Iran's energy sector review

Six leading states of the world have started negotiations with Iran on its nuclear issue. It has been agreed to sign a long-term nuclear deal before Nov.24, or to extend the temporary agreement. Iranian and Western representatives state that the main problem is the volume of the uranium enriched by Iran, as well as the issues related to lifting the sanctions imposed on Iran. Iran’s opportunities and demands Currently, Iran possesses 19,000 IR1 and 1,000 IR2 centrifuges and only 9,000 of them are operational. Uranium hexafluoride (UF6) gas has been pumped into these centrifuges for enrichment. Moreover, a nuclear plant with the capacity of 1,000 megawatts operates in Iran. Although the construction of Bushehr nuclear power plant started before Iran’s Islamic Revolution, Germans suspended the implementation of this project in 1979. Iran and Russia reached an agreement in 1992 to construct Bushehr nuclear power plant. The plant’s construction was resumed in 1996 and it bega...

Iran and Azerbaijan have the potential to cooperate in the oil and gas sector, since the two countries boast huge deposits of oil and gas, and are capable to explore, produce, and export oil and gas. In October, the National Iranian Oil Company signed a memorandum of understanding in Baku to conduct exploration operations in the Caspian Sea. Iranian Oil Minister Bijan Namdar Zanganeh, accompanied by a delegation led by President Hassan Rouhani, arrived in Baku last week. In an interview with the Trend Agency, Zanganeh said in addition to the participation in the development of Azerbaijan’s Shah Deniz gas field, Tehran could cooperate with Baku in other projects. “In order of importance, cooperation in the development of Caspian Sea fields, cooperation in the establishment of a pipeline to export gas from the two countries to Europe, issues related to the underground storage of Iranian gas in Azerbaijan, transaction of oil products, and investment in other countries, are the most...

As the Iranian government has accelerated development of several upstream gas projects to increase the output by 100 million cubic meters per day by winter, the consumption rate broke a new record in autumn, increasing by 100 million cubic meters per day (mcm/d) on November 9th compared to the same day in last year. The Middle Eastern country’s gas consumption reached 520 mcm/d on Nov.9, which of 362 mcm/d was consumed in the housing sector, according to the National Iranian Gas Company’s (NIGC) spokesman Majid Boujarzadeh, speaking to  Shana  News Agency on November 10th. The report says that about 86 mcm/d and 70 mcm/d of gas were delivered to big industrial sectors and power plants respectively. The figures indicate that Iran has decreased gas delivery to power plants significantly compared to the last months due to a huge increase in the gas consumption of housing sector. Iran sits on 33.6 trillion cubic meters of natural gas reserves; ranks the first in t...

Despite 600 kilometers of joint border, trade between Iran and Azerbaijan stood at $210 million in 2013. Both Iran and Azerbaijan are dissatisfied with the current volume of trade. Following to the visit of Azerbaijani president to Tehran in early spring, Iranian President Hassan Rouhani is scheduled to travel to Baku on November 12, aiming to sign 10 MOUs with Azerbaijan, including energy MOUs. After eight years of political and security struggles between Iran and Azerbaijan, which culminated during the second term of Iranian former president Mahmoud Ahmadinejad, the bilateral ties have becoming ameliorated at a brisk pace after President Hassan Rouhani took power in Iran in August 2013. Over the past year, several senior Azerbaijani officials have visited Iran and several Iranian officials as well as trade and economic delegations have come to Azerbaijan. The two countries signed an MOU in October to cooperate in oil exploration in the Caspian Sea. Prospect of Iran-Azerb...

OPEC oil basket price slipped to $80.64 per barrel on Nov.3 from a mid-June figure of about $108. Iran hasn't announced officially any figure for its crude oil price, but Mehr News Agency reported in late October that Iran set its oil price at $86, as opposed to an average of $104 per barrel over the past seven months.  The Middle East country's yearly budget was based on $100 per barrel oil. Iran reportedly offers discounts as well as free shipping services for his customers to help restore the huge drop in oil export levels started in 2012 due to Western sanctions. Iran 's crude oil export went from 2.5 million barrels per day (mbpd) in late 2011 to 1.07m bpd in late 2013. After sanctions eased due to the interim nuclear accord obtained on November 24, 2013, Iran 's crude oil increased, mostly because of soaring the natural gas condensate exports. However, according to the Custom Administration's latest report published on Nov.3, Iran exported a b...

Gas condensate export, which shares about one third of Iran 's total crude oil exports, rose after a two-month plunge. Iran 's Custom Administration released a common report on Oct.28, saying that Iran 's total non-oil exports reached $26.943 billion. The monthly "detailed report" hasn't been published on custom's official website yet, but the "detailed report" obtained and published on Iran's Donya-e-Eqtesad daily news on Oct.29 indicates that Iran's gas condensate export reached 10.849 million tons during seven months of Iran's fiscal year. Iran 's fiscal year starts on March 21. Iran includes gas condensate (ultra-light crude oil) in non-oil exports basket. According to latest monthly report published by the Custom Administration about the country's non-oil exports in first half on current fiscal year, Iran exported some 9.223 million tons of gas condensate. Followed by about 1.616 million tons of condensate la...

Aside from threats over Iran's yearly budget law based on $100/barrel of crude oil, the country may encounter another blow from low oil price - to its petrochemical sector. The $100 oil price has both direct effect and indirect damage on Iran's petrochemical sector, by declining its shares value at stock markets. Iran's petrochemical industry accounts to 40-42 percent of the country's total capital market. Capital markets are financial markets for the buying and selling of long-term debt or equity-backed securities. The huge share of petrochemical industry in Iran's $156-billion worth capital market (1 USD/31,000 rials, based on open market exchange rate) demonstrates the importance of petrochemical industry in Iran's economy. During the current year Iranian calendar year (started on March 21), the petrochemical units faced an index drop at the capital market, due to uncertainty in getting the crude oil and gas price set for them by the government. ...