In The Name Of God Iran s Evolving Role within Global Oil Presented by: S.M. Ghamsari Director of NIOC International Affairs And Member of the Board September 2016 Singapore
Outline: Major Characteristics of the Oil Market in Recent Years I.R.Iran s Position In The Oil Market Before & After The Imposed Sanction I.R.Iran; Potentials and Opportunities Conclusions 2
Major Characteristics of Oil Market in Last Decade Emerging economic growth, particularly in Asia, as a main driver of market demand Crude Oil Supply, OPEC S Role Crude Oil Price; Volatility and Uncertainty Refining Industry Development; Wave Toward More Complex Refineries 3
Economic Growth rate (%) 4
mbbl/d 50 Asia, The Main Driver For Crude Oil Demand mbbl/d Asia Europe US World(Right Scale) 40 94 92 90 88 30 86 Economic Crisis 20 84 82 80 10 78 Source: OPEC 0 76 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 5
World Crude Oil Supply; OPEC Role Source: IEA 6
Demand/Supply Balance Source: IEA 7
Crude Oil Price; Volatility and Uncertainty 8
Refining Industry Development; Wave Toward More Complex Refineries: Source: FGE 9
I.R.Iran Positions Before And After Imposed Sanctions 10
Iran s Crude Oil Supply Before and After Sanctions Source: Lloyd s list intelligence, JBC Although crude oil market was in surplus, Iran s crude oil supply reached to almost pre-sanction level 11
Major Market For Iranian Crude Oils 2/2 mb/d 12
Iran s Role for securing Asian Refiners Taste for Extra Heavy Crude oil grade By increasing the secondary units capacity in Asia, demand for extra heavy crude oils has been surged significantly in the last few years, One of the current and main concern of Asian refiners is shortage of extra heavy crude oils in the Middle East, Upcoming Iranian new heavy crude(west Karun) with the API around 24, would mitigate this concern significantly, West Karun crude oil production has already reached to 250 kbbl/d and is expected to be added as new crude oil to the Iranian export basket by the end of 2016. The production is planned to be increased up to 700 kbd within 3 years. 13
Investment in Iran (Potentials & Opportunities) Energy sector Economy sector 14
Energy Sector 15
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Operating Costs While most of Middle Eastern crude oil can be produced at below $10 per barrel particularly Iranian grades, the costs for more energy-intensive operations such as new areas are significantly high. 17
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Investment potentials & Opportunities A new contractual arrangement for investors: More promising than the previous ones Longer term contract (20 to 25 years) More competitive 19
The proposed hydrocarbon packages NIOC hydrocarbon field development projects 51 Gas Fields 18 Oil Fields 33 On Shore 26 Developed 14 Undeveloped 12 Off Shore 7 Developed 4 Undeveloped 3 On Shore 14 Developed 2 Undeveloped 12 Off Shore 4 Developed 0 Undeveloped 4 20
Economy Sector 21
The I.R.Iran s Potentials at a glance Economy Sector Iran qualifies from many aspects to be a good location for investment and doing business. it has huge potential for investing after the lifting of economic sanctions, Some of the features(main advantages of Iran) are highlighted below: Vast domestic market with a population of 81 million growing steadily, Young and educated population along with huge natural resources One of the top producers of Zinc, Lead, Aluminum, Manganese and Copper in the world: 4th to 9th rank in production of Zinc, Lead, Cobalt, Aluminum, Manganese and Copper in the world, Having the largest and most diversified industries in the MENA, 22
The I.R.Iran s Potentials at a glance Economy Sector Fiscal incentives, 6 Free Trade-Industrial Zones and 19 Special Economic Zones, Security and political stability, Tax exemptions and Incentives, Untapped and consumer market, Excellent strategic geographic position: The quick and easy access to neighboring markets with a population of 350 to 400 million, 23
The I.R.Iran is the most stable and safe country in the Middle East and potentially could be as an export hub for the goods which would be able to produce through joint venture of Iranian and Asian companies 24
Conclusion Based on the win-win policy, it is expected that the Asian refineries show their good gesture and to increase crude oil lifting from the I.R.Iran in the post sanction era. The I.R.Iran reciprocally will appreciate Asian companies investment in upstream, midstream and downstream of oil, gas and petrochemical sectors. The I.R.Iran and Asian Countries could also collaborate together in different areas. Last but not the least, such type of collaboration depends on the cooperation of all interested companies to provide finance facilities, transferring technology and increasing efficiency through the joint venture with Iranian companies and this type of cooperation, will brings benefits for both countries in the long run. 25