Quchan Block Kavir Block Ilam Block Caspian Energy Grid – Energy Golden Gate –Energy Silk Road New Opportunities for Upstream & Downstream Partnership in the I. R. IRAN Danan Block Lale Block Kalat Block Exploration Directorate Moghan 1 Block Naft shahr Block Raz Block Maraveh. Tapeh Block Taban Block Ferdwsi Block Gu lf By: Mahmood Khaghani Fasa Block Dayyer Block Bandar abbas Block Alvand Block The Iranian Energy Sector Challenges Moghan 2 Block
Opportunities and Challenges for Developing Cooperation between the I. R. Iran and potential investors in down stream sector during Post Sanctions era: What I said recently : Many countries never in reality slowed down their trade with Iran. Because, Iran is not only a reliable business partner, it is also the Golden Gate for trade with Caspian Sea, Central Asia and Cuscuses region as well as the Seven Seas. The fact that we can highlight : South Korea and Iran found each other as reliable partners in all business and industrial sectors. Today I have the pleasure of saying that in fact new phase of cooperation with Iran in the post sanction era is the continuation of many countries cooperation with Iran during sanction era.
The Medieval concept of the Seven Seas has its origins in Greece and Rome. The Seven Seas referred to the following seas: • The Adriatic Sea • The Mediterranean Sea including the Aegean Sea, Ionian Sea, Adriatic Sea & Tyrrhenian Sea. • The Black Sea • The Caspian Sea • The Persian Gulf • The Arabian Sea which is part of Indian Ocean • The Red Sea including the closed Dead Sea and the Sea of Galilee. The Seven Seas in medieval times also included: • The Atlantic Ocean • The Aegean Sea • The Indian Ocean • The North Sea
a 21 st Century Approach Problem with Upstream Oil & Gas as a commodity is Energy Competition; • Producers like Iran, members of OPEC, Russia etc. compete to secure demand • Consumers like EU, South Korea, Japan, …and China compete to secure supply • Middlemen/traders benefit from competitive, volatile & opaque markets How can Iran faces its energy challenges ? Minister Zanganeh : Energy Diplomacy. What he means? Perhaps he means energy economics ?
Indian, Iran and Afghanistan sign trade corridor deal India agrees to finance the development of Chabahar port. A transit hub for three countries & other countries.
Iran & the Oil & Gas Market In the short term, vested interests and competition in upstream markets in oil and gas are impossible. What we need to do? My friend Chris Cook at University College London : Downstream supply of gas and associated energy services in heat/cooling; electricity and power (particularly motive power such as freight transport) where there is a common interest in enhancing efficiency & cost reduction, would serve Iran to turn challenges into opportunities during post sanction era.
Iran & the petroleum down stream + Gas Market It is a fact : Time horizons for the development of intergovernmental (Government to Government - G 2 G) agreements takes a long time to have an outcome. Solution: Business to Business (B 2 B) agreements are capable of meeting the challenges of funding Iran's transition to a low carbon economy in the post sanction era. I am sure you all agree with me the extent that this represents a historic opportunity for a forward thinking Chamber of Commerce (ICCIMA) Education & Research Institute, IIES, RIEMP and other NGOs to focus on this ideas. Mr. Ramazani (Director of International Affairs -NIGEC, in Ashgabat-December 2014) talked about the importance of energy efficiency through the application of the 'least carbon fuel cost' principle. He recognised that not only does this tend to conserve a valuable (and finite resource) but also pointed out that the more expensive natural gas becomes the more profitable it is to save it.
Challenges + Opportunities for Iran: How investment may be made in Iran? Iran New. Clear - Market in Petroleum Products +Gas: Recent failure of Doha meeting proved the fact that the oil market has probably reached an inflection point and that the future oil price is unlikely to exceed $50 -$60/barrel again other than briefly. On that basis I think that upstream investment in an oversupplied and volatile competitive market will be difficult even if all sanctions are rapidly removed, and major banks enter into business as usual with Iran. The place for investment in Iran ? In my view in the short term, in Iran’s downstream petroleum/energy sector. Also, in the regional energy infrastructure which delivers: electricity, heat, cooling and motive power to Iran and neighbouring nations. Here we increasingly find that ECO-Caspian Sea neighbours are happy to co-operate on energy cost reduction, efficiency and renewable energy, and indeed Iran has recently committed >$100 bn to energy efficiency measures. As has been said - the cheapest carbon fuel of all is carbon fuel saved!
