Iran Petroleum Issue No.7 - Home

Iran Petroleum Issue No.7, November 2012 

Majlis Urged to Back 

Oil Projects Finance 

Iran’s Petroleum Minister Rostam Qasemi has called on 

the Parliament to adopt pieces of legislation for financing 

petroleum development projects. 

Petchem Installed 

Capacity to Hit 

100b Tons 

Iranian Petroleum Minister Rostam Qasemi has said that 

the Iran’s installed petrochemical capacity will hit 100 

billion tons by the end of the country’s Fifth Five-Year 

Development Plan (March 2010-March 2015). 

Iran Petroleum No.7 

New Investment 

Opportunity at Tehran Fair 

Like other industrial sectors, Iran’s petrochemical industry puts on 

exhibit its achievements and products every two years at Tehran’s 

International Permanent Fairgrounds. 

An Overview of Energy Giants 

Human Resources Programs 

Human resources management is an important department in any 

organization because it plays the major role in recruitment and 

payment as well as their training, health and administrative communications 

of the staff

The innocence of Imam Hussein (peace be upon him) does not mean humiliation. On the 

contrary, he is the greatest combatant in the history of Islam. He fought in the battlefield 

courageously while he always remained humble. As much as he is great, he was 

oppressed. He finally embraced martyrdom with courage. 

Iran’s Supreme Leader Ayatollah Ali Khamenei

Managing Editor: 

Es’haq Royvar 

Manpower 

Outstanding Feature of Iran’s Oil Sector 

Besides updated 

technological knowhow, 

experience is a 

requirement in the oil 

industry. The issue of 

human resources in the oil industry 

came to the fore mainly following 

the 1997 sharp fall in the oil prices 

and the subsequent migration of oil 

specialists to other industrial sectors. 

Since then, recruitment of specialist 

manpower has grown into a major 

challenge for big oil companies. 

The average age for oil engineers in 

the world was 47 in 2007 with the 

retirement age at 55. Oil companies 

in the United States and the Middle 

East moved to adopt plans to attract 

specialist manpower from across the 

globe in order to make up for their 

shortcomings. A large number of 

Iranian engineers were also recruited 

by foreign companies. 

Currently, Iran’s oil industry has 

more than 210,000 employees in 

its different sections. A view of the 

pyramid of manpower in Iran’s oil 

industry is indicative of the high level 

of their expertise and experience. 

Official figures indicate that the 

average age for the nearly 99,000 

officially employed oil staff stands at 

43 with 18 years of experience. 

At present, the number of employees 

with advanced studies exceeds 40,000, 

including 28 percent, aged under 35. 

A total of 4,295 employees are former 

outstanding students. 

Department for Human Resources of 

Iran’s Petroleum Ministry had worked 

out mechanisms to recruit young and 

specialized forces ,while providing 

better conditions to its current 

employees. 

The strategy of human resources 

management in Iran’s oil industry 

relies on repairing the composition of 

experts and managers. To that effect, 

outstanding university graduates 

have been recruited. In the meantime, 

special projects like training oil 

industry managers, standardization of 

education, training young managers, 

drafting oil industry human resources 

development document, as well 

as management of knowledge and 

documentation of experiences 

of oil managers have been under 

way in order to materialize the 

objective set in the oil development 

programs. The special conditions of 

Iran’s oil industry, along with the 

determination of Petroleum Ministry 

for self-sufficiency, have improved 

technology-based training for 

manpower. 

Doubtlessly, development of human 

resources in the oil industry is a major 

policy of the country. In that case, 

Iran will be able to implement major 

development projects in the oil, gas 

and petrochemical sectors by relying 

on its own specialists, not to mention 

the possibility to export technical 

and engineering services required 

by the oil sector to other countries. 

Chief among the breakthroughs are 

young Iranian oil experts’ acquisition 

of technology to develop catalysts 

needed in the petrochemical industry, 

implementation of research projects 

and patenting technical license for 

isomerization, methanol production, 

gas-to-propylene, MTP, VAM, DME, 

designing sophisticated software for 

fuel distribution and planning for 

enhanced recovery from oil and gas 

reservoirs. 

At present, Iran’s Petroleum Ministry 

is trying to prepare more grounds for 

research with the help of universities 

and research centers and support 

private knowledge-based companies 

in the hope of mastering technology 

for full designing and building oil and 

gas refineries in five years. This firm 

determination is indicative of the selfconfidence 

of Iranian oil industry and 

the superiority of its manpower. 

July 2012 / 

1

8 

Iran to Host the Upcoming Meeting of OPEC 

Member Countries Public Relations Departments 

Iran 

Petroleum 

Monthly 

26 

P 

ublic 

Relations (PR) managers from OPEC Member Countries met 

on 5-8 November 2012 at the OPEC Secretariat in Vienna, for the 

1 st Meeting of the Member Countries Public Relations Managers. 

Lead Money Supply to National Projects 

Former minister of petroleum Masoud Mir- 

Kazemi says selling oil at the current prices 

would harm the future generations. 

Publisher: 

Ministry of Petroleum 

of the Islamic Republic of Iran 

Managing Editor: 

Es’haq Royvar 

Ministry of Petroleum 

Public Relations Manager 

Editorial Board: 

Abol Hassan Darvishi 

Mostafa Jalali 

Amir Hossein Hashemi Javid 

Javad Asghari 

34 

Black Gold Rush in the Horn of Africa 

Executives: 

Raheleh Khaleqi 

Sara Yekrangi 

Photographers: Hassan Hosseini 

Contributors: 

Mohammad Afshin 

Setak Kakoyee 

Arash Haji Khalili 

Cover Photo: 

HASSAN HOSSEINI 

The recent developments in North 

African countries unseated Ben Ali in 

Tunisia, Hosni Mubarak in Egypt and 

Moammer Gaddafi in Libya. They were all 

turning points for the MENA. 

Translation, Graphic Design and 

Printing: 

Asia Financial News 

Graphic Designer: Ali Shams Amiri 

Translator: Kianouche Amiri 

Email: info@iranpetroleum.ir 

* The opinions expressed in this 

magazine do not 

necessarily reflect the official positions 

of Petroleum 

Ministry of the 

Islamic Republic of Iran. 

Corrigendum 

In our fifth issue, the article on Page 12 should have been 

headlined “IOPTC carries...” which was inadvertently typed 

“Railroads carry...”. The error is regretted. 

Editor

monthly 

n the northeasternmost background, Sarakhs is also the leave the mountains behind and several boulevards and a small 

spot in Iran, 180 

commercial gate between Iran everything becomes normal. square in the small city. It 

kilometers from the holy and Turkmenistan. Products The road is now lined with salt must have been considered an 

city of Mashhad is located from Iran’s eastern regions are cedar trees, some of which are abandoned village had it not 

the city of Sarakhs, where exported to Turkmenistan via tall. 

been close to a free trade zone 

farming and animal breeding Sarakhs. Here is a report about a Ten kilometers to Sarakhs and adjacent to Turkmenistan. 

battle hot and dry weather. In the city, today known as Iran’s entry stretches a railroad. The special Residents of Sarakhs mainly 

ancient times, Sarakhs served gate into the Far East. 

economic zone is also seen over work at Khangiran gas 

as a caravanserai on the “Silk 

there. Everything changes after refinery. Others are farmer 

Road”. In addition to its historic Farmlands in Desert City passing by the special zone. The or animal breeder. A certain 

nature changes dramatically species of sheep is raised in 

To reach the border city of so that nobody could believe Sarakhs. People in Sarakhs 

Sarakhs, we had first to fly we had just left the desert. wear long robes similar to 

to the holy city of Mashhad. Wherever we looked, we saw those put on by people in the 

Before I went there, I had extended maize and cotton southeastern province of Sistan 

heard that Sarakhs was a free farms. The reason for all this & Balouchistan. The main 

trade zone with a gas refinery. green landscape rests with rivers ethnic groups in Sarakhs are 

A large number of vehicles near the city. Tajan River in the Balouch, Turk and Kurd. The 

were plying the road from east and Kashf roud River in establishment of Sarakhs has 

Mashhad to Sarakhs, but the the south are flowing. Ancient its own story. An old man there 

road was not wide. Denselypopulated 

villages were seen Sarakhs as a city located in the severe drought in Sistan some 

historians have described says people moved here after a 

on the way to Sarakhs. The middle of desert, but with plenty 50 years ago. The ethnic groups 

countryside changed from time of farmlands. 

here have intermarried and that 

to time: desert, mountainside. 

is why they have become close 

Scattered trees had grown on People Are Mainly Relatives relatives. Our driver greeted 

the mountains. There was a 

everyone in the street, saying 

jungle of wild pistachio trees We arrived in Sarakhs after a they were all his cousins, uncles, 

in the middle of the desert. We three-hour drive. There were aunts, etc. Any stranger entering 

Photo: HASSAN HOSSEINI November 2012 / 63 

20 

pecialist and knowledgeable 

human 

resources are assets of 

an organization and 

the main competitive 

advantage for today’s knowledge-based 

economy. Offering 

products and services of high 

quality, cutting costs, creativity 

and competitiveness are among 

the advantages of qualitative 

and knowledge-oriented human 

resources. That is why business 

strategies are based on human 

resources. 

Oil industry, as the pivot of the 

country’s development, will remain 

as important as it is. However, 

the persistence of activities 

depends on dynamic human 

resources being in convergence 

with national, regional and global 

developments and on efforts for 

equipment with modern technologies 

and strategies. To that 

effect, laying the groundwork 

for the flow of scientific and 

technological information and 

accelerating their utilization by 

the oil industry specialists would 

be a key strategy. 

The oil industry contributes 

significantly and vitally to the 

administration of the country. It 

needs to be the least invulnerable 

possible so that its development 

would never be hindered. 

The significance of the issue of 

human resources and the necessity 

for its relevant planning 

prompted the Institute for International 

Energy Studies (IIES) to 

establish a think-tank – Management 

and Human Resources 

Management (MHRM) – in 

2007. 

IIES, affiliated to 

Photo: MOSLEM ABBASI 

By Forough Gashtasbi 

Iran’s Petroleum Ministry and quire paying serious attention to center, the experiences of other 

Ministry of Science, Research human resources. 

institutes and universities in 

and Technology, has been An option to raise the satisfaction 

level among employees is in the oil industry have been 

development of human resources 

operating as a research institute 

for more than two decades. The to invest in human resources as used. To that effect, an extensive 

mid- and long-term objectives the most significant asset of an network of university professors 

of the institute include assisting 

the oil industry to realize be necessary to make compre- 

organization. Therefore, it would and specialists are active. 

its objectives in the scientific, hensive planning to boost the Knowledge Management in 

economic, social, political and capabilities of human resources the Oil Industry 

international sectors, contributing through modern scientific methods 

in the management of human Rashidi underscored the success- 

to decision-making by senior oil 

managers based on energy studies, 

human resources manage- 

The IIES Research Center projects in the oil sector by the 

resources. 

ful implementation of research 

ment, financial management and for Management and Human 

Resources is the most them is a comprehensive system 

research center, saying one of 

planning, technological strategy, 

world energy scenarios as well as influential research center in for management of knowledge in 

international oil and gas markets. offering consultation on human the oil sector. 

All these activities are under way resources. Mohammad-Mehdi “This project was defined upon a 

in the Energy Economy Research Rashidi, head of the research request from National Iranian Oil 

Center, Human Resources and center, enumerates its missions: Company (NIOC) and is currently 

Management Research Center as defining modern strategies and under way. The objective behind it 

well as Technological Strategies approaches for the development was to present a national model for 

Studies Research Center. of human resources, recruiting identification and documentation 

Today, the countries owe their entrepreneurs, benefiting from of models in the oil industry. After 

development to extensive the successful experiences of these models are identified, the 

planning to take advantage of Iranian and foreign research branches of knowledge are defined 

all human resources, correctly centers in development of human so that the knowledge tree would 

manage them for an optimal use resources, steering changes in be sketched out. The implementation 

of the project would provide 

in view of creating maximum organizations, job planning and 

value-added at the national level. defining standardization models. NIOC with a comprehensive 

Moreover, the dynamic growth of “The research center, as think model to have access to the 

Iran’s huge oil industry notably tank in the oil industry, is tasked 

knowledge of all 

in the past three decades following 

the 1979 Islamic revolution man resources management with 

and it will 

with exploring challenges to hu- 

its labor force 

has resulted in numerous and significant 

experiences, innovations Petroleum Ministry,” he said. 

face such 

the help of the subsidiaries of the 

no longer 

and skills for human resources Based on a strategic program, the 

problems as 

management. That would help research center is active in three 

the flight of 

the country realize its goals fields – knowledge management, 

intellectual 

under its 20-year vision plan. In strategic management and human 

assets.” 

the meantime, competition with resources development. 

“Before 

regional and international rivals Since the establishment of the 

the 

and improving the status of oil research 

industry in the country re- 

60 

monthly 

to several major mergers and John D. Rockefeller’s Standard those of British Petroleum to 

Wilhelm August acquisitions, including a merger Oil, and as a strategy to face create Shell-Mex and BP Ltd, 

Deterding KBE with Samuel’s “Shell” Transport the challenges brought by the a company that traded until the 

(Hon), (19 April and Trading Company in 1907 crisis of 1907. The terms of the brands separated in 1975. 

1866, Amsterdam and the purchase of Azerbaijan merger gave 60% ownership of Around 1952, Shell was the 

- 4 February 1939, St. Moritz) oil fields from the Rothschild the new Group to the Dutch arm first company to purchase and 

was one of the first executives family in 1911. 

and 40% to the British. 

use an electronic computer in 

of the Royal Dutch Petroleum In the last years of his life, The “Shell” Transport and the Netherlands. The computer, 

Company and for 36 years Deterding became controversial Trading Company (the 

a Ferranti Mark 1*, was 

(1900–1936) its chairman and when he became an advocate quotation marks were part of assembled and used at the Shell 

the chairman of the combined of the German Nazi party. In the legal name) was a British laboratory in Amsterdam. In 

Royal Dutch/Shell oil company. 1936, he discussed with them company, founded in 1897 by 1970, Shell acquired the mining 

He came to power after the the sale of a year’s oil reserves Marcus Samuel and his brother company Billiton, which it 

early death of the Royal Dutch’s on credit; the next year, he Samuel. Their father had owned subsequently sold in 1994 and 

original leader, Jean Baptiste was forced to resign from the a company, importing and now forms part of BHP Billiton. 

August Kessler. 

company’s board membership. selling sea-shells, after which In 1936, Deterding bought the 

He made it to the runner up The Royal Dutch Shell Group the company “Shell” took its manor of Dobbin near Krakow 

against John D. Rockefeller’s was created in February 1907 name. 

am See, (Germany) and moved 

Standard Oil and it is still one through the merger of two Initially the Company 

to that place. After he died in 

of the world’s largest petroleum rival companies - Royal Dutch commissioned eight oil 

Switzerland he was buried at 

companies. He was made Petroleum Company (Dutch tankers for transporting oil. Dobbin in Mecklenburg, but his 

an honorary KBE in 1920, legal name : N.V. Koninklijke In 1919, Shell took control of body was transferred to a grave 

ostensibly for service to Anglo- Nederlandsche Petroleum the Mexican Eagle Petroleum in Liechtenstein in 1968. 

Dutch relations, but mainly for Maatschappij) and the “Shell” Company and in 1921 formed Deterding was married three 

his work supplying Allies with Transport and Trading Company Shell-Mex Limited which times (resp. to Catharina 

petroleum during World War I. Ltd of the United Kingdom, marketed products under the Neubronner, Lydia Koudoyaroff 

Called the “Napoleon of Oil”, founded by Marcus Samuel, 1st “Shell” and “Eagle” brands in and to Charlotte Knaack) and 

Deterding was responsible for Viscount Bearsted. 

the United Kingdom. In 1932, had seven children, among 

developing the tanker fleet that It was a move largely driven by partly in response to the difficult whom the eccentric Olga 

let Royal Dutch compete with the need to compete globally economic conditions of the Deterding. 

the Shell Company of Marcus with the then dominant 

times, Shell-Mex merged its 

Samuel. He led Royal Dutch American petroleum company, UK marketing operations with 

he main philosophy prices are negotiated and major 

behind establishment oil producing companies have 

of petroleum always the chance to forecast the 

commodities future of oil markets and gain 

exchanges has been higher profits. 

to determine the real crude oil 

prices by making supply and The world’s top commodities’ 

demand system more transparent exchanges are listed as below: 

in the oil market. Top oil bourses 

and their offshoots provide 

an appropriate platform for 1. CME Group 

registering futures and swap 2. Tokyo Commodity Exchange 

contracts in the oil, gas and 3. NYSE Euronext 

energy sectors. Oil markets have 4. Dalia Commodity Exchange 

been among the first energy 5. Multi Commodity Exchange 

commodities’ exchange across 6. Intercontinental Exchange 

the globe. 

7. Africa Mercantile Exchange 

A commodities’ exchange is 

an exchange where various Oil is traded online under futures 

commodities and oil products contracts on Bloomberg, known 

Persian Gulf Wars initiated 

and byproducts are traded. The as a databank for investors and 

by the former Iraqi Baathist 

existing commodities’ exchange a market indicator. The main 

regime, speculation was rife 

contracts are valued at $ 380 indicators in futures contracts are 

about the downfall of Saddam 

billion. In these exchanges, as follows: 

Hussein and subsequently the 

transactions are regulated within 

oil prices were fluctuating to the 

the framework of standardized 1. Gas Oil Future (USD/bbl) 

benefit of investors. Since the oil 

contracts with precise schedule, 2. Brent Crude Future (USD/ 

market is affected by political 

volume, price and delivery place. MT) 

developments in the Middle East, 

Crude oil is one of the important 3. Heating Oil Future (USD/ 

a simple calculation error could 

commodities traded in these 

gal) 

inflict heavy losses on the futures 

markets within the framework of 4. Natural gas Future (USD/ 

contracts. 

futures contracts. Concentrated MM Btu) 

The speculators enter Spider 

orange juice, wheat, soybean and 5. Gasoline RBOB Future 

contracts – a combination of long 

other products are also traded in (USD/gal) 

term and short term – to stoke oil 

the commodities’ exchanges. 6. WTI Crude Future (USD/ 

price hikes. 

Under futures contracts, two 

bbl) 

parties agree to purchase or sell 

- Short Position 

a specified asset of standardized Price Discovery Parameters 

quantity and quality for a price 

Occurs when a person sells 

agreed today (the futures price Speculation 

stocks he or she does not yet 

or strike price) with delivery 

own. Shares must be borrowed, 

and payment occurring at a Speculation is very common 

before the sale, to make 

specified future date,i.e. the in the commodities exchanges. 

“good delivery” to the buyer. 

delivery date. In these contracts, During the first and second 

Eventually, the shares must be 

bought back to close out the 

58 

transaction. This technique is 

used when an investor believes 

the stock price will drop. 

- Long Position 

A long position in a security, 

such as a stock or a bond, or 

equivalently to be long in a 

security, means the holder of 

the position owns the security 

and will profit if the price of the 

security goes up. 

Spider contracts cause oil 

price hikes psychologically. 

Speculators define their strategies 

based on the significant events 

transpiring the oil market. 

Geopolitics and Climate 

These two factors significantly 

impact the oil prices. For 

instance, if a hurricane is 

forecasted to lash the Gulf of 

P 

roductivity 

4 

Iran Petroleum monthly 

22 

Housing Oil Staff 

Table of contents 

Majlis Urged to Back Oil Projects Finance 

of organizations 

and improvement of the quality 

of their services and products 

is in direct relation with motivation 

on the part of their staff. 

Iran’s Petroleum Minister Rostam Qasemi has called on 

the Parliament to adopt pieces of legislation for financing 

petroleum development projects. 

12 

Iran Exports Petchems to 5 Continents 

Managing director of National 

Petrochemical Company (NPC) 

has said Iran is exporting its 

petrochemical products to all five 

continents, noting the Islamic Republic faces 

restrictions for petrochemical exports to Europe. 

10 


Capacity to Hit 100b Tons 

I 

ranian 

Petroleum Minister Rostam Qasemi has said that the Iran’s 

installed petrochemical capacity will hit 100 billion tons by the end of the 

country’s Fifth Five-Year Development Plan (March 2010-March 2015). 

40 

Composite Pipes at 

Mashhad Sadra Sharq 

A 

small but dynamic factory. 

smells resin everywhere. 

Everyone is busy working. It 

Photo: MOSLEM ABBASI 

I 

Sarakhs 

Iran Petroleum 

Gateway to the Far East 

Modern Approaches 

in Human Resources 

Development 

Human Resources 

S 


Deterding, Founder of Royal 

Dutch/Shell 

oyal Henri 

R 


T 

monthly 

A Review of 

World’s Oil 

Bourses 

By Setak Kakoei 

November 2012 / 

3


monthly 

First Line 

Majlis Urged 

to Back Oil 

Projects 

Finance 

4 

Photo: MOHAMMAD REZA TAEB


Iran’s Petroleum 

Minister Rostam 

Qasemi has called 

on the Parliament 

to adopt pieces of 

legislation for financing 

petroleum development 

projects. 

Qasemi made the remark 

to the Parliament’s 

Planning and Budgeting 

Committee members 

during their tour of South 

Pars gas field. 

“Ten phases of this 

gas field have already 

been developed and the 

development of other 

phases is under way,” the 

minister said. 

Qasemi noted that Iran 

would see its share of gas 

recovery from South Pars, 

shared with Qatar, rise 

when the remaining phases 

of the massive gas field 

have been developed. 

“Development of South 

Pars would bring big 

revenues for Iran’s 

economy. Therefore, the 

Parliament is expected to 

support the oil industry 

to reach its macro 

objectives,” he said. 

The head of Majlis 

Planning and Budgeting 

Committee, Gholam-Reza 

Mesbahi-Moqaddam, 

said the members of this 

parliamentary committee 

have discussed ways of 

financing oil industry 

projects notably in South 

Pars gas field. 

He said a working 

group comprised of 

representatives of 

Petroleum Ministry and the 

parliamentary committee 

has been set up to explore 

ways of accelerating oil 

projects. 

“Within this working 

group, we hope to present 

new projects in a bid to 

grant more credit to the oil 

industry,” he added. 


5


monthly 

NIOC Eyes Cutting Costs 

Managing 

director of 

National 

Iranian Oil 

Company 

(NIOC) Ahmad Qalebani has 

called for the reduction of oil 

production costs in the country. 

He said the only way to reduce 

the costs while producing oil 

of the best quality and in the 

shortest possible time was to use 

the state-of-the-art technology. 

“Solidarity and coordination 

for sharing experiences would 

effectively help us reach this 

objective.” 

The official said that successful 

companies should share their 

experience with NIOC in 

order to overcome production 

challenges. 

“Some companies have been 

active in outsourcing. We can 

hold meetings with them in 

order to benefit from their 

experiences.” 

He said the experiences of 

veteran oil industry staff need to 

be documented in a book to be 

used in the oil and gas sectors. 

Petrochemical Feedstock to 

Rise 

Qalebani said production 

of feedstock needed in the 

country’s petrochemical plants 

would rise with the inauguration 

of new phases of South Pars gas 

field. 

“Supplying feedstock to 

petrochemical units is in a good 

status and inauguration of new 

phases of South Pars would 

increase the amount of feedstock 

needed in petrochemical plants,” 

he stated. 

“NIOC has already announced 

its future programs to the 

National Petrochemical 

Company (NPC) in terms 

of feedstock, and we are 

currently negotiating to finalize 

the amount of feedstock for 

petrochemical plants,” said 

Qalebani. 

“NIOC is ready for whatever 

cooperation with petrochemical 

plants we are ready to 

support the petrochemical 

industry towards growth and 

development,” he said. 

Oil Bonds Forwards 

The NIOC chief said the 

company is planning to sell 

crude oil to people by issuing oil 

bonds forwards. 

“Oil bonds forwards is an 

effective instrument in the 

oil industry. By applying this 

method, the capitals of real and 

legal entities would be used in 

this industry,” he said. 

He said the bonds would also 

be an effective operational 

instrument for financing new 

oil projects. “This method 

can help people invest in oil 

production and extraction and 

gain remarkable profits.” 

“The diversity of financial 

instruments would collect 

liquidity scattered among 

people. We will witness 

economic development and 

productivity if all liquidity held 

by people serves the projects.” 

Qalebani said the oil bonds 

forwards would also cushion the 

impact of oil price fluctuations. 

NIOC needs 30 billion dollars 

of investment per annum, the 

official said. 

First Line 

Iran to Raise 

Domestic 

Equipment Share 

in Local Refineries 

A 

deputy minister of 

petroleum has said 

that plans are under 

way for domestic 

manufacturers to account for 

80 percent of the equipment to 

be used in new refineries. 

“Indigenization of the technical 

knowhow for constructing 

refineries, raising the share 

of Iranian-made products in 

the construction of refineries, 

meeting domestic needs and 

self-reliance in engineering are 

all signs of progress by Iranian 

engineers,” Ali-Reza Zeighami 

said. 

He said 40 trillion rials 

have been invested in the 

development of Imam 

Khomeini Refinery in the 

central city of Shazand. “For 

the first time, an Iranian 

consortium handled this 

megaproject and managed to 

accomplish it successfully.” 

He said the refinery would see 

its refining capacity rise from 

170,000 to 250,000 b/d, while 

its fuel oil production would 

fall from 38,000 to 15,000 b/d. 

Converting fuel oil to gasoline, 

is one of the objectives of 

development of the refinery. 

Development of Imam 

Khomeini Refinery is 

the biggest project being 

implemented by National 

Iranian Oil Refining and 

Distribution Company 

(NIORDC). After its complete 

development, Imam Khomeini 

Refinery will become the 

leading gasoline producer in 

Iran. 

“Over the past one to two years 

and concurrent with tightened 

sanctions, domestic companies 

have been of greater help in 

the oil industry and many 

foreign commodities have been 

replaced with domestically 

manufactured ones,” Zeighami 

said. 

The official noted that 

Iran will benefit from 

national knowledge for the 

development of Abadan, 

Isfahan and Bandar Abbas 

refineries, and the construction 

of Persian Gulf Star Refinery. 

Noting that Iran is constructing 

refineries in conformity 

with the international 

standards, Zeighami said: 

“The construction standards 

6

Iran Eyes 10% of World Gas 


The exploration 

operations conducted 

in Iran in the past 

years have covered 

only one-third of the 

country’s land and territorial waters. 

