Iran Oil & Gas Market Forecast 2016-2020energy business insight

e: research@douglaswestwood.com t: +44 (0)203 4799 505

www.douglas-westwood.com

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Iran Oil & Gas Market Forecast 2016-2020

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Chapter 4 : Drilling & Production

1. Azar2. North & South Yaran

3. Yadavaran4. North & South Azadegan5. Forouzan6. Abouza7. Arash

8. Doroud9. Ferdowsi10. North Pars11. Golshan12. Farzad B13. Lavan14. South Pars15. Resalat16. Reshadat17. Kish

Summary of Key Projects

Abouzar (Offshore)Product: OilOnstream: 1977

Forouzan (Offshore)Product: Oil & GasOnstream: 1969

Kish (Onshore) Product: Gas & CondensateOnstream: 2016

North & South Yaran (Onshore)Product: OilOnstream: 2014 & 2015 North & South Azadegan

(Onshore) Product: Oil Onstream: 2008 & 2015South Pars (Offshore)Product: Oil & GasOnstream: 2003

Yadavaran (Onshore)Product: OilOnstream: 2012

Tehran

Caspian Sea

Gulf of Oman

Persian Gulf

32

4

5 6

7 8

9

10

1112

13

15

16

14

17

1

Key ProjectsFurther Projects (Upside)Concentration of Fields

• Prospects• Technologies• Markets

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Chapter 5 : Onshore Rig & Oilfield Services

Onshore Rig Market: Upgrade & Newbuild Capital Expenditure

Total expenditure on newbuilds and rig

upgrades to increase from $ m in

2016 to $ m in 2020.

BOPs will account for the largest

proportion of expenditure, with a %

share of the market.

Expenditure on mud pumps to see the

strongest growth over the forecast

period, rising at a CAGR of %.

An estimated % of upgrade expendi-

ture is allocated to rigs ra

ted above

1,250HP.

“As far as I’m concerned there is no

special construction in drilling devi-

ated wells – there is no difference

in rigs for deviated & vertical wells.

But I think here in Iran some old

rigs should be replaced by new rigs.

Average lifetime of drilling rigs in Iran

is more than 15-20 years.”

Rig Contractor

Upgrade & newbuild expenditure

The upgrade and newbuild expenditure

forecast shown for Iran includes spend-

ing per component both for newbuild rigs

expected to enter the fleet, and full rig

replacement due to attrition. Equipment

covered by the ‘Others’ category includes

drawworks, rotary table, iron roughneck

and handling tools package.

Iran’s rig fleet contains a number of old

rigs which will require replacement over

the forecast period. Total expenditure on

newbuilds and rig upgrades is forecast to

increase steadily over the next four years,

rising from $m in 2016 to $

m in

2020. Total spending over the 2016-2020

period will amount to $m, compared

to $m over 2011-2015.

DW expects upgrade and newbuild

expenditure to plateau towards the end

of the forecast period, falling marginally by

% over 2018-2020. This is driven by a

slowdown in growth expected in onshore

drilling activity towards the end of the

decade. Notably, the number of onshore

development wells is forecast to decline

from in 2018 to in 2020, following

a growth of % over 2016, as drilling is

completed at key projects such as North

and South Azadegan and Azar. However,

expenditure will remain high, relative to the

2011-2015 period.

BOPs (Blowout Preventers) have historically

accounted for the largest proportion of

spending, representing % of expenditure

over 2011-2015. This trend is expected

to continue over the forecast period, with

BOPs representing % of expenditure

over 2016-2020.

Expenditure on mud pumps is expected to

see the strongest growth over the forecast

period, with spending forecast to rise at

a CAGR of % from $m in 2016 to

$ m in 2020. This represents approxi-

mately % of forecast expenditure.

Control and power systems are also

expected to contribute significantly to

upgrade and newbuild expenditure over

the forecast, representing % and % of

expenditure over 2016-2020, respectively.

Rigs rated below 1,250HP are forecast

to account for % of spending on rig

upgrades in 2016. This proportion is not

expected to change significantly over the

forecast period.

A large proportion of expenditure is ex-

pected to be allocated for higher specifica-

tion rigs for drilling horizontal and deviated

wells.

