Iran plans to begin work on exploration projects in the Caspian Sea once an accord is reached with the littoral states.

After drilling for oil in the Caspian Sea led to the discovery of gas deposits, plans for oil production from the region were put on ice.
The disputed Caspian legal regime has not yet been worked out. Iran does not accept borderlines drawn by the former Soviet republics and Russia, as it deprives the country of a major portion of the sea’s hydrocarbon reserves.
According to the Persian daily Sharq, six months after Asadollah Salehi-Forouz took over the Oil Ministry’s Caspian Sea Department, the first Caspian oil exploration contract was signed. It will, however, take two years before Iran can manage to produce oil from the Caspian Sea fields.
The deputy oil minister continued to avoid the press until recently, when the groundbreaking deal was finalized.

Gas Exports
Salehi-Forouz says Iran has plans for gas exports to Armenia in exchange for electricity imports from that country.
“As per the agreement between the National Iranian Gas Company and the Power Generation, Transmission and Distribution Company, electricity imported (from Armenia) will be connected to the national network and Iranian gas will be exported to Armenia in return,“ he said.
He noted that executive work to establish the gas pipeline began a few months ago, adding that pipes have been purchased and are being laid.
The official added that the 30-inch 113-km pipeline will pass through mountainous areas, for which purpose five million cubic meters of stones have to be removed to clear the way for the pipeline.
“Under the agreement, some 1.2 billion cubic meters of gas will be annually exported to Armenia,“ he said.
Iranian officials believe the project will become operational by early 2007.
Studies by the Russian company Gazprom on possible gas exports to Armenia would have no impact on the Tehran-Yerevan deal, as the company will be involved mostly in projects related to Armenia’s domestic gas network.
A new oil swap deal has also been struck with Azerbaijan. Based on the agreement, Iran will transfer gas from Astara to Nakhichevan and receive the transit fee from Azerbaijan. This project will be completed by October 2006.
Salehi-Forouz noted that oil price fluctuations have led to frequent changes in oil swap fees.
Meanwhile, high-profile talks are underway with New Delhi and Islamabad on gas exports to India via a pipeline crossing Pakistan.
Currently, Iran is exporting gas via pipeline only to Turkey.
Turkey, the largest buyer of Iranian gas, began purchasing four billion cubic meters in 2001 under a 25-year deal. It is expected to raise its import from Iran to 10 billion in 2007 from 6.68 billion cubic meters in 2005.
The Turkish government said last year it would resort to international arbitration after Tehran refused to cut prices.

Caspian Projects
Salehi-Forouz said the company is currently involved in talks with the French oil and gas giant Total for developing an oilfield in Kazakhstan.
“Oil transfer talks are also underway with Total in Kazakhstan,“ he said, adding that the first phase of the project would involve transfer of crude oil from Kazakhstan to Neka Port, north of Iran.
In the second phase, he said, a pipeline will transfer oil from Neka to the Persian Gulf.
The agreement with Total is known as KTI (Kazakhstan, Turkmenistan and Iran).
Salehi-Forouz said equipment for drilling two wells have been purchased and the North Drilling Company will utilize the services of an international company well-established in deepwater drilling.
“It’s the first time such a project is being implemented in Iran,“ he said, adding that foreign parties have been invited to join the project.
Subsequently, the Oil Ministry has reached an agreement with Russia for the same purpose.
Earlier, a senior Oil Ministry official said Russian companies are willing to participate in two phases of the giant South Pars gas field development project by signing buyback deals.
Mohammad Hadi Nejad-Hosseinian, deputy oil minister for international affairs, said a gas agreement would be prudent, if Russians sell Iranian gas in markets other than those where Iran is holding gas export talks.
He said Iran plans to begin work on exploration projects in the Caspian Sea once an accord is reached with littoral states.
“We are planning to sign buyback deals with international companies, including Russian firms,“ he said.
Nejad-Hosseinian noted that during his recent visit to Moscow, the Russians promised to announce their decision about their participation in Iran’s Caspian Sea projects within four weeks.
He said Iran has proposed that Caspian Sea littoral states explore and develop hydrocarbon resource-rich areas and then get their respective shares once the legal regime is approved.
On the possibility of an oil swap deal with Russia, the official said Iran has the capacity to swap 170,000 barrels per day of Russian oil in its northern Neka terminal.
“We could increase this to 700,000 bpd, once it becomes economical,“ he said, announcing that Iran has offered a 25-year oil swap deal to Russia.

