Iran Oil Industry Sign Deals Worth Over $1.8 Billion With Local Firms

Two Iranian state oil companies have signed 13 contracts worth $1.83 billion with 14 local firms to help boost oil production.

The Iranian Offshore Oil Company (IOOC) and the National Iranian South Oil Company (NISOC), acting as contractors, signed 13 deals with 14 Iranian companies in a ceremony held in Tehran on August 17, according to the oil-gas news website SHANA.

“The total value of these contracts is more than €1.527 billion [$1.83 billion], and 185,000 barrels will be added to the country's crude oil production capacity with the implementation of these contracts,” the report added.

These 13 deals that will be carried out in the provinces of Khuzestan, Fars, Kohgiluyeh and Boyer-Ahmad, Bushehr and Hormozgan, consist of 11 contracts by NISOC and two others by IOOC.

Addressing the ceremony, Deputy of Development and Engineering Affairs at the National Iranian Oil Company (NIOC), Reza Dehghan, said that “with the implementation of the 13 contracts signed today, 185,000 barrels of oil would be added to the country's oil production capacity”.

Ten of the contracts of the first phase of these projects which were signed in 2017 are 25% complete.

The contracts are worth between $161.5 and $226 million which amount to $1.83 billion in total and are set to be completed in 2 to 2.5 years.

Another senior oil official, CEO of the National Iranian Oil Company Masoud Karbasian said at the same ceremony that "the share of domestic manufacturing in implementation of these contracts is more than 70% and this share at the end of all the projects will exceed 80%”.

The deals were among a package of 33 deals aimed at enhancing and maintaining the productivity of oil fields in Iran. So far, 23 of the contracts have been signed and the fate of the remaining 10 will be determined by the end of the current Iranian calendar year to March 20, 2021, he added.

Some corrections have been made in contracts concluded within the framework of EPC (Engineering, Procurement and Construction) and EPD (Engineering, Procurement and Drilling) in order to expedite pertinent activities. These contracts were concluded after the implementation of the 2015 Iranian nuclear deal, but activities were accelerated following the US withdrawal from the deal in May 2018 and the re-imposition of sanctions on the country.

According to OPEC’s Annual Statistical Bulletin for 2020, proven crude oil reserves of Iran is 208.6 billion barrels — crude oil production is 2,356,200 barrels per day (bpd) and crude oil exports is 651,100 bpd.