National Iranian Oil Company

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National Iranian Oil Company
شركت ملّی نفت ايران
Type Government-owned
Industry Petroleum industry
Founded 1948
Headquarters Tehran, Iran
Key people Masoud Mir Kazemi
(Minister of Petroleum)
Saifollah Jashnsaz
(Managing Director)
Abdol-Mohammad Delparish
(COO)
Abbas Allahdad
(CFO)
Products Oil
Gas
Petrochemicals
Revenue Increase US$ 78 billion (2009)[1]
Employees 36,000[citation needed]
Website www.nioc.ir
File:CIAIranKarteOelGas.jpg
Iranian oil and gas fields, infrastructure
File:ELM Iran Oil.png
Iran oil production, domestic consumption and exports

The National Iranian Oil Company (Persian: شرکت ملی نفت ایران, Sherkat Melli Naft'e Iran‎), a government-owned corporation under the direction of the Ministry of Petroleum of Iran, is an oil and natural gas producer and distributor headquartered in Tehran. It was established in 1948.[2] NIOC ranks as the world's second largest oil company, after Saudi Arabia's state-owned Aramco.[3]

The NIOC is exclusively responsible for the exploration, extraction, transportation and exportation of crude oil, as well as sales of natural gas and liquefied natural gas (LNG). Having provided the domestic refineries and manufacturing plants with crude oil required for the petroleum products, the NIOC exports its surplus production according to commercial considerations in the framework of the quotas determined by the Organization of Petroleum Exporting Countries (OPEC) and at the prices prevalent in the international markets. The NIOC also signs some long term contracts on "buy-back" basis with foreign companies in order to exploit national oil fields and export its products. The NIOC exports natural gas and liquefied natural gas via the "National Iranian Gas Export Company" which is one of its subsidiaries.[2]

NIOC's oil and gas reserves in early 2005 was as follows;[4]

  • Recoverable liquid hydrocarbon reserves in early 2005, 136.99 billion barrels (21.780×109 m3, 10% of world's total).
  • Recoverable gas reserves in early 2005 , 28.17×1012 m3 (15% of world's total).

Current NIOC production capacities include over 4 million barrels (640×10^3 m3) of crude oil and in excess of 500 million cubic meters of natural gas per day.[2] In 2008, the average extraction cost of oil was less than $5 per barrel. This does not include processing (refining) and distribution costs.[5]

Iran’s cumulative oil production has reached to 61 billion barrels by the end of 2007,[6] most of these volume produced after 1951, under the supervision of NIOC.

Iran's overall export crude oil was valued at $51 billion in 2007.[7][8]

History

Main articles: William Knox D'Arcy, Anglo-Iranian Oil Company, and 1953 Iranian coup d'état

National Iranian Oil Company was established in 1948 under the reign of Mohammed Reza Shah Pahlavi and prime ministership of Saed. Then Prime Minister Mohammad Mossadegh was entrusted 1951 with the nationalisation of the Anglo-Iranian Oil Company. Following the 1953 coup that overthrew Mossadegh it became a consortium of international oil companies: 40% owned by Anglo-Iranian holding, five American companies holding 40%, and the Royal Dutch/Shell and Compagnie Francaise de Petroles holding 10% each. The consortium shared profits 50-50 with Iran but did "not to open its books to Iranian auditors or to allow Iranians onto its board of directors."[9] According to the company's Web site: The victory of the Islamic revolution annulled the Consortium Agreement of 1954 and all regulations pertaining to it. The taking of power by the Islamic Republic led to the withdrawal of foreign employees from Iran's oil industry; domestic employees took full control of its affairs.[10]

NIOC's Oil Reserves

Main article: NIOC's Oil Reserves

According to OPEC, NIOC recoverable liquid hydrocarbon reserves at the end of 2006 was 138,4 billion barrels.[6]

NIOC oil reserves at the beginning of 2001 was reported to be about 99 billion barrels,[6] however in 2002 the result of NIOC’s study showed huge reserves upgrade adding about 31,7 billion barrels of recoverable reserves to the Iranian oil reserves.

