(IIES Conference)

12^th IIES INTERNATIONAL

OIL & GAS CONFERENCE

Developments in Geopolitics Of Energy:

The Role Of Natural Gas

9-10 December 2007,Olympic Hotel,Tehran,I.R.Iran

To Ensure Global Energy Security, Let’s Talk About Economics Rather Than Politics                                                  

                                                                                                                                Ahmad Nikfarjam

This conference makes grounds for energy key player’s interaction in supply and demand sides and it also presents working procedures to struggle oil and gas challenges, “said Gholam Hossein Nozari I.R.Iran Oil Minister in his   inaugural address”. Global economic growth would not be realized only with reliance on financial and technical but capital and energy carriers during next two decades would play vital role in that response. More than 60% of global demand for energy is provided from oil and natural gas. In  the meantime natural gas with its economical and environmental specifications would carry out more growth in future.

H.E Gholam Hossein Nozari

I.R.Iran Oil Minister

This reality puts heavy burden on countries in The Middle East  and Central Asia who own vast resources of this energy. In future demand for oil in  global energy basket would remain high. The existence of more than 50% of oil reservoir in The Middle East make the role of this region in providing global energy supply security, more distinguished and dependence of industrial countries to this energy corridor to the developed world is the sign of geopolitical importance  of the Middle East and its decisive role in energy security. But it should be noted that some present obstacles in Persian Gulf in short and midterm make natural gas export difficult. The ratio of global oil  reservoir to oil production is 40 years while this ratio for natural gas is more. Also the share of independent natural gas fields has become more in comparison with oil in last decade. Natural gas has found more importance in global energy basket but its resource are more dispersed and this would  cause some development in global geopolitics which in turn influences political line up. I.R.Iran holds 16% of total world’s natural gas reserve, where still there are more noticeable potential even in underneath layers. Iran enjoys the same geopolitical situation of oil in  natural gas geopolitics. Iran has always concerned and committed to global energy security and interested in fair, justified and active interaction with global society. Relying on oil revenues, Iran uses some of this sources for improvement of infrastructures and allocates some resource of Forex Reserve Found (FRF) for development programs. Development of oil and gas field projects would be a reasonable base for active interaction between technology and capital owners and oil and gas producer countries and guarantee for sustainable global energy security in long term. Oil and gas are necessary for continuation of world economics and this reality calls for strategical conjunction between capital, technology and production to energy security became realized regardless of political differences. However international stratagem have extrovertive nature which is influenced from political and global culture development of every country has a dominate effect on  energy consumption patterns and for more effective presence in gas global market, Iran should make some fundamental changes in gas consumption pattern. Minimizing sell of raw energy carrier is another concern. Neglecting this issue could weaken active presence in the markets and also for the reason of low production efficiency and energy supply with low prices would cause irreparable damage for creative sectors in long term. The main government policy is development of creative and energy consuming industries for utilizing oil and gas relative advantages in long term. At the moment more than 1/3 of consumed gas in energy basket is allocated to household  and commercial sector which these two have little share in GNP where the share of natural gas consumption in these two sectors is high and their energy efficiency is  low. Quality control and growth of energy efficiency in various sectors such as buildings, constructional  equipments, industries and power plants (establishing and developing standard efficiency) is in agenda. Power plant efficiency in Iran is now around 34% which has a noticeable distance with 50% global standard. Energy efficiency and consumption  pattern is never independent from macro energy policies and its interactions, because efficient energy management has direct and indirect effects in energy export and interaction. Efficient Policies is possible by  utilizing suitable technologies and mutual endeavor between policy makers and energy consumers. In international scene it should be said that economic growth and development would not be possible without assured access to  oil and natural gas. The great goal for increasing level of production especially in Persian Gulf region would be possible by securing security and also countries of the region will and intentions and  beyond region powers to keep here secure. Guaranteed sustainability of energy stream is related to an atmosphere free from tension and also appropriate political relation and low cost stream of capital and technical know – how to suppliers. Supply could be more effective when capital and latest technical  now – how became available for oil and gas producing countries. Supply energy security in national and international levels is amongst I.R.Iran obligations. In this response realization of policies and programs such as increasing recovery factor and development of discoveries  is in Iran oil industries agenda, which with mutual action and facilitating the trend of capital and know – how stream this realization became possible development of international trade, utilizing capital  in an secure interactive environment and discovery and production technologies is a necessity for long term energy security. For this purpose  founding an organization as the “center of oil and gas technologies” with participation of countries who own capital and discovery, development and production – that always transfer the result of the researches to producing countries – would be considerable. The existence of such organization could facilitate energy security in long  term: founding such an organization demands political and financial  participation of all interested parties. If foundation of such organization being proposed Iran would be the first applicant for membership.  In conclusion I.R.Iran Oil Minister considers energy security as an interactive and two way street noticing geopolitics situations of producers of energy carriers. Provision of such security depends on détente, avoiding interference of the great powers and also free stream of capital and technology.

