By definition, E&P companies are those companies which carry out high-risk/high-reward integrated exploration, development, and production operations in oil & gas. E&P companies should fulfill a number of qualifications to be designated as such. These include:
- Technological capabilities: geology and geophysics, reservoir engineering, sedimentary basin modeling, reservoir evaluation, basic engineering and front-end engineering design, drilling engineering, surface facilities, launch, IOR/EOR techniques, asset management and optimization, well repair
- Management capabilities: multidisciplinary management, risk management and analysis, outsourcing, operational planning and HSE
- Financial and legal capabilities: financing technics, legal and contract negotiations
- Technological management capabilities: technological need assessment for the oil fields, project statement and outsourcing.
Iranian companies which have been acknowledged as qualified E&P companies will serve as contractors for National Iranian Oil Company and will be handed projects after tenders are held by NIOC. They will not engage in EPC, EPD, manufacturing, or delivery of services such as drilling. Rather, they will be responsible for investment, financing, development and management of exploration operations, reservoir engineering, master plan development (MDP) for reservoirs, annual delivery program (ADP), project management, development of oil & gas fields, and operation of upstream facilities, all of which are activities focusing on management of capital, risk, expenditure, liquidity, and multidisciplinary management, to create revenue for the stakeholders.
A category of Oil Service Companies (OSCs) has been also defined by Iran’s Ministry of Petroleum to include companies that deliver services such as drilling in upstream activities, plus EPC companies. OSCs are supposed to participate in competitive tenders and will sign contracts with National Iranian Oil Company as their client upon success. They can offer services and commodities to E&P companies afterwards, which ensures added value in capital and expenditure management process for the companies.