However, Iran remains the top 

holder of hydrocarbon reserves in 

the world. 

Javad Oji, deputy minister of 

petroleum for gas affairs, recently 

said Iran has more than 34,000 

bcm of recoverable gas, adding that 

only 2,039 bcm have so far been 

recovered. He said Iran produced 

more than 69 bcm of gas and 800 

mcm of gas condensates in the first 

half of 2012. Since the beginning of 

the current Iranian year in March, 

27.6 bcm of gas has been delivered 

to power plants, industrial plants 

and other sectors. 

Oji said a revolution has taken place 

in Iran’s gas industry following 

the 1979 Islamic Revolution. At 

present, 929 cities and 13,000 

villages benefit from natural gas 

supply with respective penetration 

rates of 97 and 58 percent. Iran is 

often known as a country of four 

seasons, but in the winter, more 

than two-thirds of Iranian provinces 

experience freezing temperatures. 

That is why gas has always been 

vital for Iranian people. Oji, who is 

also managing director of National 

Iranian Gas Company (NIGC), said 

226,000 kilometers of gas pipeline 

have been laid out in Iran. “This 

company has been supplying gas 

to 15,351,000 customers in the past 

three decades.” Natural gas pollutes 

the environment less than other 

fuels do. In all countries, gas is a 

prioritized source of energy. “Gas 

supply to 50,506 industrial units 

is over in Iran and the industrial 

sector’s dependence on liquid fuels 

has declined. If the necessary credit 

is allocated, all Iranians will have 

access to gas supply in three years,” 

Oji said. 

Following the implementation of 

subsidy regulation plan in Iran, the 

progressive gas consumption trend 

was halted. Last year to March 

2012, household gas consumption 

dropped between 20 and 25 percent. 

Since September 10 to mid- 

October, only one percent of gas 

customers have had above-normal 

consumption. 

Oji said NIGC is fully ready to 

deal with the growing consumption 

in winter. “In the first half of 

2012, 13 refineries have been 

overhauled by Iranian engineers. 

For the first time, we have not sent 

gas turbocompressors abroad for 

reparation and 290 of them have 

been repaired inside the country by 

Iranian engineers.” 

He said Parsian and Fajr Jam 

refineries are capable of processing 

30 mcm of sour gas produced in 

South Pars gas field. 

South Pars gas refineries are 

currently processing 45.5 percent 

of Iran’s total gas. Parsian and Fajr 

Jam refineries account each for 17.5 

percent share in the gas processing. 

“After the construction of new 

pipelines like Loushan-Rasht 

Pipeline and operation of gas 

booster facilities in Parchin and 

Semnan, gas delivery by transnational 

pipeline will each amount 

to 720 mcm and there would be 

no gas supply problem in the 

winter,” Oji said. Gas recovery from 

underground reservoirs reaches its 

peak in the winter. Even the largest 

gas producers have to store gas in 

their facilities in order to deal with 

the winter freezing temperatures. 

Iran hopes to acquire a 10 percent 

share in the global gas trade in the 

coming five years. To that effect, it 

has tried to preserve its gas exports. 

“More than five bcm of gas were 

exported to neighboring countries 

up to the end of the seventh month 

of the Iranian year. It was up one 

percent year-on-year,” said Oji. 

The official dismissed as 

propaganda the European Union’s 

gas embargo against Iran. “Iran 

sits atop the second largest gas 

reserves in the world. It can be a 

major exporter of gas to European 

countries and embargos would 

inflict losses on the Europeans.” 

Oji said a pipeline, stretching from 

Andimeshk (southwest) to Bazargan 

(northwest) and supposed to deliver 

Iran’s gas to Europe, would become 

operational by March 2014. He 

added that Iran will begin pumping 

gas to Pakistan in a year and a half. 

He said NIGC quickly repaired 

Iran-Turkey gas pipeline after each 

supply cut due to blasts by terrorist 

groups. 

Oji also said that Iran imported 

2.7 bcm of gas mainly from 

Turkmenistan in the first half of 

the current calendar year. The gas 

imports show a 52 percent decline 

compared with last year due to the 

overhaul of gas facilities in both 

countries. 

are confirmed by foreign 

companies and we have to 

reach self-sufficiency in this 

sector in a bid to skirt enemies’ 

sanctions.” 

He said that the gasoline 

production unit at Imam 

Khomeini Refinery was 

a sign of benefitting from 

the capabilities of Iranian 

researchers and engineers. 

“This national project was 

jointly operated by the 

Research Institute of Petroleum 

Industry (RIPI) and engineers 

at Imam Khomeini Refinery. It 

lasted four years.” 

The Most Lucrative 

Refining Project 

Zeighami said the stocks of 

Iran’s most lucrative refining 

project – construction of 

Persian Gulf Star Refinery – 

are up for sale. 

“Bank Mellat is willing to 

purchase some stocks of this 

refinery. We are deciding on the 

price of stocks,” he said. 

Zeighami said NIORDC, Oil 

Industry Pension Fund and 

Social Security Investment 

Company are the stockholders 

of the refinery project. 

He added that NIORDC’s 

48-percent share is to be cut to 

20 percent. 

“In case of willingness on 

the part of the private sector, 

the refinery is ready for full 

privatization,” he added. 

Persian Gulf Star Refinery is 

designed to treat 360,000 b/d to 

produce nearly 36 million liters 

of gasoline. It would be the 

most profitable refining project 

in the country. 

55% Progress 

Zeighami, who is also 

managing director of NIORDC, 

said the construction of Persian 

Gulf Star Refinery has made 55 

percent progress. 

“Nearly 300 kilometers of 

pipeline carrying feedstock 

from Assaluyeh to Persian 

Gulf Star Refinery has been 

constructed and is currently 

being tested,” he said. 

The official said the first phase 

of the refinery would become 

operational with a treatment 

capacity of 120,000 b/d in one 

year time from now. 

He said Petroleum Ministry 

has been authorized to attract 

investment as much as needed 

in Persian Gulf Star and Pars 

refineries. 

Persian Gulf Star Refinery 

would produce 55 ml/d of oil 

products, including 36 ml/d of 

gasoline, 14 ml/d of gasoil, 4 

ml/d of liquefied petroleum gas 

(LPG), 3 ml/d of jet fuel and 

130 t/d of sulfur. The refinery 

can also store nearly 11 million 

barrels of oil products in its 

storage tanks. 


7


monthly 

First Line 

Iran, a Southwest 

Asian state, 

sprawls on more 

than 1.6 million 

square kilometers. 

The country, 

whose civilization 

is millennia-old, 

is home to more 

than 70 million. 

The first people 

settled in ancient 

Persia more than 

five millennia ago. 

They had based 

their social lives on 

communications. 

They always favored 

understanding 

and solidarity 

among themselves 

and also with 

neighbors and other 

civilizations. 

The Medes, one 

of ancient Persian 

tribes, used to dispatch 

their cultural 

and economic 

ambassadors to 

other countries 

in a bid to lay the 

groundwork for 

cultural and social 

communications 

as well as economic 

and commercial 

interaction. 

After the victory 

of the 1979 Islamic 

revolution in Iran, the 

Iranians were determined 

to control their 

national resources. 

The Public Relations 

Department of 

NIOC shouldered a 

heavy responsibility in 

regulating the communications 

between 

the oil industry and 

other bodies and their 

foreign customers. The 

public relations office 

has managed to make 

great contribution 

to NIOC’s increased 

interactions. 

Iran to Host 

the Upcoming 

Meeting of OPEC 

Member 

Countries 

Public 

Relations 

Departments 

8


In 1908, oil was 

first discovered in 

Iran. After the United 

States, Iran became 

the first oil producer 

in the world. Along 

with the development 

of oil industries, 

public relations offices 

were unofficially 

established to deal 

with the administrative 

affairs of the oil 

industry. 

Public Relations 

(PR) 

managers 

from OPEC 

Member 

Countries met on 5-8 

November 2012 at 

the OPEC Secretariat 

in Vienna, for the 1 st 

Meeting of the Member 

Countries Public Relations 

Managers. The 

Meeting was organized 

to discuss how to forge a 

closer working relationship 

between the OPEC 

Secretariat and Member 

Country Ministries 

through the exchange 

and sharing of information. 

The Meeting was 

declared open by 

the OPEC Secretary 

General, HE Abdalla 

Salem El-Badri, who 

stressed the importance 

of promoting such an 

initiative proposed by 

Iran in today’s challenging 

environment. 

Participants were given 

detailed presentations on 

the tasks and activities 

of the Secretariat’s PR 

and Information Department 

(PRID), as well 

as OPEC’s involvement 

in some environmental 

activities. There were 

also comprehensive 

presentations from the 

Member Countries 

on their PR activities 

and experiences. Mr. 

Royvar, the Public Relations 

Manager of Iran’s 

Petroleum Ministry 

Iran’s Manager of PR 

of Iran’s Petroleum 

Ministry had a comprehensive 

and informative 

presentation, which was 

admired and welcomed 

by the Secretariat’s 

officials, as well as the 

participants. 

The participants agreed 

upon establishing 

direct and firm contacts 

between PRID and 

Member Countries’ PR 

operatives as a paramount 

importance to the 

success of any public 

relations initiative 

launched, and in this 

regard, called on OPEC 

Member Countries to 

consider setting up an 

OPEC PR Liaison office 

or “OPEC desk” in the 

ministries of OPEC 

Member Countries. 

Finally, Mr. Royvar, the 

Public Relations Manager 

of Iran’s Petroleum 

Ministry of the Islamic 

Republic of Iran offered 

to host the upcoming 

Meeting. However, the 

issue requires to be approved 

by the Board of 

Governors of the OPEC, 

which is the second 

highest decision making 

organ of the OPEC 

Secretariat. 

In 1951 and after 

the nationalization 

of oil industry in 

Iran, the first public 

relations office was 

set up at Abadan 

Refinery by Dr Nateqi, 

who was a specialist 

in this field. 

The activities of this 

office influenced 

the interactions of 

National Iranian Oil 

Company (NIOC). 

When the Organization 

of the 

Petroleum Exporting 

Countries (OPEC) 

was established in 

1960, Iran was a 

leading oil producer 

in the world, and was 

actively present in 

all decision-making 

meetings of this influential 

body. Iran has 

always favored constructive 

economic 

and cultural communications 

with OPEC 

member states. 


9


monthly 

8 th 

Iran Plast 

Iranian Petroleum 

Minister Rostam 

Qasemi has said that 

the Iran’s installed 

petrochemical capacity 

will hit 100 billion tons by 

the end of the country’s Fifth 

Five-Year Development Plan 

(March 2010-March 2015). 

“Iran’s vast natural gas 

resources have made the 

petrochemical sector one of 

the most important industries 

of the country,” the Iranian 

minister said in an address to 

the inauguration of Iran Plast 

exhibition in Tehran. 

He noted that a major portion 

of petrochemical industry 

is privatized in Iran, adding 

that the governmental section 

is not operating in the 

downstream sector. 

Qasemi also said that 

Iran Plast International 

Exhibition, in which 

70 foreign companies 

have taken part, can 

help demonstrate Iran’s 

capabilities in the industry. 

He went on to say that 

Islamic Republic of Iran’s 

natural gas production from 

South Pars gas field will hit 

1.4 bcm/d by March 2016, 

adding that the current 

10 

Photo: HASSAN HOSSEINI



Capacity to Hit 100b Tons 

output of the gas field, which 

is located in Assaluyeh 

in the southern Iranian 

province of Bushehr, stood 

at 600 mcm/d. The minister 

added that the field is also 

producing 400,000 b/d of 

gas condensates, which is 

expected to exceed 1m b/d in 

coming years. 

The minister said Iran’s 

natural gas production from 

South Pars gas field will hit 

1.4 bcm/d by March 2016. 

The minister noted that the 

current output of the gas 

field, which is located in 

Asaluyeh in the southern 

Iranian province of Bushehr, 

stood at 600 mcm/d. 

South Pars Gas Field covers 

an area of 9,700 square 

kilometers, 3,700 square 

kilometers of which are in 

Iran’s territorial waters in the 

Persian Gulf. The remaining 

6,000 square kilometers, i.e. 

North Dome, are in Qatar’s 

territorial waters. 


11


Iran Exports Petchems to 

5 Continents 

Managing 

director of 

National 

Petrochemical 

Company (NPC) has 

said Iran is exporting its 

petrochemical products to 

all five continents, noting 

the Islamic Republic faces 

restrictions for petrochemical 

exports to Europe. Abdol- 

Hossein Bayat, who is also a 

deputy minister of petroleum, 

said Indian Subcontinent 

, Southeast Asia, China , 

Europe, Far East and Middle 

East account for 13 , 23 , 

22 , 18 , 5 and 15 percent 

of Iran’s petrochemical 

exports,respectively. 

In his address to the 

inauguration of Iran Plast 

exhibition, he said Iran 

exported $14.7 billion 

worth of petrochemicals in 

the Iranian calendar year 

to March 2012. “During 

the first half of the current 

year, $ 6.1 billion of 

petrochemicals weighing 

7.7 million tons have been 

exported.” 

“Nearly 5.2 million tons of 

products were delivered on 

domestic markets in the first 

half of the current year. They 

were used in the mid-stream 

and downstream industries,” 

said Bayat. 

The official said Iran’s 

petrochemical sector has 

managed to fabricate 

catalysts. “The grounds 

have been prepared for the 

fabrication of catalysts in the 

country and we are ready to 

collaborate with all financiers 

for commercial production of 

catalysts,” he added. 

Regarding gasoline 

production in the 

8 th 


12

petrochemical plants, 

Bayat said: “Gasoline 

production is a 

breakthrough for Iran’s 

petrochemical sector and 

our petrochemical plants 

would be able to produce 

gasoline in aromatic units. 

Our gasoline production 

is enough to meet the 

domestic demand.” 

“Petrochemical companies 

can produce between 17 

and 20 ml/d of gasoline. 

We are currently producing 

between 8 and 10 ml/d.” 

Regarding shortage 

of feedstock in some 

petrochemical units, Bayat 

said National Iranian 

Oil Company (NIOC) 

and other subsidiaries of 

Petroleum Ministry are 

cooperative to that effect. 

“We also expect the 

country’s banking system 

to provide further support 

for petrochemical units in 

the country,” he said. 

Bayat said more than 

5,000 companies are active 

in the plastic industry in 

Iran. “Due to such massive 

activities, Iran Plast 

exhibition has become 

a venue for exchange of 

views and cooperation 

between activists in this 

sector in the Persian Gulf, 

Middle East and Central 

Asia.” 

“Downstream 

petrochemical sector 

is the link between oil 

and gas reservoirs and 

final products. To that 

effect, NPC is supporting 

downstream industries 

by supplying feedstock, 

offering technical and 

after-sales services.” 

Bayat said Iran is currently 

producing over 4 mt/y of 

polymer products. 


Petrochemicals 

Revenue 

Earner 

for Iran 

Iran’s Deputy Minister 

of Industry, Mining 

and Trade Mohammad- 

Sadeq Mofateh has said 

that the petrochemical sector 

is a key parameter in Iran’s 

economy. 

In his address to the inauguration 

of Iran Plast exhibition, 

he said regardless of 

restrictions and sanctions, 

petrochemicals make 36 

percent of Iran’s non-oil 

exports. He added that Iran 

earned nearly $ 57 million 

from exporting downstream 

petrochemical and plastic 

exports in the first half of the 

current calendar year which 

began in March. 

He noted that prices of raw 

materials have grown illogically 

in the past several 

months. 

“The downstream sector 

has reached a stage where 

its products are serving 

as raw materials for other 

industries. We process a 

petrochemical product to 

feed other industries and in 

case this chain goes on as 

expected it can bring about 

blossoming for the plastic 

industry,” Mofateh said. 

The official noted that raw 

materials for the downstream 

industries should be 

provided to consumers at 

reasonable prices. 


13

New Investment 

Opportunity at Tehran Fair 

Like other 

industrial 

sectors, Iran’s 

petrochemical 

industry puts on exhibit 

its achievements and 

products every two 

years at Tehran’s 

International 

Photo:HASSAN HOSSEINI 

8 th 


Permanent 

Fairgrounds. The 

event lets Iranian and 

foreign visitors learn 

better about Iran’s 

petrochemical sector 

and find new customers 

for their products. This 

exhibition is known as” 

Iran Plast”. 

History 

National Petrochemical 

Company (NPC) 

concentrated its attention 

on the quantitative and 

qualitative development 

of petrochemical 

products, specifically 

polymers, in the late 

1990s. To that effect, 

the NPC decided to 

create market for 

petrochemicals and 

set up a specialized 

international exhibition 

up to the global 

standards. To that end, 

the NPC won permission 

from the Exports 

Promotion Organization 

(EPO) to organize Iran 

Plast (www.iranplast. 

nipc.net). 

Iran Plast was first 

set up in 2002. In the 

first exhibition, 70 

foreign companies 

from 18 countries 

and 214 Iranian 

companies displayed 

their products. The 

second one was held 

in 2003 when 172 

foreign companies from 

20 countries and 289 

domestic companies 

were present. A year 

later, the number of 


soared to 220 and 

domestic companies to 

350. 

Iran Plast was again 

held in 2005 with 295 


from 23 countries, as 

well as 400 domestic 

companies. In 2006, 

260 companies and 

more than 390 Iranian 

companies put their 

products on exhibit. 

By 

Since 

Parisa 

2006 

Rahnama 

onwards, 

the organizers decided 

to hold Iran Plast 

every two years. The 

following exhibitions 

were held in 2008 with 

the participation of 119 

foreign companies and 

366 Iranian companies, 

and in 2010 with 

257 foreign and 423 

domestic companies. 

Iran Plast 2012 

The eighth Iran Plast 

exhibition was held this 

November with 100 

foreign and 400 Iranian 

companies. The foreign 

companies were mainly 

from France, Italy, 

Austria, South Korea, 

China, Turkey, Saudi 

Arabia, Thailand and 

Taiwan. 

The exhibitors were 

divided into five 

groups. The first group, 

comprised of 220 

companies, was the 

group of manufactured 

and semi-manufactured 

products. They 

occupied more than 

7,000 square meters of 

land. The second group 

included manufacturers 

of polymer machinery 

and equipment. They 

were 100 companies 

14

sprawling on 4,000 square 

meters. The third group 

consisted of raw materials 

producers. They were 80 

companies on 4,000 square 

meters. The fourth and fifth 

group showcases technical 

and engineering services, and 

polymer composites. They 

were allotted 1,500 square 

meters. 

Participating Companies 

Pouya Polymer 

Pouya Polymer is a joint 

venture between Iran and a 

South Korean company, which 

is also operating in Indonesia, 

Sri Lanka, Brazil and the 

United Arab Emirates. Pouya 

Polymer produces mainly 

compounds and master-batch, 

which is a solid or liquid 

additive for plastic used for 

coloring plastics (color masterbatch) 

or imparting other 

properties to plastics. 

The R & D director of 

the company said Pouya 

Polymer and other companies 

participate in Iran Plast in 

a bid to find new markets. 

He said the depreciation of 

the Iranian currency rial is 

benefiting exporters, and 

Iranian companies are turning 

to domestic producers because 

imports from European and 

Asian states are too costly. 

quality. 

Its sales manager said this 

Italian company attended Iran 

Plast for the third consecutive 

time. He said presence in Iran 

Plast would help improve 

trade level between European 

and Iranian companies. 

He noted that Iran’s 

petrochemical market would 

be attractive for Italy. He said 

Iran and Italy are running 

eight join projects valued 

at between 100,000 and 2 

million Euros, adding that 

the Italian company holds 

close trade ties with Isfahan’s 

Gitipasand Company and Arak 

Petrochemical Company. 

He downplayed the impact of 

Europe’s economic downturn 

on the activities of ICMA, 

saying the Italian company is 

a small-sized one with only 52 

employees. 

Polikim 

This Turkish company has 

been cooperating with Iranian 

market for seven years. Its 

main customers are in Tehran 

and the northwestern city of 

Tabriz. Its products are mainly 

used in 

railway, 

machinery components 

and medical equipment. 

The factory is located near 

Istanbul. 

It was the first time Polikim 

attended Iran Plast and its 

commercial director felt happy 

with Iran’s petrochemical 

market. 

He acknowledged that Iranian 

companies are unwilling to 

purchase Turkish products 

since their prices equal those 

of the Europeans companies. 

TINCOO Machinery 

Established in 1989, TINCOO 

is a professional supplier 

devoted to the designing and 

production of big-scaled and 

multi-layer extrusion 

molding machine. 

Machines from the 

company are mainly for 

export, and have been 

exported to more than 80 

countries in Asia, Mid- 

East, Europe, Africa, 

Australia, and Latin- 

America. The marketing 

network has covered all 

over the world. 

There are 2 general 

departments in the 

company: machinery 

department and mold 

department. Machinery 

department is focused on 

designing and developing 

various plastic extrusion blows 

molding machine by learning 

foreign advanced techniques 

and administration faith, based 

on our own strong techniques 

force; mold department is 

focused on mold design and 

manufacturing of perform 

mold and extrusion mold 

& blow mold. According to 

different nature of different 

plastic material, we have 

successfully designed different 

extrusion blow molding 

machines, which are suitable 

for different products: 

ICMA SAN GIORGIO SPA 

A dynamic Italian company 

successfully present in the 

international market for 

decades, with state of the art 

compounding and extrusion 

systems for technological 

solutions and productive 

November 2012 / 15


monthly 

container of PE, PVC,PP, 

PC, PETG, PS, PAN, PA, PPE, 

PP0, ABS, POM, TRV, etc. 

Its representative in Iran Plast 

said Iran’s market could be 

lucrative for TINCOO. 

Tech-send Extrusion 

Machinery 

TS series large diameter 

HDPE/PVC double-wall 

corrugated pipe machine 

,ribbed extrusion line ,large 

diameter HDPE steel strip 

reinforced pipe extrusion line 

,large diameter DHPE water 

supplying and gas supplying 

pipe extrusion line ,large 

diameter UPVC pipe extrusion 

line ,PP-R PEX pipe extrusion 

line ,PVC wood composite 

foamed profile ,board and door 

extrusion line ,UHNW-PE 

ultrahigh molecular weight PE 

pipe and sheer extrusion line 

,XPS heat insulation board 

extrusion line ,XPS(IXPE) 

cross –link PE foamed coil 

extrusion line ,PE/PVC 

aluminum composite 

sheet extrusion line 

,PE,PP,PS,ABS,PET,PETG 

single-layer ,multi-layer sheet 

,board and film extrusion line . 

This company is of the opinion 

that Iran’s petrochemical 

sector is so lucrative that any 

company would be willing to 

skirt the sanctions and grab a 

share in Iran’s petrochemical 

market. It is attending Iran 

Plast for the second time in 

a row. The representative of 

this company said Tech-send’s 

products cost much lower than 

European ones. He noted that 

Iran’s five-percent economic 

growth rate has persuaded the 

company to develop ties with 

Iran. 

Zhangjiagang Xinda 

Plastics Machinery Co. 

This company has attended 

Iran Plast to win a foothold in 

Iran’s attractive petrochemical 

market. The focus of this 

company is on PVC products 

and considers Iran’s market 

to be extensive and attractive. 

This company hopes to meet 

Iran’s construction industry 

needs in interior decoration, 

furniture, windows and PVC 

pipes. 

The representative of this 

company at Iran Plast said the 

Chinese company has already 

been successful in Bangladesh 

and Vietnam due to its highquality 

products. 

Zhangjiagang Faygo 

Union Science Co. 

This Chinese company 

specializes in PET, PP, 

PC, and any other blowing 

machine industry. It has staff 

specializing in PET industry 

and air compressors. Its blowing 

machines include automatic and 

full automatic, and each kind of 

specification one-stage process 

or two steps. This 

company 

is 

8 th 


16 


actively present in Iran’s sewage 

pipes. It manufactures seamless 

pipes for transfer of wastewater. 

The representative of this 

company at Iran Plast complained 

about the Forex rate fluctuations, 

but said Iran’s economy had a 

bright prospect. 

He noted that Iran still needs to 

transfer modern technology for 

producing some alloys. 

Xin Xing Twin Screw 

This Chinese company is a 

producer of extruder, pipes and 

plastic products. It was its fourth 

presence at Iran Plast. 

Its commercial director said 

Iranian visitors are incapable of 

buying the products from this 

company due to the sharp slide in 

Iran’s national currency. 

Sanaat Sazan 

It is a leading producer 

of plastic kitchenware. 

This company 

has attended 

all Iran Plast 

exhibitions. 

The sales 

manager 

of this 

Iranian 

company said the Forex rate fluctuations 

have not had any significant impact on its 

revenues as it purchases its raw materials 

from domestic petrochemical companies. 

He said the presence of Sanat Sazan at Iran 

Plast was aimed at getting familiar with the 

products of its rivals and studying the market. 

He added that Iran Plast is the only 

opportunity for investment in the plastic 

industry. 

Raad Plastic Machine 

This Iranian company manufactures heavy 

and light machinery for plastic injection. It 

is based in the northwestern city of Tabriz. 

Among its rivals, Raad Plastic Machine is the 

only manufacturer of Milling Machine 120. 

This company is capable of manufacturing 

85 percent of machines like mills and mixers, 

but it needs to indigenize technology for 

producing advanced injection machinery. 

Razak Chemie 

Razak Chemie, an Iranian company, produces 

plastic storage tanks of 360, 770 and 

1,100-liter capacities. 

Javad Mir-Heydari, managing director of this 

company, said it has managed to sell waste 

separation tanks to an Iraqi company under a 

one-million-dollar deal. He said companies 

from Turkey, Tajikistan and Afghanistan 

have registered orders with Razak Chemie. 

He added that the granules used in the 

company’s products are anti-bacterial and 

anti-inflammable. 

Mir-Heydari said some European countries 

have lost a big chance by their refusal to 

attend Iran Plast. 

Parsian Plastic Processing Machine 

Manufacturing 

A regular participant at Iran Plast, this Iranian 

company manufactures 100 plastic injection 

machines in different models every year. 

The managing director of this company gave 

a positive assessment of Iran Plast 2012 and 

noted that Iranian manufacturers are now 

capable of competing with their Chinese 

rivals. 

He expressed hope that his company would 

sign deals with companies from Armenia, 

Tajikistan, Cuba, Oman, Iraq, Afghanistan 

and Azerbaijan. 