Mr. Mohammad Reza ematzadeh Deputy Minister of Petroleum and NIORDC President

Ever increasing growth of industries, need of developing or developed  countries to more energy carriers, acceptable competitive price of  natural gas from one hand, and it’s compatibility with environment  from the other, put natural gas in place of superior fuel in 21 century. In global energy basket, the share of oil is 35% and in foreseenable future this would remain the most important while the share of natural gas is 24% at present time, and as forecast of International Energy  Agency (IEA) suggests, by average annual 1.8% growth would reach to 64% by 2030.IR Iranproven natural gas reserve is around 28 TMC i.e. 16% of total global reserve. In 20 Year Vision Peant, participation, regional cooperation, transit and swap of gas are favored. In 2025 the share of natural gas in country’s energy basket is determined around 70% which would be allocated to household,commercial sectors, power plants,  petrochemical industry and energy consuming industries. The most important specification of target markets for gas export are: (1) security for long term demand; (2)favored investment’s rate of return, revenue generating and realization of  the goals and their related strategies; (3) guarantee for absorbing investment and technologies and cooperation on this base. (4) Leaving positive impression on international relations and strengthening national security; and (5) reinforcing solidarity and convergence. EU with its technological capacities, India, China, UAE, Kuwait and Bahrain are assured markets which by regional and multilateral solidarity, establishing energy secure region could be possible. Geopolitical strategy of Iran for gas export is EU, China and India.  There are some route for this purpose (exporting natural gas to EU); (1) Armenia – Georgia, Ukraine and Europe; and (2) Turkey. It would be logical for Iran to use both. We should consider that Turkey is willing to join EU [and transiting natural gas of Iran through Turkey could be a privilege for Turkey and a potential opportunity for Iran as a great player in global energy scene By these considerations it would  be useful to examine all potential situations such as swap and transit of Central Asia natural gas from Persian Gulf and reaching eastern markets [by LNG and pipeline]. All these make Iran a strategic position more important and influential especially when consider that Iran is the connection point of two important global energy reserves: Caspian Sea and Persian Gulf gas basin. Iran, Russia and Qatar will play vital role in global energy security  supply and due to declining oil and gas reserves of Canada and U.S.A., the geopolitical situations of the aforesaid three countries especially I.R. Iran should be noticed seriously. Future energy security of the world, will heavily depends on natural gas which demand  major investments for developing present reserves and discovering new field and also technological and know how transfer to producing countries. World should know that every political conflict with I.R Iran is against global energy Security. Iran has enough natural gas for export and this is partly due to utilization of common gas fields. We would have the capacities of export natural gas through pipe line or in the shape of LNG and also petrochemical products even electric power.

Gholam Hossein Nejabat

Deputy Minister of Petroleum and Managing Director of National  Petrochemical Company (NPC)

Petrochemical production volume will hit 80 million tons before termination of fifth scocioeconomic and cultural 5 years plan of IR Iran. Total volume of petchem production export would reach to 11.3 million ton in 2007 valued 5.6 billion dollar, which suggests 92% of 2017 some 29.7 billion dollar would be invested in petchem sector and the volume of production would reach  to 80 million tons / year (MT/Y). In 2025 share of Iran petchem. Production would be 33% in the Middle East. At present time gas reservoir of the country consist of 80% - 90% methane, 12%-14% Ethane and the rest propane considering 3 ethylene pipelines in country (under study or in building process) – Ethylene pipeline of west from Assaluyeh to Miandoab with 2400km length is in progress and 10 patchem complexes will be establish on the route: East Ethylene pipeline  with 3500 km length crossing 4 provinces and 14 patchem complexes will be founded and finally central Ethylene pipeline which deliver feed-stock from Parsian Refinery to Firouz Abad for transforming to Ethylene. The length of this pipeline and 15 petchem complexes would be established on the route. The necessary volume of in vestment of Ethylene pipe line of west is 7.2, central 2.1 and East 13 billion dollars (total 22.3 billion dollar) Total volume production of NPC was 15.1 T/y in 2004, 15.7 MT/y in  2005, 18 MT/y in 2006 and 30 MT/y in 2007: Between 2006 and 2007, 12 new petchem complexes came in to stream. From total volume of production in 2007, around 9.2 MT was sold inside the country. 7% of productions are exporting to Europe, 25% to the Middle East, 40% to the Far East, 9% to china, 10% to India… In the end of 2014 total sale would  be reach to 20 billion dollars, 80% of petchem industries would be privatized (right now NPC enjoys 81 affiliated companies, 14 companies active in production). By termination of 5th development Plan the volume  of production would Consist 12 MT Ethylene, 10 MT polymers, 8.5 MT urea, 75 MT methanol and 4 MT Aromatics. In the end of 20 years Vision – year 2025 – Iran’s share in the Middle East would reach 34% relying upon the rich gas sources of the country. I.R Iran’s petchem industry is equipped with necessary equipment and technologies  with the aim of turning methane to olefin and methane to propylene. More over the country has followed up necessary measures with the aim of realizing most of objectives of petrochemical sector.

Mansour Moazami Deputy of Petroleum Minister for  Human Resource and Research

20 Year Vision Plan is the main document for distinction of major route of oil industries activities. By 2030 global energy demand  would reach several times of today level which of course economic situation, possibilities, supply, level of revenue and governments  social conditions, would affects the volume of demand. The Middle East is the core strategic region in  supplying world energy oil as the most sustainable energy sector of the world needs major investments and for developing world oil and gas field we would need efficient human resource. In Iran oil is the main driving force for national economic and replacement oil by exporting more added value products is amongst Iran strategic policies. At present time around 2.142000 students are attending at country’s universities and this is a valuable capital for the country. In that response many specialists are now working in contracting and investment companies and we will intend to increase efficient  human resource for moving toward production of oil proudest [with more added value] Regulating new laws for development of relations and improving organizational structures are among vital requirement of Iran oil industries. In that respect, management of oil and gas production, hydrocarbon reservoir and also financial management of oil and gas industries are among other basic needs of Iran oil industries. In that respect we have reached to some agreements with some domestic and foreign universities. By risk acceptance, developing individual capabilities and    participation. And finally out putorientation, we could reach to determined goals of 20 Year Vision Plan.

Iran Eagerness for Joint Production with Asian and European Market.