Figure 17: Iran Onshore Rig Upgrade and

Newbuild Expenditure by HP Category 2016

%

%

Upgrade Capex <1,250HP

Upgrade Capex >1,250HP

Figure 18: Iran Onshore Rig Upgrade & Newbuild Expenditure

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Expe

nditu

re (

$ m

)

BOP (Blowout Preventer)

Control System

Mud Pump

Mud System

Power System

Swivel

Top Drive

Others

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Chapter 6 : Offshore Rig & Oilfield ServicesOffshore Oilfield Services Expenditure

Figure 22: Iran Offshore Oilfield Services Expenditure Breakdown, 2010-2020

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Expe

nditu

re (

$bn)

Total offshore oilfield services ex-

penditure is forecast to rise by %

from $ bn in 2016 to over $ bn

in 2018, before declining marginally

to $ bn in 2020 as offshore drilling

activity falls.

Expenditure for coiled tubing ser-

vices is expected to see the strongest

growth, with the market forecast to

increase at a % CAGR over 2016-

2020.

Table 6: Iran Offshore Oilfield Services Expenditure Breakdown, 2015-2019

Offshore expenditure to rise by

% over 2016-2020Offshore oilfield services expenditure in Iran

declined by % over 2011-2015. Following

a % rise in 2011-2012, spending declined

by % from just over $ bn in 2012 to

$ bn in 2015. This decline was driven by

a combination of deflationary pressure and

a fall in offshore drilling activity, following

the tightening of international sanctions.

Notably, the number of offshore develop-

ment wells drilled declined by % over

2012-2015.

DW expects this trend to be offset in the

near-term, with spending forecast to rise by

% from $ bn in 2016 to a peak of over

$ bn in 2018. This rise is expected to be

driven by a resurgence in offshore drilling

activity, as several phases of the South Pars

project, as well as the Abouzar, Lavan and

Forouzan developments, are due to come

onstream. DW expects expenditure to

decline marginally over 2018-2020, reaching

just under $ bn in 2020. The majority

of key offshore projects are expected to

be onstream by this point in the forecast

period.

As per the onshore sector, offshore rig

and crew services accounts for the larg-

est proportion of offshore expenditure,

representing % of the market over the

2011-2015 period. This service line will

continue to dominate expenditure over the

forecast period, however, the market share

is expected to decline marginally to %

over 2016-2020.

Expenditure on coiled tubing services is

expected to see the strongest growth

over the next four years, with expenditure

forecast to rise at a % CAGR from $ m

in 2016 to $ m in 2020. Expenditure on production testing services

is also expected to see significant growth

over the 2016-2020 period, rising at a %

CAGR from $ m in 2016 to $ m by

2020. The market sizes for wireline logging

and wireline services are each expected

to rise at a % CAGR over the next four

years.

The increase in expenditure for these ser-

vice lines will be driven both by new wells

drilled at projects such as South Pars, as

well as the existing wellstock, with many of

Iran’s offshore fields having already under-

gone their first phase of development.Demand for technology that is able to

increase the rate of penetration (ROP)

and enhance the drilling performance is

expected to rise over the forecast period.

This will include technologies such as the

rotary steerable system (RSS) and Managed

Pressure Drilling (MPD) systems.

“Performance drilling will be needed

in offshore drilling.”Oilfield Services Provider“Offshore, the main focus right now

is on South Pars, and those projects

that are shared with Saudi Arabia,

Qatar and Oman.”Oilfield Services Provider“For offshore there are differences

in that the prices are higher, and

secondly, for the type of contract

and the minimum rate, sometimes

they charge on the basis of rotary

table pumping hours.”Oilfield Services Provider

$ millions

20152016

20172018

20192020

Casing & Tubing ServicesCementingCoiled Tubing Services

Completion Equipment

5

Directional Drilling ServicesDrill Bits

14

Drilling FluidsFishingMud Logging

5

MWD & LWDPerforation

12

Production Testing Rig & CrewSlickline Services

4

Solids Control Equipment

15

Stimulation

5

Surface Well Testing

7

Waste ManagementWireline Logging

5

Wireline Services

7

TOTAL

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Chapter 3 : Methodology

Onshore Rigs, Fixed Platforms and Downstream Expenditure Methodology

Fixed platform, refinery, gas processing data is s

ourced from DW’s in-house offshore oil & gas and downstream databases and assumptions are sourced from industry data points and consultations. Forecast drilling rig upgrade and newbuild expendi-

ture is calculated based on DW’s modelled view of the number of rig ad

ditions required to the fleet, including newbuild rigs and additional units required due to attritio

n. Assumptions are sourced from industry data points and consultations.