He said Parsian is one of those few 

manufacturers taking advantages of the 

state-of-the-art technology and using highquality 

raw materials to produce modern 

machines for Iran’s market. 


Persian Gulf 

Holding 

Controls 

Polymer 

Market 

By Sara Yekrangi 

The privatization of 

petrochemical units is a 

positive step for growth 

and development in the 

petrochemical sector. 

Shoring up the private sector in view of 

accelerating petrochemical development 

projects and enhancing petrochemical 

output would be lucrative and jobcreating. 

Persian Gulf Holding Petrochemical 

Company (PGHPC) is the largest 

privately-owned producer of polymer 

products in Iran. It has 15 offshoots 

including seven producing companies and 

two utility suppliers. PGHPC is among the 

largest markets in the stock market. 

Ali-Reza Pouri, director of production 

at PGHPC, has said his company is 

accounting for 67 percent of Iran’s PVC. 

He said PGHPC is also producing water 

bottles and detergents at its Tondgouyan 

Petrochemical Plant, tires, liquefied 

petroleum gas (LPG) and ethane in its 

Pars Petrochemical Plant. 

Pouri said PGHPC is operating 

petrochemical development projects in 

Chabahar Free Trade Zone, adding that 

the company plans to invest in Sarakhs 

Free Zone while benefitting from facilities 

like railroad, gas resources and airport. 

PGHPC is exporting its products to 

European states and China. All its 

exports activities are handled by Iran 

Petrochemical Commercial Company, 45 

percent of which is owned by PGHPC. 

Pouri said PGHPC is to list on the stock 

market in the near future. 


17


monthly 

Enhanced Recovery 

Consortium, 

First National Project 

By Parisa Rahnama 

More than a century after oil 

was discovered in Iran, the 

country still needs to develop 

modern technologies for 

recovery enhancement and 

refining. Iran’s oil industry 

– the most important element 

in Iran’s economy – needs 

technology to outdo its foreign 

rivals. To that effect, Iran’s 

Ministry of Petroleum, in 

collaboration with Ministry 

of Science, Research and 

Technology, is determined to 

benefit from Iran’s scientific 

capabilities to conduct 

research projects. For this 

purpose, Ministry of Science, 

Research and Technology’s 

Research Department has 

started its activities in the 

recovery enhancement 

consortium, whose relevant 

agreement was signed between 

the two ministries several 

months ago. The department 

is led by Mohmmad-Mehdi 

Nejad-Nouri, who answers 

Iran Petroleum’s questions. 

18 

Photo: NISOC RECEIVED

Q: What mechanism is the 

consortium based on? 

A: Normally, executive organs 

are asked to declare their 

research needs to the Ministry 


Technology that would in turn 

define scientific and research 

projects. The executive bodies 

may need education. But 

anytime we feel that Petroleum 

Ministry’s demands are 

prioritized, we will take it into 

account. 

Everyone knows how important 

enhanced recovery is. The 

Fifth Five-Year Economic 

Development Plan (2010- 

2015) requires the country to 

enhance its recovery by one 

percent. If everything goes 

ahead as planned, we will see 

nearly $ 750-billion increase 

in our hard currency revenues. 

Petroleum Ministry is required 

to realize the objectives set in 

the economic development plan, 

but it needs collaboration of 

Ministry of Science, Research 

and Technology. Oil and gas 

are important elements in 

the country’s economy and 


and Technology is determined 

to cooperate with Petroleum 

Ministry on research projects. 

Q: What are the criteria 

utilized for the selection of 

universities to be involved in 

enhanced recovery project? 

A: Petroleum Ministry has 

had negotiations with some 

universities and the selection 

has been done by this ministry. 

In the meantime, Ministry 


Technology has been of the view 

that a single university would 

not be capable of handling such 

an important project and that 

several top universities should 

help. Shiraz University, Tehran 

Polytechnic University, Tehran 

University, Sharif University of 

Technology, Sahand University 

of Technology and Petroleum 

University of Technology are 

to collaborate with Petroleum 

Ministry in this regard. 

Q: When did this consortium 

start its work and which stage 

is it in now? 

A: The agreement for 

establishment of the consortium 

was signed nearly five months 

ago. The consortium has 

currently 15 projects under way. 

Q: Are any observers 

envisaged to measure the 

quality of the project? 

A: Yes, this project is under 

way in a professional manner. 

An observer keeps a tab on 

the implementation of this 

project, which is going on in an 

acceptable manner. Ministers 

of oil and higher education 

are members of the Board of 

Trustees of the consortium. The 

main philosophy behind the 

establishment of the consortium 

is to help the country reach its 

envisaged one-percent recovery 

enhancement rate. 

Q: How have the two 

ministries been cooperating in 

research and education so far? 

A: Oil, gas and petrochemicals 

constitute influential industries 

in Iran. They are specifically 

important for the future of the 

country due to their comparative 

advantages. We know that most 

technologies are applicable 

in the oil sector and focusing 

on oil does not necessarily 

mean that we will lag behind 

in other technologies. On the 

contrary, the oil sector would 

encourage us to develop modern 

technologies. If the significance 

and position of the oil industry 

in the country is understood, we 

will reach a good status in the oil 

and gas sectors. 

In Iran, there are 4.2 million 

students and more than 2,000 

higher education institutes, 20 

of which are state-run. There are 

also 73,000 university professors 

and 400,000 advanced level 

students. The oil and gas sectors 


are expected to recruit at least 20 

percent of them. 


and Technology has always 

benefited from Petroleum 

Ministry’s assistance in 

construction, laboratories and 

other facilities. 

Another point here is that 

our concentration on further 

cooperation between the two 

ministries does not mean that the 


and Technology is running 

short of credit and research 

projects. We plan to become the 

region’s top economy. We eye 

a knowledge-based economy 

with the highest value-added. We 

need to increase our wealth and 

we have to lay the groundwork 

for a jump. 

Q: Does Ministry of Science, 

Research and Technology 

have any plan for a better 

knowledge of the scientific 

needs of the oil industry in 

order to strengthen relations 

between the two ministries? 

A: Ministry of Science, Research 

and Technology envisages 

transforming science into wealth. 

The five-year development plan 

also calls for shifting attention to 

research. The ministry has made 

the necessary preparations at 

universities, which are seriously 

bracing for research works. We 

are waiting for more cooperation 

between the industrial sector and 

universities. The scientific bases 

are ready for that purpose. 

Q: Is there a databank to 

help different industries 

benefit from the scientific and 

technological capacities of 


and Technology? 

A: Our capacities are clear 

and available in the website of 


and Technology. Moreover, 

Ministry of Petroleum has 

classified the capacities of 

different universities involved in 

the consortium. 


19

Modern Approaches 

in Human Resources 

Development 

By Forough Gashtasbi 


Specialist and knowledgeable 

human 

resources are assets of 

an organization and 

the main competitive 

advantage for today’s knowledge-based 

economy. Offering 

products and services of high 

quality, cutting costs, creativity 

and competitiveness are among 

the advantages of qualitative 

and knowledge-oriented human 

resources. That is why business 

strategies are based on human 

resources. 

Oil industry, as the pivot of the 

country’s development, will remain 

as important as it is. However, 

the persistence of activities 

depends on dynamic human 

resources being in convergence 

with national, regional and global 

developments and on efforts for 

equipment with modern technologies 

and strategies. To that 

effect, laying the groundwork 

for the flow of scientific and 

technological information and 

accelerating their utilization by 

the oil industry specialists would 

be a key strategy. 

The oil industry contributes 

significantly and vitally to the 

administration of the country. It 

needs to be the least invulnerable 

possible so that its development 

would never be hindered. 

The significance of the issue of 

human resources and the necessity 

for its relevant planning 

prompted the Institute for International 

Energy Studies (IIES) to 

establish a think-tank – Management 

and Human Resources 

Management (MHRM) – in 

2007. 

IIES, affiliated to 

Iran’s Petroleum Ministry and 


and Technology, has been 

operating as a research institute 

for more than two decades. The 

mid- and long-term objectives 

of the institute include assisting 

the oil industry to realize 

its objectives in the scientific, 

economic, social, political and 

international sectors, contributing 

to decision-making by senior oil 

managers based on energy studies, 

human resources management, 

financial management and 

planning, technological strategy, 

world energy scenarios as well as 

international oil and gas markets. 

All these activities are under way 

in the Energy Economy Research 

Center, Human Resources and 

Management Research Center as 

well as Technological Strategies 

Studies Research Center. 

Today, the countries owe their 

development to extensive 

planning to take advantage of 

all human resources, correctly 

manage them for an optimal use 

in view of creating maximum 

value-added at the national level. 

Moreover, the dynamic growth of 

Iran’s huge oil industry notably 

in the past three decades following 

the 1979 Islamic revolution 

has resulted in numerous and significant 

experiences, innovations 

and skills for human resources 

management. That would help 

the country realize its goals 

under its 20-year vision plan. In 

the meantime, competition with 

regional and international rivals 

and improving the status of oil 

industry in the country require 

paying serious attention to 

human resources. 

An option to raise the satisfaction 

level among employees is 

to invest in human resources as 

the most significant asset of an 

organization. Therefore, it would 

be necessary to make comprehensive 

planning to boost the 

capabilities of human resources 

through modern scientific methods 

in the management of human 

resources. 

The IIES Research Center 

for Management and Human 

Resources is the most 

influential research center in 

offering consultation on human 

resources. Mohammad-Mehdi 

Rashidi, head of the research 

center, enumerates its missions: 

defining modern strategies and 

approaches for the development 

of human resources, recruiting 

entrepreneurs, benefiting from 

the successful experiences of 

Iranian and foreign research 

centers in development of human 

resources, steering changes in 

organizations, job planning and 

defining standardization models. 

“The research center, as think 

tank in the oil industry, is tasked 

with exploring challenges to human 

resources management with 

the help of the subsidiaries of the 

Petroleum Ministry,” he said. 

Based on a strategic program, the 

research center is active in three 

fields – knowledge management, 

strategic management and human 

resources development. 

Since the establishment of the 

research 

center, the experiences of other 

institutes and universities in 

development of human resources 

in the oil industry have been 

used. To that effect, an extensive 

network of university professors 

and specialists are active. 

Knowledge Management in 

the Oil Industry 

Rashidi underscored the successful 

implementation of research 

projects in the oil sector by the 

research center, saying one of 

them is a comprehensive system 

for management of knowledge in 

the oil sector. 

“This project was defined upon a 

request from National Iranian Oil 

Company (NIOC) and is currently 

under way. The objective behind it 

was to present a national model for 

identification and documentation 

of models in the oil industry. After 

these models are identified, the 

branches of knowledge are defined 

so that the knowledge tree would 

be sketched out. The implementation 

of the project would provide 

NIOC with a comprehensive 

model to have access to the 

knowledge of all 

its labor force 

and it will 

no longer 

face such 

problems as 

the flight of 

intellectual 

assets.” 

“Before 

the 

20 

Photo: MOSLEM ABBASI

project was implemented on a 

massive scale, Arvandan Oil 

and Gas Company (AOGC) was 

picked as pilot. In the first phase, 

preliminary and theoretical studies 

were then conducted to give 

a model to be used in the second 

phase. We forecast to implement 

the project in one year.” 

“A strategic document of knowledge 

management has been 

designed for the National Iranian 

Gas Company (NIGC) and the 

relevant research studies would 

be complete in five months at 

the latest. A system has been 

designed to register the documented 

experiences of managers. 

Moreover, a knowledge tree has 

been defined so that experts or 

other people would get the latest 

information about knowledge 

and experiences. So far, 48 

percent of this comprehensive 

management system has become 

operational. With the adoption 

of strategies currently under 

way, we will achieve a strategic 

document that would include all 

knowledge-related activities for 

the 20-year horizon,” Rashidi 

said. 

Strategic Document for Oil 

Industry Human Resources 

By 2025, Iran’s oil industry 

would become the top economic, 

scientific and technological 

power among the countries in 

the region. To that effect, Iran 

should improve its knowledge 

and produce science and technology 

by relying on its own human 

resources and social assets. 

In order to harmonize the 2025 

vision plan with its missions, objectives, 

strategies, policies, plans 

and human resources activities, 

the oil industry defined a document 

for strategic management 

of resources. 

The diversity of missions assigned 

to the Islamic Republic 

of Iran’s oil industry and the 

significance and complexity of 

conditions necessitate comprehensive 

attention to the national 

and international environmental 

conditions in view of strategic 

orientation. Moreover, in order to 

distance from raw materials exports, 

it was necessary to define a 

strategic document for the development 

of human resources. 

The drafting of this document 

started in 2008 by the IIES 

research center upon a request 

by the Petroleum Ministry’s 

Department for Management 

and Development of Human 

Resources. The final reports were 

ready in the first half of 2010, 

but it had to undergo revision 

due to changes in Article 44 of 

the Constitution and tightened 

international sanctions against 

the Islamic Republic. The final 

copy was prepared in 2011. 

Rashidi said the main idea behind 

this document was to draw 

up upstream strategic documents 

like the country’s 20-year vision 

plan and the fifth five-year economic 

development plan. 

Regarding the implementation 

of the project, he said Schuler 

& Jackson human resources 

management model was picked 

as the framework. Among human 

resources practitioners, the 

term “strategic human resources 

management” is used broadly 

to signal the view that human 

resources management activities 

should contribute to business effectiveness. 

This linkage between 

HRM activities, the needs of the 

business, and organizational effectiveness 

is the core of the area 

called strategic human resources 

management (Schuler/Jackson 

1999). Two guiding assumptions 

of strategic human resources 

management are that effective 

human resources management 

requires an understanding of and 

integration with an organization’s 

strategic objectives and effective 


leads to improved 

organizational 

performance. 

In drawing up the 

strategic document 

for the oil 

industry human 

resources 

development, 

myriads 

studies were conducted in different 

related sectors. The PEESTbased 

study was one of them. 

Rashidi said: “In the first phase 

of the document which lasted 16 

months in a row, the perspective, 

missions, macro objectives 

and fundamental values of the 

oil industry have been defined 

in conformity with the 20-year 

vision plan.” 

The second phase, implemented 

in 2010, was in fact in the action 

plan related to the main four subsidiaries 

of Petroleum Ministry. 

The first and the second phases 

of this comprehensive strategic 

document need to be revised 

every five years. 

Highest Demand for Management 

Projects 

Based on surveys, NIOC accounts 

for the bulk of human 

resources management projects 

at the IIES’s human resources 

research center. Most of these 

projects have been defined to 

meet the oil industry’s needs. 

Successful Research Projects 

The IIES’s human resources 

research center has conducted 

studies related to seven projects 

proposed by the Petroleum 

Ministry’s R & D Department 

in a short period of time. This 

quickness is a strong point for 

the institute. 

Rashidi enumerated seven 

projects whose studies the 

institute has concluded as follows: 

Comprehensive project for 

boosting oil industry productivity, 

reengineering of oil industry 

organization, defining proper 

methods of education for correct 

energy consumption, establishment 

of EPR in the oil industry, 

establishment of intellectual 

assets system in the Petroleum 

Ministry and QHSE. 

Public Relations 

Rashidi also said a document 

has been drafted about the 

activities of oil industry public 

relations. “In 2011 and upon 

the request of the Petroleum 

Ministry’s Public Relations 

Department, the IIES’s research 

center for management and human 

resources defined a strategic 

plan to study changes inside the 

ministry. In the end, a perspective 

plan was adopted defining fundamental 

values for the oil industry, 

its missions, strategic objectives 

and actions. A roadmap for 

public relations is forecasted to 

be developed in five years.” 

The plan has been drafted to 

strike a balance between the 

expectations of influential sectors 

and beneficiaries from the public 

relations. 

Comparative Studies on 

China, Malaysia and Brazil 

Rashidi said the human resources 

management in three leading oil 

companies in China (CNPC), 

Malaysia (Petronas) and Brazil 

(Petrobras) were studied. 

This comparative study was 

aimed at acquiring information 

about the performance of 

international oil companies in 

recruitment of manpower and 

their payment. Then, they were 

compared with NIOC. Five 

parameters – philosophy, policy, 

performance, program and process 

– were studied. 


21


monthly 

Housing Oil Staff 

By Parisa Rahnama 


Productivity of 

organizations and 

improvement of 

the quality of their 

services and products 

is in direct relation with motivation 

on the part of their staff. 

Management experts consider 

motivation as the motive force 

of humanity. What is clear is that 

human resources constitute the 

motive force in any operational 

organization, and any improvement 

in productivity, application 

of state-of-the-art technology; 

innovation and the success of 

an organization depend on its 

human resources. To that effect, 

it would be necessary to glorify 

human resources in a bid to 

create wealth for the country’s 

economy. 

Proper employment of human 

resources is the most valuable 

and the biggest wealth in every 

society. Iranian Petroleum 

Ministry officials have always 

taken into account this important 

issue. In other words, mankind 

is the target of development and 

its factor, as well. Realization of 

the objectives of development 

is to a great extent dependent on 

the management of wealth. 

Given the fact that human 

resources play a key and significant 

role in the growth and 

development of the oil industry, 

especially in the challenging 

world of today, it is important 

to know that any organization 

could not be managed properly 

in the absence of motivation. To 

that effect, the Iranian oil industry 

has always paid especial attention 

to its employees working 

in hazardous and precarious operational 

zones, and has sought 

to upgrade the level of welfare 

for them and their families. One 

of the basic necessities of the 

employees of the oil industry is 

their housing. In view of the oil 

industry, housing affects other 

aspects of life and contributes to 

their psychological serenity. 

Exploring ways of winning satisfaction 

of oil staff would play 

a significant role in realizing the 

objectives of the oil sector. Oil 

and gas constitute the country’s 

assets, but human resources 

are more valuable because the 

oil industry would have no use 

without engineers and experts. 

Iranian engineers are capable of 

developing oil and gas fields in 

the country without any dependence 

on foreign countries. That 

is a great achievement of the 

Islamic revolution. 

The oil industry moved in 2010 

to identify the employees who 

do not own accommodation. 

Surveys indicated that 40,000, 

out of a total 160,000 oil staff, 

deserve to receive housing facilities 

under a government project 

known as Kindness Housing. 

Then, an agreement was signed 

between Ministry of Housing 

and Ministry of Petroleum for 

providing housing to the oil staff 

deserving the facilities. 

22 



Mohammad Amirkhani, an advisor 

to the Petroleum Minister 

Rostam Qasemi, is following up 

on the housing project for the 

oil staff. “Under this agreement, 

we took advantage of legal capacities 

for housing. Petroleum 

Ministry agreed to provide lands 

to its four subsidiaries so that 

they do not need the Housing 

Ministry to build houses for the 

oil staff.” 

The Housing Workgroup of oil 

industry, led by Amirkhani, first 

identified 550 ha of land where 

houses would be constructed for 

the oil staff. 

Regarding the present and future 

plans of the housing project for 

the oil staff, Amirkhani said: 

“Thanks to the minister of 

petroleum and upon a request 

from senior oil managers, plans 

have been adopted to provide 

housing to young staff close to 

marriage.” 

He added that at least 40,000 

flats could be given to the oil 

staff, noting that more houses 

could be constructed within the 

framework of cooperation with 

Ministry of Road and Urban 

Development. 

At present, the priority for 

housing has been given to the 

oil staff working in oil-rich 

operational zones in southern 

Iran. But other provinces, where 

gas supply and distribution of 

oil products are done, have not 

been ignored. 

The main condition and /or 

criterion to receive housing are 

to be married or breadwinner. 

“The total project is estimated to 

cost nearly 1.1 trillion rials, 500 

billion rials of which would be 

provided in facilities by Bank 

Maskan (Housing),” Amirkhani 

said. The interest rates on the 

loans granted to the oil staff 

vary from four to nine percent, 

depending on the level of costs 

in different cities. 

In one year time from now, 

2,000 housing units would be 

ready for the oil staff in the oilrich 

southern city of Ahwaz. 

Human resources are the main 

parameters of development; 

therefore, meeting their needs 

would be of specific significance. 


23


monthly 


An Overview of Energy Giants 

Human Resources Programs 

Human resources 

management 

is an important 

department in 

any organization 

because it plays the major role 

in recruitment and payment as 

well as their training, health and 

administrative communications 

of the staff. In order to improve 

the efficiency of its human 

resources management, any organization 

is expected to adopt 

optimal methods to stabilize 

an appropriate working culture 

and create healthy and thriving 

working conditions. 

In the industrial organizations 

and entities including oil companies, 

optimization of products 

and services are directly linked 

with research, knowledge 

acquisition, and training professional 

manpower and skilled 

engineers. Close interaction and 

collaboration with universities, 

scientific centers and technology 

parks, and offering the 

necessary oil and gas related 

training courses are among the 

prime necessities. 

Most major oil companies in 

the world have experienced 

periods in which such problems 

as shortage of specialized 

manpower and lack of access 

to technological updates 

emerge. Analyzing the 

management methods 

and experiences of 

these companies 

in recruitment of skilled manpower 

could be of great help for 

any company. 

The following is a review of human 

resources management in a 

number of famous international 

oil and gas companies: 

Statoil (Norway, established in 

1972, operating in the North 

Sea) 

The company often issues 

statement of recruitment for 

its industrial, technical and 

administrative sections. In this 

way, the Norwegian state-run 

company spares candidates any 

frustration over job. It also classifies 

the CVs regularly received 

from students, engineers and 

others to have easy access to the 

job applicants any time needed. 

Statoil has also employees 

working under contracts. It offers 

courses at universities and 

holds seminars on the campuses 

in a bid to identify qualified 

graduates for future recruitment. 

Statoil also develops education 

software for its employees and 

trainees at different levels. With 

the collaboration 

of its 

offshoots, 

it has 

managed to boost its employees’ 

knowledge. 

Statoil is operating in nearly 

40 countries in the world and it 

has to recruit local manpower 

for the projects it handles. It is a 

good opportunity for local manpower 

in the countries where 

Statoil is active. 

The short-term training courses 

and seminars held by Statoil 

focus on drilling, project management, 

oil and gas marketing, 

energy supply management, 

human resources management, 

communications, economy and 

finance, safety and health. 

Implementation of Statoil-style 


methods in Iran is impractical 

due to the large number of 

graduates from Iranian universities. 

Statoil encourages students to 

submit dissertations on oil and 

gas projects as part of its plans 

to prepare its future specialists. 

Job applicants in different 

countries can click into Statoil 

website and apply for vacancies 

announced. Of 32,000 Statoil 

employees in 36 countries 

across the world, nearly 19,000 

are in Norway. The company 

earns Norway nearly $ 78 billion 

a year. 

ExxonMobil (US, established 

in 1999, operating in 

Angola): 

Exxon Mobil Corporation or 

ExxonMobil is an American 

multinational oil and gas corporation 

which is a direct descendant 

of John D. Rockefeller’s 

Standard Oil Company, and was 

formed on November 30, 1999, 

through the merger of Exxon 

and Mobil. Its headquarters is in 

Irving, Texas. It is affiliated with 

Imperial Oil which operates in 

Canada. 

ExxonMobil controls concessions 

covering 11 million acres 

(45,000 square kilometers) off 

the coast of Angola that hold an 

estimated 7.5 billion barrels of 

crude. Due to its large activities 

in Angola, 72 percent of Exxon- 

Mobil employees are Angolans. 

It also offers oil education to 19 

percent of a region in Nigeria. In 

Indonesia, 15 months of English 

courses are among the top 

necessities of working in the oil 

and gas sectors. 

Marathon Oil Corporation 

(established in 1887, operating 

across the globe) 

Marathon Oil Corporation is 

a United States-based oil and 

natural gas exploration and 

production company. Principal 

exploration activities are in the 

United States, Norway, Equatorial 

Guinea, Poland, Angola and 

Kurdistan territory in Iraq. Principal 

production activities are 

in the United States, the United 

24 



Kingdom, Norway, and Equatorial 

Guinea. Marathon Oil has 

trained 1,600 people in Nigeria 

over five years. The interesting 

point is that local manpower 

is recruited in conformity with 

the projects. Extensive training 

courses are indicative of the 

willingness of these companies 

for long-term presence in some 

countries. A major challenge 

this company was grappling 

with, was its professional but 

aged engineers and skilled 

manpower. Due to the lack of 

skilled manpower, the company 

has had to keep people aged 

above 60. 

Oman Oil Company (established 

in 1996) 

The Oman Oil Company (OOC) 

is a national oil investment 

company of Oman. It is wholly 

owned by the Government of 

the Sultanate of Oman. Creation 

of the Oman Oil Company 

was proposed in 1992 and the 

company was established in 

1996. In addition to the oil and 

gas exploration and production, 

the company also invests in 

power generation, energy transportation 

and infrastructure, oil 

refining, and petrochemicals 

manufacturing. 

Since foreign companies 

have not been active in 

Oman, the OOC’s technicians 

and engineers 

have been working 

in a national 

industrial 

company. 

A large number of these 

experienced engineers found 

jobs in foreign companies that 

gradually came to Oman for 

offshore exploration, extraction 

and refining. It was economical 

for foreign companies to train 

new manpower or recruit local 

people who were working at 

much lower salaries. 

A survey conducted among 

the OOC employees indicated 

that only 25 percent of respondents 

referred to their pays as 

their main incentive. Nearly 87 

percent referred to proper working 

conditions, respect from 

superiors and progress in work 

as their incentives. The survey 

also indicated that 42 percent 

wanted that the managers let 

employees express themselves 

about decisions. 

ENI (established in 1953) 

Eni S.p.A. is an Italian multinational 

oil and gas company 

present in 79 countries, and 

currently Italy’s largest industrial 

company with a market 

capitalization of €87.7 billion 

($138 billion), as of July 24, 

2008. The Italian government 

owns a 30.3% golden 

share in the company, 

3.93% held through 

the state Treasury 

and 26.37% held 

through the 

Cassa depositi e 

prestiti. Another 

2.29% of the shares 

are held by BNP 

Paribas group. 

According to the 2011 statistics, 

42 percent of Eni’s employees 

were Italian. Every year, Eni 

grants 25,000-euro scholarship 

to 24 students from developing 

countries like Nigeria, Angola 

and Pakistan. 

Eni regularly holds seminars 

and training courses. It has invested 

in Indonesia and Pakistan 

by holding MBA courses in a 

bid to recruit specialist manpower. 

It is also active in South 

America, Venezuela, Oceania 

and East Timor. 

