The most important bottleneck of the oil
development industry over the past 100 years has been transfer of technical
know-how and using new methods of exploitation based on transfer of experience
of the international well-credited companies.
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| Shana |
International findings on methods of development of successful oil
companies nationally show that without systematic and mutual link with
companies owning knowledge and equipment, it will be very difficult and
complicated how to transfer technology.
Due to lack of constant and systematic link between National Iranian Oil
Company and the consortium companies and also in absence of the exploration and
production activities in the NIOC in the years before the 1979 Islamic
Revolution, transfer of technology was not possible and no mechanism had
been foreseen for the purpose.
Iranian engineers busy in the oil rich regions used to be mainly the
employees of the consortium, consisting international companies.
After the Islamic Revolution, a large number of the experts either emigrated or were dismissed; The remaining experts in fact undertook the basics of the technical side of the production related job in the NIOC.
However, due to lack of suitable structure for such a knowledge, it failed
to serve as a science in implementation of the exploration and managerial
development projects.
Of course, in addition to the managerial and structural barriers, lack of
financial resources was taken as a bottleneck of development in the NIOC.
First of all, the budgeting of projects was based on the financial sources
put aside exclusively for development within framework of annual budgets.
However, high cost of the eight-year war with Iraq and reconstruction of the
imposed war ruins as well as low crude prices posed severe restrictions to
development of the oil industry in 20 years after the revolution. However, such
a money needed by the NIOC could be met in the 3rd Five-Year Plan through
export of oil derivatives.
However, the financial resources gained out of export of the crude residue
could hardly meet the need of the country's oil industry. Additionally, the law
hindered the refinery development projects due to the financial resources
gained out of the crude residue exports.
Long years of deprivation in the oil industry after the Islamic Revolution,
made the policy makers use service contracts and cooperation with the
international oil companies to make up the past shortage. Hence, based on the
approvals of the budget law in the year 1994, conclusion of the buy-back
contracts using financial sources of the contractors and repayment out of
production was recognized authorized. After about 20 years from conclusion of
the buy-back contracts, energy experts found out that the contracts are by no
means capable of transferring technical know-how and project management as well
as protective production from storage tanks. So, long years of study of similar
contracts, like Iraq service contracts, resulted in using more suitable methods
in conformity with experience of other oil producing countries to compile new
contracts. The architects of the contracts tried to maintain legal frameworks
of sovereignty, ownership and profits gained out of oil and gas production.
The new contracts were designed to meet such a goal and highlights of the
mandates of the contracts were approved by the cabinet as follows.
*Mandating civil P&E contracting companies to cooperate with foreign
contractors in exploration and development fields when the new contracts are in
force; cooperation between Iranian and international companies in various
periods, including feasibility studies, preparation of the MDP, choosing
technology and various implementation phases will hence be possible. So,
naturally and automatically, it will be possible to transfer technical know-how
and management of implementation of projects to Iranian parties possible.
Moreover, Iranian engineers' financial potential and knowledge will be used in
the best possible manner in the period.
*In the buy-back contracts – due to short-term presence of foreign
contractor – transfer of technical know-how and managerial skills will be very
limited and even impossible. On the other hand, the part dealing with education
and transfer of technical know-how and practically using contractor's services
will not be possible practically due to bureaucratic and traditional management
problems. Also, the buy-back contracts do not enjoy an automatic mechanism for
transfer of technology to the NIOC or other subsidiary companies.
*Based on the buy-bac contracts, the contractor will deliver the field to
the domestic exploitation company once the executive phases of the project are
over and hence, it will not be possible for foreign contractor to be directly
present and effectively use his technical and operational capacity in the
exploitation phase. This is while, the new contracts envision presence of the
contractors and their partnership with domestic manufacturing companies. The
production will be possible as a result in the exploitation phase with the
contractor. Presence of the contractor in the exploitation phase, possibility
for transfer of technical know-how with respect to possibility of reconsidering
the development roadmap in tandem with the new findings at the time of
development and actual field/storage tank behavior in the production phases
will be possible.
So the new contracts envision transfer of technical know-how and management
of the domestic manufacturing and exploitation companies, including the private
and government sectors, in the course of implementation period. Transfer of the
knowledge to domestic manufacturing companies in the phases of exploitation
will be hence possible.
As for incorporation of certain legal mandates in the text of the contract,
it should be said certain clauses should be included: Clauses regarding quality
of preparation and presentation of technical evidence and documents; holding
educational workshops for the E&P contractors prior to any study and in the
course of the implementation phase; and holding educational courses for the
partner exploitation companies in the exploitation period.
If the mandates are included in the said contracts, the Iranian E&P
companies will well identify the process of activities and acquire appropriate
conditions for cooperation with the international companies in different phases
of implementation and exploitation.
Author: Mirtra Modaressi, MA in Economy of Energy
Translated by Behnaz Hossein Gholipour
Translated by Behnaz Hossein Gholipour
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Source: SHANA
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