Anyone entering the premises of the Research Institute of Petroleum Industry (RIPI) for the first time can never imagine the intensity of work there. None of Iran’s rivals imagined that such important projects would come on-stream in Iran during years of tough sanctions.
Since sanctions were lifted in January, RIPI has accelerated its activities and it has been even cooperating with the Atomic Energy Organization of Iran.
RIPI has set up a chain of top research institutes from across the globe in a bid to acquire cutting edge technology for Iran’s petroleum industry.
In an interview with Iran Petroleum, Amir Abbas Hosseini, deputy president of RIPI for technology and international affairs, speaks about the RIPI activities.
Q: Which fields do RIPI and AEOI are working together in? How does RIPI use centrifuges?
A: One of our tasks is benefiting from knowledge available in the country in favor of the petroleum industry. Petroleum industry equipment is of high significance to us. One of the most important aspects of petroleum industry is upstream sector, which is a top priority for Iran’s Ministry of Petroleum. In our upstream studies in rock engineering, centrifuges are used in separating rock from oil and identifying the movement of oil fluid in Earth layers and conducting studies on reservoirs, as well as finding traps. Foreign companies refuse to provide such equipment because of their dual use and that causes restrictions for us. Meantime, the Atomic Energy Organization of Iran and relevant bodies have applied nuclear technology in other sectors. For instance, centrifuges have been developed for the Ministry of Health.
Following meetings led by RIPI, AEOI officials agreed with the development of centrifuges for RIPI as the first step in nuclear knowledge spillover into the petroleum industry. Fortunately, RIPI is affiliated with Ministry of Petroleum and due to the ministry’s insistence the first contract was signed for the development of these apparatuses.
Q: What are the terms and conditions and duration of this contract?
A: This agreement involves making 10 centrifuges. The contract for making a first centrifuge has been signed for a 180-day period. Of course, AEOI has already started its work and I think the apparatus will be delivered in less than six months.
Q: Do you envisage any specific sector for using these centrifuges?
A: Yes, they are used in upstream reservoir studies. More specifically they are used in Azadegan, Ahvaz and Yadavaran oil fields development. They are also used in the routine activities of RIPI.
Q: How much do these centrifuges and foreign-made ones differ in price?
A: The centrifuges purchases from overseas are estimated to cost IRR 40 billion each, while they cost IRR 10 billion in Iran, according to an AEOI assessment. It means that we have got our necessary equipment at a price one-fourth the price of foreign products. Meantime, one has to take into consideration that due to their dual use, these centrifuges could not be purchased from abroad. These devices are strategic for Iran’s petroleum industry.
Q: What has the RIPI done for broadening its practical knowledge in this regard?
A: In this regard we have created an international network of technology. As far as development of technology is concerned we have two options; first, we start from the scratch and take the idea to the lab, bench and finally pilot scale. Then we enter the phase of industrialization and commercialization. The problem with this process is that it takes too much time. The second method is the reverse which is expanding in developing countries. In this method, a complex is built under foreign license. The proprietor of this license is often a developed country. The license is brought into a developing country. The stages are gone through from industrialization back to pilot, but not farther (There are nine steps, pilot stands in the 6th position). The level of technological maturity is time-taking in the first method and it has its own risks and it will keep the industry from catching up with the development of technology and it will resort to other sources. On the other hand, in the second method, the proprietor of technology is not interested in offering any assistance in the lower links of development of technology (steps 1 to 6) because it owns the knowledge. Resolution of this issue has different solutions in different countries. In Iran, we have applied our own nationalized method due to the policies of the Resilient Economy as well as changes in Iran’s political interactions with the world. As far as upstream policies are concerned we have applied two major principles of the Resilient Economy, i.e. endogenous development and outward-looking interaction. Endogenous development is in fact moving from down to top at different levels of energy development and going through stages of technology development from step 1 to 9. Outward-looking interaction is aimed at reducing this time. In a sustainable knowledge-based economy, receipt of raw materials must be curbed while the value-added chain must be expanded. That is when the economy will become sustainable and resilient.
For this purpose, the RIPI had to benefit from its extraordinary specialized manpower potential and use the created potentialities to research and applied projects. These potentialities have expanded in recent years.
Furthermore, the accountability time must be reduced. In recent years the RIPI has set up an international network of foreign partners that own technology.
Q: What is the basis of the activities of this international network?
A: This drive was in harmony with the petroleum industry’s priority. Our priority is to resolve the problems of this industry, and move based on demand. In other words, we do not conduct research merely for research, but our objective is to resolve a problem of petroleum industry. This is our major difference with the universities. At RIPI we have to go through step four upwards, i.e. from lab-scale upwards while the main task assigned to universities is to move in lower links of technology and develop technology. The chain of knowledge is completed in this way. We have used this issue in forming technological network.
