Iran should upgrade workforce competency to increase production, – survey

An exclusive one-day event, organized by Lloyd’s Register, was held at the NITC in Tehran, Iran where 130 senior oil and gas executives from international and national companies shared knowledge and experience to help each other optimize oil and gas operations.

Delegates were able to discuss solutions impacting Iran’s oil production including methods, tools and competence in safety management, low cost optimization of producing assets, and reducing maintenance and operating costs, through to how best to improve competence to increase drilling production and reservoir recovery.

An audience survey conducted at the Lloyd’s Register event showed that 51% of respondents felt that plant equipment and operational processes were “adequate” and could still get the job done, while 27% said these were out of date. In a separate question, 43% showed widespread recognition that equipment across the Iranian oil industry needed to be replaced, while 57% opted for equipment upgrade, arguably in recognition of the limited investment capacity that is currently available for the sector.Ninety-two percent of those surveyed agree that Iran’s energy industry workers need to upgrade their alignment with international standards and best practices.

Alasdair Buchanan, Energy Director of Lloyd’s Register says: “We are committed to help the Iranian oil and gas and marine industries increase production, and we believe it is critical to enhance the competence of the Iranian workforce by imparting our knowledge and skills, and transferring our understanding and application of technology to support production optimisation, cost effectively and safely.”

“We are looking forward to providing technical and engineering support to help the Iranian oil and gas industry through the upcoming challenges of safe oil and gas exploration,” he added.

To achieve sustainable production, Iran needs to embrace best practices to ensure that efficiencies are enhanced and losses are minimized. At the core of best practice is independence of thought and not simply relying on partnerships with IOCs. Technical and knowledge sharing partnerships with other service operators will provide Iran with better understanding on the latest standards, legislation and innovations in the industry, and avoid over-reliance on any single external partner.

Iran’s oil and gas industry dates back to the early 20th century, making it the oldest in the Middle East, with the first petroleum exploration dating back to 1901. More than 100 years later decline rates at the country’s oil fields are relatively high, ranging between 8-11%, while recovery rates are quite low at 20-25%. Over 50% of Iran’s current production comes from fields that were discovered over 50 years ago.

In a departure from the past, a key strategy to building its oil sector back up has seen a shift towards embracing foreign investment. Iran introduced a new Iranian Petroleum Contract (IPC) model in November 2015 that will result in a major shift away from its original “buy back” contract model which has been employed for the past 20 years. The new contracting model structures investment in Iran’s upstream oil and gas sector by way of joint venture (JV) where the NIOC will own at least 51 percent of the JV. This model requires the involvement of the IOCs at the exploration, development, and production stages – leading to IOCs participating in the upside of their discoveries and development. Contracts between IOCs and the NIOC will last 20-25 years and provide payment flexibility on the risk taken to explore and develop difficult fields.

Manufacturers and suppliers, plus a number of flagship upstream companies, have also been present in recent months to discuss opportunities including Shell, BP and Petropars, PetroIran, OIEC, Dana Energy and Mapna.

During the event, panel sessions were supported by special guests including Ehsan Mousavi, Managing Director, PKMS Training Services, a representative from the EOR Study Center-Research Institute of Petroleum Industry (RIPI), and James McCallum, Lloyd’s Register Consultant.