After 2003 Iran has made some significant discoveries which lead to addition of another 7.7 billion barrels of oil to the recoverable reserves of Iran.[11]

The vast majority of Iran's crude oil reserves are located in giant onshore fields in the south-western Khuzestan region near the Iraqi border. Overall, Iran has 40 producing fields – 27 onshore and 13 offshore. Iran's crude oil is generally medium in sulfur and in the 28°-35 °API range.

Table 1- The five biggest NIOC oil fields;[12]

Rank Field Name Formation Initial Oil in Place
(Billion Barrels)		 Initial Recoverable Reserves
(Billion Barrels)		 Production


Thousand barrels per day

1 Ahwaz Asmari & Bangestan 65.5 25.5 945
2 Marun Asmari 46.7 21.9 520
3 Aghajari Asmari & Bangestan 30.2 17.4 200
4 Gachsaran Asmari & Bangestan 52.9 16.2 560
5 Karanj Asmari & Bangestan 11.2 5,7 200
Largest Iranian Oil Fields
Field's Name Thousand
barrels per day 		Thousand
cubic meters per day
(onshore)
Ahwaz (Asmari Formation) 700 110
Gachsaran 560 89
Marun 520 83
Bangestan 245 39.0
AghaJari 200 32
Karanj-Parsi 200 32
Rag-e-Safid 180 29
BibiHakimeh 130 21
Darquin 100 16
Pazanan 70 11
(offshore)
Dorood 130 21
Salman 130 21
Abuzar 125 19.9
Sirri A&E 95 15.1
Soroush/Nowruz 60 9.5

Strategic petroleum reserves

Iran has begun plans to create a global strategic petroleum reserves in 2006 with the construction of 15 crude oil storage tanks with a planned capacity of 10 million barrels.[13] The storage capacity of oil products in the country is around 11.5 billion liters (2011), but it will reach 16.7 billion liters by the end of the Fifth Five Year Development Plan (2010-2015).[14]

NIOC's Gas Reserves

Main articles: Iran Natural Gas Reserves, National Iranian Gas Company, and Gas Exporting Countries Forum

NIOC holds about 1,000×10^12 cu ft (28,000 km3) of proven Natural gas reserves of which 36% are as associated gas and 64% is in non associated gas fields. It stands for world's second largest reserves after Russia.[15]

NIOC’s ten biggest Non-Associated Gas Fields;

NIOC’s ten biggest Non-Associated Gas Fields.[16]
Field's Name Gas In Place Tcf Recoverable Reserve Tcf
South Pars 500 322
North Pars[17] 60 47
Kish[18] 60 45
Golshan[19] 55 25 - 45
Tabnak NA 21,2
Kangan NA 20,1
Khangiran NA 16,8
Nar NA 13
Aghar NA 11,6
Farsi (B-Structure) NA 11 - 22

Recent Discoveries

Main article: NIOC Recent Discoveries

Since 1995, National Iranian Oil Company (NIOC) has made significant oil and gas discoveries, standing for some 84-billion-barrel of oil in place and at least 175×10^12 cu ft (5,000 km3) of gas in place, which are listed below.[20]