DW’s in-house offshore and downstream

databases are used to extract known Iranian

construction projects inclusive of fixed platforms,

refineries and gas processing plants. Capacities

are assumed where unknown.

For onshore rigs, the number of additions

required to the fleet for a given year is ca

lculated

based on historical rig demand, which is driven

by onshore wells drilled.

Known Greenfield Projects

Greenfield

Retrofit

Greenfield Capex

Retrofit Capex

(equipment replacement)

Equipment modelled within the Capex forecast for fixed plat-

forms, refineries and gas processing facilities includes compressor

packages, pumps, turbines, valves, electrical components, power

generation package, control systems, metering equipment, heat

exchangers, tanks, separator and reactor vessels, process units,

and pipes, bends, flanges and fittings.

Equipment modelled within the onshore drilling rig upgrade and

newbuild expenditure forecast includes drawworks, top drive,

rotary table, swivel, mud pumps, BOP (blowout preventer), mud

systems, iron roughnecks, power systems, handling tools pack-

age, and control systems. The forecast includes expenditure for

newbuilds expected to enter the fleet, and full rig replacement

due to attrition.

Key Equipment Modelled per Asset Type

0Year 1

Year 2Year 3

Year 4TotalC

apex

($m

)

Fixed platforms - 2 years

Gas processing - 4 years

Refinery - 4 years

Key Equipment Modelled per Asset Type

Collation of industry data points used to obtain cost assump-

tions per equipment and facility.

Cost assumptions are dependent on facility type and size.

Cost Assumptions

Industry standard indices are used to derive inflation by com-

ponent with DW pricing views incorporated for the forecast

period.

Inflation Assumptions

Retrofit and greenfield Capex for fixed platforms, gas processing

facilities and refineries is phased to provide a realistic overview

of project spend and timing from engineering to installation.Project Phasing

Gap analysis conducted to determine

assumed-yet-likely future greenfield projects

for each asset type.

Macro-economic assessment including historic

and forecast oil & gas production is considered.

Projects included in model as ‘assumed’ units

with no operator, and with assumed capacity

and installation year.

Assumed Greenfield Projects DW’s in-house offshore and downstream

databases are used to extract the installed base

of facilities, inclusive of fixed platforms, refineries

and gas processing plants.

Data is checked and updated where appropriate.

Facility population and age are the key determi-

nants of the retrofit market.

Facility Population

Average lifespan of equipment is used

to determine likely cycle for retrofit

requirements.

The retrofit replacement cycle will differ

per component.

For onshore rigs, an assumed attritio

n

rate is applied to determine the number

of newbuilds required due to attrition.

Replacement Cycle

Ass

et D

ata

Mod

ellin

g Pr

oces

s

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Chapter 2 : Introduction to Iran & Macroeconomic Overview

Iran: Historical Production & Exports

Iran’s oil & gas infrastructure sustained

heavy damage during the 1980-1988

Iran-Iraq War.

Oil production remained stagnant over

1995-1999 following the introduction

of a US trade embargo.Successive phases of the South Pars

gas and condensate field came on-

stream over 2003-2014, contributing

to rising natural gas production.Oil production stagnated over 2005-

2008, following the introduction of

UN and EU sanctions.Oil production fell by 17% in 2012 and

9% in 2013, following the tightening of

the sanctions.

Oil production rose by 6% in 2014,

following the interim agreement

reached between Iran and the P5 + 1

group in late-2013.

N.B. Oil export data unavailable

for 1980-1985, 2013-2014.

Gas export data unavailable for 2014.

Key events Iran-Iraq war (1980-1988)Average daily hydrocarbon production over

the 1980-1988 period was approximately

2.3 mmboe/d, compared to approximately

5.5 mmboe before the 1979 Revolution.