Dr H.M. Qabazard

Director of Research Division of OPEC Secretariat, Austria

 The share of natural gas in global energy basket would increase from present 23% to 28% in a foreseen able future. OPEC members would make notice able investment in that area. In future in oil and gas they should cooperate for supplying the demand of consumers. Competition here would be meaningless because OPEC members believe that oil and gas should not be considered as rival energy carries. Some of OPEC  members enjoy the great natural gas reserves. They hold around half of the world’s proven gas reserves, among them Iran is the greatest.  What in industry conjuncts oil  and gas is endeavor for guarantee sufficient energy supply to consumers. At the same time gas export from OPEC countries help them to invest sufficiently in oil and gas. But guarantee for sustainable demand has the same importance of security of supply producers  and investors should have right full under standing from market to invest confidently. And this only be achieved by interaction of producers and consumers sides. No country could not do it’s commitment individually and OPEC has shown  that the organization is seeking conditions for pacifying markets through dialogue with EU, China, Russia and Non OPEC producing countries. Establishment of a gas exporter organization could be a positive step  because most of the members are among great OPEC exporters. IR Iran had the largest volume of proven natural gas reserves among  OPEC members in 2006. Iran has also been eager to establish joint production and experts with a number of nations in Europe and Asia. Algeria, Indonesia and Qatar are major gas exporters and investing heavily in expanding  their gas export facilities, through both pipeline and LNG. What is expected is that demand for gas, as for oil, is forecast to rise. In the gas sector, however, the rise is expected  to be faster than for oil.Oil security of demand is as important to gas producers as security of supply is to consumers. The producers and other investors have a fair idea of how much will be required and who their main consumers will be, so thatthey may invest with confidence.  The importance of this is that the gas industry will grow from a predominantly regional one into a more global one we have today for oil.  There is a recognition that in theworld it’s environmental credential,
as well as for it’s reliability and high efficiencies. At global level platform for gas industry dialogue is less well established. This is partly because of the regional nature of the gas industry. Furthermore, as we go down stream, the line between oil – sourced energy and gas – sourced energy is becoming blurred

Role Of Iran Natural Gas in Geo energy Era

Dr H. Ghanimifard

Executive Director of International Affairs of NIOC

 Present time is the era for sustainability for central role of economics and energy. The pivotal situation of economics has challenged global politics centrality. After the end of cold war and before collapse of U.S.S.R, oil and politics were under influences in centrality of global strategies. The situation put USSR neighboring countries in Middle East, and also it’s satellite countries in Latin America. But after Collapse of U.S.S.R, the previous goals were neglected and economicocracy (or dominance of economics) become the base for international equations and disruption and disturbance for main energy source owner countries. This disorder became worse by far west economic crisis in 1990’s and now it might be expectable to see global economic dominance on ownership of oil and gas pipelines and also witnessing occupation of rich regions (in respect of energy reserves) by super powers by Next two decades. The existence of one pole of power economic centerality, human resource relation with environmental situation, pivotal role of economics in cooperation of the governments and also multinationals with each other foraccess to the reserves with the best share of technical know-how and  the highest share of global trade  would be amongst future issues and challenges. Global energy dominance would became a phenomena which put oil and gas industries under the greatest technological and commercial development, and due to rapid trade and technological changes this industries became the center of attention. Geoenergy centerality would be an era which managementcapabilities, intellectual capital, knowledge oriented industries, innovations , networking economics all for achieving economical goals and objective, in an extent as large as the world would be it’s main characteristics. IR Iran with 28.17 TCM proven gas reserves – i.e. 15% of total global reserves – and 137.5 billion barrel oil – i.e. 11.5% of global oil reserve – is among the greatest oil producers of the world. In 2014 Vision it has been planned total production of natural gas (with 14.2% growth rate) reach to 1.537 BCM which part of it would be provide from South Pars gas field At present time house hold and little industries consume 34% of allocated produced gas while this ratio is 30% for power plants, 3% to transportation, 17% to petrochemical industries and the rest for big industries. By 2014 at least 20% of daily production (around 300 MCM) should be injected to oil reserves. In Organization for Economic Co – operation and Development (O.E.C.D) countries the demand for natural gas would increase noticeably by 2030. Economic vitality of developed, newly industrialized anddeveloping countries would not be  possible with out sufficient energy – oil, gas and coal – carriers. So in that respect energy centerality – and truly the global affairs dependence on energy – is not an exaggeration. It could influence every thing even social relation with neighboring countries. IR Iran is a successful player in market and due to its natural gas reserves could play the same role. In geoenergy era, the countries who own vast energy resources should play a powerful, appropriate role with up grading their knowledge in global geoenergy power distribution.

Energy Security Mr. M.Souri Chairman and Managing Director of NITC

NITC prepares full participation in LNG shipping of Iran Total volume of global gas trade at present time has reached 748 BCM- 537 BCM through pipelines and 211 BCM in the shape of LNG. Most  LNG tankers are built in Korea,Japan and china. Total active LNG tankers are 246. By 2011 more 131 will be utilized while in 2012 some 58 tanker will leave out because average life times of LNG tanker  are 40 years. Three LNG installations would be established in 3 regions while their natural gas would be provide from 11, 12, 13 and 14 phases of South Pars, North Pars field, Golshan and Ferdows [on December 26, 2007 the development of Golshan and Ferdows gas field were granted to a Malaysian  consortium in one of the greatest oil and gas contract in Iranian history with 16 billion dollarvalue – 6billion for development of upstream and 10 billion to downstream and LNG production]. When utilizing these capacities total  production would reach to 83 MCM. The first LNG export is planned for 2011. NITC was established as a tanker company in 1955 and has been fully privatized since the year 2000. At present time the capacity of NITC is around 6.2 MT and 11.3 MT by 2011. NITC developing other shipping activities in dry cargo, petrochemical, crude oil and LNG. NITC is developing Tanker shipping  company in Caspian Sea to play an important role in North – South transshipment of crude oil on swap and other trading bases. To provide marine solutions to the forecasted substantial LNG production and export from off shore gas field in Persian Gulf (83 MT/Y by 2015) substantial research and studying has been carried out by the expertise of NITC for the past several years. In the line with the government policies and  NIOC decision, at least 50% of LNG products will be exported by Iranian shipping entities and there for NITC is studding to in corporate at least 5 LNG shipping companies jointly with a numberof major LNG importers / A traders and LNG shipping companies.