A Globally Networked Market in Petroleum Products + Gas Our proposal for a globally networked market in petroleum products + gas (as it may be also proposed to GECF for consideration) comprises two key elements: Swap protocols – partnership agreements whereby petroleum products + gas is not sold as a commodity but is supplied in exchange for the supply of products or services. e. g. a gas for power swap, or a CNG for transport swap Prepay energy credit instruments – promises issued by energy service providers in exchange for value and returnable in payment for energy services supplied. Key to such a networked market in petroleum prodcts + gas is what my friend Mr Cook refers to as a gas market user agreement, which constitutes the kind of multilateral institution referred to by President Rouhani at Davos in 2014. Such an agreement would link associations of producers and consumers and would incorporate agreed market standards. There is the possibility of risk pooling – a ‘petroleum products+Gas Clearing Union' – in close liaison with central banks, with risk management (rather than risk taking) by private banks.
21 st Century Caspian Energy Grid & Iran role HVDC Links Turkmen Gas/ Power Hub The Energy Silk Road
21 st Century energy grids need literally trillions of dollars in investment. . . how? . . where from? Regional market global market Europe Russia & CIS Caspian Americas Middle East & Africa Asia Pacific 12
Energy swap? Energy Swaps are not new: during my career at the Ministry of Petroleum(NIOC) I was involved in; • Caspian Oil Swap – Caspian crude oil swapped for Persian Gulf oil • Gas to Power Swaps: Iran with Republics of Azerbaijan and Armenia Gas to power swaps transforms competition for energy as a commodity to cooperation for energy as a service Iran’s 'New. Clear' - Implementation Road Map: We have long seen the Caspian Sea unresolved legal regime and in particular the South Caspian – where the legal framework is problematic at best and intractable at worst – as the starting point for what we term the New. Clear next generation gas market initiative.
Dispute Resolution ? It will not have escaped attention of this eminent Summit that a key function in such market architecture is neutral dispute resolution which is specific to the natural gas market. Our suggestion for gas-specific dispute resolution draws upon and develops the example of the historic role played by the London Metal Exchange as the centre for global metal market arbitration, and the recent launch in Scotland of the International Centre for Energy Arbitration http: //www. energyarbitration. org/ which has been in contact with ICCIMA Education & Research Institute. I would like to emphasis that not only in my view, but also in many energy experts view, Iran’s post sanction era objectives may be executed by a new approach to partnership working between public and private sector, in which the Iran Chamber of Commerce, Industries, Mines & Agriculture (ICCIMA) Education & Research Institute will be instrumental.
To conclude: Challenge of least carbon fuel cost energy transmission & generation technically straightforward Recent volatility of oil and gas markets as well as failure of OPEC & Non-OPEC recent meeting in Doha makes conventional infrastructure financing & funding of infrastructure very difficult New solution is needed. Could energy swaps – priced in $, € or any other currency - be part of that solution?
Baku Shah. Deniz Gases Phase 2 KTIOP Energy for Peace Caspian Sea, Persian Gulf, Black Sea, Mediterranean Sea. rsi Pe Iran is key to 7 Seas Energy Cooperation. an st Ga Tabriz Caspian Refinery o. E U Ira n Tehran Me Gas dit err Pipe l an ean ine v Se ia Ir a at o E q, S yri U a, Can Energy Cooperation & Diplomacy be Win/Win? Pe rsia n. G Turkm e Pipeli nistan Ga ne s t o P. G. Western & Eastern Economies requires security of oil & gas supply; Iran & other producers and exporters require security of demand. ulf Peace I Pipeline-IP JASK 16
To conclude: The Name of The Game is New Dimensions of Energy Dialogue & Co- operation –The Energy Diplomacy THANK YOU
Mahmood Khaghani, now retired, had more than 33 years of service in senior international positions in Iran's petroleum industry. He held the position of the Director for Energy, Minerals and Environment at the Secretariat of the Economic Cooperation Organization (ECO) during 1996 -2000. He is a graduate in energy engineering at Britain's Surrey University and is a Petroleum- development Strategy advisor (International). Mr Khaghani has participated and presented papers in many international conferences and seminars. He Currently is Advisor to the President of ICCIMA Education & Research Institute, IIES, RIEMP and Initial Member of IRAEE. Contact address: Tel/Fax: +98(0)21 -88885632 Mobile: +98(0)912 -1153991 E-mail: mkh 50 mkh@yahoo. com & mahmood_khaghani@hotmail. com & khaghani@tasdid. com www. iccim-ins. ir www. tasdid. com