Nouroddin Shahnazizadeh, the managing director of the Petroleum Development and Engineering Company of Iran, told the domestic media that the leading European bidders for the project include Total (France), Shell (UK/Hollande), Eni (Italy), Wintershall (Germany), Rosneft (Russia), OMV (Austria) and Maersk (Denmark).

Shahnazizadeh added that several Asian companies including CNPC and Sinopec (China), ONGC (India), Pertamina (Indonesia), Petronas (Malaysia) and PTTP (Thailand) would also participate in a tender over South Azadegan.

The official said officials from the bidding companies had visited Iran for three days to become fully aware about the conditions of the project. Almost a dozen of them, he added, had been even taken to visit the project site.

Nevertheless, Shahnazizadeh did not indicate when the tender over South Azadegan would be held.

Iran has repeatedly postponed the tender over the giant field which it jointly shares with Iraq.

Reuters quoted an unnamed Iranian official as saying in June that the bidding over the project had been delayed by another few months.

This, the unnamed official told Reuters, was meant to allow energy companies more time to study the field.

Iran discovered Azadegan oil field in 1999 in what was the country’s biggest oil find in decades. The country accordingly teamed up with Inpex to push the project toward development. However, the Japanese company later quit the project in what appeared to be the result of US sanctions against Iran.

The NIOC later divided the project into South Azadegan and North Azadegan and both were awarded to China’s CNPC when Iran’s former president Mahmoud Ahmadinejad (2005-2013) was in office.

The media reported in 2014 that Iran’s Oil Minister Bijan Zangeneh had sidelined CNPC from South Azadegan due to its protracted delays in developing the field.

South Azadegan is believed to hold an in-place oil reserve of about 33.2 billion barrels and its recoverable resources estimated at about 5.2 billion barrels.

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Majid Najarian, deputy project director for development of South Azadegan oilfield, said 565 million dollars were invested over three years to increase output of North Azadegan to 35 thousand barrels per day while, for the South Azadegan case, crude production soared to 40 thousand bpd in less than five months and by spending one fifth of the designated budget.

Azadegan oil field in south west of Iran is located about 80 Km. west of Ahwaz
and straddles the Iran-Iraq border.

Over the past months, about 19 new wells have been drilled in the joint field, said the official, nearly a quarter of the yielded oil is directed to the northern cluster while the remaining thirty thousand barrels are transferred to refineries through a 32-inche pipeline.

Najarian said all measures, including pipeline installation, well drilling and establishment of wellhead equipment, are successfully accomplished adding “presently, a three-hour shut down of the factory is required its new control program to come on stream.”

He emphasized that output of South Azadegan will climb to 160 thousand barrels by the end of the current Iranian calendar year (began March 21) asserting “a total of 12 more wells are scheduled to be drilled in the coming two or three months in a bid to lift production level by 25 thousand barrels.”

“Also in the southern part of the field, 13 wells will come on stream yielding 28 thousand barrels per day,” he continued.

The official said a skid mount project will also add 50 thousand barrels to South Azadegan’s daily crude production.

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Following the inking of Memoranda of Understanding (MoUs) for conducting developmental studies in Azadegan oil field with France’s Total, Britain’s Royal Dutch Shell and Inpex Corporation of Japan, a cooperation agreement will be also inked in the current week between the largest Malaysian oil firm PETRONAS and the National Iranian Oil Company (NIOC) to carry out similar studies in Iran’s joint oil field with Iraq.

Moreover, NIOC will also sign into another deal with the Malaysian side in order to perform studies for boosting recovery factor in Cheshmeh Khosh field.

In recent months, NIOC has sealed several MoUs with Austria’s OMV and Gazprom of Russia aiming to increase recovery factor of Cheshmeh Khosh in the west of Iran.

The accord between NIOC and PETRONAS is scheduled to be signed on Wednesday in Tehran between officials of the two oil companies.

On the sidelines of his meeting with Minister of Foreign Trade and Industry of Malaysia Dato’ Seri Mustafa Muhammad, Iranian Oil Minister Bijan Zanganeh said Iran welcomes arrival of Malaysian firms, Petronas in particular, since they hold a long history of relations with the country’s oil industry.

