Iran – partnership, progress & prospects – Shell’s Perspective – Part two:

Published November 15th, 2000 - 02:00 GMT

Ingo Dijksma, General Manager, Shell Iran Offshore Ltd, says "It has been a year since the signing of the Soroosh/ Nowrooz agreement. Most of the major contracts have been awarded, and the value of the commitments made is well within budget. 


"Front-end engineering design was completed in August and all surveys have now been completed. The quality of the 3D data is excellent and we expect to be able to identify prospects other than the Burgan reservoir, which is the area of the Soroosh/Nowrooz agreement. 


"Spudding of the first well in the Soroosh field is scheduled for later this year with the 'Maersk Viking' rig, which is presently drilling a well for the Iranian Pars Oil and Gas Company in the South Pars field. 


"The National Iranian Drilling Company's rig 'Shahid Rajaie' has undergone a thorough inspection to determine the scope of the refurbishment required to this rig. We expect this rig to commence drilling in Soroosh in early 2001. 


"All indications are that we will be able to achieve early production by August 2001. We are pleased that our efforts to include Iranian companies in the realization of this project have been satisfactory, with the majority of the structures for the early production facilities being fabricated in Iran." 


Logistics back-up for Soroosh/Nowrooz:Iranian Oilfield Services Company (IOSC) has been awarded a contract by Shell Iran Offshore to provide Shell with logistics services during the development of the Soroosh/Nowrooz offshore oil fields.  


From the project's onshore base at the port of Bandar Imam Khomeini (BIK), which IOSC will manage, the company will provide a wide range of back-up services. IOSC is a joint venture of Oilfields Supply Center Ltd (OSC), a Dubai-based operation.  


'Shell in the Middle East' talks to the Director and General Manager, Corporate Affairs, of OSC and the General Manager of the company. 


I.M.A. Abedin, Director and GM of Corporate Affairs of Oilfields Supply Center Ltd (OSC), says, "OSC is very pleased to be involved, through its affiliate, Iranian Oilfield Services Company [IOSC], with Shell in the development of the Iranian oil and gas industry.  


OSC has grown to become one of the region's major service providers, and we now have one of the largest oil and gas 'shopping malls' in the world, with a wide range of products and services to offer. 


"Over the last six years since moving to the Jebel Ali Free Zone in Dubai, we have invested over US $75 million to give us the most modern facilities possible. The Jebel Ali Port provides us with an excellent infrastructure and is a natural focal point and gateway to the region for all oil and gas activity. 


"I am pleased to see the development of IOSC and to see our new facility at the port of Bandar Imam Khomeini [BIK] taking shape so rapidly," says Mr Abedin. 


John Ellis, General Manager of OSC, goes on to explain, "IOSC, in which OSC has a 40 percent equity, was awarded a contract by Shell in July of this year to provide logistics services for the development of the Soroosh/Nowrooz oil fields by Shell under a buy-back agreement with the NIOC. 


"The other 60 per cent equity in IOSC is owned by Tehran Berkeley Engineers, a well-established Iranian firm of consultant engineers. IOSC, which has its head office in Tehran, is, however, fully managed by OSC. 


"The contract involves the provisioning and management of the base at BIK for Shell. Our responsibilities cover warehousing, storage and the provision of jetty facilities for supply vessels through our contract with the port and shipping organization at BIK. We will also provide the necessary mobile cranes, fork lifts, pipe handlers, and the personnel to operate all this equipment. 


"Initially, we will have to employ a mix of expatriate and local Iranian staff but we intend to localize the operation within six to nine months. To do this, we will carry out extensive training both in situ and in Dubai. 


"As the Soroosh/Nowrooz oil fields are offshore, the main method of supplying the rigs will be by supply vessel. Swire Pacific have been awarded the contract to provide supply vessels, whilst IOSC are in charge of vessel voyage management. 


"IOSC is also responsible for the provision of agency services at BIK, work which will involve the clearing of vessels in and out of the port with customs and immigration, bunkering and liaising closely with port authorities. 


"The majority of drilling tools and equipment shipped to the rigs, except for casing, is usually sent by pre-slung containers or 'baskets', designed specifically for offshore oil rigs to ensure the safe handling of equipment.  


IOSC will manage the storage, maintenance and provision of these containers. 

"The company will co-ordinate the logistic movement of drilling mud to the rig location.  


It is important that stringent environmental standards are maintained both at the BIK base and at the rig location during the transfer and handling of drilling mud. It is, therefore, the company's responsibility to ensure that the product is handled correctly during these movements as well as attending to its correct disposal. 


"With an operation of this size there will inevitably be a considerable need for the movement of people. We will provide road transport from the airports at Ahwaz and Abadan to the heliport at Mashahr, where crew will be transported to the rigs. 


"The movement of some materials from within Iran may also be required. We will manage this operation by using our own transport fleet or through the use of sub-contractors. 


"Throughout the project we will ensure that best HSE practices are carried out to Shell's very high standards. The education and training of local personnel will also be high on our list of priorities. 


"OSC will provide support throughout the contract and ISO 9002 standards will be implemented in all aspects of our contract with Shell by July 2001. 

"This is the first opportunity that OSC has had to be involved with Shell and we are very excited by that involvement," says John. 


SMDS Study under way: 

Martin Trachsel, Project Development Manager, Iran SMDS, says, "Shell Gas and Power signed an MOU [Memorandum of Understanding] with NIOC [National Iranian Oil Company] and NPC [National Petrochemical Company] in September to examine the feasibility of constructing a Shell Middle Distillates Synthesis [SMDS] plant in Iran. 


"As the world's second largest gas resource holder, Iran is examining ways to increase its exports of gas, and gas-to-liquids conversion offers another highly attractive option in addition to conventional alternatives, such as LNG [Liquefied Natural Gas] and pipeline exports.  


While LNG and pipeline exports require the development of firm offtake markets prior to project commitment, the market for SMDS products is essentially unlimited. This can significantly reduce project lead times. 


"The SMDS process produces ultra-clean, environmentally-friendly synthetic products for use as premium transportation fuels and chemical feedstock. 


"The MOU is to conduct an initial scouting study to determine the viability of the project and it will be completed in early 2001. If the results are favorable, stage two will involve a detailed feasibility study and project specification, leading to a final investment decision in 2002 and an eventual on-stream date towards the end of 2005 or early 2006. 


"The project under study is to build a second-generation SMDS plant to produce 70,000 barrels of product per day. The plant, which would be in the Assaluyeh Special Economic Energy Zone on Iran's coast, would also produce up to 10,000 tones of fresh sweet water a day, which could be used for irrigation purposes. 


"If the plant is built, there is every possibility that in the future it would be expanded to increase production levels. The established infrastructure, utilities and excess power generated by the SMDS process could also provide synergies with future LNG facilities. 


"The plant would consume some 600 million standard cubic feet of natural gas per day, and would draw this feedstock from the massive South Pars gas field some 100 kilometers away. 


"This is a further indication of the relationship between Shell and Iran, something we value very highly. This project would be good for both parties," concludes Martin, "providing Iran with an additional export conduit for its gas, development costs, the transfer of knowledge and expertise and high quality jobs for Iranians.  


For Shell, it provides the opportunity to participate in the commercialization of one of the world's largest undeveloped gas resources." 

Source: Shell Middle East 

© 2000 Mena Report (

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