National Iranian Oil Company

The National Iranian Oil Company (NIOC; ) is a government-owned national oil and natural gas producer and distributor under the direction of the Ministry of Petroleum of Iran. NIOC was established in 1951 and restructured under The Consortium Agreement of 1954.[4] NIOC ranks as the world's second largest oil company, after Saudi Arabia's state-owned Aramco.[5]

The NIOC is exclusively responsible for the exploration, drilling, production, distribution and export of crude oil, as well as exploration, extraction and sales of natural gas and liquefied natural gas (LNG). NIOC exports its surplus production according to commercial considerations determined by the OPEC and at the prices prevalent in the international markets. In early 2015 NIOC's recoverable liquid hydrocarbon reserves was 156.53 Goilbbl (10% of world's total) and recoverable gas reserves were 33.79 m3 (15% of world's total). As of 2012, the NIOC production capacity included over 4 Moilbbl of crude oil and in excess of 750 million cubic meters of natural gas per day.[4]

History

NIOC's Oil Reserves

According to OPEC, NIOC recoverable liquid hydrocarbon reserves at the end of 2006 was 1384 Goilbbl.[14]

NIOC oil reserves at the beginning of 2001 was reported to be about 99 Goilbbl,[14] however in 2002 the result of NIOC's study showed huge reserves upgrade adding about 317 Goilbbl of recoverable reserves to the Iranian oil reserves.

After 2003 Iran made some significant discoveries which led to addition of another 7.7 Goilbbl of oil to the recoverable reserves of Iran.[15]

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.[16]

As of 2012, 98 rigs are in operation in onshore fields, 24 in offshore fields and a single rig is in operation in the Caspian Sea. Iran plans to increase the number of its drilling rigs operating in its onshore and offshore oilfields by 36 units to reach 134 units by March 2014.[17]

Table 1- The biggest NIOC oil fields;[18]

Gas reserves

NIOC holds about 1000 Tcuft 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.[20]

NIOC's ten biggest Non-Associated Gas Fields;

Recent discoveries

Since 1995, National Iranian Oil Company (NIOC) has made significant oil and gas discoveries, standing for some 84 Goilbbl of oil in place and at least 175 Tcuft of gas in place, which are listed below.[25]

Organizational structure

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

• The President
• Vice President
• Director General of the Management and Planning Organization
• Minister of Petroleum
• Minister of Energy
• Minister of Industries and Mines
• Minister of Labor and Social Affairs
• Minister of Economy and Finance

Subsidiary companies

The NIOC's subsidiaries are as follows:

Production costs and investments

The cost of producing each barrel will rise to $30 or more from $7 in 2012.[59]

Iran currently allocates $20 billion a year to develop fields and $10 billion on maintaining output. In the next decade, maintaining production will cost $50 billion, with a similar sum required for development.[59] This does not include development and investment costs in related fields such as Petrochemicals.

NIOC's major domestic contractors

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,[60] as well as engineering. Iranian manufacturers will supply oil industry with $10 billion worth of domestically made goods and equipment in 2012.[61]

NIOC produces 60–70% of its industrial equipment domestically including towers, reactors, various turbines, refineries, oil tankers, oil rigs, offshore platforms, valves, pipelines, generators and exploration instruments.[62][63][64][65] Iran is also cooperating with foreign companies to transfer technology to Iranian oil industry.[66] The objective is to become self-sufficient by 85% before 2015.[67] The strategic goods include onshore and offshore drilling rigs, pumps, turbines and precision tools. Domestic production of 52 petrochemical catalysts will be started in 2013.[68]

In 2019, the government sub-contracted projects worth 6.2 billion to domestic contractors. Pending projects include domestication of wellhead equipment, desalinating packages, anti-corrosions, sulfur recovery catalysts, wellhead control panels, among others.[69] According to NIOC in 2019, Iran was manufacturing 12,000 components and complicated equipment of the petroleum industry.[70]

In 2021, Iran announced that 820 domestic firms, including 182 knowledge-based, have manufactured 85% of the parts or equipments needed by the oil and gas sector, worth some $5 billion. The companies have generated some 80,000 and 250,000 jobs directly and indirectly, respectively.[71]

Participations in foreign gas fields

• Iran owns 50% of the offshore gas field of Rhum in the North Sea, which is Britain's largest untapped gas field. It is a joint-venture with BP worth $1 million a day at 15 June 2010 spot prices.[55]
• 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 Intertrade, a subsidiary of NIOC.[55]

Environmental record

According to geographer Richard Heede,[72] is third on the list of companies with the highest level of emissions globally with 739 e6t in 2013, amounting to more than 3.1% of worldwide anthropogenic emissions.[73]

See also

• The nationalization of the Iran oil industry movement
• International rankings of Iran
• Petroleum industry in Iran
• Ministry of Petroleum of Iran
• National Iranian Gas Company
• National Iranian Petrochemical Company
• National Iranian Oil Refining and Distribution Company
• Economy of Iran
• Iranian oil bourse
• Foreign Direct Investment in Iran
• Privatization in Iran
• Eilat Ashkelon Pipeline Company – used to be 50% in control of NIOC and the focus of a dispute between Israel and Iran.
• William Knox D'Arcy

Further reading

External links

• NIOC – official website
• National Iranian Oil Company's Information Center & Central Library