Currently, there are different turbines ranging in power from 1 megawatt (MW) to 30 MW. We have decided to define three ranges with 6-10 MW turbines included in ones that they would provide after-sales servicese range, 10 to 15 MW in another and 20 to 30 MW in a third range. The Ministry of Petroleum will have the manufacturers give guarante within the country. And even if they are not going to do it themselves, they would assign their Iranian partners to the job by signing contracts with the Iranian private sector so that repairs and maintenance would be carried out in Iran. To this end, Davaar Moharrek Co. was set up to handle repair operations for the oil industry.
After specifying the ranges, we succeeded in organizing the operations. NIOC asked its subsidiaries to report the total number of turbines they required within the next 10 years for their own operation and for implementation of their projects. As a result, it was found out that our projects definitely needed 2000 MW of power to be supplied by gas turbines and compressors. The classification of turbines and compressors showed that most of them fell under the range of 20 to 30 MW.

Progress Continues: To this end, a company has been set up to coordinate the project with local industries for optimal use of domestic potential. This has led to a great development in our industries as well as enthusiasm among the university-educated work force since this initiative leads to the employment of about 2000 to 3000 staffs. We hope to achieve all this within the next 10 years. We are going to go through the same processes for the other ranges of 6-10 MW and 10-15 MW turbines.
The same has been done for the pump industry. There are now a number of companies in Iran which were not very much active in the past and had no hope of any orders to be placed with them. Practically, millions of rials of investments did not return anything. Negotiations have been held with these companies to persuade them to find foreign partners for improvement of their standards up to the international level.

Other Measures: Another goal being pursued in the oil industry is adopting the right policies to prevent the unnecessary consumption of spare parts. Previously, the oil industry followed a replacement policy instead of a repair policy. Repairing the machinery at home would generate jobs and would pave the way for local industries to work not only on repairs, but also on manufacturing. We currently purchase $150-$200 million of machinery each year and hope to bring that down by 50% within the next four to five years. This is coupled with higher value-added and use of domestic work force to draw a bright future ahead of us. Training constitutes another one of our goals to help improve the Iranian technicians’ and engineers’ knowledge of technology.

Encouraging the Private Sector: Attempt will be made to push the oil sector’s services toward the private sector. This is in line with the policies set out in the Third Economic Development Plan. We are putting these policies into practice and creating opportunities so that the private sector would form an idea of what they are going to be doing. We are going to pursue this in parallel with our own operations so that involving the private sector would not result in any hurdles in our way.
Hopefully, in a few years the oil sector’s machinery will be repaired on a turnkey basis without the need for the oil industry to invest in the maintenance of parts or have massive warehouses. The private sector must be persuaded to make the investments and purchases and repair the machinery on a turnkey basis. This can be achieved through careful and organized planning. The private sector would believe in a job only when it is convinced that it would have work to do for at least ten years while backed by some sort of guarantee.
We have the Wood Group and Elbar cooperating with us in Davaar Moharrek both of which enjoy long-running experience in repairs of turbines. Some of the manufacturers are now convinced that they should cooperate with us and are considering to invest in FTZs to create warehouses for parts which would enable us to procure our requirements from the FTZs and prevent from going through the red tape for imports.

Moving to Gas: Development and expansion have taken place to a very large extent in the oil sector, but in the gas sector we are only beginning to expand. With the massive gas resources explored in South Pars, Iran is on its way to become the main energy highway within the next 10 years, because our country should supply a portion of Europe’s requirements for gas, and will work on Pakistan and India provided that they settle their disputes. Therefore, we have a very broad range of expansion ahead of us which will involve $3 billion worth of machinery in the next 10 years.