The National Iranian Drilling Company, a subsidiary of the National Iranian Oil Company, signed a memorandum of understanding on Monday with the Oil Industries Engineering and Construction Company to cooperate in oil and gas development projects.
The MoU was signed by Sepehr Sepehri, NIDC's managing director, and Mohammad Mohammadi, the CEO of OIEC, and is valid for a one-year period, NIOC's news portal reported.
As per the agreement, OIEC will provide NIDC with drilling and extraction equipment, and technical engineering support.
The MoU concerns the two companies' cooperation in future upstream projects and tenders.
According to Sepehri, the move is in line with the Oil Ministry's policy to indigenize oil and gas equipment. He added that such collaborations could help NIDC expand its overseas activities.
"NIDC has participated in several drilling tenders in the oil- and gas-rich Iraq, which entails boosting cooperation with domestic contractors for supplying equipment and technical support," he said.
OIEC is a leading private engineering, procurement and construction company active in the fields of exploration and production, upstream services and energy trading.
The ministry has taken measures to boost domestic manufacturing of oil equipment to curb capital outflows for imports.
In 2014, a committee was set up by Oil Minister Bijan Namdar Zanganeh to pursue the production of 10 major categories of equipment for the key oil and gas sector, including turbines, pipes and compressors.
Some of the essential devices used in oil and gas exploration/production, including various types of drill bits as well as wellhead and downhole equipment, are being produced by Iranian firms.
According to Sepehr, the company is capable of conducting 20 out of the total 28 drilling activities undertaken by major international companies.
"Expanding the range of activities is high on the agenda, which would be accelerated with the help of domestic players," he concluded.