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MAPNA Group; A Historical Necessity of Iran's Oil and Energy Industry

Although the nationalization of the Iranian oil industry in 1951 provided the country with the right to own and use its oil resources, it took decades for the country to achieve the technology of manufacturing the required equipment.

 

MAPNA Group was launched in the 1990s to manage power plant projects in the country and after a decade of impressive experiences in this section, decided to enter the oil and gas industries by relying on its modern technical and management capabilities. MAPNA Group’s oil and gas section, which started its work in the mid-80s, has put the development of related onshore and offshore projects on its agenda since its inception.

The conglomerate established MAPNA Noor Kish Drilling company with the aim of carrying out onshore and offshore drilling projects, as well as providing technical drilling services. By expanding its market, the company was able to make a significant contribution to providing technical drilling services and implementing drilling projects.

The following article is an overview of the history of drilling operations in Iran and MAPNA Group’s role in increasing the country’s capability in this field.

How did MAPNA Group become the technological force behind the nationalization of Iran's oil industry?

Oil came out for the first time in the Middle East on the morning of May 26, 1908. It happened in Dare Khersan of Masjed Soleyman city, southwest Iran.

The first well was drilled using the simple equipment of that time and oil was found at a depth of 338 meters in the Asmari formation. The process of extracting oil from the well started three years later with an output of 500 barrels per day.

During the next years, oil explorers discovered more oil fields, including Haftgol (1927), Aghajari (1936), Gachsaran and Pazanan (1937), Naft Sefid (1938), Lali (1948), Ahvaz (1958), Binak (1959), Bibi Hakimeh (1961), Maron and Karanj (1963), Parsi and Rag Sefid (1964).

As oil was being injected into the country’s economy and politics, still one issue was being neglected; from the time when exploration and exploitation operations began in the deserts of Iran with primitive tools, until decades later and even after the nationalization of Iran’s oil industry, the technology of drilling and exploration was still out of reach; even after the Iranian government managed to increase its share of oil revenues in 1953, the construction and maintenance of oil extraction equipment, including oil rigs, was still being carried out by foreign experts.

In oil exploration and extraction, the world’s oil companies followed a model similar to “Standard Oil” for years. In this model, they were responsible for the whole cost of oil exploration and extraction and the produced oil also belonged to them; in return, the owner of the land where the oil was extracted would get a sum of money. The owner could be a farmer in the southern states of America or the government of an oil-rich country. In the 1960s, oil became the biggest source of energy in the world and oil companies made a lot of money. This is when Iranians tried to change the equations through the oil nationalization movement.

For Iranian private companies, things changed since 2012. By changing some rules, an Iranian private company could drill a well with its own investment and manage oil or gas production for some years. The company would also get back its original money and some extra revenue from selling oil or gas. This model was called “Iran Petroleum Contract” (IPC).

MAPNA Oil and Gas Development Company (OGDC) was established in 2008 to carry out oil and gas development projects and this came after some changes in the international conditions. The company began its work with the “Forouz B” gas field development project. Its activities cover a wide range of areas, such as strategic management and implementation of various oil and gas field development plans, exploration, drilling, supply of daily mining equipment and product transportation to the desired locations, construction of oil and gas refineries and related industrial facilities.

In addition, MAPNA OGDC offers other services, such as direct investment in oil and gas construction, management and production, implementation of oil and gas field development plans under conventional contractual plans, implementation of major oil and gas projects under EPC/EPCF schemes and construction of oil and gas refineries.

In October 2008, Kish Noor Middle East Energy Development Company (MEED) was established to implement offshore/onshore projects and provide technical drilling services. The company changed its name to MAPNA Drilling Noor Kish Company in 2014. Since then, the company has expanded its market and played a significant role in providing technical drilling services and implementing drilling projects for the development of the country’s fields.

The company’s main mission is to implement various drilling projects, including engineering and supervisory services, drilling services, procurement of equipment, machinery and related equipment for onshore and offshore drilling projects, as well as technical drilling services such as coring, cementing or acidizing, tubular running, mud logging, Drill Stem Test (mechanical DST & RTTS), surface well testing, Drill Stem Test (DST), coiled tubing, nitrogen services, and waste management.

During 11 years of activity, MAPNA Drilling Company has achieved significant results in various projects and also in implementing plans that are important for both MAPNA Group and the country.

The company signed three three-year contracts with Oil Industries’ Engineering and Construction (OIEC), two one-year contracts with Pars Energy Gostar Drilling and Exploration Company (PEDEX), three one-year contracts with Dana Energy for one year, and a one-year contract with Tadbir Petro Energy (TPE) which shows its important achievements in drilling technical services.

In the underground part of Danan oil field, MAPNA Drilling Company provides various services in engineering, procurement, and drilling, including the completion and drilling of 11 new wells in Dehloran, Ilam province. This project started in February 2017 with MAPNA Group (represented by MAPNA OGDC) as the client and Iranian Central Oil Fields Company as the main client.

As of this report, the actual physical progress of this project is 75 to 80 percent and 7 wells have been drilled.

Moreover, one of the remaining four wells will be completed in the next few weeks, and the other two will be completed in April and June respectively. The only remaining new well will be completed by July of next year and thus, the project will be complete.

Among the other activities of MAPNA Drilling Company, one can mention its participation in Shurijeh project. Furthermore, other customers outside MAPNA Group, such as Naft Engineering and Construction Company, National Iranian South Oilfields Company (NISOC), Dana Company, Pezhvak Energy Engineering Services Co. (PECO), and PetroIran Company receive technical services such as:

  1. Cementing
  2. Well Stimulation
  3. Tubular running services
  4. Well Testing
  5. Surface well testing
  6. Coring
  7. Mud logging services
  8. Drilling waste management

 

MAPNA is also active in Phase 11 of South Pars, providing daily rental of drilling equipment to PetroPars Company. Moreover, drilling experts say that the success of Danan project, as one of the few Rial-based projects of the Oil Ministry, can give MAPNA Group a competitive edge.

According to estimates, these projects have created 60 job opportunities for locals on a monthly basis for a period of 23 months.

In 2017, MAPNA signed a deal with the National Iranian Oil Company to implement a program to increase oil production from Parsi and Paranj oil fields under an IPC contract. In this project, new wells and facilities are drilled and installed to boost the production of two oil fields in southwest Iran.

This contract helped MAPNA Group to rank as the seventh best contracting company for engineering, supply and construction of oil and gas contracts in the Middle East and North Africa from autumn 2018 to autumn 2019, according to the international magazine MEED.

According to this magazine, MAPNA performed well by signing a contract worth $876 million for the development of Parsi and Paranj oil fields with the National Iranian South Oil Company.

In less than two decades, Iranian private companies have managed to meet most of the country’s oil and gas industry needs. As a result, MAPNA can outperform its domestic competitors and secure its position in the future of this industry due to its competitive advantage, strong financial support, technical knowledge and ability to use domestic goods.

Experts say that MAPNA’s drilling services are unmatched among Iranian companies, and the efficiency of drilling rigs has improved so much that the company has broken the records of coring, Tubular running in some sizes, and drilling in Danan oil field.

The financial value of the projects that MAPNA has added to its portfolio is a remarkable achievement among rival companies. The conglomerate may face some challenges in implementing these projects but it hopes that it could gain valuable experience by completing major projects in diverse areas of the oil and gas sector.

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