Chevron Corporation (established 

in 1984) 

Chevron Corporation is an 

American multinational 

energy corporation based in 

San Ramon, California, United 

States and active in more than 

180 countries. It is engaged in 

every aspect of the oil, gas, and 

geothermal energy industries, 

including exploration and 

production; refining, marketing 

and transport; chemicals 

manufacturing and sales; and 

power generation. Chevron is 

one of the world’s six “supermajor” 

oil companies. For the 

past five years, Chevron has 

been continuously ranked as 

one of America’s five largest 

corporations in the Fortune 500 

and it is currently ranked the 

eight. In 2011, it was named 

the 16 th largest public company 

in the world by Forbes Global 

2000. Chevron is one of the 

largest corporations in the world 

in terms of revenue. 

Chevron employs approximately 

62,000 people worldwide, of 

which approximately 30,000 are 

employed in US operations. The 

company has a worldwide marketing 

network in 84 countries 

with approximately 19,550 retail 

sites, including those of affiliate 

companies. The company also 

has interests in 13 power generating 

assets in the United States 

and Asia. 

Conclusion 

The parameters contributing to 

the effectiveness and efficiency 

of manpower in the oil companies 

could be summarized as 

follows: 

Encouraging students to submit 

better dissertations on oil and 

gas projects in return for their 

guaranteed recruitment; 

Developing software to inform 

employees of organizational approaches 

for their progress; 

Offering specialized courses to 

local people notably in remote 

areas; 

Holding English language and 

oil and gas principles courses; 

Keeping the average age of employees, 

notably engineers, low; 

Offering attractive payment to 

employees; 

Letting employees express 

themselves about decisions; and 

Respecting HSE standards in 

workplaces. 


25

Lead Money Supply 

to National Projects 

By Amir-Hossein Hashemi-Javid 

Former minister of 

petroleum Masoud 

Mir-Kazemi 

says selling oil 

at the current 

prices would harm the future 

generations. 

Mir-Kazemi, who also served 

as minister of commerce, said 

in an interview with Iran 

Petroleum that the oil prices 

have not increased in harmony 

with the gold price hikes. 

“In the 1970s, Iran sold 

oil at 20 dollars per barrel 

when gold cost 35 dollars per 

ounce. Today, it is around 

100 dollars per barrel, while 

each ounce costs 1,700 dollars. 

It indicates that producers’ 

purchasing power has 

significantly dropped over 

the past 40 years,” said Mir- 

Kazemi, currently chairing the 

Iranian Parliament’s Energy 

Committee. 

The full text of the interview is 

as follows: 

Q: Where does Iran’s oil 

industry stand now and what 

are the main issues it is faced 

with? 

A: Some issues of this industry 

depend on domestic factors. It is 

easy to find numerous domestic 

factors causing challenges for 

the oil industry. Removing these 

challenges requires adoption of 

effective laws and formulating 

proper plans. Foreign investment 

in Iran’s energy sector is 

facing challenges, but an 

optimal management of money 

supply could accelerate the 

implementation of development 

projects. 

It is important to note that our 

country is facing a new serious 

economic battle. We have 

no other choice but to resist 

and make precise planning 

to overcome the obstacles. 

In the meantime, it would be 

possible to change threats into 

opportunities. For example, 

when crude oil exports face a 

problem we can seize on the 

moment to wean away the 

economy from petrodollars. 

During eight years of imposed 

war (1980-1988), we did not let 

any halt in the flow of oil. In the 

post- war period, tough sanctions 

and restrictions failed to stop 

our progress, on the contrary 

we became self-reliant in the oil 

industry. The challenges may 

impose costs on us and may slow 

down the affairs, but they could 

never grind the country to a halt. 

Q: Under the present 

circumstances, what do you 

propose for financing oil 

projects in the country? 

A: An effective proposal 

to that effect is to invest in 

national projects through fiscal 

mechanisms. To that effect, 

financial and economic bodies 

in the country should make 

policies and develop methods 

to lead liquidity to the oil sector. 

For this purpose, the Central 

Bank of Iran (CBI) should 

reconsider the interest rates 

on bonds to make them more 

attractive to potential investors 

in development projects. Oil 

projects are productive and they 

expect to come to fruition in 

less than a year. Iranian banks 

are also capable of investing in 

development oil projects. They 

could be of great help to that 

effect. The banks should also 

revise the way they grant shortterm 

facilities for the oil, gas, 

petrochemical, and refining and 

energy sectors. Another option 

is to attract investment from 

Iranian expatriates. There are 

lots of Iranians living abroad 

and willing to invest in Iran’s oil 

sector, but we have to prepare 

the necessary conditions for 

them to transfer their money into 

the country. 

Q: What grounds are 

needed for attracting foreign 

investment, mainly from 

foreign countries and OPEC 

member states? 

A: Due to several reasons, OPEC 

member countries may not be 

willing to invest in Iran, but 

other countries tend to invest in 

Iran’s lucrative energy market. 

Some oil giants have noted that 

despite their willingness to invest 

in Iran they have been forced 

to cut business with Iran due to 

penalties. The undeniable fact 

is that foreign companies are 

eager to participate in business 

activities with Iran, but they face 

obstacles. Even neighboring 

states, specifically Muslim 

countries, are keen to invest in 

Iran; however, the first step is to 

facilitate procedures. 

Q: How can pension funds 

and financial institutes be 

encouraged to finance national 

projects? 

A: We have to clear the way 

for investment by proper 

management of capitals. All 

institutes and people should be 

convinced that investment in the 

energy sector would be lucrative 

and guaranteed. 

Q: Non-replacement of 

crude oil with other energy 

products in the 20 th century is 

indicative of the significance 

of this source of energy. Oil 

continues to remain a powerful 

instrument for generating 

wealth. Given the advantages 

of the oil sector in Iran, what 

do you propose to maximize 

benefits from this source? 

A: In the oil and gas sectors, oil 

products would generate more 

value-added as long as they 

are processed and refined. The 

value-added from crude oil sales 

is much lower than the valueadded 

gained from oil products 

like gasoline and diesel fuel. We 

have to make more headway in 

science and knowledge. In the 

meantime, we have to take steps 

toward reducing our exports 

while maintaining the level of 

our income. The solution is 

to brace for knowledge-base 

companies and convert raw 

materials to products of higher 

value-added. We have taken 

steps to that end, like planning 

to build refineries. There are also 

projects to renovate refineries. 

The advantage with refinery 

projects is exporting less crude 

but selling products of higher 

quality and value-added. 

Anyway, putting an end to crude 

oil and raw materials sales and 

acceleration of development 

projects are tied to supplying the 

necessary finance for refining 

projects currently under way in 

the country. 

Q: What measures need to be 

taken so that Iran would reach

Strategic Energy Proposals 

By Mehdi Mousavinejad, MP 

the position it deserves to 

enjoy in the oil market? 

A: Growing oil production in 

the Persian Gulf and Iran is 

an objective pursued by the 

Western governments and the 

United States. Is there any 

reason for us to be the first or 

the second producer of oil? At 

present oil is selling at very 

low prices. In the 1970s, Iran 

sold oil at 20 dollars per barrel 

when gold cost 35 dollars per 

ounce. Today, each barrel is 

around 100 dollars while each 

ounce costs 1,700 dollars. 

Therefore, it indicates that 

producers’ purchasing power 

has significantly dropped over 

the past 40 years. The oil price 

growth has been very low, 

and since crude is traded in 

dollars, we have witnessed 

inflation in Iran. It would be 

unfair to sell oil at such low 

prices. The future generations 

should also benefit from the oil 

revenues. Anyway, we have to 

invest our petrodollars in the 

sectors that would generate 

higher value-added and wealth, 

and transform underground 

reserves to assets. 

Oil, a prime 

necessity in 

the world, is a 

strategic tool in 

the hands of its producers for 

maneuvering in the arena of 

international diplomacy. In 

other words, oil can lay the 

groundwork for diplomatic 

dynamism and political 

growth in the producer 

countries. 

Oil is a strategic instrument 

in Iran, too. Since some 

countries are trying to use 

oil for their own benefits, 

it is necessary for Iranian 

officials to manage the 

country’s energy sector with 

more precision. 

Over the past three decades, 

we have managed to reduce 

our dependence on other 

countries and take influential 

steps in view of developing 

domestic energy industries. 

But now, in a bid to protect 

this powerful energy tool, 

we have to clear the way for 

oil to prove its influence and 

further activate the Islamic 

Republic’s international 

diplomacy. 

To that end, two approaches 

are proposed. They could 

help clear many hurdles 

on the way of the Islamic 

Republic to enjoy more 

freedom of action. 

The first point is that the 

country’s budget has been 

oil-dependent for years. Due 

to this heavy dependence on 

petrodollars, any fluctuations 

in the oil prices may 

overshadow Iran’s economy. 

Changes in the oil revenues 

have restricted state officials’ 

room for maneuvering. 

Therefore, legislative and 

executive bodies should take 

action to that effect and plan 

for reducing the country’s 

annual budget taking into 

consideration oil revenues. 

In fact, the exit of oil 

from the country’s budget 

would make this Godgiven 

resource a strong 

tool for control. With the 

help of oil, it would be 

possible to adopt strongarm 

tactics or incentives on the 

international scale. In that 

case, oil embargo would not 

even leave the least impact 

on the country’s economy 

and would even harm the 

imposers of sanctions. In 

other words, oil would be a 

tool exclusively in our own 

hand. 

The second point is that we 

have so far adopted reactive 

and subsequent policies visà-vis 

sanctions. We have 

always waited to see which 

sector the enemy is going to 

ban and then we have tried 

to find solutions to encounter 

the sanctions. Naturally, 

the whole thing would be 

difficult, costly and nonstrategic. 

Therefore, the oil managers 

should adopt policies based 

on hypotheses and forecasts 

against sanctions. 

Besides, these two points 

are other issues which can 

have their own solutions. 

One of them is controlling 

consumption. Despite 

Islamic teachings, we 

practice consumerism. A 

country of 75 million should 

not consume equally with 

a country of 300 or 400 

million. To that effect, we 

need to take the necessary 

measures. 

Reliance on domestic 

production and trust in 

domestic products would 

clear the way for economic 

progress and industrial 

development. Specifically 

in the oil sector, using 

domestic products would 

dispense with the need for 

imports and would make 

domestic producers more 

experienced. To that effect, 

Iran’s Petroleum Minister 

Rostam Qasemi has said in 

clear terms that the ministry 

is fully ready to establish 

domestic markets for 

producers. 

The important point here 

is that Iranian employers 

should trust the private 

sector. 

The proper proposal is 

establishment of a body 

outside the government 

to coordinate affairs 

between manufacturers and 

consumers. In that way, 

the consumer presents its 

quantitative and qualitative 

indices to the manufacturer, 

that would in turn, supply 

the required products. That 

would make domestic 

production target-oriented 

and cohesive.


monthly 

Developing Knowledge 

Networks in I.R.Iran’s 

Petroleum Industry 

Ruhollah Tavallaee (Young Advisor to the Minister of Petroleum) 

Adolescence is the best time in life. The most important feature of this useful 

period of time is being active, energetic, hopeful and ready to learn and experience. 

Using this energy and capability properly could help any organization to succeed in 

fulfilling its tasks and missions. To that effect, Iran’s Petroleum Ministry has set up 

think-tanks in recent years for a more effective presence of youths in the oil industry 

procedures. The think-tank is working under the title of Young Advisors to the 

Petroleum Minister. 

Acculturation in view of realizing the oil-related objectives set in the country’s 

20-year vision plan, preparing the grounds for a more effective presence of young 

engineers, benefiting from the views of creative experts and boosting motivations 

for teamwork are among the main objectives of establishment of the think-tank 

of young advisors. In the meantime, the think-tank holds symposiums aiming at 

exploring traumas, enhancing productivity, slashing costs and identifying young 

engineers to establish a databank, and documenting the experiences of veteran 

managers and employees. 

Rouhollah Tavallaie, a young advisor to the petroleum minister, holds a PhD in 

industrial management from Tehran’s Allameh Tabatabaei University. He says 

training young people to serve as managers in the future is the most important goal 

of this think-tank. He has authored an article about knowledge-base companies. 

INTRODUCTION 

In order to reach the goals and do the duties, organizations own different sources 

and assets. Some of these sources are valuable and strategic which play a main 

role to acquire organizational competitive preference. Knowledge is one of these 

sources and assets for all organizations, so that experts consider knowledge as 

final alternative for production, wealth, and monetary capital ‎[14]. In fact, knowledge 

is a unique source in the organization that during usage of time not only its 

value does not decrease, but also it increases.‎[7] This knowledge does exist in 

organizational procedures, instructions, viewpoints, actions and decisions. It does 

mind more when it transforms to valuable products and services. Therefore, it can 

be concluded that organizations permanent competitive preference comprises of 

the things they know and with what speed they can use their knowledge. ‎[3] 

Knowledge management means taking control and authority of the knowledge 

of human capital of organization and even the knowledge in exterior part of 

organization, propagating it to do current assignments in the organization which 

would be more improved and developed. The goal of knowledge management is 

to identify, collect, classify and organize, store, publish, disseminate and make 

available the knowledge in organizations. In organizations which are managed 

through traditional approaches, the knowledge flows from up to down through 

organizational lines. Thus, the knowledge is seldom available at the right time and 

where it is needed more. But, in the knowledge-oriented organizations in which 

implementing knowledge management is considered, the knowledge is flowing 

throughout the organization. Everyone can use it to do his/her assignments at the 

right time according to his/her own needs. 

The necessity of managing 

knowledge in Iran’s 

petroleum industry 

In the petroleum industry of Iran; 

a wide range of specialists active 

in various fields such as oil, gas, 

petrochemical, purification and distribution 

of oil production, drilling, 

business management, IT, etc take advantage 

of knowledge, proficiency, and experience 

and work on different projects 

with different subjects in different cases 

- exploration, extraction, transportation 

and production. In petroleum industry 

(particularly because of expansion of 

activities) a huge volume of knowledge 

is produced through implementation of 

different projects. 

Some parts of this knowledge are 

recorded in the form of evidences, reports, 

software, instructions, etc.(explicit 

knowledge) and some parts are intangible 

(tacit knowledge) which remain concealed 

in people’s minds as experiences, 

relations, skills, insights, etc. These parts 

have a little possibility for transferring 

and being used again. Lack of allotment 

and re-using of produced knowledge in 

the existing activities and knowledge 

capitals in petroleum industry (including 

human capital, structural capital, 

and communication capital) is actually 

wasting financial resources and it is a 

proof for lack of productivity. On the 

other hand, since an important part of 

28


current knowledge in petroleum industry 

is intangible and it is hidden in people’s 

minds as intellectual capital, in practice 

when those people leave the industry 

due to getting retired, being transferred, 

being redundant) the industry will not 

benefit from this knowledge anymore. 

From a decade ago, the petroleum and 

gas industries around the world have 

been using knowledge management 

improvements and now it is taken into 

consideration by different petroleum 

companies as a scientific subject with 

various organizational, technological, 

and human approaches. When oil companies 

focus on new technologies, using 

external resources, taking new partners, 

assessing management, governmental 

regulations, managing capacities, reducing 

costs and environmental issues, 

knowledge management groups can help 

them in forecasting, planning, processing, 

and lots of technological innovations 

through using the technology and 

knowledge transferring. 

The definition of Chevron Company; as 

one of the major petroleum companies in 

the world; about knowledge management 

which is applied in many parts of the 

industry, defines it as: processes, tools, 

and behaviors which give correct concept 

to correct individuals at the proper time 

and in the proper situations. As a result, 

they can make the best decisions, take 

advantage of existing opportunities, and 

propagate innovative ideas. It is noteworthy 

that the world gas and petroleum 

leaders focus on knowledge management, 

as well: 

Ken Derr, manager of Chevron Company 

says: “We have learned we can use 

knowledge to achieve improvements in 

our company. We focus on purchasing 

knowledge from external parties, bringing 

it into the organization rather than 

attempting to create something by our 

own. Every day that a new idea comes 

and we cannot use it, actually we have 

lost an opportunity. We should participate 

into knowledge promptly”. 

John Brown of BP Company says: “Using 

a knowledge which is more efficient 

than competitors, is an issue that all 

companies encounter with it”. 

Brendan O’Neill from Imperial 

Chemicals Industries says that: “Knowledge 

management is a framework for 

innovation. It brings business success in 

compatibility of employees with quickly 

changing operational environment”.‎[13] 

A Framework for 

knowledge networks 

High performing knowledge workers 

have been found to leverage their informational 

environments through networks 

because they find and use information 

through using their own knowledge and 

expertise but also through their social 

networks by seeking out information 

from colleagues and friends. ‎[4] 

The framework of knowledge networks 

comprises of the following components: 

actors, individuals, groups, organizations; 

and relationships between actors, 

which can be categorized based on 

form, content and intensity; resources 

which may be used by actors within their 

relationships, and institutional properties, 

including structural and cultural 

dimensions such as control mechanisms, 

standard operating-procedures, norms 

and rules, communication patterns and 

so on. 

These components can be perceived 

from either a static or a dynamic point 

of view. From a micro perspective, we 

conceptualize knowledge networks on 

the following three building-blocks. ‎[1] 

Developing a model of knowledge 

networks 

Briefly reviewing the literature of article, 

one can find out that in order to design 

the development model of knowledge 

networks, some variables are related to 

structural properties of these networks 

(knowledge network necessities, knowledge 

network levels, and knowledge 

trees) and other variables are related to 

content features (knowledge species and 

intellectual capital of organization). Each 

one of these variables includes some 

components as follows: 

Knowledge network: the main applications 

of knowledge network in the 

organization are: knowledge acquisition, 

knowledge sharing, as well as accessing 

to internal and external knowledge. 

Knowledge network necessities: a 

knowledge network needs to be supported 

by technology infrastructures (like the 

Internet and Intranet), communication 

and architectural networks‎[9] 

Networks levels of organization: networks 

which exist in the organization are 

divided into levels as follows: organizational 

network, national network, international 

network, multinational network, 

and global network. ‎[10] 

Knowledge tree: knowledge fields in 

organizations can be classified in tree 

structure. Generally, knowledge fields 

in all organizations are divided into two 

knowledge groups: general knowledge 

(i.e. common among all organizations, 

like management knowledge), and 

technical knowledge (is related to special 

activity of each organization). 

Knowledge species: through a brief 

review of scientific resources, generally, 

Fig. 1: Framework of knowledge networks_ a micro perspective 

there are two different typologies for 

knowledge of organization. Edwards and 

Mahling believe that different kinds of 

knowledge are as follows: administrative 

knowledge, declarative knowledge, 

procedural knowledge, analytical knowl- 


29


monthly 

edge. ‎[6] But some other experts 

believe that knowledge 

of organization comprises 

of two kinds of explicit and 

tacit knowledge.‎[12] 

The aforesaid experts believe 

that explicit knowledge 

can be encrypted and coded, 

so it can be easily transmitted, 

processed, transferred, 

and stored in data bases. We 

can shape this kind of knowledge 

and publish it between 

people in the organization 

in the form of a scientific 

formula or a guidebook. 

Instructions, laws and 

regulations, procedures, 

standards, detailed description 

and so on, which are 

formally used by people in 

organizations and can be 

simply transferred, are all 

explicit knowledge. But tacit 

knowledge is subjective and 

personal. It is difficult to 

formulate it. This kind of 

knowledge which is often 

acquired through sharing 

experiences and observations 

and also emulating, 

are derived from people’s 

actions, procedures, values 

and feelings. In addition, 

tacit knowledge could not be 

easily coded and transmitted 

through a similar language. 

According to former 

studies conducted in the 

petroleum industry and based 

on researchers’ recognition 

about this industry, the second 

typology is applied more 

in the petroleum industry. 

So it is used for drawing the 

basic suggested model of researcher 

in macro theoretical 

framework of the research. 

Intellectual Capital: It 

includes that part of whole 

capital and asset of company 

that is based on knowledge 

and the company owns it. 

Intellectual capital comprises 

of three main parts such 

as below: human capital, 

structural (organizational) 

capital and communicative 

(customer) capital. (Edwinsson 

& Malone, 1997) 

Knowledge networks pattern 

in petroleum industry 

have some functions, the 

most important of which are: 

Assisting in policy making 

and determining the policy of 

Petroleum Ministry. 

Classifying the knowledge 

based on materiality, function, 

degree of confidentiality 

and so on. 

Operational and administrative 

policies. 

According to presented 

definitions, the basic suggested 

model for developing 

knowledge networks in 

organizations is as follows: 

Conclusion 

Managing knowledge 

networks within organizations 

has taken on enhanced 

importance in recent years 

because of the decline of 

middle management and 

other changes in formal 

organizational structures, 

the growth of information 

technologies, and our increasingly 

competitive global 

economy.‎[8] 

Knowledge networks can 

be manifested in a variety 

of forms: project teams, 

research groups, advice 

networks, professional communities, 

communities of 

practice, support groups, and 

so on. Individuals increasingly 

find that they must 

determine for themselves 

what choices they will 

make, distilling the information 

they have gathered in 

their personal networks to 

knowledge, which in its own 

turn results in strategies they 

can pursue as they act in a 

more complex world. The 

awareness of the operation 

of knowledge networks is, 

quite literally, an important 

survival tool for individuals. 

In turn, it leads to individual 

learning; nevertheless actions 

determine how organizations 

adapt to rapidly changing 

environments and innovate 

to face new challenges. 

As mentioned before in 

this article, due to special 

properties that exist in Iran’s 

petroleum industry, knowledge 

management is of high 

importance. However official 

structures of petroleum 

industry, which are illustrated 

in structural diagrams, 

do not display the real flow 

of knowledge in industry; 

however, informal networks 

play a major role in fulfilling 

its missions and transferring 

knowledge. 

Over the recent years, informal 

networks have attracted 

the most attention of senior 

managers. Organizations 

have found out that most 

activities are done cooperatively 

and through benefitting 

from these informal 

networks. 

Taking into consideration the 

capabilities that are created 

by knowledge networks for 

organizations; they are appropriate 

solutions for innovation, 

knowledge creation, 

sharing individual and organizational 

knowledge in petroleum 

industry (and other 

industries). Benefitting from 

knowledge networks are the 

most efficient and effective 

way to manage knowledge. 

They are designed to share 

knowledge amongst different 

individuals and knowledge 

bases. According to 

the researches’ view, the 

second typology is applied 

more in petroleum industry. 

It is used for drawing the 

basic model for developing 

knowledge networks in 

organizations. By designing 

the model, knowledge 

networks will demonstrate 

the main applications and 

the most important functions 

of an efficient and effective 

knowledge network. 

References 

1. A. Seufert, G. Krogh 

and A. Bach, “Towards 

knowledge networking”, 

Journal of Knowledge 

Management, Vol. 3 

Issue: 3 pp. 180 – 190, 

1999. 

2. M. Castells, The Information 

Age: Economy, 

Society and Culture; The 

Rise of the Network Society 

(2nd edn), Oxford: 

Blackwell, 2000. 

3. M. Cohen, G. James and 

P. Johan, “A garbage can 

model of organization 

choice”, Administrative 

Science Quarterly: 1-25, 

1998. 

4. T.H. Davenport, “Thinking 

for a Living: How 

to Get Better Performance 

and Results from 

Knowledge Workers”, 

M.S. thesis, Boston, 

Harvard Business 

School Press, 2005. 

5. S. Durbin, “Creating 

Knowledge through 

Networks”, Gender, 

Work and Organization, 

Vol. 18 No. 1, January 

2011. 

6. D. L. Edwards and D. 

E. Mahling, “Toward 

Knowledge Management 

Systems in the 

Legal Domain”, in Proc. 

Proceedings of Group 

97, Published in May 

1997 by the Association 

for Computing Machinery 

(ACM), USA: 

Phoenix Arizona, 1997, 

pp. 158-166. 

7. R. Glaser, “Measuring 

the knower: toward a 

theory of knowledge 

equity”, California 

Management Review, 

Vol. 40, No. 3 : 175-194, 

1998. 

8. J. Johnson, Managing 

Knowledge Networks, 

Cambridge University 

Press, 2009. 

9. P. Monge, J. Fulk, M. E. 

Kalman, A. J. Flanagin 

30


and C. Prnassa, “Production 

of Collective Action 

in Alliance-Based”, Inter 

organizational Communication 

and Information 

Systems, Organization 

Science, vol. 9 (3), pp. 411- 

433, 1998. 

10. J. Nahapiet and S. Ghoshal, 

“Social capital, intellectual 

capital, and the organizational 

advantage”, Academy 

of Management Review, 

vol. 23 (2), pp. 242-266, 

1998. 

11. S. Newell, M. Robertson, 

H. Scarbrough and J. 

Swan, Managing Knowledge 

Work, Basingstoke: 

Palgrave Macmillan, 2002. 

12. I. Nonaka, and H. Takeuchi, 

The Knowledge 

Creating Company, Oxford 

University Press, Oxford, 

1995. 

13. R. Tavallaee, Knowledge 

Strategy Formulation in 

the Islamic Republic of 

Iran petroleum Industry, 

Case Study in the NIOC, 

M.S. thesis, Dep. Management, 

Imam Sadegh (a) 

Univ., Tehran, I. R. Iran. 

14. A. Toffler, Power shift: 

knowledge, wealth and 

violence at the Edge of the 

21st century, New York: 

Bantam Books, 1990. 

Photo: HASSAN HOSSEINI 


31


monthly 

Pulsed Fluid Pressure Sludge 

Dryer Design & Manufacturing 

Introduction 

A significant environmental challenge in all refineries and oilrelated 

industries is the oil sludge. Generally speaking, heavy sludge 

often settles in the crude oil tanks, likely to disturb the oil refining 

systems. Throughout different stages of water, oil and suspended 

solids separation, a large volume of oil sludge is produced, causing 

serious problems for the refineries. Therefore, it would be necessary 

to develop an effective method to separate oil compounds from the 

sludge in different sections of the oil industry. 

Various methods have so far been presented for separating sludge 

from oil. Some of them are centrifuging, filtration, and solvent 

extraction, thermal and biological methods. Each method has its own 

advantages and disadvantages. Thermal desorption methods pollute 

the environment because they release pollutant gases. Moreover, 

less recovery of oil materials from the sludge are obtained because 

some of the hydrocarbons are removed. Biological methods take 

a long time and also remove all hydrocarbons. Extraction-based 

methods are used in the refineries which produce solvents as one of 

their products. But the problem is that solvents, which are organic, 

are costly and to some extent pollute the environment. Centrifuges 

have high speeds and therefore are amortized quickly and their 

equipments are expensive. 