High Profile in Global Geo politics of Natural Gas: Challenges and Guide line

Mr. S.R. Kasaeezadeh

Deputy Oil Minister and President   of NIGC

 With 15.5% of global natural gas reserves Iran stands in second place of the world. . At present time total gas reserves of Iran is 176 billion barrel oil equivalent while total oil reserve is 136 BB, while still most part of our country has not yet been studied and there are possibilities of new discoveries. In future plan for providing demand for energy extracting gas reserve is more simple than oil and it should be considered as pivot. The ratio of reserve to production shows that life time of Iran natural gas reserve is around 245 years. In comprehensive plan of 2024 by assumption of existenceof 19.44 TCM reserve, Iran would take the first place in the Middle East, while at present time with 115 bcm/y is in the 4th place after Russia, USA, Canada. There are 8 active refineries in the country and recently Ilam refinery has been added. Refining capacity in creased from 189 MCM in 1999 to 440 MCM in 2006. there are 26000 kilometer high pressure line which by 2009 would reach to 30000 km. At present time four nation  wide pipeline are utilized. The 5th line which has been allocated for transferring gas to oil field for injection would come to stream in near future. Lines 6-10 are in various phases under construction or under study. The transmission and distribution networks have been developed and share of natural gas in fossil fuel basket is above 60%. This in turn caused avoiding of reduction of oil export presence plan in global  market could have a bright prospect. At this respect various programs are under operation or study. Exporting gas to Turkey is continued; Armenia pipeline is ready for coming to stream; Peace pipeline is in final phase of negotiation; pipeline to Kuwait and Europe are under  discussion, UAE pipeline and LNG projects are under execution. The main goals of IR Iran gas industries are: (1) earning income; (2) development of international relations; (3) providing energy security; (4) increasing interactions with neighboring countries; and establishing regional networks.  Iran is committed to global energy security supply. By securing long term demand, consumer countries should understand IR Iran role instability of the region. Cooperation between suppliers and consumers could be fruitful; Establishment of regional energy networks for export, import, exchange, swap and transit through using of potential members systems of transmissions and distributions could enhance political relations, peace and stability of the region. Iran is ready for such interactions. To increase cooperation between gas producing countries, and protection of energy security, IR Iran has recommended formation of a gas OPEC for these reasons: - increasing level of demand from 25% in 2005 to 40% IN 2025; - avoiding unhealthy competition  and optimization of exploration in common fields;- establishment of an improved pricing system in accordance with  market conditions; - supply sufficient gas and providing energy security - reduction of investment risk by construction of infra – structures - development the protective measures for environment. There are also challenges in development of export, such  as: (1) the distance between Iran and great consuming markets; (2) securing more technical and financial sources for more development; (3) increasing in domestic consumption; and (4) lack of integrated management system. Present energy intensity in Iran is  7 times of the US, 10 times of Japan and 3 times of India. It’s been planned to reduce it by average 4.1% annually and energy intensity factor also reduce from 1.43 to 0.72. Gas geopolitics become more important and we could have a decisive role. This could be possible with integrated organization and management. At present time the chain from production to consumption is not integrated. So decision making is faced with lack of harmony. Transparent information is also favored.NIGC in that respect has transferred all provincial gas companies and 7 refining companies only 20% of share are public.  ran has favorable ground for presence in global markets and in turn world energy markets need Iran presence. Investors should improve their prospects of investment in gas industry of Iran.

Two Faces of Energy Security: Energy Supply and Demand 

Dr. M. Mazraati

Energy Model Analyst Officer, OPEC Secretariat, Austria.

Given the essential role of energy to world economic growth and indeed to contemporary civilization, from transportation to health care delivery and food production and the huge financial cost required to sustain timely provision of energy, it is understandable why there is so much concern about energy security for many decades till recent years energy security was seen as an issue  of industrial energy consumers. It was interpreted and translated as the on time, affordable continuous and reliable supply of energy to their economy. Realization of booms and recessions in oil markets revealed the main cause of instability and cyclical behavior in oil market huge investment in 1980’s and creation ofconsiderable excess capacity led to power oil prices, lower profitability and higher opportunity cost for producers. Low profitability in upstream caused less investment and accordingly creation of imbalances between oil supply and demand and a non – stabilized oil market. The idea of security energy supply is accomplished by formation of IEA and setting up the response system for oil emergency. Energy security mainly refers to oil and gas. It incorporates security of supply as equal as security of demand. In a multi – dimensional definition of energy security where producers, consumers and the investors sharetheir view, interests, risks and opportunity cost, a more secure energy market is emerged.  In summary energysecurity in suppliers and producers side are faced with issues like lack of constant demand and predictable and in demand side is affordable price. Reasonable prices, profitable actions, acceptable term of agreement, fair behavior are the necessity for energy security supply from producer’s side. Depolarization, avoidance from political and military interference and also economic sanction and adhering to international laws are another concerns. From demand and industrial companies side energy security is interpreted in issues like accessibility of reserves, political stability, guaranteeing investments an commitment not to nationalize, acceptable profit margin, lack of threat of sanction and possibility for transferring revenue to the parent company.Finally it should be said energy security is depend on oil and gas and security of supply for consumers should be reflection of demand. For producers in a de-politicized web consisting consumers, NOC’s , IOC’s and producers. Energy Management for Sustainable Development

Mr. H. Mohammadian Nejad Deputy Oil Minister for  Engineering and Domestic Manufacturing