Iran’s oil & gas infrastructure sustained heavy

damage as a result of the conflict. Notably,

the Abadan refinery was shelled and largely

destroyed in September 1980. Facilities at

Kharg Island and Lavan Island were also

targeted during the conflict, including the

Salman, Resalat and Reshadat fields. US trade embargo (1995)In March 1995, the Clinton Administration

issued an executive order prohibiting US

companies from investing in Iran’s oil & gas

sector. This was followed in May 2015 by the

introduction of a trade embargo banning US

trade with and investment in Iran. US purchas-

es of Iranian crude oil in 1994 amounted to

an estimated $4 billion, or approximately one

fifth of Iran’s oil revenues. Iran’s oil production

subsequently stagnated over the 1995-1999

period, falling marginally from 3.7 mmbbl/d in

1995 to 3.6 mmbbl/d in 1999.Development of South Pars Iran’s giant South Pars gas and condensate

field was first discovered by the National

Iranian Offshore Oil Company in 1990. The

field is being developed over 24 phases, with

first production from Phases 2 & 3 of the

project having been achieved in 2003.

Successive phases of the project came on-

stream over the 2003-2013 period, including

Phases 1, 4 & 5 in 2004, 6, 7 & 8 in 2007 and

9 & 10 in 2008, contributing to rising natural

gas production.

Introduction of UN and EU sanctions

(2006-2008)In December 2006, the UN introduced its

first round of sanctions on Iran, involving a

trade embargo on nuclear-related materi-

als and technology. These sanctions were

strengthened in 2007 to include asset freezes

on individuals and institutions linked to Iran’s

nuclear program, and in 2008 to include

sanctions on Iranian banks. In April 2007, the

first round of EU sanctions was introduced,

involving an expanded list of frozen assets

relating to the nuclear program. Iran’s oil

production remained stagnant over this

period, falling marginally from 4.24 mb/d in

2005 to 4.18 mmbbl/d in 2008. Oil exports

also declined from 2.62 mmbbl/d in 2007 to

2.30 mmbbl/d in 2009.Tightening of the sanctions (2012)

In January 2012, the US introduced sanc-

tions on Iran’s Central Bank. The EU also

broadened its sanctions to include a ban on

importing Iranian crude oil, and a freeze on

the assets of Iran’s Central Bank. Subse-

quently, oil production fell significantly by

17% in 2012, and by a further 9% in 2013.

Oil exports also declined significantly in 2012,

falling by 36% from 2.2 mb/d to 1.4 mb/d.Interim agreement and sanctions relief (2013)

Oil production rose by 6% to 3.38 mb/d in

2014, following the preliminary agreement

reached in November 2013 between Iran

and the P5 + 1 group to curb Iran’s uranium

enrichment in exchange for sanctions relief.

Output continued to rise in 2015, reaching

3.59 mmbbl/d.

Figure 2: Iran Historical Oil & Gas Production & Exports 1980-2014

Sources: EIA, Douglas-Westwood

0

1

2

3

4

5

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Prod

uctio

n an

d Ex

port

s (m

mbo

e/d) Oil ProductionGas ProductionOil ExportsGas Exports

April 1980 The US and Iran end diplomatic ties due to

the US hostage crisis.Sept. 1980 Iraq invades Iran.

Aug. 1988 Iran and Iraq agree a ceasefire.May 1995 US imposes a trade embargo on Iran.

Dec. 2006 First round of UN sanctions are

imposed on Iran.April 2007 First round of EU sanc-tions introduced.

Jan. 2012 US tightens sanctions on Iran.

Oil ProductionGas ProductionOil ExportsGas Exports

2016

Iran Oil & Gas Market Forecast

Prospects, Technologies, World Markets

2016-2020

Courtesy Statoil

Courtesy Statoil

Douglas-Westwood’s (DW) NEW publication the Iran Oil & Gas Market Forecast provides detailed analysis of key markets within Iran’s oil & gas sector, including historical and forecast drilling and produc-tion, oilfield services expenditure, and onshore and offshore rig demand. Highlights from the new edition of the report, which covers the 2016-2020 period, include a forecast 12% compound annual growth (CAGR) in onshore oilfield services expenditure (to reach $2.23bn in 2020), a 6% CAGR in the active onshore rig fleet and a 5% CAGR in gas process-ing Capex (forecast to reach $7.4bn in 2020). The macro-economic commentary within the Iran Oil & Gas Market Forecast report has been updated to reflect the current climate with regard to sanctions – including an overview of the sanctions that have been lifted and those that remain in place following Implementation Day. Subsequently, the macro-eco-nomic commentary within the report also focuses on the key barriers to entry for investors.