NIOC Oil Discoveries Since 1995.[21]
Field's Name Oil In Place Recoverable Oil Discovery Year
Billion Barrel Billion Barrel
Azadegan 33.2 5.2
Yadavaran (Kushk+Hosseinieh) 17 3
Ramin[22] 7.398 1.11 2007
South Pars Oil Layer 6 NA
Band-E-Karkeh[23][24] 4.5 NA 2007
Mansour Abad 4.45 NA 2007
Changoleh[25] 2.7 NA
Azar[25][26] 2.07 NA 2007
Paranj 1.6 NA 2007
Andimeshk (Balaroud)[27] 1.1 0.233 2007
Binalood[28] 0.776 0.099 2008
Mansouri-Khami layer[26] 0.760 NA
Jofeyr-Fahliyan layer[29][30] 0.750 NA 2008
Asaluyeh[31] 0.525 NA 2008
Arvand[32] 0.500 NA 2008
Tusan 0.470 NA 2006
Arash 0.168 NA
Total 83.967 NA
NIOC Natural Gas Discoveries Since 1995.[33]
Field's Name Gas in Place Recoverable Gas Reserve
Trillion cubic feet Billion cubic meters Trillion cubic feet Billion cubic meters
Kish[18] 59 1,700 47 1,300
Tabnak 30 850 NA
Farsi (B-Structure)[34] NA 11-23 310-650
Ghir (Sefid Zakhur) 11.4 320 8.5 240
Yadavaran-Gas Layer 9.75 276 NA
Lavan 9.1 260 NA
Balal-Dahroum Formation 8.8 250 NA
Homa 7.6 220 NA
Marun Gas Layer 6.2 180 NA
Gardan 5.7 160 NA
Day 4.4 120 NA
Binak Gas Layer 3.5 99 NA
Karanj Gas Layer 2.9 82 NA
BiBi hakime Gas Layer 2.4 68 NA
Zireh 1 28 NA
Kuh-e-Asmari (Masjed Soleiman)[35] 1 28 0.739 20.9
Arash 0.79 22 NA
Kheyr Abad 0.17 4.8 NA
Total 170 4,800 NA

Organizational structure

See also: Petroleum industry in Iran

The company is completely owned by Iranian government. NIOC's General Assembly consists of:

It is its highest decision marking body, determining the company's general policy guide lines, and approving the annual budgets, operations and financial statements and balance sheets. The company's Board of Directors has the authority and major responsibilities to approve the operational schemes within the general framework ratified by the General Assembly, approve transactions and contracts, and prepare budgets and Board reports and annual balance sheets for presentation to the General Assembly.

The Board supervises the implementation of general policy guidelines defined by the General Assembly, and pursues executive operations via the company's Managing Director.

Subsidiary Companies

See also: Privatization of the petroleum industry in Iran

With appropriate division of tasks and delegation of responsibilities to subsidiaries- affiliates, NIOC has been able to establish acceptable degrees of coordination within its organizational set up. In fact, NIOC's Directors act primarily in policy making and supervision while subsidiaries act as their executive arm in coordinating an array of operations such as exploration, drilling, production and delivery of crude oil and natural gas, for export and domestic consumption.

The NIOC's subsidiaries are as follows:

