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Developments in the Iranian
oil industry have been unprecedented in the past three months: huge contracts, interesting
presentations and new instances of partnership. Here are excerpts of two of the
outstanding presentations at Iranian Oil, Gas and Petrochemical Forum in London followed
by a brief account of Iran’s latest gas deal.
The Caspian: Another North Sea
By: Dr. Peter
Wells, Middle East and Caspian Business Managing Director, Lasmo plc
Ten years ago, when I
first came to the Caspian region, oil companies were faced with several major
uncertainties: How big were the offshore oil reserves? Who has title to the offshore
reserves? What would the oil cost to develop and how would the logistic difficulties be
overcome? And, what were the feasible export options and what would they cost?
We are still faced with the same uncertainties today - despite the international interest
and the successful activities of companies in Azerbaijan, Turkmenistan and Kazakhstan.
The issue of how the wealth of the Caspian may be divided among the Caspian states is
rightly the area of the Caspian Sea states and not of the oil companies.
However, over the next few years, developments such as exploration activities and active
engagement of Iran in the exploration for development of oil and gas in the Caspian will
create the climate for resolution of ownership of resources and the export of oil and gas.
In December 1998 LASMO and Shell signed an Exploration Study Agreement with NIOC for the
South Caspian Basin. Veba joined the South Caspian Study Group late last year. The group
has completed the acquisition, processing and interpretation of 10,000 kilometres of new
seismic data in a very large unexplored area of the South Caspian. This work is the first
integrated evaluation of the entire South Caspian basin, based on full seismic data
coverage. The new seismic has identified several very large new prospects, and has shown
that major structures are still present in the southernmost parts of the basin.
The South Caspian basin has an area of some 140,000 square kilometres, which suggests that
the source rocks may have supplied some 700 billion barrels of oil to the basin, based on
our estimation. In the north-central and eastern parts of the basin gas is almost
certainly being generated today in the deep synclines between structures. The geology is
certainly world class, particularly in the south, central and western parts of the basin.
We believe that more than 20 billion barrels of oil reserves, and more than 30 trillion
cubic feet of gas reserves, remain to be discovered in the South Caspian. This is
certainly not Middle East in scale, but is similar to another North Sea.
A Partnership for the Future
By: Robert Weener,
Chief Executive, Shell Development Iran
It is a good time to
be part of the energy industry as more and more countries decide that it is to their
advantage to join the global economy.
Iran also is opening up to the world and playing an important role internationally. To win
the prizes offered by the new world, adaptation, new thinking and flexibility is
necessary. While promising great benefits, such a dramatic pace of change can also be
extremely threatening. For a country like Iran, to weather this storm of change, a
partnership with industry is an invaluable tool.
We feel that there is a lot of opportunity in Iran where we can build a long-term,
sustained and mutually beneficial relationship. In Iran, the relationship with the primary
customer - the national government - is crucial. To be successful in this partnership, we
want to work with the Iranian people; building a company that is true to the country and
the culture. To do that takes time and effort. Trust and confidence have to be built:
relationships formed, nurtured and tested.
In Iran it has been made clear that the government is looking for: assistance and support
for NIOC subsidiaries wishing to compete in international markets, employment for the
large, young and well-educated population, access to technology and project management
skills, and that a significant part of the benefits off these projects accrue to Iranian
private enterprise. These requirements fit in well with our commitment to contribute to
sustainable development.
We seek to build the type of relationship which brings true benefits and progress to the
Iranian people, which allows growth of mutual understanding and knowledge, and, which
incorporates continuing training and development. Shell can bring relatively large amounts
of capital, management and technological expertise to the table. Iran brings relatively
large amounts of resources and educated workers who only need further exposure to
international practices. There is an obvious fit there. The opportunity to acquire new
skills and build relationships exists today, but the window of opportunity may not stay
open indefinitely. I believe that by building solid, long-term relationships in Iran,
Shell is making a contribution to sustainable development. Iran can benefit. Shell can
benefit. Nothing could be a better basis for business. |