The main goals of UN millennium development program are:(1) predication of poverty and  starvation; (2) public access to education; (3) gender equality; (4) reduction children motility; (5) struggle against AIDS and Malaria; (6) watch over mothers; and (7) sustainability of environment. The concept of sustainable development is to mean present generation need without endangering future generation’s ability in country’s plans and policies. But one of the main concerns is increase maximum demand would be for fossil fuels [and energy coefficient is a major concern] In Iran in the year 2005 energy coefficient – which is the ratio of growth rate of energy consumption to growth rate of GDP – reached to 1.84  that was 2.5 times more than globalaverage. At the same year more than  70% of energy consumption was allotted to residential, commercial and transportation sectors. This means majority of energy consumed in non productive with low added  value. The substantial difference of energy prices in Iran in compares on with the region is really a hidden subsidy with the value around 44 billion dollar. It is obvious that Iran as a member of OPEC has a defined limitation of oil production. There fore in creasing consumption will cause export revenue reduction. The subject of energy management  has been focused considerably by national development plans in odder to preserve level of oil exports, improving energy efficiency and decreasing energy intensity. For the purpose of stabilizing the  concept of energy management in each economic sector, different measures have been planned such as: pre paring energy standards and criteria, financial support of energy conservation measures, in proving consumer’s behavioral patterns by training, establishing energy management department at high energy intensive industrial plants, study and survey capacity building and perform required project etc. it is predicted that by applying energy management measures, the amount of energy saving till 2016 in building, transportation and industry sectors will reach respectively 3168 MBOE, 1263 MBOE and 930 MBOE.

Condensate market prospects Mr. Seyyed Mohammad Ali Khatibi Tabatabaei Vice Executive Director, Crude Oil and Product Marketing International Affairs, NIOC

Condensate is a blending of ultra light crude oil with heavy crude oil and a suitable feed stock for  petrochemical industries. In 2017 the production volume would reach to 5.3 mbp/d mainly in the Middle East, Asia – Pacific and Africa. Most  production increase would be in IR Iran, Qatar and then Saudi Arabia, Oman and U.A.E. In 2017 for example Oman production volume would reach to 0.28 mbp/d, Qatar 0.81 mbp.d, UAE 0.43 mbp/d and Africa 1.1 mbp/d totally this region share of global production would reach to 17% in the year 2017 during this period production level in North America would reduced from 0.22 in 2006 to 0.19 mbp/d in 2017 where in Europe, level of Norway would reduced to 0.39 mbp/d, while global demand from around 3 mbp/d in 2006 would increase 50% in 2017 for the time being Asia – Pacific region is accounted for the biggest
share of demand but the shifting demand trend toward middle east is observed (from 23% in 2006 to 29% in 2017). The raise in   condensate consumption in Middle East, Asia Pacific and Africa has been found to be attributed to a rapid growth in splitter capacity while in other region condensate is used for blending with heavy oil. Pricing mechanism for condensate varies across the regions and isbenchmarked from crude oil to petroleum products. Solphur content is an important factor in pricing condensate while naphtha – gas oil could be benchmark. In Iran in South Pars gas field, recoverable reserve is around 4 billion barrel: the total production of first 5 phases of south pars 200,000 barrel and in 0.7 and 8 would reach to 52000, 9 and 10, would add 8000 while by utilizing 11,12,13 and 14 phases (which it’s product is allocated to LNG projects) would raise the figure to 66000 and it would reach to 120000 bpd by utilizing 19, 20 and 21 phases, while phases 22, 23 and 24 would add 55000 barrel / day to total capacity. Some of Borzoyeh and Bou Ali petrochemical complex feedstock would be provided from these produced condensate. Iran would be one of the main players in condensate market.

Challenges for the security of gas supply in the Asian market and opportunities for co – operation between gas producing countries and gas consuming countries.
Mr. Kenji Kobayashi
Executive Director forInternational Affairs Jognec Japan.

Fossil fuel would be the main energy  source for supplying the global demand by 2030 and natural gas would enjoy considerable growth rate. By JOGMEC estimation, annual average growth rate for energy carriers are: oil 1.6%; coal 1.7% and natural gas 2.5 for the world and 2.9% for Asia. Natural Gas is mainly consumed in Japan, China, South Korea [and India]. In future the share of naturalgas in Asian energy basket would reach from 10% to 16%. On the other hand, gas consuming countries may begin to depend  more on distant gas producing countries, especially in the form of LNG (Liquefied Natural Gas). This should lead to growth of demand for LNG. The main issues that should be noticed, are :(1) the state for setting level of price (2) amount of required investments in LNG (3) the circumstance in which potential producers and exporters of natural gas reach to mutual benefit with the importers long term and (4) How to ease growth of investment in gas section? If LNG prices are set too high, some of the real natural gas demand could be substituted by other energy sources such as coal and nuclear energy. If LNG prices are set to low, the investment for LNG projects may be discouraged by gas producing countries due to lower incentives. LNG exporters and importers should immediately commence to cooperate tackling these challenges. It is important to secure natural gas / LNG supply so that experts of companies and relevant organization in exporting and importing countries  will cooperate to develop technology for project cost reduction.

China’s Exertion on Energy security, Implication to Geopolitics of Energy
Mr Huaibin LU
President 3E. U.S.A

China’s sustained high economic development during 3 past decades. Average growth rate was 10% annually this was due to the growth of industrialization and urbanization. Some area in china are most developed, some in rapid progress where some area are still under developed. This rapid growth of economy has been accompanied by significant increase of energy demand in China. Total energy demand would be double of 2007 in 2022 (5.2 billion ton/year). At that time demand for oil would be around 17 mb/d and for gas 28 million cubic feet (MCF) – 4 times of 2007. China began LNG importing in a large scale from 2006 China pursuance to secure energy supply is confronted with enormous challenges and sending significant indications and effects on the global energy market. Growing energy security concerns may promote the rationalization of domestic energy sector in China, helping China jump in to a quick track of utilizing world resources, available technologies matured energy policy essentials and management skill, bringing out  more energy to sustain it’s social and economic development. Consorted efforts among countries to strengthen global energy supplysecurity will promote cross investment and extensive cooperation developing throughout the whole industrial Chain, which will enhance ties between consuming and producing countries and help energy supply security. In summary for energy security China needs improving  energy resources and developing it, more self suffice energy strategies, consumption rationalization, more speed in utilizing natural gas, control of emission of green house gas.

