Oil Ministry Dishes Out 1.5b Euros in Oil Contracts to Domestic Firms

IRAN NEWS ECONOMIC DESK

TEHRAN – Oil ministry has signed 13 contracts worth roughly €1.5 billion with 14 local firms to enhance and maintain oil production.

The deals were signed on Monday morning in a ceremony held in Tehran between the Iranian Offshore Oil Company (IOOC) and the National Iranian South Oil Company (NISOC), as employers, and 14 Iranian companies as contractors.

The total value of these contracts is more than €1.527 billion, and with the implementation of these contracts, 185,000 barrels will be added to the country’s crude oil production capacity, SHANA reported.

These 13 contracts, which will be implemented in the five provinces of Khuzestan, Fars, Kohgiluyeh and Boyer-Ahmad, Bushehr and Hormozgan, entail 11 contracts by NISOC and two others by IOOC.

Accordingly, the contracts of Zilaei project and Chalingar and Garangan project were both signed with Global Petrotech Kish Company; Ramin project with Persia Oil and Gas Industry Development Company, Mansourabad project with Petro Iran Development Company, Siahmakan project with Pasargad Energy Development Company, Maroon 2, 5 and 6 projects with Petrotenco, Maroon 1 and 4 projects with North Drilling Company (Sina Energy Gostar Holding), Maroon 3 project with the Iran Offshore Engineering and Construction Company, Balaroud project jointly with the National Iranian Drilling Company and Jahanpars Engineering and Construction Company, Ahvaz 1 and 4 projects jointly with Qeshm Oil and Energy Industries and Maroon Karan.

The contract for Resalat Project of IOOC was signed jointly with the Iran offshore engineering and construction Company and the Intelligent Solutions Inc., and the Forouzan project was also signed jointly with Petropars and Mobin Sazeh Gostar.

Addressing the ceremony, Zangeneh said that Iran is ahead of its neighbors in producing crude from joint oil and gas fields.

Zangeneh said that Iran cannot wait for foreigners (foreign contractors) to develop its oilfields.

He said that one needs to compete in order to survive and more enhanced technology is needed in order to be able to compete.

“As the first step to this end, we interacted with universities so that we will be signing new contracts with universities over the next weeks to give a boost to production,” the minister said.

He also said that the country can use the potential of the capital market to provide finance for the oil projects.

Sanctions and its sponsors will go and Iran will continue to remain, Zangeneh further said.

“We have to create capacity as the power of a country does not rely on its reservoirs but on its production capacity,” he added.

Zangeneh pointed out that if Iran cannot create capacity, it will not be able to retake its market with the lifting of sanctions.

“We have to restore our capacity in less than three months once the sanctions are lifted,” the minister said.

Meanwhile on the sidelines of the ceremony, Zangeneh said the Organization of the Petroleum Exporting Countries (OPEC) had performed well in the oil market given the increase and stabilization of oil price in the market.

He told reporters: “The price of Brent crude oil has risen from about $16 per barrel in May to $45 and it is almost stabilized; this shows that OPEC (Organization of the Petroleum Exporting Countries) has performed well in this regard.”

He added: “What will come next depends on market reactions. The outbreak of the coronavirus has affected the market. If the world economy recovers and production restarts, the imbalance between supply and demand will decrease and this will have a positive impact on prices.”