Energy Machinery & Equipment
Domestic manufacturers are capable of providing technical services and producing 80% of advanced oil equipment to develop downstream and midstream projects that will be tendered by the Oil Ministry soon, the head of the Society of Iranian Petroleum Industries Equipment Manufacturers said.
"Although we have been deprived of cutting-edge technology to manufacture machinery to launch upstream ventures, our factories can meet at least 50% of contractors' need for state-of-the-art equipment," Reza Khayyamian was also quoted as saying by ISNA.
Pointing to the Oil Ministry's plan to undertake 36 projects in the current fiscal, which started on March 21, Khayyamian said, "As per the ministry's rules, qualified Iranian contractors are obliged to purchase locally-made equipment."
According to the official, over $6 billion worth of oil contracts will be signed with local upstream and downstream companies to support the private sector in line with the country's push toward indigenization of oil and gas equipment, including control valves, pipes and rotating machines.
Commenting on the ministry's initiative to assist domestic firms in playing a constructive role in development ventures, Khayyamian said Iranian enterprises, which will be commissioned to conduct the Oil Ministry's 36 projects, are not allowed to import equipment manufactured locally.
"A vendor's list of Iranian oil equipment producers has been prepared," he said, adding that qualified firms should refer to the list to sign agreements with domestic suppliers.
According to Khayyamian, items can be bought from producers who are willing to offer the best competitive prices.
Reportedly, devices used in oil and gas exploration/production, including various types of drill bits as well as wellhead and downhole equipment, are being produced by domestic manufacturers.
Highlighting the ministry's efforts to oil the wheels of the key sector by giving incentives to local companies, Khayyamian said, "The 36 projects were originally mega ventures that have been divided into smaller ones so that they can be developed even by medium-sized firms whose financial and technical abilities are limited.
According to the official, indigenization of oil and gas products tops the Oil Ministry's list of priorities and plans are in place to manufacture 14,000 key equipment.
Oil Minister Bijan Namdar Zanganeh believes that Iran Petroleum Contract, the country's new model of oil and gas contracts, is a cornerstone for fostering domestic players' potentials, as the new framework obliges local firms to join foreign partners in petroleum projects.
Energy experts, including Khayyamian, opine that as long as Iranian producers do not interact with foreign firms, they will not be able to play a key role in the global energy market, that is why teaming up with big names like BP, Eni, OMW and Total can help Iranian manufacturers expand their foothold in the increasingly saturated oil market.
Iran wants to expand the production of equipment, such as control valves, pipes, rotating machines (turbines and compressors), smart pigs used in cleaning the pipes, oil and gas measurement tools as well as equipment associated with health and safety.