Energy security Strategies and Concepts in , EU , Middle East and US
Dr. N. peddle
Director of the Globe Research University of Rome, Italy

Energy security is a global concern  but in every region it has different meaning and approaches this is because differentiation in strategicand political point of views. The US, EU and the Middle East view on energy security are extremely different. In the U.S. energy security means both defending the interest of a big producer and consumer at the sometime, as well as acting at a  global level as the only surviving. The superpower. The American vision for energy security is still basically linked to the concept of the necessity of an open global market not threatened by cartel and monopolistic positions. In summary logic and regulation of free market, existence a security context  between institutions and industries, accessibility of global market energy open toward competition, necessity for a long term multilateral agreement, development of resource diversity, reducing dependency on oil are amongst other specifications and view of U.S. energy security policy. The European Union, despite the long standing rhetoric that followed  the drafting of the EU Green Book it is still dominated by a deeply mercantile vision of energy supply with a sector’s politics characterized by huge and deep divergence among various state members and the absence of any real common strategy. In some cases there are logics and regulations of free market without any common agreed context and generally is based upon bilateral agreement. There is no long term vision in development of resources. For future energy security strategy the EU need a long term agreement between all member countries and also development of diversification of energy resources, also sharing in long term strategic vision on energy security, with USA, China, India and the Middle East and also with developing countries. The Middle East has dramatically changed  its vision and strategy since 1973 shifting from position of oil dominus to the more difficult role of balancing entity. The greatest threats today for Middle East energy security are mainly linked to the main problems of the oil market in the consuming countries: oil companies are investing few percentages of their earnings in energy exploration and production, local regulatory laws are demonstrating almost every where in the Middle East how strong is the need for improvements in order to attract foreign investments: security is becoming crucial issue and only synergies could deliver solutions. However there are some threats  for the Middle East which in turn end conger energy security supply: threats like lack of sufficient infrastructures, unpredictable price fluctuation of global financial  markets: aggressive competition: reduction of refining capacities. There are also geographical threats like political tensions and conflicts, economic sanction, transportation difficulties etc. finally it should be said that we are moving rapidly from geopolitical to  geoeconomic though we are not still ready to cope with it.

Human Resource Energy Market Developments and their Implications for Human Resource
Mr. M. Ashdown
Resource and Development Manager, Shell, UK

The dynamics of today’s petroleum industry emphasizes the importance to have the right people in the right place at right time to maximize existing assets and grasp new business opportunities. The global market demand for competent resources and a tight supply  distribution through out the chain. Some fact about global economy seems so concerning whether in demand and / or supply side of energy carriers: GDP growth in Asia is high; growth rate of population  of the world is relatively high and it would reach to 9 billion by 2050 from 6.4 billion today until present time man has consumed 135 trillion barrel of oil and there are concern that more one trillion barrel only with in 30 next years. There are also some challenges in supply side such as: (1) declining in production, (2) tight capacity and product not enough supply / tight global market which might be led to along term hurt and into a loop (limited supply led to higher prices which led to lower demand). Declining in production level is partly due to shortage of capital and absorbing new technologies. Securing supply of energy carriers depend son sustainable increase in operational and asset efficiency assurance and also reliability toward middle and final customers share  holders and people. In addition to effective management of supply chain, establishing collaborative relations (horizontal and vertical) within and outside the chain is necessity. Strategic Human Resource market require employers manage conflicting pressures through demand prediction and management and respond in novel and flexible  way.

Securing Efficient supply: Horizontal and vertical collaboration in petroleum Industry
Dr Jalal Ashayeri
Professor Tilburg University, the Netherlands

Securing efficient supply of oil and  gas with effective management of entire supply chain from upstream exploration to production to downstream oil and gas business is vital to protect or increase limited margins. This requires precise, up to date, information on availability level of resources (from crude oil to finished good) as well as ability  to flexibly plan and schedule production activities and manage distribution through out the chain. Some fact about global economy seems so concerning whether in demand and / or supply side of energy carriers: GDP growth in Asia is high; growth rate of population of the world is relatively high and it would reach to 9 billion by 2050 from 6.4 billion today until present time man has consumed 135 trillion  barrel of oil and there are concern that more one trillion barrel only with in 30 next years. There are also some challenges in supply side such as: (1) declining in production, (2) tight capacity and product not enough supply / tight global market which might  be led to along term hurt and into a loop (limited supply led to higher prices which led to lower demand). Declining in production level is partly due to shortage of capital and absorbing new technologies. Securing supply of energy carriers depend son sustainable increase in operational and asset efficiency assurance and also reliability toward middle and final customers share  holders and people.In addition to effective management of supply chain, establishing collaborative relations (horizontal and vertical) within and outside the chain is necessity

Management and it’s Challenge in Oil and Gas Industry Projects
Ms. M. Shohrabi
Analyst, IIES

In studying the challenges of  human resource management, two different aspects of soft and hard skill development are being addressed which requires a discrete investigation and analysis, though both are effectively interacting witheach other and this integration shall be cautiously taken into account. Recruitment, training procedures, appraisal and feed back, promotion, motivation and performance, labor relation and cultural difference are the subjects that are examined amid soft skill issues. On the other hand, hard skill issues have their own tools and techniques, namely resource estimation and loading, resource leveling, crashing and resource performance measurement methods, particularly by means of earned value techniques some other subsidiary process in various areas such as risk analysis are being addressed.  Chosen communication technology and established infrastructure to exchange human resource information are teams functioning in the project or a section or phase of a specific project (such as construction team) in remote geographical area that is very common practice in most of oil and gas industry projects. The aim of Ms Sohrabi study is to study and analyze important aspect  of human resources, soft and hard skill challenge confronting project managers of oil and gas industry projects. It also presents scientific – based and practical solution to over come such obstacles. Eventually, the main goal pursued by the paper is to suggest solutions for improving productivity and efficiency of human resources and presenting the effective  alternatives to facilitate dealing with the persisting challenges within oil and gas projects.