Prior to sanction years, the bulk of cooperation between National Iranian Oil Company (NIOC) and Malaysia pertained to sales and exports of crude oil as Iran was deploying a daily average of 50 to 60 thousand barrels of crude oil to Malaysia’s PETRONAS under spot contracts, he continued.

One of NIOC’s most significant deals with Petronas was over the developmental project of South Pars Phase 11 which was supposed to be accomplished in collaboration with France’s Total and Repsol S.A. of Spain though the agreement was violated as a result of international sanctions against Iran.

Despite having had only a few years of activity in the oil and gas industry, PETRONAS remains among rare oil and gas companies who enjoy functionality and operational teams in both upstream and downstream oil sectors.

The Malaysian oil and gas company is currently active in numerous fields including oil and gas refining, construction of pipelines, LNG transfer, gasoline stations management, manufacturing and marketing of petrochemicals and chemicals, exploration, exploitation, drilling, production and storage of crude oil, petroleum products and natural gas.

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On cooperation between Tehran and Moscow over oil swap projects, Bijan Zanganeh said no talks were conducted in this regard during the recent visit to Iran of Russian Energy Minister Alexander Novak though relevant negotiations are underway with Lukoil company.

He further touched upon gas swap with Russia asserting “Gazprom is taking measures to join hands with Iran for gas swap purposes.

“During the recent visit of a Russian delegation to Tehran, talks were held over development of some Iranian oil fields and agreements were also signed.”

The official underlined that Russneft firm was seeking to collaborate with the Headquarters for Execution of Imam Khomeini’s Order (EIKO) to develop four oilfields including South Azadegan.

During visit of Russian economic and oil delegation, headed by Novak, to Tehran last week, the MoU for studying two oil fields of Cheshmeh Khoshk and Chenguleh in west of Iran were signed.

Accordingly, Iran’s Oil Minister Bijan Zanganeh reported on signing research and development MoUs with Russia for expansion of seven Iranian oilfields.

Russian Lukoil will be engaged in study on Mansouri and Ab Teimour, Russian Zarubezhneft will study Aban and West Paydar and Tatneft will study the Dehloran , while Gazprom will study Cheshmeh Khoshk and Chenguleh oil fields.

Meanwhile, one joint project likely to be implemented by the two sides is oil swap deal which has not reached conclusion and based on primary talks 150,000 barrels per day oil is slated to be swapped though the figure will eventually hit 500,000 barrels per day.

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Azadegan oil field in south west of Iran is located about 80 Km. west of Ahwaz
and straddles the Iran-Iraq border.

Manouchehr Assadi said his company had drilled more than 140,000 meters as part of the operations to drill 40 wells, Fars News Agency reported.

Eight heavy onshore drilling rigs of the NIDC were used for drilling the wells, said the official.

With the expulsion of the Chinese company from South Azadegan field in the year to March 2015, the drilling operation of 40 wells was ceded to the NIDC by the Petroleum Development and Engineering Company (PDEC).

The official said out of 43 wells, 30 are completed, finalized and put at the disposal of the employer.

The NIDC is now drilling in South Yaran and Azar fields, Phase 14 of South Pars as well as the onshore part of Kish gas field.

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“Oil production west of Karun must reach one million barrels per day,” Rouhani said on Sunday, referring to the North Azadegan, Yadavaran and North Yaran fields. “This is a realistic goal, and we need investment and technology,” IRNA reported.

Output at the fields west of the Karun River rose from 65,000 barrels per day in 2013 to about 250,000 barrels per day.

Iran had expected to reach that output target by the end of the year, Mohsen Ghamsari, director for international affairs at the National Iranian Oil Co., said in September.

North Azadegan is presently producing 85,000 bpd. Production from Yadavaran and North Yaran stand at 115,000 bpd and 30,000 bpd, respectively.

Accordingly, Iran’s production from oilfields on the western bank of the Karun River, that includes the above fields, has increased by above 250,000 bpd.

Iran awarded North Azadegan to the China National Petroleum Company (CNPC), Yadavaran to China’s Sinopec, and North Yaran to Iran’s Persia Oil and Gas Development Company through contracts worth $2.5 billion, $3 billion and $0.6 billion, respectively.