South Pars gas field is currently producing almost 125 million cubic meters of gas and is expected to increase to one billion.

South Pars Status
Iran’s gas reserves are the second largest in the world after Russia, according to the National Iranian Gas Company. It is among the world’s top three countries in terms of gas industry installations.
The country enjoys a high global standing in terms of speedily establishing gas supply networks, with the current annual growth rate at 13 percent.
Given the State Expediency Council’s recent ratification, which was also endorsed by the leader earlier this year, the gas industry is expected to help promote privatization in the near future. The government is working on a bill to privatize the gas industry.
Implementation of the multiple phases to develop the giant South Pars gas field, which holds nearly 8 percent of the global gas reserves, is a top government priority.
The field straddles Iranian (South Pars) and Qatari (North Field) sectors of the Persian Gulf, and Iran’s share is being developed in 25 phases.
South Pars phases 6 to 8 are expected to yield about 650 billion cubic meters of gas (equivalent to four billion barrels of oil) and some 700 million barrels of condensates (light crude).
Some lawmakers have called on the incoming administration to reform oil industry structures.
Kamal Daneshyar, who heads Majlis Energy Commission, says parallel energy-related organizations should be merged to reduce state expenses. He said the next government must build new refineries.
The lawmaker further said the South Pars gas field has the capacity to increase production by 10-fold, stressing that the next government must give top priority to this.
“The (South Pars) field is currently producing almost 125 million cubic meters of gas and this figure must increase to one billion,“ he said.
Daneshyar pointed out that increased gas production will enhance oil production as gas can be injected into oil wells for recovery purposes.

Traffic movement in central Tehran is severely hampered by congestion.

Some products and services are distributed free of charge but that does not mean citizens can use them whenever they want or as much as they can.
Demand exceeds supply when public products and services are free of charge. For instance, access to several streets and roads is free and motorists use them all the time, even without a reason. This creates huge traffic jams within the busy central zones of the capital. The time wasted behind the heavy traffic jams reaches billions of rials every month.
Some economists argue that by introducing traffic charges, it would be possible to minimize wastage of time for motorists. Such a scheme might encourage people to rethink about using their vehicles in central Tehran and other busy zones and also to choose alternate forms of transport. Motorists who still wish to travel through the city center will have to pay a fee to use the zone. Such a charge will reduce congestion and also raise money, which can be used to improve the capital’s transport system and cover part of the costs for building and maintaining streets and roads.
In the 17th and 18th century, England used to charge motorists using certain streets and roads. The money collected was used to maintain the public transport system. In many developed nations, motorists pay a toll to cross particular streets, roads and highways.
Traffic is a huge problem for Tehran. Urban officials have introduced different methods to resolve the issue, such as limiting access to certain busy areas in the traffic zones. However, as more and more cars come on to the streets daily, the main roads and streets are proving inadequate. In the city center particularly during rush hours, there is hardly any maneuvering space.
It would be easy to levy traffic charges for motorists. The charge could be introduced for rush hours and within certain zones.
Such a scheme will not be difficult to implement. Through electronic tagging it will be easy to identify each car on the street. The scheme is now being tested in certain countries. Singapore is one of the first nations to introduce the scheme.
Traffic movement in central Tehran is severely hampered by congestion. Through an efficient public transport system and introduction of traffic fees it is possible to reduce vehicular traffic and save time, improve the public transport and metro networks. This will help make central Tehran a more pleasant location for residents, visitors and the working class.