The project has been conducted by Research and Technology 

Directorate of National Iranian Oil Refining and Distribution 

Company (NIORDC). It focuses on the design and manufacturing 

of a fluid pressure dryer to dry oil sludge. The method was used in 

the country for the first time to separate solid parts of oil sludge. 

The advantage of pulsed fluid pressure devices is that they lack the 

restrictions of biological methods and centrifuges. They can also 

recover a high percentage of oil and water from the sludge and they 

are effective for sludge with different physical properties. 

The advantages of this dryer are as follows: 

• The maintenance of these systems is very inexpensive 

since they lack any sophisticated mechanical and rotary 

equipments. 

• They are able operate in a vast spectrum of concentrations 

and different kind of sludge. 

• The system is highly efficient, being able of converting 

one-percent solid sludge into 90-percent solid dewatered 

sludge. 

• Possibility of separating water and oil from highly viscose 

sludge. 

• The system is portable and could be carried to different 

sections of the refinery. 

• It is highly flexible and could be designed to meet various 

conditions and needs. 

32 

Photo: ARASH YADOLLAHI


Methodology 

The project focuses on designing 

and manufacturing a pulsed 

fluid pressure dryer to separate 

the liquid phase of oil sludge 

from its solid phase. The design 

calculations have been made 

based on the fluid pressure 

systems equations. An usual 

compressors have been used to 

create the proper pressure in the 

system. These compressors are 

the most customary ones are 

available in the industrial market. 

In this system, the pressure 

declines gradually because the 

sample’s physical form 

changes form – from paste 

to something like cracked 

cake. The system, designed 

on the lab scale, is capable 

of transforming various oil 

sludge input sample into 

solids containing less than 

10-percent liquid phase. 

The lab prototype of the system 

has passed the necessary tests and 

the technological knowhow for its 

industrial manufacturing has been 

mastered. 

The pulsed fluid pressure sludge 

dryers are expected to: 

1. Recovering maximum 

valuable oil and 

hydrocarbon materials 

from oil sludge; 

2. Minimizing wastes 

through maximizing the 

solid percentage of the 

sludge; 

3. Achieving the highest 

separation yield; 

4. Minimizing energy 

consumption and costs; 

and 

5. Simplifying the system 

and it’ operation. 

Conclusion 

Fluid pressure filtering is a 

method for separating oil from 

oil sludge. This process is a 

physical one with a large number 

of factors, and has rarely been 

analyzed theoretically. This 

method could be highly efficient 

if high pressure is applied. 

The pressure forces needed in 

pulsed pressure systems are 

generated by various devices 

like pumps and compressors. 

The resistance forces include 

frictions and the resistance of 

solidified separated sludge cake. 

At the beginning, the sludge 

resistance is zero, but it increases 

as filtering goes on. If the solid 

sludge is washed after filtering, its 

resistance will remain unchanged 

during the operation. Usually as 

time passes, the resistance of slid 

sludge increases and the pressure 

drop increase notably. 

Drying by fluid pressure systems 

is a specific case of flow in porous 

media. As mentioned earlier, 

resistance to flow increases as 

the dryer is filled with dewatered 

sludge. 

The manufactured devices are 

capable of separating the liquid 

phase from the solid phase of 

the oil sludge regarding the oil 

industry’s needs and the absence 

of an appropriate device; with 

these characteristics such a system 

would be the key to resolve the 

challenge of oil sludge in the oil 

industry. 

The project is specifically 

designed and manufactured to 

serve the oil and petrochemical 

industries. This pulsed fluid 

pressure sludge dryer has been 

upgraded to its maximum 

efficiency in oil and hydrocarbon 

separation. 


33


monthly 

Black Gold Rush 

in the Horn of Africa 

By Parisa Fotouhi Mozafarian 

Introduction 

The recent developments in North 

African countries unseated Ben Ali in 

Tunisia, Hosni Mubarak in Egypt 

and Moammer Gaddafi in Libya. 

They were all turning points for the 

MENA. 

The new leaders in the North 

African states are defining modern 

strategies. Their success still hangs 

in balance, but what is certain is 

that economic, social, political 

and cultural structures would be 

significantly affected. 

In many Arab states influenced by 

these developments, oil and gas are 

major parameters in their economies. 

The revenues gained from oil and gas 

exports constitute the bulk of their gross 

domestic product (GDP). Moreover, neighboring 

Arab states with no significant oil and gas reserves 

depend on their labor force working in the oil or gas-rich 

countries. Therefore, the economy of Arab states in the 

MENA is influenced by oil in a 

way or another. 

The impact of waves 

of unrest in the 

Arab states is not 

limited to the 

region because 

the world’s 

economy 

depends on oil 

and gas supply 

from the 

MENA. 

Given the 

significance of 

Egypt and Libya 

in the region and 

the fundamental 

changes in their 

regimes, the present article 

studies the impact of political 

unrest on these two countries’ oil 

and gas sectors in terms of production, 

transportation and investment. 

34 



Impact of Developments on 

Domestic Consumption 

The Arab world accounts for 

49.6 percent of the world’s total 

proven oil and 29.1percent of 

the world’s proven gas reserves. 

Such hydrocarbon richness has 

spread the wrong belief among 

their people that they can use 

up these resources at very low 

prices. 

It’s no surprise that the per 

capita consumption of fossil 

fuels in the Arab world is much 

higher than in other countries, 

thanks to the huge subsidy 

allocation by their governments. 

The price of crude oil and its 

products stand very low in 

most Middle East nations and 

these prices are not unrealistic. 

Therefore, these major crude 

exporters would have to cut 

their exports due to their 

growing domestic consumption. 

To tackle this challenge, many 

Arab governments decided to 

reduce domestic consumption 

through mechanisms like 

removing subsidies, but they 

faced the resistance of the 

majority of people. 

In the aftermath of the outbreak 

of unrest in North Africa, the 

Persian Gulf Arab states began 

paying more cash to people. 

Protests erupted in Algeria, but 

the outcome was different from 

what happened in Tunisia and 

Egypt. One reason was that the 

Algerian authorities took the 

demonstrations seriously and 

lifted a 19-year-old emergency 

law. The Algerian government 

also promised housing and 

financial facilities to youth, 

higher pay to the government 

employees and more subsidy 

allocation to foodstuff. 

Countries with low-income 

in North Africa cannot adapt 

themselves with the incentives 

offered by Persian Gulf littoral 

states and Algeria, while 

they have no tendency to cut 

subsidies. A project in Arab 

countries to reform energy 

prices in order to bring them 

closer to the market prices 

remains hamstrung. Therefore, 

the growing domestic 

consumption of oil products 

would go on and will pose a 

serious challenge in the coming 

years. 

Impact on Foreign Investment 

According to the latest forecasts 

by the International Energy 

Agency (IEA), the world’s oil 

and gas sectors would need 

respectively $ 10 and 9.5 

trillion of investment through 

2011 to 2035. Since the world 

would depend on the MENA 

for oil and gas supply for at 

least several more decades, 

the oil and gas industry in the 

Middle East needs remarkable 

investment. 

Since the bulk of this investment 

should be made by international 

oil companies which generally 

prefer to invest in politically and 

economically stable regions, 

the continuation of political and 

social tensions in the Arab states 

of MENA would disturb the 

attraction of foreign investment 

and subsequently oil and gas 

production in this region would 

drop in the long-term. 

Political tensions and food price 

hikes in 2011 were the main two 

factors that affected MENA. Oil 

price hikes in the oil exporting 

countries except for crisisaffected 

Libya and Yemen have 

increased national revenues. 

The GDP growth in this region 

was 4.9 percent in 2011 and 

is forecasted to fall to 3.9 

percent this year. In general, 

the growth rate in MENAstates 

is falling due to the hindrance 

of economic activities by 

political developments, decline 

in domestic and foreign 

investment and the number of 

foreign tourists. 

Impact on Egypt Oil and Gas 

The Egyptian revolution has left 

insignificant impacts on the oil 

and gas production, oil products 

refining as well as oil and gas 

delivery. The shipment of oil 

and gas through Suez Canal and 

Sumed pipeline never topped 

despite the anti-regime protests. 

Some gas pipelines were on the 

receiving end of the political 

tensions in this country. 

Egypt is not a major oil 

producer in the world and 

specifically in MENA. Its 

oil output reached its peak 

of 935,000 b/d in 1996 and 

has since faced declines to 

fall to 735,000 b/d this year. 

In spite of the discovery of 

new fields and the adoption 

of new technologies for the 

enhancement of the recovery 

factor in some oil fields, the 

production is forecasted to keep 

falling to reach 690,000 b/d. 

In return, the oil consumption 

reached 709,000 b/d in 2012 

and is forecasted to reach 

820,000 b/d in 2016. That 

means that Egypt would depend 

on oil imports to meet its 

growing domestic demand. 

Analysts are of the opinion that 

this country would make up for 

its oil output decline by quick 

development of its gas sector 

and exports. Egypt has been 

recognized as one of the main 

gas producers and exporters in 

the past decade. Egypt holds 

the third largest gas reserves 

in Africa, just behind Nigeria 

and Algeria. Gas production in 

this country has trebled from 

2000 to 2012, hitting 61.3 

bcm. But exports have not 

increased quickly due to the 

growing domestic demand. Gas 

consumption soared to 49.6 bcm 

early this year from 20 bcm in 

2000. The Egyptian government 

plans to raise its gas production 

by 10 percent by the end of 

2013. 

Throughout the widespread 

waves of unrest against the 

former Egyptian government, 

oil and gas fields were 

never attacked and the new 

government is trying to 

attract foreign investment to 

develop them. Analysts say the 

government’s success in foreign 

investment attraction depends 

on political and economic 

stability in this country. 

Before the outbreak of unrest, 

the Egyptian government was 

planning to reduce energy 

consumption rate by cutting 

subsidies. In the face of public 

fury against high prices, the new 

Egyptian leaders are unlikely 

to reconsider energy carriers 

pricing. The government is 

likely to adopt the policy of 

increasing government costs and 

keeping subsidies unchanged. 

With 10 refineries, Egypt 

constitutes a large segment of 

the African refining sector. Its 

refining capacity is beyond its 

domestic need, requiring Cairo 

to import crude and export oil 

products. 

Over the recent years, Egypt 

has adopted plans to develop 

its refining capacity. These 

plans need foreign investment 

and guaranteeing investment 

requires economic stability and 

increased internal security. 

Egypt is playing an influential 

role in the world’s energy 

market through Suez Canal 

and Sumed pipeline – both 

providing routes for crude oil 

and liquefied natural gas (LNG) 

exports from the Persian Gulf. 

The income from transit of these 

products constitutes a major part 

of the Egyptian government’s 

revenues. Moreover, any 

hindrance of delivery of cargoes 

would negatively affect the 

consumption markets notably in 

Europe. 

Suez Canal, 120 miles 

long, connects the Red Sea 

and the Persian Gulf to the 

Mediterranean Sea. Crude and 

oil products are transported 

on both sides of the canal, in 

the north to the Mediterranean 

Sea and in the south to the Red 

Sea. The LNG transfer through 

the canal is often carried out 

through Suez Canal from Qatar 

to European and American 

markets. 


35


monthly 

In late 2000, one percent of the 

world’s total crude oil supply 

or 5 percent of the marine oil 

shipment was done through 

this canal. This figure shows 

a decline from the previous 

decades. In 1956 and from 1967 

to 1975, the canal was blocked 

due to the outbreak of war. That 

was why alternative routes were 

considered. 

Sumed pipeline, 200 miles long, 

is an alternative to Suez Canal 

for big cargoes. This pipeline 

was constructed in 1967 due 

to the closure of the canal. 

With a capacity of delivering 

2.4 mb/d, Sumed connects the 

Red Sea to the Mediterranean 

Sea. The pipeline stretches 

from south to north, carrying 

oil from the Persian Gulf to 

the Mediterranean coasts. the 

pipeline is owned by the Arab 

Petroleum Pipeline Company/ 

Sumed Company, a joint 

venture of EGPC (50%, Egypt), 

Saudi Aramco (15%, Saudi 

Arabia), IPIC (15%, the United 

Arab Emirates), three Kuwaiti 

companies (each one 5%), and 

QGPC (5%, Qatar). 

The oil shipment via Suez 

Canal and Sumed pipeline has 

declined since 2008 for the 

following reasons: 

1. The fall in the world’s 

economic growth and 

subsequently lower demand for 

crude: OPEC and specifically 

Persian Gulf producers reduced 

their output or suspended 

their production hike plans in 

reaction to the falling demand. 

It resulted in lower oil trade 

in region at time of the 2009 

economic turmoil in the world. 

2. Since mid-2000, the global 

oil market’s indicators changed 

a lot. Oil consumption and 

imports in Asian states, notably 

China and India, have increased 

compared with European 

countries and US, and the flow 

of crude oil from the Middle 

East to East gained momentum. 

3. Piracy and security concerns 

in the Horn of Arica obliged 

some exporters to go a longer 

way to deliver their cargos to the 

Western markets. 

Unlike crude oil, LNG shipment 

via Suez Canal has increased. 

The delivery of LNG cargoes 

through the northern route 

of the canal takes place from 

Qatar or Oman to European and 

North American markets. The 

southern route is used for the 

delivery of cargos from Algeria 

and Egypt to Asian markets. 

In the event of the closure of 

Suez Canal and Sumed pipeline, 

oil and LNG tankers will have 

to bypass southern Africa to 

cross the Cape of Good Hope 

– a longer and costlier distance. 

Throughout the 

2011 unrest in 

Egypt, the delivery 

of cargoes via Suez 

Canal or Sumed pipeline 

faced no problem. 

Impact on Egypt Upstream 

Oil and Gas Sectors 

Chilean state firm ENAP 

doubled its Egyptian production 

to 7,000 b/d as output soared 

at its operated East Ras Qattara 

concession. ENAP is looking 

to further expansion after 

recently signing an exploration 

and production agreement 

for the Sudr block, located in 

the Gulf of Suez. It is one of 

the seven fields the Egyptian 

oil company put to tender in 

2010. ENAP and its subsidiary 

Sipetrol are operating three 

main oil blocks in Egypt and 

are determined to win another 

block. Egypt last issued tender 

bids for its oil fields in March 

2011, offering seven quite 

small fields for development. 

Since Egypt’s oil company 

lacks sufficient resources to 

finance the projects, the fields 

have been commissioned for 

development to contractors 

under service contracts. Under 

such contracts, the contractor 

pays for the maintenance of the 

equipment and will take a share 

of new products according to its 

investment and technology. 

ENAP was totally recouped for 

its costs despite domestic unrest 

in Egypt. Currently, 20 percent 

of ENAP production in the 

world comes from Egypt. 

A BP PLC-led group started gas 

production from Seth field in 

the Nile Delta offshore Egypt 

in June. 

Two wells in the 

western part of the 

Seth reservoir are 

expected 

to reach 170 mcf/d 

and develop about 240 bcf 

of gas. Meanwhile, the group 

has accelerated Phase 2 of the 

development of the eastern 

part of Seth through two more 

platform wells that should go on 

production by the end of 2012, 

hiking total output to more than 

250 mcf/d. 

The Seth development went 

on production on 23 rd June, 18 

months from project section and 

15 weeks ahead of schedule. BP 

predecessor, Amoco Production 

Co. led a group that discovered 

Seth and other Nile Delta fields 

in the mid-1990s. 

Seth field is 60 km offshore in 

the Ras El Bar concession in the 

East Nile Delta Mediterranean 

near the group’s producing 

Ha’py and Denise fields. 

Seth is being developed with 

a 6-slot, normally unmanned 

platform in 262 ft of water. Gas 

is being shipped via the Denise 

(Pliocene) pipeline to the El 

Gamil gas terminal near Port 

Said. El Gamil handles 20% of 

the gas produced in Egypt. 

BP is operator of Ras El Bar 

with 50% interest, and Eni SPA 

has 50% through its subsidiary 

International Egyptian Oil Co. 

BP said its joint venture with 

Egyptian General Petroleum 

Corp./EGAS, the Pharaonic 

Petroleum Co., and BP’s 

partners 

meets nearly 40% 

of Egypt’s domestic 

gas demand. 

BP is actively 

exploring in the Nile 

Delta and investing to 

add production from 

existing discoveries, 

and it is developing 

West Nile Delta, a 

strategic project that 

will supply gas to the 

domestic market. 

Impact on Libya Oil and 

Gas 

The impact of Arab Spring 

on the Libya’s oil industry 

was much more than on the 

neighboring countries’. The 

overthrow of Mubarak was 

less violent. NATO and foreign 

armies made great contribution 

to the Libyan regime change. 

It is no surprise to see regime 

change in Egypt without any 

significant decline in the oil 

production, while the Libyan 

36


monthly 

oil industry was paralyzed and 

some of its fields, terminals and 

refineries were attacked. Libya 

accounts for 3.4 percent of the 

world’s proven oil reserves and 

sits atop the largest oil reserves 

in Africa. The Libyan oil sector 

enjoys the following two 

advantages: 

1. Geographically, oilrich 

Libya is close to energythirsty 

Europe. Despite their 

efforts to diversify their energy 

basket, the Europeans heavily 

depend on oil which could be 

easily imported from Libya. 

2. Unlike the oil produced in 

the Persian Gulf, Libyan oil 

is of high-quality thanks to its 

low sulfur content. The Libyan 

crude oil is better for processing 

and treatment could be done in 

a simple refinery without any 

sophisticated equipment. 

Sweet and light crude oil 

shortage is much more difficult 

than the shortage of sour and 

heavy crude oil. The reason is 

that the refineries fed by light 

and sweet crude are less flexible 

and of lower quality compared 

with others. The world’s oil is 

mainly heavy and sour, pushing 

Libya into bold relief due to the 

quality of its oil. 

In the Persian Gulf states, 

including Iran, Iraq, Kuwait 

and Saudi Arabia, oil was 

discovered in the early 20 th 

century, but Libya explored 

oil in the late 1950s. 

However, Libya 

became the world’s 

fourth big exporter 

of crude oil in the late 

1960s. 

But due to Gaddafi’s 

wrong policies, Libyan oil 

production and exports dropped 

sharply four decades later. 

Libya undertook fewer efforts 

than other countries to attract 

international oil companies. 

Besides, international sanctions 

against Libya and 

Gaddafi’s ignorance of 

international norms and 

conventions dissuaded 

international oil firms 

from investing in the 

North African state. 

In 2000, when all 

sanctions were lifted, 

Libya was expected to 

retain its position as a leading 

oil exporter and consumer. 

Significant contracts were 

signed with BP and Eni. Alas, 

this period was short-lived. 

The Libyan officials were loath 

to attract foreign investments 

and the Libyan companies 

were working under tight 

bureaucracy. Continuation 

of this trend will leave oil 

reservoirs untapped in Libya. 

Unlike Egypt, Libya is one of 

the most significant producers 

of oil in the world, Middle 

East and North Africa. Oil 

production in this country was 

1.66 mb/d in 2010, but declined 

to 480,000 b/d in 2012. 

Given the fact that Libya’s 

petrodollars make 95 percent 

of the country’s hard currency 

revenues and more than 70 

percent of its GDP, it would be 

significant to fully prospect in 

its hydrocarbon reservoirs. 

The urgent need for Libya 

to enhance its crude output 

again has motivated the 

country to reconstruct its oil 

infrastructures. Libyan oil wells 

need regular maintenance and 

six months of halt in production 

must have inflicted heavy 

damage on the facilities. Libya 

has six main terminals, two of 

which were seriously damaged. 

In addition to oil, Libya’s 

huge gas resources remained 

untapped. Libya became a 

gas exporter in 1971. Libya’s 

gas exports soared to 3.6 bcm 

in 1977. But in 1980, Esso 

Libya was declared as national 

asset and the prices went up. 

Consequently, LNG buyers 

either scrapped their deals or 

reduced their purchases. 

Two decades later, LNG 

industry development declined 

due to the economic sanctions 

and the lack of interest on the 

part of foreign companies. In 

the early 2000s, the gas industry 

became profitable again. A 

340-mile subsea pipeline, 

constructed by Eni and Libya’s 

national oil company and 

connecting Libya and Italy, 

was inaugurated in October 

2004. In February 2011 when 

Libya plunged into uprising, 

Eni blocked the pipeline before 

reopening it by the end of 

the year. The resumption of 

gas exports in Libya was a 

significant step in this country’s 

oil and gas industry. 

At present, many famous 

oil companies like Eni, 

Spain’s Repsol, France’s 

Total, Germany’s Winterzahl, 

US ConocoPhillips, Hess 

Corporation and Marathon Oil 

Company have voiced their 

interest in resuming work in 

Libya. Some of them have even 

dispatched their representatives 

there for negotiations. Libya’s 

oil production is forecasted 

to reach 1.95 mb/d in 2016 in 

the light of interest by foreign 

companies to invest in this 

country. 

Different estimates have been 

given about the time required 

by the new Libyan government 

to rebuild the country and make 

up for damage inflicted on the 

oil infrastructures. Reparation 

of structures requires a high 

level of security as well as legal 

frameworks. 

Any decision about oil deals in 

Libya depends on their future 

president. Anyway, Libya has 

to repair the fields, terminals 

and other damaged facilities. 

The Libyan authorities have to 

start from scratch as their frozen 

assets have been released. 

Conclusion 

The recent developments in 

Arab and African countries 

have been more influential 

on Libya’s oil industry than 

Egypt’s. Analysts believe 

that Libya would become 

a significant factor in the 

world’s energy market in 

the mid-term by establishing 

political stability and economic 

security. Financial transparency 

is needed for economic 

development in North Africa. 

Economic problems do not 

necessarily stem from financial 

shortages and may result 

from improper allocation of 

resources. Economic woes 

always give rise to political 

problems and therefore the 

North African states have to put 

job opportunities’ creation and 

better life quality high on their 

agenda. 

Economic stability in MENA 

requires politically fundamental 

changes. Moreover, due to the 

public demand for transparency 

and auditing, the new contracts 

are examined with more 

precision. 


37


monthly 

Mini-Refineries in Russia 

By Sousan Afzalzadeh 

Director for refining, distribution and gas projects planning, Petroleum 

Ministry Department for Hydrocarbon Resources Planning and Supervision 

Introduction 

The primary crude oil refineries were a simple distillation tower whose products were of low quality. Over the past half a 

century, modern refining technologies have been developed and new units like isomerization and CCR have been added to 

the refineries in a bid to offer products of better quality. The development of new technologies requires higher investment 

which faces restrictions. The discovery of crude oil reservoirs in oil-rich countries like Iran, Iraq, Russia and the United States 

prompted their officials to look for a technology to build small-sized refining units close to their crude oil reserves. 

1. Technology 

One of the sophisticated technologies applied in the 

construction of mini-refineries is ordinary distillation 

technology. In the past, external reflux causes separation in the 

distillation tower, but today, internal reflux has been set twice 

and more to increase separation, which is done in vertical pipes 

measuring between 0.5 and 3 meters in length and between 6 

and 25 millimeters in diameter. This process is known as Linas 

Technology, developed by Russia in the late 20 th century. In the 

beginning, refineries processed 150 b/d, but their capacity was 

raised to 8,000 b/d soon. The technology became operational 

in four years. In 2008, seven mini-refineries in Siberia treated 

150 to 8,000 b/d. 

2. Linas Technology 

Table 2 – Feedstock in Linas Technology Refineries 

Feedstock 

Density (gram/cubic 

centimeters) 

Crude 0.805-0.860 

Gas condensates 0.75-0.79 

Crude mixed with gas 

condensates 

0.75-0.83 

Table 3 – Refined Products Specifications 

This technology is flexible enough and is applied in crude oil 

and gas condensate distillation.ّFeedstock could be crude oil, 

gas condensate and /or crude mixed with gas condensates. 

Table 1 specifies distillation towers for different capacities of 

treatment. 

Product 

Start of 

Distillation 

(degrees 

C) 

90% 

Distillation 

(degrees C) 

Density 

(gram/ cubic 

centimeters) 

Table 1 – Distillation Towers for Different Refining 

Capacities 

Gasoline 

33-40 

145-170 

0.7-0.73 

Refining Capacity (1,000 

tons/year) 

Tower’s 

Length 

(meters) 

sdddTower’s 

Diameter 

(meters) 

Diesel 

fuel 

160 

330-335 

0.82-0.84 

12 7 0.5 

50 7 0.9 

Fuel oil 

175-165 

0.935-0.92 

150 7 1.6 

The refining capacity could be enhanced by adding two pipes. 

Tables 2 and 3 specify inputs and outputs. 

38


Fig. 1. Schematic Comparison between Ordinary and Linas Distillation Towers 

3. Advantages and Disadvantages 

Construction of mini-refineries through utilizing Linas 

technology has the following advantages: 

- It facilitates refinery designs and could be used 

anywhere in the world. 

- It is usable in very low refining capacities even below 

1,000 b/d. 

- Its technological knowhow costs less than other 

technologies. 

- However, this technology could not be used in largesized 

refineries because it would not be economical 

when the diameter and length of pipelines increase. 

Data about Russian Mini-Refineries 

Russia – the second largest non-OPEC producer in the world 

– has in some occasions been recognized as the largest oil 

producer with a refining capacity of 9 mb/d. Nearly 20 refineries 

are operating in the European section of Russia and 6 more 

in its Asian section. Their refining capacities vary between 

14,000 and 380,000 b/d of crude oil and gas condensates. 

There are nearly 160 mini-refineries in 53 spots in Russia with 

a treatment capacity of less than 14,000 b/d. 

Russia has numerous small crude oil reservoirs for which a 

big refinery would not be economical; therefore min-refineries 

have been built close to them. The US and Russia account for 

the bulk of mini-refineries in the world. More than 30 percent 

of Russian refineries process less than 9,000 b/d. 

4. Linas Technology in Iran 

Oil-rich Iran has nine refineries for processing crude oil 

and gas condensates. It has also large refining plants under 

construction, but it is still seeking to boost its refining capacity. 

Iran has scattered oil and gas fields, some of them shared with 

its neighbors. Gathering crude oil and gas condensates from 

so many reservoirs into a single large refinery would have no 

economic benefits and application of Linas Technology would 

be cost-effective. 

Given Iran’s climatic diversity and the difficulties of oil 

products delivery in cold seasons to some regions, it would be 

logical to build mini-refineries in Iran. 

