Industry

Modulift refurbishes subsea beams for oil and gas project

offshore liftModulift has refurbished two subsea spreader beams for a major subsea installation contractor before they were used to lift 260 tonnes and 280 tonnes manifolds for a field development offshore Libya

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Iran faces Total withdrawal, signs new oil contract with Pergas

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Iran has signed a new deal with London-based Pergas to develop the Keranj oilfield, on the same day that Total announced it will withdraw from the South Pars 11 gas project unless it can be granted a waiver from the USA to protect it from secondary sanctions

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Dow Innovation Centre to help transform KSA into knowledge-based economy

Dow KAUST lrThe multinational chemical corporation Dow Chemical Company has opened a new innovation centre at King Abdullah University of Science and Technology (KAUST) in Saudi Arabia, aiming to address critical needs in the kingdom such as increasing energy efficiency and minimising the environmental footprint

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Oil price hits US$77/bbl following USA’s withdrawal from Iran nuclear deal

trumpPresident Trump’s announcement of the USA’s withdrawal from the Iran nuclear deal has shaken the oil markets, with Brent hovering around US$77/bbl on Wednesday 9 May, its highest level for three and a half years

The oil price had in recent days risen above US$70/bbl with tension in the Middle East a key factor, along with tighter compliance with the OPEC/non/OPEC output deal and supply losses from Venezuala. Some analysts predict it could rise above US$80/bbl.

The impact of the USA’s withdrawal from the Iran nuclear deal on Iran’s economy is likely to be very significant, with the US President announcing he will reimpose economic sanctions that were waived when the deal was signed in 2015. The US Treasury has said it will re-impose a wide range of Iran-related sanctions, including transactions with its central bank. Oil-related sanctions, including sanctions on the National Iranian Oil Company (NIOC) are due to be reimposed after 180 days. 

France, the UK and Germany have stressed their continuing commitment to the deal, and have promised to work with the remaining signatories to uphold it, as well as to support companies doing business with the market. However “the key question will be how far the UK and other European countries are ready and able to go to protect their banks and firms from US sanctions if they do business with Iran,” comments the BBC’s diplomatic correspondent, James Landale. US national security adviser John Bolton is reported as saying that European companies doing business in Iran will have to stop doing so within six months or face US sanctions.

“It may be challenging for France, Germany and the UK to stick to the nuclear deal with heavy US sanctions on European companies doing business in Iran,”  adds Moin Siddiqi, economist. “Chinese and Russian companies will continue investing in Iran’s hydrocarbons sector but their technologies are not advanced compared to the western oil majors.” 

The IEA further comments that firms from Russia and Asia are thought to be top contenders for upstream deals because they do not have significant US exposure and are less dependent on the US financial network.

“Companies such as Total and Eni may choose to stop lifting Iranian crudes altogether for fear of being precluded from the US market,” said Richard Robinson, who manages the Ashburton Global Energy Fund. 

Total signed a US$5bn contract with Iran in 2017 to develop phase 11 of Iran’s South Pars gas field.

Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted in return for curbs on its nuclear programme. According to the IEA, production was 3.8mn bpd in March, with exports averaging 2.1mn bpd in the first quarter of the year, making it the third largest OPEC exporter after Saudi Arabia and Iraq. 

Iran officials are keen to stress the self-reliance of the country’s oil sector, built up during years of sanctions. Nouroddin Shahnazizadeh,  head of the Petroleum and Engineering Development Company (PEDEC), which administers oil industry projects in the West Karoun area, said on 8 May that possible renewed sanctions on Iran would be costly, but not to the extent to worry officials, according to a report from Iranian news agency Shana.

"[Possible] sanctions will increase our costs and cause [implementation of] our projects to last longer, but we are not worried," he said, according to the report.

"The oil production from the South Azadegan [oil field] has increased from 30,000 bpd to 100,000 bpd owing to domestic capabilities. Therefore we can still continue with development with the help of domestic capabilities." 

Analysts’ estimates of the possible reduction in Iranian crude supplies as a result of reimposed sanctions range from 200,000 bpd to one million bpd, according to a Reuters report, with most impact from 2019 as sanctions take effect. “We view that Russia, China, Turkey and India will likely all oppose the sanctions and keep their current levels of Iranian crude purchases, while on the other hand, certain US allies, including Japan and South Korea, may comply with the proposed reimposition of Iranian sanctions…” said Ehsan Khoman, MUFG's head of Research and Strategy for MENA. Several Asian refiners are said to be seeking alternatives to Iranian supplies.

While foreign participation in the Iran Oil Show, taking place from 6-9 May in Tehran, is reported to have been down on last year, more than 600 companies from 37 countries are said to have attended, in addition to Iranian companies. Germany’s Siemens and the UK’s Dunlop Oil & Marine are reported to have signed agreements at the show.

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Eni and FS Italiane signs MoU to promote workplace safety

oil and gas safetyItaly’s oil and gas major Eni has signed a Mou agreement with FS Italiane, the Italian state railway company, to share knowledge and best practices to improve standards of safety across all professional and industrial areas

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