Despite these remaining barriers to entry, the lift-ing of the international nuclear-related sanctions poses significant upside potential for Iran’s oil & gas production –the country has set ambitious targets for increasing its output in the coming years. The Iran Oil & Gas Market Forecast includes historical and forecast onshore and offshore oil & gas production over 2006-2022, in addition to onshore and offshore oil & gas development wells drilled. This analysis, up-dated for the new edition of the report, is based on a thorough project-by-project review of upcoming field developments and a conservative assessment of the timing of activity. The report contains a detailed overview of the key onshore and offshore E&P op-

erators, as well as key planned or ongoing projects.

An anticipated rise in drilling activity will lead to in-creased demand for both onshore and offshore rigs. The Iran Oil & Gas Market Forecast contains a de-tailed overview of historical and forecast rig demand over 2011-2020, as well as the current identified fleet and competitive landscape. Drilling activity has positively impacted the oilfield services market and the Iran Oil & Gas Market Forecast provides histori-cal and forecast oilfield services expenditure for 20 oilfield service lines in Iran, including rig & crew, cementing, and fishing.

In its analysis of key production infrastructure, the report includes coverage of the fixed platforms market, including historical and forecast installations, as well as historical and forecast capital expenditure over 2011-2020. Analysis of the onshore pipelines market includes an overview of the installed length and prod-uct type of identified pipelines in Iran over 2011-2020, as well as historical and forecast capital expenditure and kilometres installed for the Middle East.

The report also provides coverage of fixed plat-forms, onshore pipelines and key downstream facilities, including refineries, gas processing facilities and petrochemical facilities, as well as the liquefied natural gas (LNG) market. DW’s market analysis for refineries, gas processing, and petrochemicals in-cludes historical and forecast cumulative capacity, as well as maintenance expenditure, over 2011-2020. For refineries and gas processing, the report also includes historical and forecast capital expenditure segmented by equipment type.

Iran Oil & Gas Market Forecast 2016-2020energy business insight

e: research@douglaswestwood.com t: +44 (0)203 4799 505

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The Iran Oil & Gas Market Forecast contains:• Introduction to Iran and macro-economic overview

– The report contains detailed information on Iran’s oil & gas sector, including analysis of the impact of the international sanctions and an overview of the post-Implementation Day sanctions environment. The report also contains detailed commentary on Iran’s current hy-drocarbons policy. Additional information is provided on oil & gas prices and breakeven prices for Iran compared to the rest of MENA.

• Coverage of a range of markets – Coverage of a range of markets – The report provides in-depth coverage of key markets within Iran’s oil & gas sector, including oilfield services, onshore and offshore rigs, fixed platforms, onshore pipelines, and downstream facilities (refineries, gas processing, petrochemicals and LNG).

• Detailed analysis – Analysis of key markets included in the report is based on data generated in-house using models exclusive to DW, including DW’s own D&P models for production and wells drilled. The report also utilises a multitude of data sources, including DW’s upstream & midstream construction and rig fleet data, drawing on a range of established DW reports and in-sight, including the World Drilling & Production Forecast, the World Onshore Pipelines Market Forecast, and the World Oilfield Services Market Forecast.

• Focus on key projects – The report provides a detailed overview of key onshore and offshore oil & gas projects which are expected to drive growth in the rig and oilfield services markets, as well as onshore pipelines projects planned or under construction.

• Expenditure forecasts – The report contains forecasts for onshore rig upgrade and newbuild expenditure, onshore and offshore oilfield services expenditure, fixed platforms capital expenditure, maintenance expenditure for refiner-ies, gas processing and petrochemical facilities, and capital expenditure for refineries and gas processing facilities.

Why purchase the Iran Oil & Gas Market Forecast?The potential uplift in Iran oil & gas activity is viewed as a major opportunity for the international operator and service sector. This new study from Douglas-Westwood brings to-gether a full appraisal of the ‘size of the prize’ in key identified sectors, upstream, midstream and downstream.

DW’s market forecasting is trusted by sector players worldwide, with clients including the world’s top-10 oil & gas companies, top-10 oilfield services companies and top-10 private equity firms. DW is renowned for its work in difficult to access geographies and markets including the Middle East and onshore & offshore oilfield services and equipment.

The report is essential for financial institutions, equipment manufacturers, engineering contractors, oilfield services providers, operations & maintenance companies and con-tractors, oil & gas companies, and government departments wanting to make more informed investment decisions.

Our proven approach includes:• Unique and proprietary data – Updated year-round

from published sources and insight gained from indus-try consultation.

• Proven market-modelling – The report draws from DW’s suite of market models that have been devel-oped and tried and tested throughout our 25 years of business.