NIOC subsidiaries
Company Name Activities[36]
Iranian Offshore Oil Company (IOOC) in charge of offshore oil fields in the Persian Gulf offshore oil and gas fields with the exception of South Pars. It focuses mainly on production platforms, ancillary facilities, and installations.
Central Iranian Oil Fields Company supervises all upstream activities in the central oil and gas regions of the country, i.e. everything, excluding the oil-rich southern Khuzestan province, Caspian and offshore.
National Iranian Gas Export Co. in charge of gas exports for the National Iranian Gas Company. See also: Persian pipeline and Peace pipeline.
Iran LNG Company a subsidiary of National Iranian Gas Export Co.
National Iranian South Oil Co. in charge of onshore oilfields in southern Iran. Focuses on onshore upstream activity in the province of Khuzestan. As Khuzestan is the main oil and gas-producing province, this entity is among the most significant in the NIOC family.
National Iranian Central Oil Co supervises all upstream activities in the central oil and gas regions of the country, i.e. everything, excluding the oil-rich southern Khuzestan province, Caspian and offshore.
Khazar Oil Exploration and Production Co. in charge of Iran's Caspian Sea sector (onshore and offshore)
Petroleum Engineering and Development Co.(PEDEC) is the most important NIOC offshoot company. The responsibility for all buy-back projects under operation, study or negotiation has been given to PEDEC. This company enjoys full authority to manage the projects. Further information: Foreign Direct Investment in Iran
Pars Oil and Gas Co. (POGC) National Iranian Gas Company does not play a role in awarding upstream gas projects; that task remains in the hands of the National Iranian Oil Company.[37] Pars Oil and Gas Co. is in charge of the offshore North and South Pars gas fields and responsible for awarding the contracts for the different phases. Since 2010, it has been raising capital on the domestic and international markets in order to finance its projects.
Pars Special Economic Energy Zone Co. handles and organizes all activities in the Pars Special Economic-Energy Zone, located near the South Pars gas field (a subsidiary of Pars Oil & Gas Co.)
National Iranian Oil Terminals Co. has four transport hubs including facilities on the three islands of Kharg, Lavan and Sirri consisting of 17 jetties capable of berthing tankers of all sizes to lift and export its crude oil that load more than 2,000 oil tankers per year.[38] 2,000 of them dock in Bandar Abbas Port, 1,000 in Khark Island. Iran earned nearly $2 billion in 2009 from bunkering ships in the Persian Gulf (25% market share).[39] Projected bunkering sites by 2015: Bandar Abbas (two sites), Kish, Qeshm, Bushehr, Mahshahr, Assalouyeh, Khark and Chabahar.[40] Fujairah bunkering hub, UAE is Iran's main competitor in the Perisan Gulf.
National Iranian Drilling Co. (NIDC) in charge of all offshore and onshore drilling activities. Iran manufactures 60–70% of its industrial equipment domestically, including refineries, oil tankers, drilling rigs, offshore platforms and exploration instruments.[41]
Ahwaz Pipe Mills Company manufacturing oil and gas pipes and has a capacity of up to 420,000 tons per year. It operates three plants.
Iranian Fuel Conservation Organization regimenting the fuel consumption in different sectors through review and survey of the current trend of consumption and executing conservation measures nationwide. See also: 2007 Gasoline Rationing Plan in Iran
National Iranian Tanker Company controls the second largest fleet of tankers in OPEC.
Exploration Service Company (ESC) responsible for providing operational services in all facets of exploration and production activities within NIOC onshore regions.
Kala Naft (London) Ltd. in charge of carrying out the procurement needs of the NIOC that cannot be met domestically. However, NIOC organizations can in theory also purchase directly from suppliers.
Kala Naft (Canada) Ltd. in charge of carrying out the procurement needs of the NIOC that cannot be met domestically
Naftiran Intertrade Co. (NICO) (Switzerland) handles trading & swaps operations on behalf of NIOC. Iran has swap arrangements with Azerbaijan, Turkmenistan, and Kazakhstan, under which it ships crude from the Central Asian producers to its Caspian ports. In exchange Iran delivers the equivalent barrels of crude on behalf of the three Central Asian producers to their costumers in the Persian Gulf.[42] In October 2010, Iran asked for the terms of the contract to be re-negotiated because it claims it has lost money because of it.[43] NaftIran also buys the vast majority of Iran's gasoline imports.[44] Naftiran is a key player in Iran's energy sector.
Petropars General contractor for the oil & gas industry (a subsidiary of Naftiran Intertrade Co.)
Iran Petro Development Co. (aka PetroIran or PEDCO) General offshore contractor (a subsidiary of Naftiran Intertrade Co.). Petro Iran was initially formed to be the Iranian partner of foreign contractors with a 10% share in each buy-back contract.
Iranian Oil Company (UK) in charge of Rhum gasfield (a subsidiary of Naftiran Intertrade Co.)
Iranian Offshore Engineering and Construction Company (IOEC) First Iranian general contractor to the oil and gas industries. Joint venture with IDRO
Arvandan Oil & Gas Company (AOGC) responsible for the development of the Arvandan oil & gas fields. AOGC was established in 2004 working as the main operator in oil and gas production from Azadegan, Yadavaran, Darquain, Jufeyr, Moshtagh, Khorramshahr, Arvand, Susangerd, Band-e-Karkheh, Omid and other fields which are located in west of Karun River.[45]
Research Institute of Petroleum Industry (RIPI)

