Iran’s Potential And Priorities

Mohammad Iravani, chairman of Dana Energy, talks to TOGY about opportunities for companies in Iran’s growing oil and gas industry and the changes in this market following the lifting of international sanctions. Dana Energy is an Iranian company that works in upstream activity, fuel trading and oilfield services.

What do you think of the new terms featured in the Iran Petroleum Contract (IPC)?

The IPC is quite suitable for joint venture opportunities between Iranian and foreign companies, as well as for international oil companies working in Iran.

For long-term contracts, the changes are also appealing. Depending on the type of field, leases can be either 20 or 25 years. For pure exploration fields, it is 25 years. For greenfield activities it is 20 years.

What are Iran’s growth opportunities moving forward?

President Hassan Rouhani said the government has plans for the economy to grow at a rate of 8%. This is a huge target and it could be challenging. However, I know that growth in 2017 will be very positive with sanctions being lifted and oil companies coming into the country. Among other things, I assume the main growth opportunities are for the oil and gas industry and for Iranian companies working abroad.

What should we expect from Iran’s oil and gas production looking forward, and how do you anticipate this will affect trading activities?

As of today, the main target of the National Iranian Oil Company is brownfield work, and that will be the top priority in the first round of tenders.

Following the completion of the development of the South Pars field, the production of Iranian gas will increase.

In 2017, Iran have more fuel oil available for export. The best markets for it are Asia-Pacific, Africa and the Middle East. These are target markets for Dana and places where we intend to establish branches.

What are your company’s strengths in geophysical data acquisition?

We have a very comprehensive knowledge of the reservoirs in the area with the country’s best analysts, who have worked for NIOC for more than 30 years. These analysts have a deep understanding of the reservoirs. They know their ins and outs.

There is no official documentation in Iran that offers a comparative study of different fields and there isn’t comprehensive knowledge on fields: it is all based on the work of individual experts.

The strength of our company lies in the individual experts who have experience on these fields. I dare say we have one of the best teams in the country, with expertise in all the upstream activities including exploration techniques, geophysics, reservoir modelling, well planning, drilling, production and oilfield services.

We work with graduates from around the world and are forming a very highly educated team, with graduates from Stanford University, for example. We believe in our expertise and we know what to do, where to do it and when to do it.

Based on these circumstances we are looking at different companies with different capital to invest in fields. We are in constant negotiations.

Can you give us an introduction to Dana Energy?

Dana Energy was established in 2000. We have three segments of activity in the oil and gas business: the first is exploration and production for field development, the second is energy trading, especially fuel and LPG, and the third is oilfield services such as seismic surveying and drilling. We have more than 700 people working at Dana. The main office is in Tehran.

Istanbul is the local office providing geophysical services for the Kurdistan Region of Iraq. Dana’s offices in Dubai and Oman are for trade operations support.

What is the priority for Dana Energy in 2016 across these segments?

We are currently waiting for the National Iranian Oil Company policy regarding the new IPC, in particular for the approval of the vendor companies and qualifying companies’ procedures in the new tenders. We should know more about these in four to five months. In the meantime, we are focusing on improving our oilfield services with the latest technological advancement in our segment, which it has not been possible during the sanction time.

Is there a particular field of upstream activity that is more interesting to Dana Energy?

Among other things, I have a plan to increase our assets, including our drilling fleet, but I am waiting for the oil prices to stabilise first. We are also working on adding new services, entailing directional drilling services and coiled tubing, to our current services.

Are there companies that you are interested in working or establishing joint ventures with?

Yes. Many companies are coming to us to meet about this type of operations, but we are not yet in the contract phase. We are currently in MoU discussions with international oil companies and are waiting for NIOC approval on the IPC and the position of all of its partners to go further in our own partnering processes.

Could you tell us about your involvement in the South Pars projects?

At South Pars, we are working on phases 15, 16, 17B and 18B. We have finished our work in phases 15 and 16 for drilling and some associated drilling services. Phases 17B and 18B will be finished by the end of year 2016.

This is the first time a 100% private company has been involved in these types of services, such as drilling in the South Pars field for the Pars Oil and Gas Company.

Can you tell us about other projects Dana is engaged in elsewhere in Iran?

Some of our highlighted projects are the Tandis 3D-seismic data acquisition project, located in the Karun region near the border with Iraq, stimulation services of Persian Gulf fields for Iranian Offshore Oil Company, the third gas storage project in subsurface salt structure for Natural Gas Storage Company, ongoing procurement of drill bits and downhole tools for many offshore and onshore projects, rig lease and operation services in three different locations.

What opportunities are available to Iranian services companies looking to work abroad?

In a low oil price environment, opportunities exist for services companies coming from Iran both nearby and further afield. Dana, for instance, is targeting supplying services to companies in places such as Azerbaijan. The company is also involved in providing geophysical services in Pakistan. We are participating in several more tenders there and have established a branch in Islamabad.