• Concise report layout – Consistent with DW’s commitment to delivering value for our clients, all our market forecasts have a concise layout consisting of in-dustry background and supporting materials condensed to enable quick review with ‘speed-read’ summaries of key points throughout.

2016

Iran Oil & Gas Market Forecast

Prospects, Technologies, World Markets

2016-2020

Courtesy Statoil

© 2016 Douglas-Westwood 2 Iran Oil & Gas Market Forecast 2016-2020By purchasing this document, your organisation agrees that it will not copy or allow to be copied in part or whole or otherwise circulated in any form any of the contents without the written permission of Douglas-Westwood

Contents

Table of Contents

1 Summary & Conclusions ..........................................7Summary ......................................................................................................................................... 8

Conclusions .................................................................................................................................... 9

2 Introduction to Iran & Macroeconomic Overview 10Iran: Historical Production & Exports .................................................................................... 11

Iran’s Economic Sanctions: Details of the Sanctions ............................................................ 12

Iran’s Economic Sanctions: Impact on the Iranian Economy .............................................. 13

Iran’s Economic Sanctions: Outlook Post-2015 .................................................................... 14

Oil Price Volatility ....................................................................................................................... 15

Natural Gas .................................................................................................................................. 16

Iran vs. Rest of MENA: Breakeven Prices .............................................................................. 17

Iran’s Current Hydrocarbons Policy ....................................................................................... 18

3 Methodology ............................................................ 19Drilling & Production Methodology ........................................................................................ 20

Onshore Rig Demand Methodology ....................................................................................... 21

Offshore Rig Demand Methodology ....................................................................................... 22

Oilfield Services Methodology .................................................................................................. 23

Onshore Pipelines Methodology .............................................................................................. 24

Onshore Rigs, Fixed Platforms and Downstream Expenditure Methodology ................ 25

Downstream Methodology ....................................................................................................... 26

4 Drilling & Production............................................. 27Summary of Key Projects .......................................................................................................... 28

Onshore Drilling & Production Overview ............................................................................. 29

Key Onshore E&P Operators .................................................................................................. 30

Key Onshore Projects ............................................................................................................... 31

Key Onshore Projects ............................................................................................................... 33

Offshore Drilling & Production Overview ............................................................................. 34

Key Offshore E&P Operators .................................................................................................. 35

South Pars Gas & Condensate Development Project ......................................................... 36

Key Offshore Projects ............................................................................................................... 37

Further Projects & Upside Potential ....................................................................................... 39

5 Onshore Rig & Oilfield Services ......................... 41Onshore Rig Market Forecast .................................................................................................. 42

Identified Onshore Rig Fleet: Competitive Landscape ........................................................ 43

Onshore Rig Market: Upgrade & Newbuild Capital Expenditure ..................................... 44

Onshore Oilfield Services Expenditure .................................................................................. 45

6 Offshore Rig & Oilfield Services ......................... 46Offshore Rig Market Forecast .................................................................................................. 47

Identified Offshore Rig Fleet: Competitive Landscape ........................................................ 48

Offshore Oilfield Services Expenditure .................................................................................. 49

7 Onshore & Offshore Infrastructure ................... 50Fixed Platforms Market .............................................................................................................. 51

Onshore Pipelines Market......................................................................................................... 52

Key Pipeline Projects.................................................................................................................. 53

8 Downstream Facilities ........................................... 55Refinery Capital & Maintenance Expenditure ........................................................................ 56

Gas Processing Capital & Maintenance Expenditure ........................................................... 57

Petrochemicals Maintenance Market ...................................................................................... 58

Liquefied Natural Gas Market .................................................................................................. 59

9 Appendix .................................................................. 60Project Listings: Onshore .......................................................................................................... 61

Project Listings: Offshore .......................................................................................................... 62

Project Listings: Fixed Platforms .............................................................................................. 63

Project Listings: Downstream .................................................................................................. 65

Drilling & Production Barriers and Limitations..................................................................... 67

Onshore Rig Data, Analysis & Assumptions .......................................................................... 68

Oilfield Service Line Cost Inclusions ....................................................................................... 69

Oilfield Services Barriers and Limitations .............................................................................. 70

Data and Text Conventions ...................................................................................................... 71

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Contents

Figures

Figure 1: Iran Total Hydrocarbons Production .................................................................................................8