NIOC's major domestic contractors

See also: National Iranian Petrochemical Company, List of Iranian companies, and Industry of Iran

Although usually neglected and overlooked, Iran also has a number of very active private companies in the oil sector. The growing private sector activity is mainly active in projects involving the construction of oil field units, refinery equipment, tanks and pipelines, as well as engineering.

NIOC produces 60-70% of its industrial equipment domestically including refineries, oil tankers, oil rigs, offshore platforms and exploration instruments.[46][47][48][49]

Participations in foreign gas fields

  • Iran has another 10% joint-venture participation with BP and other foreign oil companies in Azerbaijani Shah Deniz gas field, producing 8 billion cubic meters of gas per year, worth up to a reported $2.4 billion per year. The Iranian entity with which BP has partnered in these ventures is the Swiss-based NaftIran, a subsidiary of NIOC.[44]

See also

References

  1. ↑ List of companies by revenue
  2. ↑ 2.0 2.1 2.2 http://www.irantradelaw.com/wp-content/uploads/2010/03/Irans-Foreign-Trade-Regime-Report.pdf
  3. ↑ PIW Ranks The World's Top Oil Companies
  4. ↑ NIOC Website
  5. ↑ http://www.iran-daily.com/1387/3313/html/economy.htm
  6. ↑ 6.0 6.1 6.2 OPEC Annual Statistical Bulletin 2006
  7. ↑ ISNA - 01-03-2007 - 85/10/13 - Service: / Energy / News ID: 855495
  8. ↑ http://previous.presstv.ir/Detail.aspx?id=21038&sectionid=351020103
  9. ↑ Kinzer, Stephen, All the Shah's Men : An American Coup and the Roots of Middle East Terror, Stephen Kinzer, John Wiley and Sons, 2003, p.195-6
  10. ↑ NIOC Website Brief History of Iran Oil Company
  11. ↑ NIOC Recent Discoveries
  12. ↑ The 8th IIES International Conference “Energy Security and New Challenges”, held in 29–30 November 2003, IRIB Conference Center, Tehran, Iran [1]
  13. ↑ http://www.eia.doe.gov/emeu/cabs/Iran/pdf.pdf
  14. ↑ http://www.presstv.com/detail/162338.html
  15. ↑ Iran Oil Ministry Annual Bulletin, 5th Edition, pages 190-193 (available in Persian) (كتاب نفت و توسعه).[2]
  16. ↑ Iran Oil Ministry Annual Bulletin, 5th Edition, pages 190-193 (available in Persian) (كتاب نفت و توسعه).[3] and Iran Energy Balance Sheet (ترازنامه انرژی ایران ) (available in Persian) Published by; Iran’s Energy Ministry, Secretariat of Energy and Electricity,2000 [4]
  17. ↑ POGC Website
  18. ↑ 18.0 18.1 NIOC Website
  19. ↑ POGC Website
  20. ↑ Iran Oil Ministry Annual Bulletin, 5th Edition, pages 190-193 (available in Persian) (كتاب نفت و توسعه).[5] and Iran Energy Balance Sheet (ترازنامه انرژی ایران ) (available in Persian), Pages 132 & 175, Published by; Iran’s Energy Ministry, Secretariat of Energy and Electricity,2006 [6]