Rouhani said that Iran needs a total investment of at least $18 billion to develop all West Karun fields as well as the latest technology to guarantee increased oil recovery at the fields.

He noted the Ministry of Petroleum has effectively used the investment potentials created after the removal of sanctions in January under a nuclear deal, known as the JCPOA, with six world powers.

The president added that more work still needs to be done to further increase the country’s production of crude oil.

The oilfields in West Karoun are Yadavaran, North Azadegan, South Azadegan, North Yaran, and South Yaran. The biggest among all are South Azadegan and Yadavaran which are shared with Iraq’s Majnoon and Sinbad fields, respectively.

Officials have already emphasized that a long-term plan has been devised to increase production from the fields to above one million bpd.

Iran has approved a new oil contract model to lure foreign investors, although the details have not been made public.

France’s Total SA reached an initial agreement to develop a natural gas field in Iran last week, becoming the first international oil company to sign a deal under the new energy contracts.

Foreign investment

Elsewhere in his remarks, President Rouhani said foreign investment is needed for full prosperity in the post-sanctions era.

“The nuclear deal created a new situation that ushered in fresh breathing air for Iran,” Rouhani said. “The oil industry has been a leading body in taking advantage of the new opportunities.”

“In the post-sanctions era, many said it would take years before Iran’s oil production could reach 2 million barrels per a day, but within a few months, the hardworking managers and engineers at the oil industry worked miracles and returned the country’s production to the level before the sanctions were imposed,” he said.

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Gholam-Reza Manouchehri, the deputy for engineering and development affairs of the National Iranian Oil Company (NIOC), specified neither the companies nor the projects. Nevertheless, he did indicate that the projects were large scale.

The foreign companies will play a central role in the development of major fields.

Manouchehri further emphasized that the companies that won oil sector deals in Iran would have to team up with locals, IRNA reported.

“The foreign companies will play a central role in the development of major fields,” said Manouchehri. “Still, they will have to use the help of Iranian companies for their projects.”

The official also added that Iranian companies can be only the project leader for the development of small fields and can use the help of foreign enterprises.

Elsewhere in his remarks, Manouchehri said that Iran has so far signed memorandums of understanding (MoUs) with 10 companies over the development of certain oil sector projects. However, he did not name the companies and the projects for which they have signed the MoUs.

Last week, the NIOC invited eligible international companies to participate in the pre-qualification phase of a tender for 50 exploration and development targets across the country.

The targets include a variety of low and average risk oil and gas fields. They include lucrative oil targets like South Azadegan, Changuleh, and Ahwaz-Bangestan as well as promising gas fields such as Kish, Farzad-A, North Pars, Golshan and Ferdowsi.

The tender is a central part of Iran’s plans to increase its production to above four million barrels per day – the same level that existed before a series of draconian US-led economic sanctions were imposed against the country in 2012. /IRAN-DAILY

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Bijan Namdar Zanganeh told the press on Tuesday morning that at least $100bn in investment were required to revive the industry to fresh conditions where Iran’s excavation companies would provide services to other countries.

Zanganeh was speaking to the press on the sidelines of an agreement with Pars Oil and Gas Company (POGC) to work on four massive oil fields as the first deal after reforms introduced to overall scheme of oil contracts.

 Iran oil minister: “The industry currently requires $100bn in upstream section.”

“Iranian domestic companies would provide engineering services in oil and gas to other countries; a priority is also put upon improving the well recovery rate of Northern and Southern Yaran, Koupal, and Maroun,” Zanganeh added. “The industry currently requires $100bn in upstream section; we believe mergers and new offshoots of excavation and exploration companies would not weaken the mother holding, but would also attract investments and facilitate inflow of new technologies; the ultimate outcome would be improved and increased production and revival of antiquated oil wells.”

Zanganeh also said that development of South Azadegan oilfield was a priority post-JCPOA times; “currently, the recovery rate in Sarvak formations in shared field is mere 5 per cent, virtually rendering the remaining 95 per cent to other predators; other fields including Rag Sefid, Asmari, Koranj, Pakdel, Shadegan, etc., are in the queue for new contractors, with 600 billion barrels of crude in West Karoun massive field, and with only 150 billion barrels extractable with current recovery rates,” he detailed. /MNA

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