Figure 2: Iran Historical Oil & Gas Production & Exports 1980-2014 ............................................. 11

Figure 3: Iran GDP per Capita and Unemployment Rate ....................................................................... 13

Figure 4: Iran Imports, Exports (Year-on-Year % Changes) and Inflation Rate ............................. 13

Figure 5: Historical Brent and WTI Oil Prices, January 2010-July 2015 ........................................... 15

Figure 6: Brent Annual Average Spot Price Forecasts, 2010-2020 .................................................... 15

Figure 7: Levelised Cost of Energy ($/MWh) in 2020 .............................................................................. 16

Figure 8: Henry Hub Annual Average Spot Price Forecasts, 2010 - 2020 ..................................... 16

Figure 9: MENA Oil Exporters’ Fiscal Breakeven Oil Price .................................................................... 17

Figure 10: MENA Oil Exporters’ External Breakeven Oil Price ........................................................... 17

Figure 11: Iran Onshore Production ................................................................................................................. 29

Figure 12: Iran Onshore Development Wells Drilled ............................................................................... 29

Figure 13: Iran Offshore Production ................................................................................................................. 34

Figure 14: Iran Offshore Development Wells Drilled ............................................................................... 34

Figure 15: Iran Rig Fleet and Implied Utilisation ........................................................................................... 42

Figure 16: Iran Identified Drilling Fleet HP ...................................................................................................... 43

Figure 18: Iran Onshore Rig Upgrade & Newbuild Expenditure ........................................................ 44

Figure 17: Iran Onshore Rig Upgrade and Newbuild Expenditure by HP Category 2016 ... 44

Figure 19: Iran Onshore Oilfield Services Expenditure Breakdown, 2011-2020 ........................ 45

Figure 20: Iran Contracted Offshore Rigs ....................................................................................................... 47

Figure 21: Iran Offshore Rig Dayrates and Utilisation 2010-2015...................................................... 47

Figure 22: Iran Offshore Oilfield Services Expenditure Breakdown, 2010-2020 ........................ 49

Figure 23: Iran Fixed Platform Installations ..................................................................................................... 51

Figure 24: Iran Fixed Platforms Market Capital Expenditure ............................................................... 51

Figure 25: Total Onshore Middle East Pipeline Capex and Km Installed 2011-2020 ............... 52

Figure 26: Identified Pipeline Projects Split by Product Type in Iran 2011-2020 ........................ 52

Figure 27: Identified Pipeline Projects Split by Diameter Size in Iran 2011-2020 ...................... 52

Figure 28: Percentage of Onshore Km Installed in Iran versus Rest of Middle East .................. 52

Figure 29: Iran Refinery Maintenance Expenditure and Cumulative Capacity .............................. 56

Figure 30: Iran Refinery Capital Expenditure ................................................................................................. 56

Figure 31: Iran Gas Processing Maintenance Expenditure and Cumulative Capacity ............... 57

Figure 32: Iran Gas Processing Capital Expenditure .................................................................................. 57

Figure 33: Iran Petrochemicals Maintenance Expenditure ...................................................................... 58

Figure 34: Iran Gas Processing Cumulative Capacity ................................................................................. 58

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Contents

Tables

Table 1: Comparison of Iran’s Hydrocarbon Contract Systems .......................................................... 18

Table 2: Iran Rig Fleet and Implied Utilisation ............................................................................................... 42

Table 3: Iran Identified Rig Fleet ........................................................................................................................... 43

Table 4: Iran Onshore Oilfield Services Expenditure Breakdown, 2015-2019 ............................. 45

Table 5: Iran Current Identified Offshore Rig Fleet .................................................................................... 48

Table 6: Iran Offshore Oilfield Services Expenditure Breakdown, 2015-2019 ............................. 49

Table 7: Identified Iranian LNG Projects .......................................................................................................... 59

Table 8: Iran Onshore Projects ............................................................................................................................. 61

Table 9: Iran Offshore Projects ............................................................................................................................. 62

Table 10: Iran Fixed Platforms ............................................................................................................................... 63

Table 12: Iran Refinaries ............................................................................................................................................ 65

Table 11: Iran Gas Processing Facilities ............................................................................................................. 65

Table 14: Iran Petrochemicals Facilities ............................................................................................................. 66

Table 13: Iran LNG Projects ................................................................................................................................... 66

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Date of publication:17th March 2016

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