  21. ↑ Iran Oil Ministry Annual Bulletin, 5th Edition, pages 190-193 (available in Persian) (كتاب نفت و توسعه).[7] and Iran Energy Balance Sheet (ترازنامه انرژی ایران ) (available in Persian), Page 132, Published by; Iran’s Energy Ministry, Secretariat of Energy and Electricity,2006 [8]
  22. ↑ NIOC Official News Agency,(www.Shana.ir),April 23, 2005
  23. ↑ NIOC Official News Agency,(www.Shana.ir),25/4/2009
  24. ↑ NIOC Official News Agency,(www.Shana.ir),25/4/2009
  25. ↑ 25.0 25.1 NIOC Official News Agency,(www.Sahan.ir),October 15, 2007
  26. ↑ 26.0 26.1 NIOC Official Web Site,(www.NIOC.ir)
  27. ↑ NIOC Official News Agency,(www.Shana.ir)
  28. ↑ NIOC Official News Agency,(www.Shana.ir)
  29. ↑ NIOC Official News Agency,(www.Shana.ir)
  30. ↑ NIOC Official News Agency,(www.Shana.ir),July 02, 2008
  31. ↑ NIOC Official News Agency,(www.Shana.ir)
  32. ↑ NIOC Official News Agency,(www.Shana.ir)
  33. ↑ Iran Oil Ministry Annual Bulletin, 5th Edition, pages 190-193 (available in Persian) (كتاب نفت و توسعه).[9] and Iran Energy Balance Sheet (ترازنامه انرژی ایران ) (available in Persian), Page 175, Published by; Iran’s Energy Ministry, Secretariat of Energy and Electricity,2006 [10]
  34. ↑ IHS International Oil Letter, Vol 24 issue 6, published 15 February 2008 [11]
  35. ↑ Shana.ir, 2008 April 17
  36. ↑ 36.0 36.1 36.2 36.3 36.4 36.5 36.6 http://web.archive.org/web/20070928000413/http://www.atiehbahar.com/Resources/Oil&Gas.htm
  37. ↑ Atieh Bahar: Oil & Gas in Iran (brief Study) Retrieved May 4, 2008
  38. ↑ http://www.upi.com/Energy_Resources/2009/09/21/Irans-oil-terminals-move-to-private-hands/UPI-60211253548800/
  39. ↑ http://www.zawya.com/Story.cfm/sidZAWYA20091225071139/Iran:Bunkering%20revenue%20reaches%20$844m?cc&pass=1
  40. ↑ http://www.iran-daily.com/1389/8/4/MainPaper/3810/Page/4/Index.htm#
  41. ↑ SHANA: Share of domestically made equipments on the rise. Retrieved July 26, 2010.
  42. ↑ http://www.presstv.com/detail.aspx?id=131131&sectionid=351020103
  43. ↑ http://www.payvand.com/news/10/oct/1051.html
  44. ↑ 44.0 44.1 44.2 http://www.time.com/time/nation/article/0,8599,1996921,00.html
  45. ↑ http://www.shana.ir/162792-en.html
  46. ↑ [12]
  47. ↑ Iran Daily - Domestic Economy - 04/29/07
  48. ↑ http://niordc.ir/index.aspx?siteid=77&pageid=973&newsview=6402
  49. ↑ http://www.shana.ir/155561-en.html
  50. ↑ http://www.iran-daily.com/1387/3295/html/economy.htm
  51. ↑ 51.0 51.1 Developing 8. Developing 8. Retrieved on 2010-05-17.
  52. ↑ http://tehrantimes.com/Index_view.asp?code=213747
  53. ↑ http://www.oiecgroup.com/en/sub.aspx
  54. ↑ 54.0 54.1 54.2 54.3 54.4 http://en.niordc.ir/index.aspx?siteid=77&siteid=77&pageid=979
  55. ↑ 55.0 55.1 55.2 http://www.payvand.com/news/10/apr/1255.html
  56. ↑ http://www.shana.ir/145223-en.html
  57. ↑ http://www.shana.ir/145223-en.html
  58. ↑ 58.0 58.1 http://www.shana.ir/154657-en.html

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