Iran's Largest Joint Oil Field to Be Tendered by Summer 2018

Iran will finalize a deal for Azadegan Oilfield, the crown jewel of its shared oil deposits, by the summer of 2018, Oil Minister Bijan Namdar Zanganeh said.

"The tender for Azadegan Oilfield is going according to schedule…it will be concluded by summer next year if the tender goes as planned," Zanganeh was quoted as saying this week on the sidelines of signing a gas deal with Russia's Gazprom in Tehran, IRNA reported.

Iran is in a race to develop the shared reservoir with Iraq -- its largest joint oilfield -- that contains an estimated 33 billion barrels of crude in place. Royal Dutch Shell has developed the Iraqi stretch of the reservoir, known as Majnoon Oilfield in the southern city of Basra. Majnoon came into production in 2014.

Azadegan has been split in the northern and southern sections to speed up development. The field's output is around 80,000 barrels a day, with Oil Ministry's plans to double production by March looking exceedingly unlikely.

Iraq is pumping between 220,000-230,000 bpd from Majnoon, nearly three times above and over the Azadegan output.

Ali Kardor, the chief executive officer of state oil company NIOC, told ISNA on Friday that Japan's INPEX, China's CNPC, Shell and Total have presented their studies on Azadegan. The first two were part of Azadegan development which began in early 2000s.

"Other companies have requested more time to submit their technical surveys," Kardor said without providing details. Malaysia's Petronas is also interested in the project, having presented its findings on the oilfield.

In an interview with Reuters in October, Kardor ruled out the Azadegan tender by the end of this year.

Azadegan was singled out as the first oilfield to be tendered based on a new model of oil contracts, known as Iran Petroleum Contract, unveiled in late 2015. But the tender project has since been delayed several times for unknown reasons.

In 2004, Iran signed a contract with INPEX to develop South Azadegan, but it abandoned the project after the United Nations Security Council imposed sanctions on Iran over its nuclear plans.

That allowed the China National Petroleum Corporation to take over the project under a $2.5 billion deal, but it was booted out of South Azadegan in 2014 after repeated delays in fulfilling its contractual obligations.

Energy Deals

Zanganeh also said that Iran is holding talks over 10 new oil and gas deals, clarifying a previous comment that his ministry was on pace to finalize 10 energy agreements by March, the end of fiscal 2017-19.

"We are on one side of the table. They [foreign companies], on the other side, have their own outlook…talks are proceeding well, but some issues from the inside and outside that affect the negotiations are beyond our control," he said.

After signing a $5-billion gas deal with French group Total earlier this year, Tehran hopes to bring more energy majors to its oil industry.

Total's deal to develop an offshore phase of the South Pars Gas Field in the Persian Gulf is Iran's biggest energy contract with a major western firm since economic restrictions were eased in January 2016.