5. Conclusion 

Building mini-refineries whose capacity is below 10,000 b/d 

in remote regions, notably in the west and south, where oil and 

gas fields abound, would be reasonable because construction 

of pipelines for feedstock delivery is costly. It is recommended 

that Linas Technology be applied for building small refining 

units in a bid to meet local needs for strategic oil products. 


39


monthly 

Composite Pipes at 


By Mohammad Afshin 

A 

small but 

dynamic factory. 

Everyone is 

busy working. It 

smells resin everywhere. 

The pipes, tanks and profiles 

stored outside indicated 

how active the factory was. 

We were waiting for the 

guide. He finally arrived 

with several masks. We wore 

the masks and entered the 

factory. Welding machinery 

and metalworking lathe 

were operating. Experts 

were assessing the products. 

One of these products was 

MT6 supposed to produce 

fiberglass pipes for the first 

time in Iran. Fiberglass is 

a fiber reinforced polymer 

made of a plastic matrix 

reinforced by fine fibers of 

glass. It is also known as 

GFK. 

Iran used to import fiberglass 

pipes from the United 

States and India, but today 

Mashhad Sadra Sharq Co. 

is manufacturing these 

pipes at much lower costs 

than foreign companies. 

Fiberglass pipes are key to 

oil and gas industries. 

The company is located in 

Khorasan Razavi province, 

in northeastern Iran. 

Properties 

Today, composite materials 

are largely used in the 

oil, gas, water supply 

and chemical industries. 

Composite materials, often 

shortened to composites or 

called composition materials, 

are engineered or naturally 

occurring materials made 

from two or more constituent 

materials with significantly 

different physical or 

chemical properties which 

remain separate and distinct 

within the finished structure. 

Underground pipes are used 

across the world for the 

transfer of oil, gas, water and 

sewerage and protection of 

telecommunications cables 

and power transmission 

lines. These pipelines, often 

buried under soil or water, 

always face challenges of 

protection and maintenance. 

But reconstruction and 

reparation of pipelines is 

technically and economically 

significant. The first 

composites developed by 

mankind were hatch and 

adobes using straw. These 

composites date back to four 

millennia BC. Iran’s historic 

citadel Arg-e Bam is the best 

example of composite in 

ancient times. 

The need for faster, more 

secure and less costly 

methods shifted attentions 

to using composites for 

repairing pipelines. The 

tendency to composites 

stemmed from successful 

experiments with fiberreinforced 

plastic (FRP). 

Also known as fiberreinforced 

polymer, FRP 

is a composite material 

made of a polymer matrix 

reinforced with fibers. The 

fibers are usually glass, 

carbon, or aramid, although 

other fibers such as paper 

or wood or asbestos have 

been sometimes used. The 

polymer is usually an epoxy, 

vinylester or polyester 

thermosetting plastic, and 

phenol formaldehyde resins 

are still in use. FRPs are 

commonly used in the 

aerospace, automotive, 

40 




41


monthly 

marine, and construction 

industries. 

A common example of a 

composite would be disc 

brake pads, which consist 

of hard ceramic particles 

embedded in soft metal 

matrix. Another example is 

found in shower stalls and 

bathtubs which are made 

of fiberglass. Imitation 

granite and cultured marble 

sinks and countertops are 

also widely used. The most 

advanced examples perform 

routinely on spacecraft in 

demanding environments. 

Low Weight, High 

Resistance 

Advanced polymer 

composites are light, 

reinforced and highly 

resistant to destruction and 

corrosion. Therefore, they 

make repaired pipelines 

more durable. Among other 

advantages of this method is 

easy and quick installation 

without any need for drilling 

to pull out the pipe. 

The most significant 

advantage of composite 

pipes is the low cost of their 

maintenance and resistance 

to corrosion from fluids 

(liquids and gases) on the 

inner and outer walls. 

Managing-Director of 


Ali Pilzour says the company 

is a leading manufacturer 

of pipes, joints, tanks and 

fiberglass profiles in Iran. He 

said the company has taken 

great strides in pushing ahead 

the composite industry by 

relying on its own technical 

knowledge. 

Saving Money 

Pilzour said the company 

began producing fiberglass 

pipes in 2006 in a bid to save 

100 million dollars a year in 

state coffers. This company 

has expanded its activities in 

Assaluyeh and has managed 

to be present in Phases 13-18 

of the giant South Pars Gas 

Field in collaboration with 

Iran Power Plant Projects 

Management Company 

(MAPNA). Mashhad Sadra 

Sharq Co. is currently 

cooperating also with Persian 

Gulf Gas Liquids Refinery 

and National Iranian South 

Oil Company (NISOC). 

Among non-oil projects 

operated by Mashhad Sadra 

Sharq are water supply 

to Markazi, Fars, Yazd, 

Kermanshah, Khorasan 

Razavi and Semnan 

provinces. 

Pilzour said the company 

has so far patented two 

inventions related to 

composite pipes. 

First in Middle East 


is the first Middle Eastern 

company meeting all 

the composite pipelines 

requirements of Iran’s oil 

industry. It has patented the 

design and manufacture of 

continuous pipes. 

The nominal capacity of 

this company is 11,400 

tons a year, but is currently 

operating at half its capacity. 

If needed, it can raise its 

capacity. 

Pilzour said Iran purchased 

42 



in 1992 its first pipe making 

machine from Italy’s 

Sarplast, which is the global 

leader in the design and 

production of fiberglass 

pipes. After the purchase 

of the machine, Iranian 

engineers at Mashhad Sadra 

Sharq Co. managed to 

acquire the technology to 

build the machinery. 

Currently, the necessary 

fiberglass for this company 

is imported from foreign 

states. However, Pilzour 

said Iranian companies can 

produce fiberglass if the 

necessary technical savvy is 

purchased. 

Iran imported more than 

9,000 tons of fiberglass in 

the first eight months of the 

current calendar year which 

began on March 21. Iran’s 

FRP imports from mainly 

Asian and European states 

are forecasted to reach 

10,000 to 12,000 tons – 

much higher than last year. 

Iran is also importing big 

consignments of resins. 

Modern Methods 

The production of fiberglass 

joints at Mashhad Sadra 

Sharq Co. is done either 

manually or mechanically. In 

many developed countries, 

manual methods are still in 

effect. 

Ali-Reza Fadaei Pour, 

an executive director at 


Co., said: “This method 

needs more labor force, but 

mechanical production is 

more attractive to customers. 

In order to respect our 

obligations and satisfy our 

customers, we have installed 

the necessary machinery for 

manufacturing composite 

pipes.” 

Mechanization of composite 

pipe production at Mashhad 

Sadra Sharq Co. began in 

2008, Fadaei Pour said, 

adding that the company 

has been modernizing its 

machinery. He said the first 

machine installed in the 

factory was a four-axis one. 

R&D 

Sattar Maleki, the company’s 

R&D director, said the main 

product of Mashhad Sadra 

Sharq is composite pipe 

and joint, in sizing varying 

from half an inch to 4,500 

millimeters, manufactured 

either continuously or 

discontinuously. 

Mashhad Sadra Sharq has 

acquired the technology 

for designing and building 

machinery manufacturing 

composite pipes. 

Over the past years, Iran’s 

oil industry has broadened 

its communications with 

universities and scientific 

centers. Every year, 

thousands of dissertations 

and theses are focused on 

upstream and downstream oil 

sectors. 

Maleki said Mashhad 

Sadra Sharq has been in 

touch with polymer and 

scientific centers, working on 

composite pipes, for the past 

ten years. 

“Since four years ago, our 

communications with the 

universities entered a more 

practical stage and we 

have managed to conduct 

several joint projects, the 

most significant of which 

was an oil and gas pipeline 

reparation project in 2009. 


43


monthly 

Turbine 

Machine 

Middle East 

Company 

Develops 

Gas Turbines 

The most 

significant asset 

of every nation 

is its creative 

manpower that 

could contribute to economic 

progress. Creative manpower 

is like a beacon showing the 

way towards progress. 

Economic flexibility is 

known as the most prominent 

advantage due to the existence 

of effective and young 

manpower. Over the past 

years, some international 

restrictions in Iran’s oil 

industry have encouraged 

researchers and managers to 

brace for risks. At present, 75 

percent of Iran’s oil industry 

equipment is manufactured 

domestically. The percentage 

is planned to reach 98 percent 

by March 2016. 

Among strategic oil and gas 

equipment, gas turbines are 

the most important. These 

turbines are used in oil and 

liquefied gas production 

factories, oil pumps and gas 

booster stations. Given the 

significance of turbines in the 

44 

Photo: ARASH YADOLLAHI 

oil industry, the manufacturing 

of their main components 

topped the agenda of 

knowledge-based companies. 

Thanks to Iranian experts 

and manufacturers, a large 

segment of these components 

have been indigenized. 

A leading company to that 

effect is Turbine Machine 

Middle East Company (TMC), 

which is currently producing 

full package of gas turbines 

with capacities of 10,000 to 

15,000 horsepower. 

Design and manufacture of 

gas and steam turbines are 

among the most sophisticated 

technologies. Only two or 

three countries have already 

mastered the technology for 

manufacturing gas turbines. 

Iran has joined this club. Over 

the past three years, Iranian 

engineers have been following 

in the footsteps of American 

and European engineers, but 

the point is that the Iranians 

will make headway much 

more quickly than foreigners. 

In less than two decades, 

Iran will become a leading

manufacturer of gas turbines in 

the world. TMC, a knowledgebased 

company, has reached a 

stage to be capable of providing 

the necessary components of 

industrial turbines for Iran’s 

oil industry. The company has 

90 staff, 75 percent of whom 

hold university degrees. They 

are aged around 30, but they 

are developing systems whose 

technology is mastered by few 

industrialized countries. Javad 

Taqizadeh, executive director 

of this company, says engineers 

work 14 hours a day in TMC. 

He said a contract has been 

signed with Tehran Kala Naft 

Company for the manufacturing 

of three top rotors installed in 

5- and 18-megawatt industrial 

turbines. Taqizadeh said TMC 

has also agreed to retrofit rotary 

machinery in the platforms of 

Forouzan Oil Field. Retrofitting 

refers to the addition of new 

technology or features to older 

systems. Retrofit projects 

replace or add equipment 

to existing power plants to 

improve their energy efficiency, 

enhance their output and extend 

their lifespan, while mitigating 

emissions. 

TMC mastered in three 

years the technology for 

manufacturing and retrofitting 

turbines, compressors and 

other equipment used in the oil 

industry. 

Mechanics and metallurgy 

constitute the components of 

research work at TMC. The 

metallurgy team has conducted 

a precise study about turbines 

and their operation, while the 

mechanical team has focused 

its efforts on manufacturing. 

TMC engineers began working 

on their first project in 2005 

and managed to develop the 

prototype of their first product 

one year later. The product 

was a gas depressor used in 

four-megawatt turbines. It was 

installed on one of the turbines 

of the National Iranian South 

Oil Company (NISOC). 

Taqizadeh says gas depressors 

are like the heart of turbines and 

make great contribution to air 

compression and combustion in 

the turbine. Gas depressors are 

the most sensitive component 

of an industrial turbine. He said 

TMC then moved in 2007 to 

develop another type of rotor 

– air compressor – which was 

installed in Lavan Island. TMC 

has so far manufactured and 

installed 15 other components 

of turbines. 

Due to the diversity of 

equipment manufactured by 

TMC, engineering and research 

groups in this company focused 

further on indigenization of 

technologies and a variety of 

gas and steam turbines were 

manufactured. 

Taqizadeh said restrictions 

and non-diplomatic conduct 

of some countries against Iran 

failed to frustrate TMC and 

it even added to the technical 

knowledge of Iranian scientists 

and specialists. 

Over the past years, the 

company has managed to win 

awards at national scientific 

festivals. 

“Since its establishment, 

TMC set up an overhaul 

unit for industrial turbines in 

parallel with its manufacturing 

of rotors, turbines and 

compressors,” Taqizadeh said. 

TMC first conducted overhaul 

on gas turbines in 2005. 

TMC has so far provided 

services to NISOC, Iranian 

Offshore Oil Company (IOOC), 

Iran Oil Terminals Company 

(IOTC), Iranian Oil Pipelines 

and Telecommunications 

Company (IOPTC), Ramin 

Power Plant, as well as oil and 

gas refineries and petrochemical 

plants. 

TMC has so far delivered more 

than 120 types of products 

to different industrial plants. 

The company’s capacity in 

designing and manufacturing 

under-15 megawatt industrial 

turbines is unique. 

“In the past, there was no 

sense of self-confidence for 

domestic manufacture of rotary 

machinery, but today, Iranian 


engineers are firmly determined 

to do so. We can say that 

Iranians are engaged in every 

industrial field, but employers 

are required to provide much 

more support,” said Taqizadeh. 

Nearly 40 technologies are 

required to manufacture 

industrial turbines – among the 

most expensive in the world. 

Currently, the components of 

these strategic commodities are 

manufactured in the country at 

much lower cost. 

These turbines used to be sent 

abroad for overhaul, but today 

they are repaired inside the 

country. 

Taqizadeh says Iranian 

companies should be trusted 

upon for the signature of longterm 

deals. “At present, nearly 

75 percent of the components 

of five-megawatt turbines are 

manufactured by TMC. But 

this company intends to unveil 

a fully Iranian five-megawatt 

turbine” in the next Oil Show 

due to be held in April 2013. 

TMC’s main activities could be 

listed as follows: 

Reverse Engineering/ 

Manufacturing of Rotor Parts 

Centrifugal Compressor 

Rotor Design & Manufacturing 

Repair & Reconstruction 

Overhauling of Gas & Steam 

Turbines 

Refurbishment of Parts 

Control System Retrofit 

Procurement & Supply of 

OEM Parts 

Rotor Services/Repair/ 

Restaging 

Complete Rotor 

Manufacturing of Gas & Steam 

Turbines 

Manufacturing of Hot & 

Cold Section Blades, Disks and 

Shafts 

Consultancy, Design, 

Manufacturing, Supplying and 

Installation of CHP packages 

based on gas turbines. 


45


monthly 

Esferayen Louleh 

Produces 

The Middle East 

accounts for more 

than 56 percent 

of the world’s oil 

reserves held mainly 

by Iran, Saudi Arabia, Iraq, 

Kuwait and the United Arab 

Emirates. 

Since the discovery of oil in the 

Middle East in Iran’s Masjid 

Soleyman, oil production 

preservation and output 

enhancement have always 

been causes of concern for 

the producers in the region. 

In order to keep oil flow from 

the reservoirs, new wells are 

required to be drilled because 

of pressure decline. Every year, 

producers spend heavy costs on 

drilling. 

The equipment required for 

drilling is costly. One of the 

basic and quite expensive tools 

in drilling is casing. At present, 

the Persian Gulf oil producers 

are top importers of casing 

and it would be significant 

for Iran to invest in the casing 

manufacturing. 

Saudi Arabia, Iran and Iraq are 

the leading oil producers in 

the Middle East, but Iran has a 

longer history than its neighbors 

in terms of oil recovery. 

International estimates indicate 

that Iran would account for 

more than 16.34 percent of the 

Middle East oil production by 

2015. Iran is bent on playing 

a more significant role in 

the world’s energy market 

by enhancing its oil and gas 

recovery in the coming years. 

To that end, Iran’s Petroleum 

Ministry is considering new 

drilling. Given the significance 

of drilling in the development of 

oil fields, implementation of oil 

industry projects require precise 

scheduling. To that effect, the 

priority should be given to steel 

seamless pipes, and drilling 

and refining equipment. Iranian 

engineers have indigenized 

production of a large number 

of strategic products and 

equipment required in the oil 

industry in the year to March 

2012. 

Iran’s Minister of Petroleum 

Rostam Qasemi has said that 

there is no problem for the 

oil industry to reach selfsufficiency, 

adding that the 

necessary planning has been 

made for nationalizing the 

manufacturing of oil industry 

equipment in the shortest 

possible time. The technology 

for manufacturing expansion 

casings used in hydrocarbon 

exploration operations has been 

mastered. Down-hole casings 

are largely used in the drilling 

industry, and thanks to Iranian 

manufacturers, the country has 

no longer to import them. 

Esferayen Louleh Gostar 

Company (ELGC) is one 

of the Iranian companies 

manufacturing pipes. The 

company was initially 

established to provide the 

necessary oil and gas pipelines 

in the country. The next step 

for ELGC is to supply the 

necessary pipes to Persian Gulf 

and Caspian Sea littoral states. 

ELGC was set up with a capital 

investment of $ 31 million 

plus 710 billion rials in the 

northeastern province of North 

Khorasan. 

The first manufacturer of 

down-hole casing in the Middle 

East, ELGC is prioritized by 

Industrial Development and 

Renovation Organization 

(IDRO). Its proximity to 

Esferayen Industrial Plant – the 

sole producer of steel billets and 

super-alloys – is a privilege for 

this company. 

Diversity in Products 

The products of this company 

are diverse. The company has 

units manufacturing seamless 

pipes measuring 7 to 16 inches 

in diameter, casings measuring 

4.5 to 16 inches in diameter, 

casing coupling pipes measuring 

1.9 to 16 inches in diameter and 

casing tubing pipes measuring 

1.9 to 7 inches in diameter. 

The rolling process is as 

follows: The billets are heated 

in rotating furnaces up to 1,300 

degrees centigrade before being 

transformed into seamless 

and thick tubes or casings by 

hydraulic press and elongator. 

They are then rolled into mother 

pipes before undergoing final 

touches to turn into plain end 

pipe. 

The technology used in here is 

Pilger Mill. 

A tube-rolling unit including 

a Pilger mill is used primarily 

46 



Gostar Company 

Casings 

to manufacture seamless pipe 

of large diameter (400–700 

mm). The initial material is 

round ingots, which may be 

solid and cast in ingot molds 

or hollow and prepared by 

continuous casting; hollow 

billets produced on hydraulic 

presses are also used. The billets 

are preheated and rolled on 

a piercing mill and then on a 

Pilger tube-drawing mill, which 

is a two-high mill with periodic 

control of the rolls. The pipe is 

rolled on a cylindrical mandrel, 

with stepped feed by a special 

mechanism at each revolution 

of the rolls. The pipe is reheated 

after rolling and is then sized, 

straightened, and put through 

the finishing process. 

Pilger Mill makes pipes more 

resistant to rupture. 

Pipe Testing 

In the casing factory, both 

ends of the pipes are threaded 

by CNC apparatus. CNC pipe 

threading lathe is a highly 

efficient and high precision 

oil pipe and casing thread 

machining lathe developed 

to meet the needs of the oil 

industry. The series of machine 

tool is designed mainly for 

machine shops supporting the 

oil field activities, in certain 

steel industry and other 

industries where large-diameter 

pipe and casing is threaded. 

This CNC pipe threading lathe 

features high rigidity, high 

precision, and high efficiency. 

The pipe threading lathe can 

be equipped with automatic 

up-enders, and loading and 

unloading devices which 

together can achieve systems of 

continuous automatic machine. 

This is ideal for the machine of 

oil pipe and casing. 

The CNC pipe threading lathe 

adopts front-situated selfcentering 

pneumatic chucks 

with large jaw travel. The 

chucks are easy to clamp, resist 

contamination, and can meet 

the needs of machining oil line 

couplings and heavy oil pipe. 

The machine spindles 

incorporate tapered roller 

bearings that are capable of 

withstanding large axial and 

radial forces, for high rigidity 

and high accuracy of the 

finished work-piece. 

The standard configuration of 

the electrical cabinet provides 

a complete seal from external 

elements, and has an air 

conditioning system to reduce 

dust contamination and reduce 

heat within it. 

Mehdi Barzi Keshtan, manager 

of ELGC, says the factory 

manufactured 20,000 tons of 

casings last calendar year to 

March, forecasting the current 

year’s production to reach 

33,000 tons to serve oil and gas 

industries. 

At present, the casing 

production line of this factory 

is operating at 26 percent of its 

nominal capacity, but is capable 

of operating up to 40 percent 

of its capacity if it receives 

new orders from domestic 

companies. 

Iran’s oil industry uses nearly 

35,000 tons of tubing pipes per 

year. But ELGC, the only tubing 

manufacturer, supplies nothing. 

Barzi Keshtan said 80,000 tons 

of casings are used in the oil 

and gas industry every year. 

“ELGC has made planning to 

manufacture 35,000 tons of 

pipes this year. This company 

is also capable of producing 

250,000 tons of coupling pipes 

a year.” 

Quality Certificates 

Quality control, destructive 

and non-destructive testing is 

done simultaneously on LEGC 

products. The metallurgy lab 

conducts tension and pressure 

test, metallography, chemical 

spectrometry, MFL, VT, MT 

and PT. 

Moreover, chemical tests 

including water analysis in 

purification post and cooling 

tower, examination of varnishes 

and lubricants, corrosion tests 

like HSC and SSC are chief 

among the other activities 

carried out in the laboratory. 

Precise quality control based 

on qualitative engineering 

principles is done by 

experienced people. 

Being an IDRO subsidiary, 

ELGC is the sole manufacturer 

of seamless steel pipes in the 

Middle East. Its products outdo 

foreign ones in terms of quality. 

ELGC has so far been awarded 

ISO 14001: 2004, OHSAS 

18001: 2007 and Certificate of 

Self-declaration Manufacturers’ 

Record. 


47


monthly 

Azarab Building Boilers 

& Storage Tanks 

It would be no cause for 

humiliation when an 

oil producing country 

imports equipment 

from industrialized 

countries to serve its oil sector. 

However, improper conduct 

of some Western countries 

vis-à-vis Iran has promoted 

the country’s oil engineers to 

consider manufacturing instead 

of imports in a bid to counter 

unjust restrictions. 

Iranian contractors are currently 

active in South Pars gas 

filed, known as the beating 

heart of Iran’s oil industry. 

Iranian companies are capable 

of operating the projects 

abandoned mid-way by foreign 

contractors in South Pars, the 

largest gas field in the world. 

Iran’s Minister of Petroleum 

Rostam Qasemi says transfer 

of technological savvy tops the 

agenda of the ministry. “Iranian 

contractors are capable enough 

to manufacture the equipment 

needed in the oil, petrochemical 

and refining industries. More 

than 80,000 Iranians are 

currently working in different 

phases of South Pars without 

any dependence on foreign 

contractors.” 

An Iranian company largely 

active in manufacturing is 

Azarab Industries Company 

– a leading manufacturer of 

power plant and oil, sugar and 

gas refinery equipment in the 

Middle East. Its equipment also 

serves cement, sugar, gypsum 

and mining industries. 

Among the short- and long-term 

strategies of Azarab are: 

Winning foothold in 

global markets and finding 

international customers, 

becoming a general contractor 

equipped with the state-ofthe-art 

technology, capturing 

national and regional markets, 

achieving annual 20 percent 

growth in selling products, 

striking a balance to its targets 

for development of human 

resources and technology 

and applying endogenous 

and exogenous technological 

methods. 

International Scope 

Some examples of Azarab’s 

cooperation with foreign 

companies are listed below: 

Transfer of technology from 

Japan’s IHI for designing, 

engineering, manufacturing and 

installing boilers with capacity 

of 20 to 2,200 tons of steam 

per hour, transfer of technology 

from Japan’s GKK for 

manufacturing air pre-heaters, 

transfer of technology from 

Japan’s JSW for designing and 

building towers, reactors, highpressure 

storage tanks, technical 

cooperation agreement with 

China’s HEC for procurement 

of the mechanical equipment 

of water turbines, acquiring 

ISO 9001 certificate, being 

awarded by Management and 

Planning Organization (MPO) 

for designing new products, 

receiving GQM, ISO 14001 

and OHSAS 18001 certificates, 

transfer of technology from 

Spain’s FW for designing heat 

recovery steam generator 

(HRSG), cooperation with 

Russia’s LMZ for designing 

and manufacturing 

butterfly valves and 

transfer of technology 

from Austria’s VOITH 

for water turbines. 

Azarab has signed 

a consultation 

agreement with 

Velosi for 

manufacturing 

steam boilers 

and highpressure 

storage 

tanks up 

to ASME 

standards. The consultant 

is a foreign expert affiliated 

with the American Society of 

Mechanical Engineers (ASME). 

Depending on its unique 

capacities and facilities, 

Azarab is currently designing, 

manufacturing and installing 

SC, SD, SN, SR, HRSG and gas 

air heaters. 

The Department of the 

Environment (DOE) and Water 

and Wastewater Department 

(WWD) have obliged Azarab 

to comply with the defined 

standards regarding the 

environment. An independent 

committee, mandated by DOE, 

submits annual reports about 

the compliance Azarab with 

environmental obligations. 

Hydraulic Power Plants 

Department 

Azarab established a department 

20 years ago to manufacture 

and overhaul power plants 

equipment. The department 

is expected to indigenize 

fundamental industrial 

technology 

within the 

framework of 

management 

systems on the 

GC and EPC 

bases. 

While relying on 

the technological 

savvy acquired from 


and using the unique 

equipment available 

there, Azarab designs 

the sophisticated 

equipment of refineries, 

and offers consultation 

services on construction of 

hydraulic power plants. 

In recent years, this company 

has handled the construction 

of Karoun 1-4 power plants 

and the development of Masjed 

Soleyman and Karkheh power 

plants. Azarab has managed to 

win foothold in international 

markets in China, Belarus 

and Austria. It has managed 

to install OHSAS: 18001 for 

safety and professional health 

management. 

In addition to these investments, 

Azarab has been serious in 

transfer of technology. Its 

signature of an agreement with 

the famous LMZ Company for 

designing and manufacturing 

butterfly valves is a case in 

point. Currently, Azarab’s power 

plant activities are concentrated 

on designing and manufacturing 

butterfly valves and water 

turbines. 

Azarab’s products and services 

in the oil and gas sectors have 

grown significantly in recent 

years. This company is now 

capable of operating turnkey 

development projects. 

High-Pressure Cylinders 

Azarab’s products are mainly 

high-pressure cylinders and 

storage tanks. The storage tanks 

are used for storing water and 

fuel in refineries, power plants, 

petrochemical plants and other 

industrial places. High-pressure 

cylinders are pressure vessels 

used to store gases at above 

atmospheric pressure. High 

pressure gas cylinders are also 

called bottles. A pressure vessel 

is a closed container designed 

to hold gases or liquids at a 

pressure substantially different 

from the ambient pressure. 