Natural Gas development in the Caspian and Beyond
Mr. J. Benigni
Managing Director and Senior Partner of PMV Oil Associates,Austria

The Nabco pipeline could provide  an opportunity for Iran to send some of it’s natural gas reserve to European markets. The future of this pipeline is in limbo due to anumber of reasons. These include competitor projects and uncertainties over potential supplies. With this in mind it is a devisable to review the options available for alternative routes and forms of cooperation to supply the lucrative European market. Nevertheless, access to  European consumers is not just a matter of logistics, the position of Russian state – giant Gazprom must also be considered. Some experts suggest that EU problem with Russia has been doubled. They believe till present time European were faced to a Gazprom as a great company which was supported by Russia’s president but from march 2008 they may face with a Gazprom which it’s chief would become Russia’s President. To this experts the worst message to European consumers of Russia’s gas is choosing Gazprom boss as Russia’s president but Peter Mandelson EU trade commissioner believes that although misunderstanding and existing lack of trust between EU and Russia has reached to an unprecedented level after cold war but “political and commercial  relation between EU and Russia is in transition from critical conditions he said. After all EU is the main trade partner of Russia and the level of transaction has reached to 60 billion dollars annually in recent years. Energy is the most important ground of cooperation between EU and Russia which totally provides 30% of EU demand for oil and gas.  Finally Johannes Benign believes that Iran may consider inviting Russia to participate in the project  in exchange for the Kremlin to have no objections regarding Iranian involvement in Nabco. It seems the France prefers Total and other European companies not being involved in more Iranian business. In this case, collaboration suggests: “PVM Vienna has elaborated on the current market situation, with special attention being paid to the possibility of Iran establishing a foothold in European natural gas market.” 

Europe’s Natural Gas Market: Security of Supply and Security of Demand Mr. D. G. Steiner Head of International Affairs OMV Gas Int’l GMBH, Austria.

The combination of, on one hand, the rapidly growing natural gas consumption in the EU, and aged on the other, the gradual depletion of the natural gas resource in the European gas producing countries has made the EU decision makers more aware of the necessity to take measure to insure the security of energy supplies to Europe. The total European natural gas consumption is forecasted to increase from 500 b cm in 2005 to about 800 b cm in 2030. In the coming two decades, the share of natural gas among other primary energy  carriers will increase from 23% to 34% this surge in share of natural gas consumption will lead to an import dependency of 80% in 2030. EU investment in Nabco pipe line project is a necessity and also priority. Even by diverse fiction of energy resource plans of EU and considering 12% growth in renewable energies by 2020, the  union need for investment in import gas in frastructer (pipe line and LNG would reach to 245 billion Euro by 2020. OMV as the leading central European oil and Gas Company have committed itself to tackle the issue of energy security for Europe by establishing cooperation pattern with a diversified number of energy producing countries. Since 2002 OMV has taken the initiative to build the Nabco natural gas pipe line. The enormous increase in import dependency for natural gas bear a clear indication to the urge for diversification of natural gas supplies to Europe. This in return highlights the importance of energy cooperation with a major producers of natural gas in the world. In this regard, Iran’s vast natural  gas resource and OMV’s considerable presence in Europe natural gas market provide an excellent foundation for in creased cooperation between Iran and OMV in energy field.

The European Union as a Global player: Energy and politics
Mr. M. W. Richter
Project Leader, INOS, Belgium

Geopolitics is a salient nexus of interests, power, geography and ability to determine the roles of the international system. There are major trend in energy security international economics, foreign trade and security policy which might affect on many issues such as military expenditure growth, increasing energy prices and energy crisis especially for developing  countries. Change in global climate could also affect on energy security. Environmental protection, energy scarcity’s as well as resource scarcity will change the political and economic frame work world wide. This process is a cross – cross by the rise of china, India and other big developing countries as international  actors “The European approach is compared with two American approaches which do not primarily proceed from climate change as global threat like the European union but from the imperative to over come dependency on imported oil. The relationship between US and EU will be decisive for any future development of the international system. For different roles which the EU can take toward its major alliance partner with cores pending implications for international system are differentiated. The conciliatory role of the European Union is singled out: it is signifies the ability to balance interests to reconcile, to create and to protect consensus he conclude by drawing some consequences for a constructive  relationship between Iran and EU.
 

Oil and Gas Markets Development Energy Outlook Depicted by IWEM (focusing on Role of Natural Gas) Mr. Dariush Vafi Head of Energy Modeling Division IIES.

The trends and developments of  energy consumption and planningfor energy supply is an inevitable issue for every country. In economics energy consumption like others variables such as labor and capital has an important role in production. This clearly justifies it’s importance in economy and economic activities. There fore every country tries to define a security level for energy. This is an  important reason why countries apply many methods for calculating and estimating size of energy resources and prices, as well as supply and demand models of energy. There are several institution devising models for estimating and fore casting energy. EIA and IEA, from the consumer side and OPEC from the supplier side, are the organizations that have developed world energy models to estimate and forecast trends of energy markets inthe different world regions. They  also publish reports on a monthly, quarterly and annually basis. IIES world energy model (IWEM) is one of these models that has been developed recently. IWEM is a long run and econometric model and has four sub – models which estimate and forecast demand, supply and price equations for different regions  and sectors of world. This model is run by E views software and is compatible with windows system. It employs up to 450 equations and relations (about 150 stochastic equation and 300 relations). Two specific features of IWEM make it different from other large scale models: it is user friendly and results  are easily accessible. Each sub model considers a region. Further more, every region is divided into different sectors (there sectors are: transportation, industry, commercial – residential and power sector) and equations have been devised for these sectors. This model also has equations for estimating gas demand, supply and price. The estimation of model for period 1960-  2001 and forecast for 2002-2010 are indicating an ascending trend for gas in all regions.
 