Q: Can you provide an example to explain this process?
A: In the upstream oil industry, the top priority is to enhance recovery rate. In this way, the problems pertaining to production, reservoir studies, enhanced recovery and the environment will be resolved altogether. In order to deal with all these issues, the RIPI set up a technological network of top international companies to make contribution. In the downstream sector, the Ministry of Petroleum insists on the development of technologies related to repeatable units of petroleum industry. Ministry of Petroleum has tasked RIPI with establishing a sweetening institute for gas products. Similar networks are also used in the environment and energy sectors that would help enhance the RIPI capacity and help us contribute to more projects.
Q: Which countries are most represented in network members?
A: The Netherlands, France, Germany, Brazil, South Korea, Canada and Norway are present in this network. There are also some companies from Britain and Austria. In total, more than 20 countries are working with Iran in this field. Sixty percent are companies and the remaining 40% are universities.
Q: Which sectors are these countries involved in?
A: For instance, France is helping in the upstream industry and in enhanced recovery. In the downstream sector, it is involved in gas sweetening. With Germans, we are cooperating in catalyst production. We cooperate with Austria in upstream oil industry.
Q: Which sectors are related to cooperation with Brazil and England?
A: Heavy crude oil production is one of the important issues to us. Of course it pertains to the future and one of the RIPI strategies. The RIPI is getting ready for the future. That is why we are cooperating with Brazilian companies. Furthermore, for the first time, a consortium of Brazilian companies involved in upstream and field development is cooperating with us. England is working with us in the development of fields in the upstream sector.
Q: When was this network established?
A: Each company or university started its cooperation with us at a different time. But generally speaking, the network has taken shape over the past two years.
Q: Given the two-year history of this network, has it had any significant achievements?
A: Yes, definitely. We use the achievements of this network in upstream projects. We are working with one of these companies in the development of Ahvaz and Yadavaran oil fields. We use this network in our projects for studying reservoirs. We also refer to this network for some studies related to reservoir engineering. Some companies are internationally reputed. The RIPI has great potential, but it has to cooperate with well-known international companies in a bid to upgrade its technology and acquire updated knowledge. In master development plans for fields, NDP and FFS we cooperate with leading companies.
In the downstream sector, chemicals, additives and catalysts are advantages for us. Such cooperation has already taken shape in sweetening. Our partners will be named soon.
Gas is an important and strategic issue for this industry. That is why RIPI plans to boost its knowledge through interaction with top international companies in a bid to expand its sweetening procedures. The Netherlands’ Delft and Utrecht universities, Imperial College of London, Norway’s University of Bergen and a Brazilian institute are working in the upstream sector within the framework of a consortium. Britain’s Synergy Company and a Canadian firm are present in surface installations.
Q: Does Iran have any plans to export the knowledge it acquires?
A: In some sectors yes, but in some other sectors no. Our priority is to recover further from oil and gas reservoirs and resolve the problems of the petroleum industry in the future. Development of technology lies in the upstream sector and it will make great contribution to wealth generation in the country. One percent increase in recovery will add at least $200 billion to our wealth, with oil price at $40 to $50 a barrel. It means that we have to go that way.
We also provide services in some sectors. We are offering technological services to neighboring countries. The first reason is that our human power is highly potential. The second reason is the manufacturing of equipment despite all obstacles and restrictions. And the most important reason is the existence of huge oil and gas reserves. Therefore, the objective is to make Iran a service-providing hub in the region in terms of education and services. In our collaboration with some international companies, we are pursuing this objective.
Q: What has Iran achieved from cooperating with international companies?
A: We have to take into account the fact that we have got out of unjust sanctions after 10 years and we have just entered an atmosphere of interaction with the world. The Joint Comprehensive Plan of Action is not an old document and we cannot expect foreign companies reach agreement quickly with us. We are just starting.
Naturally, we are expecting the waiting period for investment in the country and transfer of technology to be reduced. We have to create capacities in order to tempt back foreign companies. The RIPI is serving as a partner for attracting foreign companies. It also develops technology based on national policies and principles.
Q: How long will this process take?
A: Definitely this process will not be short-term, but we are making our best to accelerate the affairs. The second part of this issue lies outside the RIPI. Hopefully our petroleum industry has realized this issue very properly. For instance, the first technological proposal for Ahvaz field has been endorsed. The first desalting proposal with foreign partners has been also submitted. What we must do is to enhance our capacities; otherwise, we will face the same old problems.