Heat exchangers, towers, 

gas pre-heaters and chemical 

reactors are variations of highpressure 

cylinders developed 

by Azarab. Designing and 

manufacturing these cylinders 

are done based on a variety of 

parameters including operational 

pressure, operational thermal 

temperature, type of consumed 

steel, workshop facilities, 

48 

Photo: HAMED NOORI


environmental effects, wind, 

earthquake, useful 

life and resistance to 

corrosion. 

The cylinders’ pressure 

is calculated based 

on ASME and BS 

standards. The thermal 

temperature and 

pressure of designing 

are of high significance 

and they directly 

affect the cylinder’s 

thickness. The existing 

standards for designing 

pressure vessels are 

ASME, BS5500 as 

well as standards 

developed by German 

and Italian institutes. 

Azarab mainly relies 

on American standards 

in development of its 

cylinders. In order to 

design a product, some 

parameters need to be 

calculated in advance. 

The main software 

Azarab applies in 

designing high-pressure 

cylinders are PV elite, 

Aspen B-Jack, Nozzle 

Pro, Compress, 

Nastran and Ansys. 

Inflow and 

outflow 

nozzles for 

fluids, small 

and large 

windows, 

temperature 

sensors, 

safety 

valves, trays 

and distributors are 

designed before their 

construction begins in 

the workshop. 

Quality Tests 

After the end of 

the construction 

stages, the product 

needs to undergo 

hydrostatic test 

by water. In that 

way, the residue 

stress created 

due to welding 

are removed. 

The cylinder is 

put in a stressrelieving 

furnace 

under standard 

temperature. 

The main tests 

conducted 

in the final stages are 

ultrasonic test and 

penetration test – all 

conducted under the 

supervision of quality 

control section. 

The storage tanks 

developed by Azarab 

are used for storing 

fuel and chemical 

in the oil, gas and 

petrochemical 

industries and 

in power plants. 

Their capacities 

are up to 300,000 

cubic meters with 

their dimensions 

measuring 150 

meters in diameter 

and 24 meters 

in height. They 

are designed and 

manufactured up to 

API 620 and API 

650 standards. 

Azarab 

Products in Iran’s 

Oil Industry 

Azarab has recently 

won EPC-style 

projects in 

tender 

bids. 

Designing 

and 

manufacturing 

storage tanks 

on an EPC 

basis would 

include a 

variety 

of activities like mechanical 

design, construction, power 

supply, control and instruments. 

Among the projects Azarab 

has handled recently are 

stainless steel storage tank in 

Chabahar, spherical tank at 

Ilam Refinery, olefin and boiler 

towers at Maroun Petrochemical 

Plant, petrochemical boilers 

in Kermanshah, Maroun and 

Kavian, cement production 

equipment in Shahre Kord, 

cement furnace in Mazandaran, 

350-ton boiler at Bandar Imam 

Petrochemical Plant, 120-ton 

boiler at Kavian Petrochemical 

Plant, three boiler packages 

for Lorestan Petrochemical 

Plant, three boiler packages for 

Mahabad Petrochemical Plant 

and oil refinery boilers in some 

neighboring states. 

Moreover, Azarab has signed 

contracts for 

designing 

and 

manufacturing 

six boilers for 

Phases 22, 23 

and 24 of South 

Pars gas field, 

designing and 

manufacturing 

in Kharg 

Petrochemical 

Plant, boiler for 

Persian Gulf Star 

Refinery, designing 

and manufacturing 

four boilers 

as well as 

designing 

and building 

towers and 

reactors for 

Phases 13, 22, 23 

and 24 of South Pars gas field, 

installing boilers in Phases 17 

and 18 of South Pars gas field as 

well as six 180-ton boilers for 

Phase 19 of South Pars gas field. 

But a key project operated by 

Azarab is its contribution to 

the development of Shazand 

Refinery in Arak, in central Iran. 

It is known as an important 

project in the oil industry in the 

Islamic Republic and is aimed at 

enhancing the refining capacity 

of the treatment facility. With 

the implementation of this 

project, the refinery’s output 

would soar to 250,000 b/d from 

a current 175,000 b/d. Quick 

design and manufacture of 

equipment for the development 

of Shazand Refinery has raised 

the country’s gasoline output 

by 12 million liters per day. 

Moreover, Iran managed to 

produce for the first time highoctane 

gasoline up to Europe 

2004 standards. 

Azarab has signed an eighttrillion-rial 

deal with Shazand 

Refinery for the manufacturing 

and installation of two 227-ton 

boilers, three heat recovery 

boilers, 38 reactors and towers 

as well as 40 heat exchangers. 

All these achievements have 

been made in spite of unjust 

sanctions imposed against Iran. 

November 2012 / 49


Osveh Industrial 

Group Indigenizes 

Economizers 

When you visit 

a refinery, 

you will see a 

boiler, which 

is an inseparable part of 

oil, gas and petrochemical 

facilities. A boiler is a closed 

vessel in which water or 

other fluid is heated. The 

heated or vaporized fluid 

exits the boiler to be used in 

various processes or heating 

applications. 

Steam boilers generate steam 

and raise the temperature in 

order to accelerate chemical 

changes in the oil industries 

like in refineries. 

Until recently, Iran used to 

purchase steam boilers from 

Germany and Italy. But 

several years ago, a staterun 

and a pharmaceutical 

company managed to 

acquire the technology to 

manufacture boilers. In 

that way, Iran became a 

manufacturer of boilers and 

saves millions of dollars 

a year. Osveh Industrial 

Group (OIG) is one of the 

manufacturers of steam 

boilers. This company has so 

far operated several projects 

for Iran’s oil industry. 

“Since 1979, we started work 

as the first private company 

involved in the oil, gas and 

steel industries. We are now 

producing steam boilers 

whose capacity is above 30 

tons,” the acting manager of 

OIG said in an interview. 

Amirbahador Kashefi said: 

“Before OIG decides to 

operate oil industry projects, 

it used to manufacture 

steam boilers for buildings. 

We built and installed four 

30 ton/hour boilers for 

Mobarake Steel Mill. Then 

Razi Petrochemical Plant 

ordered a 100-ton boiler to 

us. We have also built and 

installed two 150-ton boilers 

for Razi. Currently, we are 

working on a project in [the 

southern city of] Shiraz.” 

Noting that boilers are 

necessary for refining, 

Kashefi said steam boilers 

are required in all oil and gas 

refineries and petrochemical 

plants. He added that OIG is 

ready to build steam boilers 

for all oil industry sectors. 

“It is necessary to observe 

the standards in the oil 

industry. When a private 

company is to become a 

supplier of equipment for 

the oil industry, oil experts 

examine its products 

qualitatively.” 

Kashefi stated that 

domestic companies and 

manufacturers are capable 

of supplying the bulk of 

equipment required in the oil 

industry. “Iranian engineers 

enjoy high capabilities in 

designing and implementing 

industrial projects. That is 

why Iranian experts receive 

lots of proposals at the 

international level. It has 

been proved that Iranian 

engineers and companies are 

capable of handling projects 

much better than foreigners. 

Trust in the technical 

knowhow of Iranian 

manufacturers encourages 

them to get more involved in 

manufacturing.” 

Kashefi said the steam 

boilers manufactured inside 

the country can rival famous 

foreign brands. “OIG 

enjoys special technology in 

building stream boilers. The 

dimensions of the structure 

are smaller and therefore the 

price would be lower and it 

would become economical 

for buyers.” 

“In Assaluyeh, foreign 

boilers whose capacities 

are 150 tons are currently 

operating. But the point is 

that we manufacture boilers 

with two flares, while foreign 

boilers are four-flare. That is 

an advantage for our product 

50 Photo: HASSAN HOSSEINI


because it would boost the 

efficiency of the boiler and 

cut energy loss.” 

Kashefi said the most famous 

world companies are willing 

to collaborate with OGC due 

to the quality of its products 

and its relatively low prices. 

“We established a section for 

exports in 2009.” 

Currently, OIG is capable of 

manufacturing different types 

of boilers for all refineries 

and oil industry facilities. 

“The projects operated by 

OIG are of significance from 

two standpoints: Financially 

speaking, our products cost 

30 percent lower than foreign 

products. The second point 

is that our company offers 

after-sales services. It has 

happened many times that 

foreign companies never 

provide after- sales services 

for their defective devices.” 

“The project we operated 

for Bidboland Gas Refining 

Company was optimization 

of its steam unit. We 

modernized the boilers, 

which were 50 years old 

and worked manually. 

We equipped them with a 

controlling system so that its 

management would be done 

by fewer people. This project 

prompted us to expand 

system control unit in our 

company which is another 

step towards independence 

of foreign experts.” 

Kashefi said OIG seeks to 

enhance the efficiency of 

refineries. “We are currently 

working on recovery 

boilers. To that effect, we 

have signed an agreement 

with a South Korean 

company. They design and 

we manufacture. Our oil 

industry desperately needs 

this technology. The energy 

products prices are also 

raising and we need to build 

recovery boilers in a bid 

to make our refineries and 

power plants more efficient.” 

“OIG is conducting studies 

to transform gases into 

steam in a bid to avoid the 

waste of gases. Moreover, 

we are envisaging building 

economizers that heat the 

feed water, a combustion 

air heater in the hot flue gas 

exhaust path, or both.” 

Kashefi said an economizer’s 

costs would be recovered in 

two years. “Some refining 

units and old power plants 

are not equipped with 

economizers due to the low 

price of gas and negligence 

of environmental obligations. 

An economizer raises the 

efficiency of the boiler by 

5 to 15 percent without 

requiring fuel or energy 

product. It would also serve 

the environment.” 


51


monthly 

NIDC Engineers 

Reconstruct BOP 

Blowout preventers 

(BOPs) and hydrils 

are among the main 

equipment needed 

in oil and gas wells 

drilling. Their manufacturing is 

monopolized by several Western 

countries. 

Yadollah Kamali, director 

of Department for Drilling 

Equipment of at National Iranian 

Drilling Company (NIDC), has 

said Iran had to buy its required 

BOPs and hydrils from foreign 

companies before they could be 

reconstructed in the country. 

Each BOP or hydril costs one 

million dollars, he said, adding: 

“Thanks to engineers from NIDC 

and knowledge-base companies, 

reconstruction of each BOP costs 

2 billion rials and each hydril 

costs 200 million rials.” 

Kamali referred to the 

indigenization of components of 

BOPs like packing element which 

Iranian engineers have managed 

to design and manufacture less 

costly than foreign ones. 

“At present, Iran’s drilling 

industry is independent of 

advanced equipment and has 

already more than 80 percent of 

the required equipment. Iranian 

engineers are planning to fully 

develop BOPs.” 

BOP is a large valve at the 

wellhead that may be closed if 

the drilling crew loses control 

of formation fluids. By closing 

this valve (usually operated 

remotely via hydraulic actuators), 

the drilling crew usually regains 

control of the reservoir, and 

procedures can then be initiated 

to increase the mud density until 

it is possible to open the BOP 

and retain pressure control of the 

formation. 

Kamali said the reconstructed 

BOPs in Iran are up to the global 

standards, noting that they are of 

high quality and durable. 

“Under the aegis of this success 

achieved within the framework of 

the policies of Iran’s Petroleum 

Ministry and National Iranian Oil 

Company (NIOC), millions of 

dollars have been saved in hard 

currency, industrial plants have 

been activated and jobs have been 

created,” the official said. 

Kamali said NIDC is scheduled 

to showcase domestically 

manufactured equipment on the 

anniversary of its establishment 

in late December. 

The first pilot plan 

aiming at using gas 

in the transportation 

sector started in 

the southern city 

of Shiraz in 1977 where taxis 

used gas as their fuel. It was the 

beginning of serving gas vehicles 

in Iran. Several years later, the 

plan was extended to the taxis 

in the holy city of Mashhad in 

northeast. However after the 

outbreak of war the relevant 

activities halted for two decades. 

In 204, nearly 63 CNG stations 

were built, but CNG’s share 

in the country’s transportation 

sector was below one percent. 

Iran is now a center of excellence 

in CNG knowledge. 

The current calendar year, [20 

March], is named after national 

production. The country is also 

facing unjust sanctions imposed 

by Western governments. Iran’s 

Supreme Leader Ayatollah 

Seyed Ali Khamenei called for 

“economy of resistance” as the 

solution in the face of tightened 

sanctions. 

Senior economists are of the 

opinion that the energy sector – a 

main element of management 

of financial resources and 

revenues – is key to economy of 

resistance. 

Undoubtedly, CNG industry is 

one of the most important and 

most influential instruments 

for developing a model of 

economy of resistance in the 

country’s energy industry. 

Therefore, it requires planning 

and management by relevant 

officials. 

Gas Legislation 

In 1979, the Iranian Parliament 

adopted a piece of legislation 

according to which dual-fuel 

vehicles had to replace clappedout 

cars. That was the first time 

the law stressed the need for 

dual-fuel cars. 

People turned to dual-fuel cars in 

2007 and 2008 and the number 

of such cars rose progressively. 

Consequently, CNG stations 

increased. Even today, in view 

of people’s warm welcome for 

clean fuel, construction of CNG 

stations is followed up on by the 

relevant officials. 

52 



CNG, Contributor 

to National 

Independence 


At present, nearly 25,000 people 

are employed in the CNG sector. 

This figure will significantly 

rise when new CNG stations 

have been constructed. A 

priority in this national industry 

is to develop the relevant 

technologies and industries. 

CNG industry has managed to 

activate some other industrial 

sectors in a short period of 

time. Due to the growing prices 

of crude oil and its products, 

specifically gasoline, CNG has 

come to the fore in the energy 

planning of countries. Pakistan, 

Argentina and Brazil are among 

the countries massively involved 

in this sector. 

Most Gas Vehicles in Iran 

At present, Iran is the leading 

state in the world in terms of the 

number of CNG vehicles. As far 

as CNG stations are concerned, 

Iran is ranked fourth. In terms of 

the ratio of CNG stations to gas 

vehicles, Iran comes eleventh. 

CNG lower price compared 

with gasoline, environmental 

considerations and energy 

security or diversification of 

fuel in the transportation sector 

constitute the outstanding 

features of CNG compared with 

other non-electrical fuels. 

CNG, Contributor to 

Independence 

Official figures indicate that 

CNG consumption in Iran has 

cut gasoline imports by 20 

ml/d. The data provided by 

National Iranian Oil Refining 

and Distribution Company 

(NIORDC) indicate that CNG 

would account for a 15.5 percent 

share in the Iranian Petroleum 

Ministry’s fuel basket by March 

2016 and to 13.1 percent by 

2025. These figures are for the 

total transportation fleet in the 

country.The fuel basket for 

light vehicles contains only two 

percent of gasoline and CNG – 

much lower from the 22 percent 

a year before. 

Alborz Gas, Example of Self- 

Reliance 

Iranian engineers have 

significantly contributed to 

the development of domestic 

production by designing several 

production lines in the energy 

sector, notably gas industries. 

Although continuation 

of this trend still requires 

resolving some structural and 

administrative problems related 

to CNG, and needs support from 

the upstream sector, the future 

of domestic production in this 

modern industry is forecasted to 

be promising. 

Alborz Gas Industrial Group 

(AGIG) established Rahbaran 

Tose’eh Alborz Transportation 

Company in 2010. This 

company has a special fleet 

for transporting petrochemical 

products. It can carry 25,000 

tons of liquefied natural gas 

and has storage facilities for 

propane, butane, ammoniac and 

propellant. 

This company is active in 

storage, charging and distribution 

of liquefied petroleum gas 

(LPG) canisters for household, 

commercial and industrial use in 

the western city of Azna with an 

annual capacity of 20,000 tons. 

The company has made up for 

the shortages in the country’s 

gas industry notably after the 

imposed war. AGIG launched 

the first LPG purification plant 

with a capacity of 3,600 tons a 

year on 18,000 square meters of 

land in 2009. 

The plant is now producing 

odorless gases with impurity rate 

below 1 ppm for industrial use. 

Due to easy access to production 

resources and consumption 

market, the western province 

of Lorestan was chosen as its 

location. More than 20 billion 

rials of investment were made 

in this plant and the required 

technical savvy has been 

indigenized. 


53


monthly 

s h o r t s t o r i e s 

Petcham Production Capacity to Hit 57 m/t 

Iran’s petrochemical production 

capacity will hit 

57 million tons following 

commissioning of a number 

of petrochemical projects at 

Kavian, Kermanshah and 

Bandar Imam Khomeini petrochemical 

plants by the end 

of this Iranian calendar year 

[ 20 March 2013]. 

Director of planning and 

development at National Petrochemical 

Company (NPC), 

Ramezan Owladi made the 

remarks on the sidelines of the 

Eighth Iran Plast Exhibition in 

Tehran adding the country’s 

total petrochemical production 

stood at 42.7 million tons 

last year. “Plastic industry’s 

main players were present at 

this year’s Iran Plast Exhibition 

to present their latest 

achievements”, Owladi said. 

He continued: Private sector’s 

companies took part in the 

exhibition in large numbers 

and held very constructive 

meetings with NPC, which 

will bear fruit in the future in 

view of growth and flourishing 

the petrochemical industry. 

Owladi went on to say that 

during the event, private sector 

offered constructive suggestions 

that paved the way for 

better confrontation with some 

challenges. Elsewhere in his 

remarks, Owladi said petrochemical 

industry had finalized 

its 6th Development Plan 

adding the plan is focused on 

complementary industries. 

Iran Exports Petrochemicals to All around the World 

Islamic Republic of Iran 

exports petrochemical 

products to five continents. 

Speaking in a news conference 

at the 8th Iran Plast 

Exhibition, Abdol-hossein 

Bayat, managing director 

of National Petrochemical 

Company (NPC) made the 

remarks denying sanctions 

have impeded production 

or exports of petrochemical 

products. 

He continued $1.5 billion of 

petrochemical products including 

methanol and various 

polymer grades were exported 

to Europe during the last 

Iranian calendar year which 

ended on 20 March 2012. 

‘At the time being, NPC exports 

petrochemical products 

to many countries across the 

globe, Bayat said. 

According to Bayat European 

countries and the Middle East 

make up 5 and 15 percent of 

Iran’s petrochemical exports 

destinations, respectively. 

He went on to say that last 

year 14.7 billion dollars of 

petrochemical products were 

exported from the country 

adding during the first six 

months of current Iranian 

calendar year petrochemical 

exports stood at $ 6.1 billion 

and 7.7 million tons, respectively 

in terms of value and 

weight. 

During the first six months 

of current year, total petrochemical 

production hit 20.5 

million tons excluding those 

transactions occurred within 

domestic petrochemical 

complexes. 

Iran May Revise its Oil Exports Policy 

Islamic Republic of 

Iran will revise its oil 

exports policy if West 

intensifies sanctions. 

Iranian minister of petroleum, 

Rostam Qasemi, 

made the remarks in an interview 

with Shana, adding 

Iran does not like to make 

such a decision in response 

to the sanctions because 

absence of Iran’s oil not 

only will have an impact 

on oil prices but will hurt 

people in oil consuming 

countries, a move that their 

related governments should 

take the responsibility. 

Referring to bouncing back 

oil exports during the recent 

months, Qasemi said: 

Measures are underway to 

improve oil export situation 

amid emerging an upward 

trend in oil exports. 

He said enemies of Iran 

plan to hinder development 

of Iran’s oil industry adding 

despite all the impediments, 

oil industry projects 

are moving ahead with 

desirable speed. 

“Despite recent pressures 

and sanctions imposed 

against oil industry, we 

have managed to leave 

behind sanctions by taking 

appropriate measures”, the 

official said. 

Eliminating Iran’s oil from 

the world market will jeopardize 

security of supply 

in oil markets resulting in 

uncertainty and volatility 

and mounting oil shortage 

in those markets, Qasemi 

noted. 

Despite releasing some 

statistics by foreign media 

on falling Iran’s oil production, 

Iranian minister of 

petroleum announced, on 

the sidelines of World Energy 

Forum in Dubai late 

October that the country’s 

oil production capacity 

stood at 4 million barrels 

per day. 

Qasemi confirmed rising 

oil consumption at home, 

adding the move was the 

result of rising oil refining 

capacity. 

54


Domestic Companies Making 

%80 of Refining Equipment 

Domestic manufacturers 

will make 80 

percent of equipments 

needed for construction 

of oil refineries and 

implementation of their 

development plans. 

Speaking to Shana, deputy 

minister of petroleum, 

Alireza Zeighami made the 

remarks adding indigenizing 

oil refineries’ expertise, 

raising the share of 

Iranian made equipment 

in building oil refineries, 

manufacturing bulk of the 

needed items at home, selfsufficiency 

in engineering 

and implementation of the 

refining projects are the 

samples representing Iran’s 

experts and engineers’ 

progress in the sector. 

Referring to 40 thousand 

billion rials investment in 

development plan of Imam 

Khomeini (Shazand) oil refinery, 

Zeighami noted that 

for the first time an Iranian 

consortium has been fully 

responsible for implementation 

of a mega project 

and managed to complete it 

successfully. 

By implementation of 

Imam Khomeini oil refinery’s 

development plan, 

refining capacity of the facility 

will edge up from 170 

thousand barrels per day to 

250 thousand barrels per 

day amid cutting production 

of fuel oil production 

from 38 to 15 thousand barrels 

per day. 

Upgrading and improving 

the quality of Imam Khomeini 

oil refinery’s products 

is the biggest ongoing 

project of National Iranian 

Oil Refining and Distribution 

Company (NIORDC) 

that upon completion will 

turn the refinery to the largest 

producer of gasoline in 

the country. 

Rising Oil Exports Suggesting 

Sanctions Failure, Qasemi 

Oil exports has 

bounced back and 

that is why we say 

Islamic Republic of Iran has 

left behind sanctions, Iranian 

minister of petroleum Rostam 

Qasemi said. 

Speaking at a meeting with 

board of directors of oil 

industry’s OAP syndicate, 

Qasemi said this year investments 

would rise in oil industry 

considerably reaching 

as much as $ 40 billion. 

He referred to development 

of shared oil and gas fields 

as top priority of Petroleum 

Ministry adding development 

of all South Pars gas 

field phases is underway and 

upon completion will enhance 

the country’s revenues 

equivalent to production of 

six million barrels of oil per 

day. ‘Excluding two or three 

fields that their situation will 

be determined by the end 

of current Iranian year on 

March 2013, we have made 

decision on all other shared 

oil and gas fields’, Qasemi 

told the meeting. 

He continued: last year as 

much as $ 30 billion invested 

in oil industry, which 

is unprecedented, adding 

while total investments stood 

at $13 to 15 billion in 2010 

it will rise to as much as 40 

billion dollars, this year. 

Second Drilling Contract of Azar Oil Field Signed 

Persia Oil and Gas 

Company and Oil Industries 

Engineering 

and Construction Company 

(OIEC) signed Azar 

oil field’s second drilling 

contract. 

Operator of Azar and 

Changuleh oil fields, 

Hamid Karimi, made the 

remarks adding Persian 

Oil and Gas Company and 

National Iranian Drilling 

Company (NIDC) have 

dispatched two drilling rigs 

to the area and the third 

drilling contract will be 

signed in near future. 

He continued drilling operations 

will start next week 

and six drilling rigs will 

enter the area before the 

end of current Iranian year 

ending on 20 March 2013. 

Azar oil field will yield 65 

thousand barrels of oil per 

day in a 55-month period 

but before that, oil production 

will start initially with 

30 thousand barrels per 

day in a 36-month period. 

Under the contract, Persia 

Oil and Gas Company are 

responsible for drilling of 

two oil wells in a 29-month 

period. NIDC and OIEC 

have already signed another 

contract on drilling 7 

development wells under 

which NIDC would drill 

31.5 thousand meters in a 

35- month period. 

With in-place oil reserves 

at about 2.5 billion barrels, 

the oil field is located west 

of Iran and is shared with 

Iraq. Development contract 

of the field was signed 

September last year between 

OIEC and a consortium 

comprising domestic 

companies. 


55


monthly 

Asian Crude & 

Products Market 

Crude prices dropped on October, after a four month 

raise. Weak economic signals from China and Europe 

outweighed geopolitical tensions and supply concerns. 

U.S crude WTI fell $ 5/85 per barrel to $ 84.44 per 

barrel while Dubai and Brent prices recorded much smaller loss 

on October. Brent declined by $ 2.16/bl to $111.68 per barrel. 

The Persian Gulf marker Dubai decreased 2.97 dollars at $ 

108.87 a barrel (see chart). 

At the beginning of October, Mideast Gulf producers sharply 

increased their official selling prices (OSPs) for light sour crudes, 

anticipating firm demand for light products as winter approaches. 

In addition, medium and heavy sour Mideast Gulf grades were 

under pressure because of weak fuel oil market. The Saudi 

Arabia’s OSPs for December loading released at the beginning 

of November. The same trend was continued as the country 

raised OSPs for light grades and decreased the heavy ones. 

Lower refinery maintenance in Asia and consequently strong 

demand caused regional prices to rise. Meanwhile, weakening 

Brent levels allowed for more Atlantic Basin crude to head to the 

east. 

$/bl 

150 

120 

90 

60 

30 

0 

Crude Prices 

Brent, Dubai, WTI 

BRENT1, 111.68 

DUBAI1, 108.87 

WTI1, 89.47 

08 09 10 11 12 01 02 03 04 05 06 07 08 09 10 

2011 2012 

Asian Products Markets 

At the top of the barrel, two products- gasoline and naphthareceived 

slight gains over the reporting month. The other 

products posted a bearish performance over October. However, 

weaker than expected economic activity in China and India 

limited some of increase. Product cracks came under further 

pressure as refineries returned from maintenance and added 

to available product supplies. 

• Light Distillates 

The monthly average of Singapore gasoline price was 

$124.07/bl, $1.86/bl down from September due to the fall 

in crude prices. However, Singapore gasoline crack- the 

Singapore gasoline price minus Dubai crude price- was 

up $1.11/bl. The bullish trend was attributed to healthy 

regional demand from Indonesia, Vietnam, Pakistan and 

Sri Lanka. In Indonesia, the Haj pilgrimage in late-October 

picked up the gasoline imports. Pakistani import increased 

mostly because of the problems with gas supplies and 

infrastructure in the country. Ample supplies in the 

region eliminated 

the gains in gasoline 

market and 

light 

Singapore onshore 

distillate 

stocks fell 

56


to 9,180 thousands of barrels at the end of October, -6 % 

m-o-m change (see chart). Naphtha was the other winner of 

the month. The mean of Singapore naphtha price was $104.91/ 

bl in October. Singapore naphtha crack spread rose a little. The 

market was supported by better than expected demand from 

petrochemical sector as well as tight supplies. There was also 

some pressure on the market by a rebound in Indian naphtha 

export. Although, the demand from gasoline blenders in the West 

was lower than previous month, the western arbitrage arrivals 

were low. The demand for naphtha was weak in the Europe 

because of decline in US gasoline demand. Therefore, arbitrage 

inflows are expected to rise next month. However, these 

additional volumes may be absorbed by rebounding demand 

from crackers returning from maintenance in November. 