Project Risks and Mitigation Factors in International Pipelines Mr. A. Maleknejad Vice President, Pars Oil Company

International pipe line projects have  significant potentials for enhancing stability and improving living standards in host countries.They will be pioneering efforts in linking the energy – deficit economies to the hydrocarbon – rich countries. International pipe line projects are long term and have wide spread positive implications for the region. Such projects also reflect the essence of approach toward regional cooperation which helps to mobilize necessary technical and financial resource’s for the project. Nevertheless, these kinds of projects have considerable risk. These risks pertain to techno – economic viability of the projects, security aspects and investment climate in the region. However they can be seen as challenges that help the projects to be successful. The papers’ conclusions about major risks related to pipe line projects and mitigation in relation with crossborder risks, pipeline project could be summarized this way” domestic legislation must give certainty and stability while issues like military crisis, increasing of demand, challenges faced trans it of energy, owner ship and operational systems, weak interaction of interests should take into account. Some other key require mends which should be considered, are: shareholders interests: minimizing governmental interference and utilizing it’s technical support;  providing legal framework; taking interdependence of supply and demand into consideration; ownership structure and operational systems of pipe lines; powerful sponsorship and capital balance and long-term agreements and contracts.

Mr. B. Vibert
Senior Manager, Ernst and
Young’s Paris Office, France

The gas market has been historically  driven by two of it’s physical properties: (1) Gas transportation is difficult and expensive; (2) Gas storage is difficult. Producers have thus used long term gas contracts that enabled them to obtain an assurance of selling their commodities (take or pay contracts). Consideringthe current environment, the gas producers face an equation leading to a new cooperation amongst gas producer is required but it should encompass a deep evolution of the old practices. This entails a new kind of partner ship for gas production and commercialization. Gas markets recent development has paradoxically broken the long term equilibrium between gas producers and distributors. What is at stake for producers in to reach a new equilibrium which is in reality a new kind of cooperation between producers. A significant contractual  evolution of the production operation and a higher recognition of the value added by various stake holders to the joint venture are some ways easing the equilibrium between producers.

An OPEC for Gas?
Dr M. Takin
Senior Petroleum Analyst, CGES UK

What do we mean by a gas OPEC?  A brief look on what OPEC does and what does not [would be illuminating] can gas OPEC be effective – [especially when we think about] differences between oil and gas? Does international gas market would change with gas OPEC? The idea of Organization of Gas Exporting Countries (Gas OPEC) has been discussed many times in the decade. It began to attract attention with the growing importance of theinternational trade in natural gas and particularly with the rise in the price of oil and increased importance of OPEC (organization of petroleum Exporting countries) in the 1980’s. OPEC emerged because IOC’s (International oil companies) held the control of volume of production and also prices and producing countries had no influence on these two issues. This was an unfair situation. It was from 1986 which OPEC adjusted level of productions for stability of markets and target prices (though it is market conditions which determine the prices). OPEC dose not determine type does not determine oil policy of member countries. The truth is that OPEC members are competitors who are aware of their dependence to oil revenue; they have common goals and make their decision consensually and adopt policies in benefit for all. Another point is the difference of oil and gas in their nature where oil is a form of condensate which it’s transportation and / or reservation is relatively simple. A country could do drilling, producing and exporting oil from it’s terminal sand sell it by high prices. In comparison gas has lesser volume with same volume  of oil, it’s transportation a potential costumer or a group should be findfor a long term (20 years) contract.  The expenditure of transportation – whether through pipe line or in form of LNG – is heavy and demands huge investment. The growing influence of OPEC in international oil market has  encouraged the idea of a similar organization for natural gas however in most cases the idea of a gas OPEC is not clearly defined. One can also find and element of emotion and rhetoric in many comments on Gas OPEC. On the other hand some authors and commentators have been too enthusiastic with a  vision for a power full organization setting the price of natural gas and controlling or strongly influencing the international trade of gas. Other has been less fervent, critical or even hostile towards such an idea, saying that there should be no interference in the free market. The latter is most often reflected in the international media. However both of these are extreme views and are partly because of maunder standing OPEC and its track record and partly due to ignoring the differences between oil and gas market.   “Realization of pre-determined goals that have been stipulated in the 20-Year Vision Plan within the framework of four 5-year development plans and reaching an average growth rate of 8 percent in  the course of implementation of each plan sketches the outlines within which our national economy has been defined. Moving in this direction, the perspective for benefiting from foreign financial resources and demonstrating an active presence in international monetary markets, further encourages different sectors of the Iranian economy, including the oil industry, to employ different mechanisms for  attracting foreign financing and concentrating on formulating proper contracts in this regard.” This point is the very essence and raison d’etre for organizing the conference on Oil Industry Projects  Financing (OIPF); a move forwhich the first step was taken by the Enerplus Institute on 8 and 9 December 2006 by an extensive planning which consumed hundreds of hours of work at expert level at the Expediency Council Center for Strategic Studies. The institute organized the second conference on February 2-3 this year in a broader dimension as compared to the previous year event. “Our path is absolutely clear,” says former deputy oil minister and head  of the strategic committee of the conference, Seyed Mehdi Hosseni. “To be standing in the first place in the West Asian Region, as the priority of Iran’s vision plan in the year 1404 (2025), is the guideline for OIPF conference and for the Iranian oil industry as well. By treading this path, financing for oil, gas, petrochemical and oil products projects no doubt remains as one of the major challenges in encouraging