbaijan do not conduct flight over territory of Armenia - MoD
Azerbaijan has enough armored vehicles in its arsenal, uses them in operational situations - MoD
Information on alleged artillery shelling of Khankendi and Khojavend districts by Azerbaijan - not true
Chairperson, deputy chairperson of US - Educated Azerbaijani Alumni Association appeal to US Secretary of State
Yerevan not interested in peace, wants to escalate conflict, make it a regional one, says Azerbaijani's First VP
Information spread by Armenian side on Iran's artillery shelling Azerbaijan’s positions - false
Turkey reduces volume of exports of mining industry
Iran discloses value of exports from Tehran Province
Georgia increases import of ground and instant coffee
Japan plans to recruit astronauts in 2021, first time in 13 yrs
Kazakhstan increases exports to Denmark despite COVID-19
Azerbaijani FM talks Karabakh conflict with US Secretary of State
Azerbaijani Bank of Baku's net profit declines multifold
Member of UK’s House of Lords condemns Armenia’s missile attacks on Azerbaijan’s Ganja
Rejection of UN’s unfair statement – another diplomatic victory for Azerbaijani president
Azerbaijani Xalq Bank's income for 9M2020 published
Data on cargo handling from US via Turkish ports for 9M2020 revealed
Azerbaijani soldiers liberate cities, settlements from occupation one after another - First VP
Export of cars from Turkey to Russia down – Trade ministry
Export of cars from Turkey to Turkmenistan drops
Export of cars from Turkey to Tajikistan down
Export of cars from Turkey to Ukraine up – Trade ministry
Armenia attracting mercenaries to occupied territories of Azerbaijan
Targeting Azerbaijani civilians by Armenia - crime, says Uzbek ambassador
Azerbaijani MoD shows footage of liberated Minbashyly village in Jabrayil district (VIDEO)
Cabinet of Ministers bans entry/exit to several Azerbaijani cities and districts
Armenia poses threat to Trans-Caspian International Transport Route
Azerbaijan's Xalq Bank discloses its assets for 9M2020
Payments with foreign cards down in Georgia
Export operations between Azerbaijan and Croatia double
New terminal to be built in Georgia's Poti port
Azerbaijani Prosecutor General's Office gives updates on damages, following Armenia's attacks
Meeting between Azerbaijani FM and US secretary of state held
Kazakhstan's import from Poland down amid COVID-19
ADB supports Georgia in its COVID-19 fight
Azerbaijan, Latvia keen to increase mutual investments (PHOTO)
Russian president's statement on Karabakh generally suits Azerbaijan - deputy parliament speaker
Armenians threatening to kill French TV channel's journalist (PHOTOS)
ISET-PI thnk-tank updates its real GDP growth forecast for Georgia
Azerbaijan's troops liberate villages in Khojavend, Jabrayil, Zangilan districts
Azerbaijan liberates 4 Gubadli district villages from Armenia's occupation
Georgia to allocate funds for marketing of its wine
EAEU reveals volume of food oil exports to Turkmenistan
Secretary General of Organization of Islamic Countries supports Azerbaijan
Georgia to issue agricultural loans to promote primary production of annual crops
Turkmenistan's Turkmennebit opens tender for purchase of pipes
Uzbekistan to maintain positive GDP growth despite difficult economic conditions
Uzbekistan’s National Bank likely to be backed by gov't, Fitch Ratings says
Azerbaijani people trust their president - First VP Mehriban Aliyeva
Percentage share of Austria in Azerbaijan's total import slightly grows
Kazakhstan’s KazMunayGas receives ESG rating in sustainable development
Chairman of US Educated Azerbaijani Alumni Association appeals to US Ambassador in Azerbaijan
Surrendered Armenian officer says Karabakh isn't Armenian land
Armenian armed forces' manpower, armored vehicles destroyed, says Azerbaijani MoD (VIDEO)
Azerbaijan itself doing what Minsk Group didn’t - MP
Inflow of funds to Georgia up
Kazakhstan must invest in agriculture technologies oriented towards Kazakh reality
Israel sends humanitarian aid to Azerbaijan (PHOTO)
Uzbek import of cars from Turkey shrinks
Ballistic missile attacks on Gabala and other Azerbaijani cities - vandalism and fascism of Armenian leadership - People's Artist
Volume of nine-month cargo shipment from Germany via Turkish ports revealed
Iran to implement second phase of ring road around Hormoz Island
Turkmengas to buy geophysical equipment via tender
New buses to start serving passengers in Georgian Tbilisi
Deutsche Bank: Brexit trade costs will be 'material' deal or no deal
Metallurgical products import to Uzbekistan to be reduced via metallurgical plant in Tashkent
Stable basic export rate could help boost Iran's exports
Iran to settle all wheat farmers' claims
WB implements new project in Georgia
President Aliyev holds phone conversation with father of National Hero of Azerbaijan Shukur Hamidov
Iran plans to establish trade centers
New company admitted to Baku Stock Exchange
Shukur Hamidov's name will be immortalized in Gubadli district
Iran reveals its COVID-19 data for October 23
Iran increases number of emergency beds in hospitals
Ambassador welcomes liberation of Azerbaijan's Agbend settlement on border with Iran
Turkey hopes for achieving success in Karabakh conflict settlement together with Russia - Erdogan
Putin's comments were response to those taking anti-Azerbaijani position, analyst says
Kazakhstan's postal service operator to buy petrol via tender
Discussions on Karabakh conflict held at UN Security Council 25 years later - Assistant to Azerbaijani president
Export of cars to Kyrgyzstan spiked - Turkish Ministry of Trade
Turkmenistan increases fruit imports from EAEU countries
It's incorrect to talk about CSTO's help, while conflict taking place in Karabakh - Russian MFA
Azerbaijan confirms 212 more COVID-19 recoveries
No objective benefit for NATO's open support to any party of Karabakh conflict - Russian expert
Georgia reveals total projected harvest of grapes in 2020
Gold, silver prices in Azerbaijan down
Armenia carries out eco-terrorism against Azerbaijan
Georgia names number of beneficiaries received discount cards under agro-diesel promotion program
Captured Armenian soldier admits presence of foreign mercenaries in Armenia (PHOTO/VIDEO)
Azerbaijani media working hard in information space, demonstrating objectivity, accuracy - MP
Daimler lifts profit forecast as China snaps up luxury cars
U.N. says Libya sides reach ceasefire deal
Azerbaijan's CBA to hold deposit auction on Bloomberg platform
Turkey's nine-month export of cars to Italy drops
Sulfur output drops in Kazakhstan year-on-year
All news