• Middle Distillates 

Moving to the middle of the barrel, the mean of Singapore 

gasoil and jet/kero prices were $127.63 per barrel and $130.17/ 

bl respectively. The weakness in gasoil market was on the back 

of growing regional exports, especially from India. Indian and 

Chinese gasoil demand was low due to slowing economic 

growth. Therefore, more cargoes were free for export from India 

and more gasoil was imported to China. Less opportunities to 

ship gasoil to Europe was also a weakening factor. 

However, there was some supports from strong 

Australian import. 

The jet/kero market was mostly unchanged. 

Singapore jet/kero crack spread fell very slightly. 

Tight supply and increased demand from China 

were supporting the market. Meanwhile, 

lower arbitrage inflows to US eliminated the 

strength. Looking forward, some supports 

are likely to happen from increased kerosene 

production in Northeast Asia at the expense 

of jet fuel. 

• Fuel Oil 

At the bottom of the barrel, fuel oil continued with its 

downward trend. Singapore fuel oil crack fell sharply 

and It was the most decline since June when HSFO 

crack started to weaken. However, some gains were 

seen in the market over the reporting month partly 

because of the decline in outright crude prices and also 

the possibility of demand raise ahead of winter. During 

October, the fuel oil 380 and 180 fell to $ 639.27 /mt and 

$ 650.24 /mt ,respectively. Singapore onshore fuel oil 

stocks stood at a four month high of 20,471 thousands 

of barrels (see table). Plentiful shipment from Europe 

over the recent months has led to ample fuel oil 

supply. As a result, the fuel oil forward 

curve moved into contango, quite 

recently. 

Singapore Products Stocks ( Thousands of Barrels) 

Light 

Distillate 

(Gasoline, 

Naphtha) 

Middle 

Distillates 

(Gasoil, 

Jet) 

Residual 

fuels 

(Fuel Oil) 

28-June 10,978 8,260 20,631 

26-July 9,337 8,464 17,607 

29-August 8,283 9,600 17,321 

26-September 9,773 9,325 18,532 

31-October 9,180 9,370 20,471 

M-O-M 

Change 

+1,490 -275 +1,211 

$/bl 

25 

20 

15 

10 

5 

0 

-5 

-10 

-15 

-20 

Singapore Products Prices VS. Dubai 

(Products Crack) 

2011 2012 

BMU95 

FH180 

FH380 

GOR5P 

JETKR 

NA 


57


monthly 

A Review of 

World’s Oil 

Bourses 

By Setak Kakoei 

The main philosophy 

behind establishment 

of petroleum 

commodities 

exchanges has been 

to determine the real crude oil 

prices by making supply and 

demand system more transparent 

in the oil market. Top oil bourses 

and their offshoots provide 

an appropriate platform for 

registering futures and swap 

contracts in the oil, gas and 

energy sectors. Oil markets have 

been among the first energy 

commodities’ exchange across 

the globe. 

A commodities’ exchange is 

an exchange where various 

commodities and oil products 

and byproducts are traded. The 

existing commodities’ exchange 

contracts are valued at $ 380 

billion. In these exchanges, 

transactions are regulated within 

the framework of standardized 

contracts with precise schedule, 

volume, price and delivery place. 

Crude oil is one of the important 

commodities traded in these 

markets within the framework of 

futures contracts. Concentrated 

orange juice, wheat, soybean and 

other products are also traded in 

the commodities’ exchanges. 

Under futures contracts, two 

parties agree to purchase or sell 

a specified asset of standardized 

quantity and quality for a price 

agreed today (the futures price 

or strike price) with delivery 

and payment occurring at a 

specified future date,i.e. the 

delivery date. In these contracts, 

prices are negotiated and major 

oil producing companies have 

always the chance to forecast the 

future of oil markets and gain 

higher profits. 

The world’s top commodities’ 

exchanges are listed as below: 

1. CME Group 

2. Tokyo Commodity Exchange 

3. NYSE Euronext 

4. Dalia Commodity Exchange 

5. Multi Commodity Exchange 

6. Intercontinental Exchange 

7. Africa Mercantile Exchange 

Oil is traded online under futures 

contracts on Bloomberg, known 

as a databank for investors and 

a market indicator. The main 

indicators in futures contracts are 

as follows: 

1. Gas Oil Future (USD/bbl) 

2. Brent Crude Future (USD/ 

MT) 

3. Heating Oil Future (USD/ 

gal) 

4. Natural gas Future (USD/ 

MM Btu) 

5. Gasoline RBOB Future 

(USD/gal) 

6. WTI Crude Future (USD/ 

bbl) 

Price Discovery Parameters 

Speculation 

Speculation is very common 

in the commodities exchanges. 

During the first and second 

Persian Gulf Wars initiated 

by the former Iraqi Baathist 

regime, speculation was rife 

about the downfall of Saddam 

Hussein and subsequently the 

oil prices were fluctuating to the 

benefit of investors. Since the oil 

market is affected by political 

developments in the Middle East, 

a simple calculation error could 

inflict heavy losses on the futures 

contracts. 

The speculators enter Spider 

contracts – a combination of long 

term and short term – to stoke oil 

price hikes. 

- Short Position 

Occurs when a person sells 

stocks he or she does not yet 

own. Shares must be borrowed, 

before the sale, to make 

“good delivery” to the buyer. 

Eventually, the shares must be 

bought back to close out the 

transaction. This technique is 

used when an investor believes 

the stock price will drop. 

- Long Position 

A long position in a security, 

such as a stock or a bond, or 

equivalently to be long in a 

security, means the holder of 

the position owns the security 

and will profit if the price of the 

security goes up. 

Spider contracts cause oil 

price hikes psychologically. 

Speculators define their strategies 

based on the significant events 

transpiring the oil market. 

Geopolitics and Climate 

These two factors significantly 

impact the oil prices. For 

instance, if a hurricane is 

forecasted to lash the Gulf of 

58


Mexico in the coming three or 

four months, the oil prices would 

rise and more futures contracts 

would be signed. Predicting war, 

earthquake and other natural 

disasters would also stir the 

prices. 

Oil Storage Capacity 

Oil storage capacity is a 

determining factor in the futures 

contracts in the energy markets. 

If for whatsoever reason, an oil 

producer fails to stock oil as 

much as it often does the futures 

contracts would differ. Economic 

powers and oil producers have 

long been locked in a systematic 

debate about oil supply and 

demand. 

The growing demand by 

emerging economies like China, 

India and Brazil for crude oil 

has significantly affected the 

general demand index for years. 

That could raise demand for 

oil and subsequently add to the 

number of futures contracts. 

Iran has the capacity to sell its 

oil to these emerging economies 

within the framework of futures 

or long-term contracts. Even in 

the short-term, Iran can sell part 

of its oil under futures contracts 

and earn the National Iranian Oil 

Company (NIOC) significant 

gains. 

US Greenback 

Since oil is traded in the US 

dollars, its prices would be 

affected by the changes in the 

value of the US legal tender. 

For instance, if the US economy 

is forecasted to plunge into 

recession next March or its 

interest rates are to be cut, the 

oil prices would go up and 

more futures contracts would 

be signed. However, there are 

mechanisms to blunt the impact 

of US economy on the oil prices. 

One of them is to trade oil in 

other currencies than the dollar. 

A top oil and gas producer, Iran 

can become the Middle East’s 

hub if it stabilizes its national 

currency. In that event, a new 

benchmark would vie with 

North Sea Brent and WTI. The 

opening of Kish Oil Bourse was 

the beginning of the movement 

towards an international energy 

commodities’ exchange. 

Facilitation of legal procedures 

could help Iran realize its 

objectives. 

Futures Contracts in Energy 

Commodities’ Exchanges 

An oil financier is supposed to 

buy 1,000 barrels of oil (42,000 

gallons) in December 2012 at 

$ 127 per barrel. The barrels 

should be delivered on schedule. 

What is the logic behind such 

transactions? 

Financiers enter futures contracts 

for risk management. Rarely 

do futures contracts end in the 

delivery of commodity because 

these contracts are standardized 

and just change hands. These 

contracts are traded in the market 

and they result in oil price 

discovery. 

Given Iran’s long experience in 

capital market management, Kish 

Oil Bourse is capable of carrying 

out such transactions. That, along 

with Iran’s capacity in mass 

production of fossil fuels and 

petrochemicals could stabilize 

Iran’s position in the price 

discovery of oil and its products. 

The more dynamic the energy 

commodities exchange, the more 

complete the price discovery 

process would be. 

Oil Bourses 

Intercontinental Exchange (ICE) 

Established in 1990, 

IntercontinentalExchange, Inc., 

known as ICE, is an American 

financial company that operates 

Internet-based marketplaces 

which trade futures and overthe-counter 

(OTC) energy and 

commodity contracts ,as well 

as derivative financial products. 

While the company’s major 

focus was energy products (crude 

and refined oil, natural gas, 

power, and emissions), recent 

acquisitions have expanded 

its activity into the “soft” 

commodities (sugar, cotton and 

coffee), foreign exchange and 

equity index futures. 

West Texas Intermediate (WTI) 

West Texas Intermediate (WTI), 

also known as Texas light sweet, 

is a grade of crude oil used as 

a benchmark in oil pricing. 

This grade is described as light 

because of its relatively low 

density, and is sweet because 

of its low sulfur content. It is 

the underlying commodity of 

Chicago Mercantile Exchange’s 

oil futures contracts. The price of 

WTI is often referenced in news 

reports on oil prices, alongside 

the price of Brent crude from the 

North Sea. 

DME Oman Crude Oil Futures 

Contract 

Launched by the Dubai 

Mercantile Exchange (DME) on 

June 1, 2007, the DME Oman 

Crude Oil Futures Contract 

(OQD) is the Asian crude oil 

pricing benchmark. The contract 

is traded on the CME Group’s 

electronic platform CME Globex, 

and cleared through CME 

Clearport. 

From 2007 to 2010, the futures 

contracts in this exchange market 

soared from 200 to 700 million 

barrels. 

Pension Funds 

Pension funds are main 

stockholders in the oil and 

gas companies and influence 

futures contracts. When the 

energy market contracts become 

complicated, the pension funds 

would have to work out new 

mechanisms to salvage their 

future contracts and the prices 

would subsequently be affected. 

If their strategy is based on short 

position, speculation will drive 

the oil prices down. In the event 

of long position, raising the value 

of the contracts would benefit 

them. 


59


monthly 

Deterding, Founder of Royal 

Dutch/Shell 

Royal Henri 

Wilhelm August 

Deterding KBE 

(Hon), (19 April 

1866, Amsterdam 

- 4 February 1939, St. Moritz) 

was one of the first executives 

of the Royal Dutch Petroleum 

Company and for 36 years 

(1900–1936) its chairman and 

the chairman of the combined 

Royal Dutch/Shell oil company. 

He came to power after the 

early death of the Royal Dutch’s 

original leader, Jean Baptiste 

August Kessler. 

He made it to the runner up 

against John D. Rockefeller’s 

Standard Oil and it is still one 

of the world’s largest petroleum 

companies. He was made 

an honorary KBE in 1920, 

ostensibly for service to Anglo- 

Dutch relations, but mainly for 

his work supplying Allies with 

petroleum during World War I. 

Called the “Napoleon of Oil”, 

Deterding was responsible for 

developing the tanker fleet that 

let Royal Dutch compete with 

the Shell Company of Marcus 

Samuel. He led Royal Dutch 

to several major mergers and 

acquisitions, including a merger 

with Samuel’s “Shell” Transport 

and Trading Company in 1907 

and the purchase of Azerbaijan 

oil fields from the Rothschild 

family in 1911. 

In the last years of his life, 

Deterding became controversial 

when he became an advocate 

of the German Nazi party. In 

1936, he discussed with them 

the sale of a year’s oil reserves 

on credit; the next year, he 

was forced to resign from the 

company’s board membership. 

The Royal Dutch Shell Group 

was created in February 1907 

through the merger of two 

rival companies - Royal Dutch 

Petroleum Company (Dutch 

legal name : N.V. Koninklijke 

Nederlandsche Petroleum 

Maatschappij) and the “Shell” 

Transport and Trading Company 

Ltd of the United Kingdom, 

founded by Marcus Samuel, 1st 

Viscount Bearsted. 

It was a move largely driven by 

the need to compete globally 

with the then dominant 

American petroleum company, 

John D. Rockefeller’s Standard 

Oil, and as a strategy to face 

the challenges brought by the 

crisis of 1907. The terms of the 

merger gave 60% ownership of 

the new Group to the Dutch arm 

and 40% to the British. 

The “Shell” Transport and 

Trading Company (the 

quotation marks were part of 

the legal name) was a British 

company, founded in 1897 by 

Marcus Samuel and his brother 

Samuel. Their father had owned 

a company, importing and 

selling sea-shells, after which 

the company “Shell” took its 

name. 

Initially the Company 

commissioned eight oil 

tankers for transporting oil. 

In 1919, Shell took control of 

the Mexican Eagle Petroleum 

Company and in 1921 formed 

Shell-Mex Limited which 

marketed products under the 

“Shell” and “Eagle” brands in 

the United Kingdom. In 1932, 

partly in response to the difficult 

economic conditions of the 

times, Shell-Mex merged its 

UK marketing operations with 

those of British Petroleum to 

create Shell-Mex and BP Ltd, 

a company that traded until the 

brands separated in 1975. 

Around 1952, Shell was the 

first company to purchase and 

use an electronic computer in 

the Netherlands. The computer, 

a Ferranti Mark 1*, was 

assembled and used at the Shell 

laboratory in Amsterdam. In 

1970, Shell acquired the mining 

company Billiton, which it 

subsequently sold in 1994 and 

now forms part of BHP Billiton. 

In 1936, Deterding bought the 

manor of Dobbin near Krakow 

am See, (Germany) and moved 

to that place. After he died in 

Switzerland he was buried at 

Dobbin in Mecklenburg, but his 

body was transferred to a grave 

in Liechtenstein in 1968. 

Deterding was married three 

times (resp. to Catharina 

Neubronner, Lydia Koudoyaroff 

and to Charlotte Knaack) and 

had seven children, among 

whom the eccentric Olga 

Deterding. 

60


Sirens Wailed 

Over Iran 

Win 

When the World War I 

broke out, the British troops 

entered Iran and promoted 

golf &football. These games 

were mainly held between 

the British troops and 

Anglo-Persian Oil Company 

(APOC) in Masjed Soleyman 

& Abadan. Anytime the 

APOC team was close to 

winning, the oil site’s sirens 

were suddenly activated, the 

game was halted and APOC 

players had to rush to their 

work. The game had no loser 

then! 


61

In Three Years: 

Sarakhs Gas 

Refinery to 

Process 60 mcm/d 

By Mohsen Qezeli 

Implementation of new units at 

Sarakhs Gas Refinery to sweeten 

sour gas would add 10 mcm/d 

to the processing capacity of the 

treatment facility to raise its daily 

treatment capacity to 60 mcm. 

Managing director of Sarakhs Gas 

Refinery Masoud Hassani has told 

Iran Petroleum in an interview that 

enhanced gas production is among the 

strategies of this refining company. 

“Based on these strategies, projects 

have been defined to enhance gas 

output. Sour gas sweetening unit is one 

of them.” 

“The initial studies for the 

implementation of these projects 

are under way. The studies are to be 

finalized in the first quarter of next 

year [beginning in March] so that 

construction operations would start in 

August 2013.” 

He said the sweetening unit would last 

three years to be complete. 

“With the discovery of Tous Gas Field, 

located 60 kilometers from the refinery, 

4 mcm/d of gas would be delivered to 

the treatment facility,” Hassani said. 

Currently, five gas refining units are 

operating in the refinery, he said. 

“These units are supposed to produce 

41 mcm/d of refined gas, which would 

soar to 50 mcm/d.” 

Biggest Sulfur Producer 

Hassani said Sarakhs Refinery 

processes the most acidic gases in 

the country and even in the region, 

adding that the refinery produces 2,000 

t/d of sulfur. Sarakhs Refinery is the 

biggest sulfur producer in the country. 

“Currently, four sulfur producing units 

are operating in the refinery. They 

are capable of producing 2,600 t/d of 

sulfur – 70 percent of which would 

be exported. Sulfur export s earns the 

country over $ 100 million a year.” 

“Earlier,38 mt/y of sulfur was produced 

from 1 mcm of gas, but now the sulfur 

production has exceeded 40 mt.” 

Gas Processing Enhanced 

Hassani said the refinery’s gas 

processing capacity has increased by 3 

bcm in the past ten years to reach 16.3 

bcm/y, noting that the enhancement 

is achieved due to the knowledge of 

Iranian engineers. 

Gas recovery from flares is another 

significant measure taken at Sarakhs 

Refinery, he said. “At present, 40 

percent of the refinery’s flares’ gases 

are recovered. According to our plans, 

the plant would quit flaring by March 

2014 and the relevant gas would be 

used as fuel in boilers.” 

Hassani said Sarakhs Refinery is 

among the top green industry plants 

although it is refining the most 

polluting gas. 

Overhaul in 21 Days 

The manager of Sarakhs Gas Refining 

Company said the time needed for 

overhaul operations in the refinery has 

been slashed to 21 days from 46 days. 

The refinery’s preparedness rate has 

climbed to 94 from 92 percent in the 

past six years. 

All technical equipment are designed 

and supplied by Iranian engineers, 

Hassani said. “We are ready to launch 

and overhaul other gas refineries in the 

country.” 

“One of our strategies is to export 

specialist manpower and technical 

knowledge. To that effect, we have 

designed a sour gas storage facility for 

one of Turkmenistan’s gas fields.” 

No Winter Gas Supply Problem 

Hassani said the refinery is fully 

prepared to supply the necessary gas in 

the winter. 

“The overhauls carried out in the first 

half of the year ensure that the refinery 

would go ahead through winter. We 

are not concerned at all with the 

sanctions,” he said. 

“We have not sat idle in the face 

of sanctions,” he said, adding that 

domestic manufacturers are supplying 

the necessary equipment to industrial 

plants. 

“We can say that 95 percent of the 

mechanical equipment used in the oil 

and gas industries is manufactured 

domestically,” he said. 

62


Sarakhs 

Gateway to the Far East 

In the northeasternmost 

spot in Iran, 180 

kilometers from the holy 

city of Mashhad is located 

the city of Sarakhs, where 

farming and animal breeding 

battle hot and dry weather. In the 

ancient times, Sarakhs served 

as a caravanserai on the “Silk 

Road”. In addition to its historic 

background, Sarakhs is also the 

commercial gate between Iran 

and Turkmenistan. Products 

from Iran’s eastern regions are 

exported to Turkmenistan via 

Sarakhs. Here is a report about a 

city, today known as Iran’s entry 

gate into the Far East. 

Farmlands in Desert City 

To reach the border city of 

Sarakhs, we had first to fly 

to the holy city of Mashhad. 

Before I went there, I had 

heard that Sarakhs was a free 

trade zone with a gas refinery. 

A large number of vehicles 

were plying the road from 

Mashhad to Sarakhs, but the 

road was not wide. Denselypopulated 

villages were seen 

on the way to Sarakhs. The 

countryside changed from time 

to time: desert, mountainside. 

Scattered trees had grown on 

the mountains. There was a 

jungle of wild pistachio trees 

in the middle of the desert. We 

leave the mountains behind and 

everything becomes normal. 

The road is now lined with salt 

cedar trees, some of which are 

tall. 

Ten kilometers to Sarakhs 

stretches a railroad. The special 

economic zone is also seen over 

there. Everything changes after 

passing by the special zone. The 

nature changes dramatically 

so that nobody could believe 

we had just left the desert. 

Wherever we looked, we saw 

extended maize and cotton 

farms. The reason for all this 

green landscape rests with rivers 

near the city. Tajan River in the 

east and Kashf roud River in 

the south are flowing. Ancient 

historians have described 

Sarakhs as a city located in the 

middle of desert, but with plenty 

of farmlands. 

People Are Mainly Relatives 

We arrived in Sarakhs after a 

three-hour drive. There were 

several boulevards and a small 

square in the small city. It 

must have been considered an 

abandoned village had it not 

been close to a free trade zone 

and adjacent to Turkmenistan. 

Residents of Sarakhs mainly 

work at Khangiran gas 

refinery. Others are farmer 

or animal breeder. A certain 

species of sheep is raised in 

Sarakhs. People in Sarakhs 

wear long robes similar to 

those put on by people in the 

southeastern province of Sistan 

& Balouchistan. The main 

ethnic groups in Sarakhs are 

Balouch, Turk and Kurd. The 

establishment of Sarakhs has 

its own story. An old man there 

says people moved here after a 

severe drought in Sistan some 

50 years ago. The ethnic groups 

here have intermarried and that 

is why they have become close 

relatives. Our driver greeted 

everyone in the street, saying 

they were all his cousins, uncles, 

aunts, etc. Any stranger entering 



63


monthly 

the city will soon be recognized. 

However, the residents of 

Sarakhs are hospitable people. 

White Robes 

The first thing striking 

everyone’s eye is the way 

people, notably old men and 

women, get dressed. Long 

and white robes falling up to 

their knees, big trousers and 

black vests are typical dresses 

here. In the past, both men and 

women used to wrap a white 

turban around their head. Those 

who are descendents of the 

prophet Muhammad (PBUH), 

wear green turbans. People are 

traditionally attired in marriage 

and mourning ceremonies. 

Sheep Infringe Upon Borders 

After a short visit to the city, 

we are driven to the Sarakhs 

border and its customs’ office 

checkpoint. It took us five 

minutes to reach there. We 

saw Turkmens, businesspeople 

and truck drivers there. The 

Turkmens commute to Iran and 

Mashhad to purchase carpets 

and rugs. 

To know the border better, the 

driver took us to Tajan River, 

which was one kilometer 

away. We cut through a cotton 

farmland to reach the river, 

shared with Turkmenistan. Iran 

and Turkmenistan have built 

a friendship dam on this 

river which supplies 

water for 

farmers in both countries. Two 

bridges are constructed on 

the river; one for transit trains 

and one for trailer trucks and 

vehicles. 

A shepherd was grazing his 

sheep over there. I asked 

him if he had ever been to 

Turkmenistan. “Almost every 

day,” he replied. “Every night, 

we took our cattle there to 

graze,” he said. “Isn’t there 

any problem?” I asked. The 

shepherd asked if he had done 

anything wrong or illegal. For 

him and his cattle, demarcation 

was meaningless. 

We returned to the customs’ 

office checkpoint. Trucks, 

carrying second-hand cars, were 

queuing. These second-hand 

cars are sent to Turkmenistan 

to be scrapped. In addition to 

vehicles, grain, cotton, potato 

and onion are also waiting to be 

cleared. 

Three Days of Marriage 

Ceremonies 

In Sarakhs, I witnessed marriage 

ceremonies here and there. 

I asked people about their 

traditions and I was told that 

the ceremonies lasted three 

days. The first day, they dye the 

prospective couple’s hands and 

feet with henna. The second day, 

the groom is shaven and dressed 

in new costumes before being 

carried on a horse to a bathroom 

in the village. After taking his 

bath, he is taken to the bride’s 

house. 

Each ceremony has between 

1,500 and 2,500 invitees, 

who gather for three days at 

the groom’s residence. The 

residents of Sarakhs put a tub 

at the entrance of the residence 

of the lovebirds for 

purification 

and 

happiness. The 

bride weaves carpets before 

getting married and takes them 

into her new house. 

Sheikh Loqman, a Mystic 

Figure 

Before travelling to this border 

city, I studied about Sarakhs, 

whose ancient name was 

Sarika and located on the way 

from Marv to Neyshabour and 

Iraq. It was a big city in the 

first centuries of the Islamic 

period. Sarakhs was the capital 

city of Alb Arsalan, a Seljuk 

king. In the 19 th century, the 

Russians separated the ancient 

Sarakhs along with Marv and 

Neyshabour from Iran. 

A respected figure in Sarakhs 

is Sheikh Loqman Sarakhsi, 

known as Father Loqman. 

His tomb is near the city and 

people have constructed fruit 

garden around it. We arrived at 

the tomb near the sunset. The 

sheikh was laid to rest in a tomb 

housed by a towering building 

decorated with gypsum and 

bricks. Remnants of turquoise 

tiling are still visible. The 

mausoleum is open to public 

only on Wednesdays. 

Many residents of Sarakhs say 

Loqman has been a close ally 

of Imam Reza, the eighth Shiite 

imam. He was a mystic figure in 

Khorasan. 

Brick Museum 

On the way back to Mashhad, 

we visited Robat Sharaf, some 

60 kilometers away from 

Sarakhs. This caravanserai was 

located on a foothill. From 

there, one could easily watch 

the wild pistachio trees. What 

distinguished this caravanserai 

from others was its brick 

decoration. It had two yards. In 

the first yards, businesspeople 

treated their horses and camels. 

In the middle of the second yard, 

a stone basin gathered rainwater. 

Small rooms in the second yard 

were used by people for rest. 

There are two mosques in the 

caravanserai. Some gypsum 

decorations in the buildings date 

back to seven centuries ago. 

Robat Sharaf could be named 

Iran’s brick museum. 

I toured the caravanserai for one 

hour and a half. I went on the 

rooftop to have a better view. 

The first yard was for Commons 

and the second year for Lords. 

An old woman there said 

she had come to visit her 

husband, who looked after the 

caravanserai. 

“I regularly tell him to abandon 

this place, but he doesn’t accept 

to do so. I come here several 

times a week so that he would 

not be alone,” she said. 

I closed my eyes for moments 

and imagined myself in the time 

this caravanserai was used by 

businesspeople travelling on the 

Silk Road. But today, the couple 

should wait for hours until they 

see someone pass by. 

64 


Vali ruins, one the glorious remaining monuments in Sarakhs 

Mystic figure, Baba Loqman Mausoleum

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