Iran on Tuesday underlined the giant South Azadegan Oilfield as the first of dozens of projects to be tendered under its new oil contracts, known as Iran Petroleum Contract.
The bidding process for the sought-after onshore project will begin next month or in early October, said Ali Kardor, head of state-owned National Iranian Oil Company, the Oil Ministry news agency Shana reported.
Kardor expected that two or three oil deals will be signed under the new contractual model by next March, which would attract an estimated $10 billion in foreign investment.
"Tenders for several small and medium-sized fields will also be held in the near future," he said, referring to three unnamed fields in western Iran.
Buyback contracts, which had been the main contractual framework in Iran's oil and gas sector for over 20 years, will not be used for small-scale projects, he said.
According to Kardor, Iran has signed seven new initial agreements with foreign oil companies, including Austria's OMV, France's Total, Germany's Wintershall, Indonesia's Pertamina, Russia's Lukoil and Zarubezhneft, to study its oilfields.
Located 80 kilometers west of Ahvaz in Khuzestan Province, the shared South Azadegan field with Iraq holds an estimated 33 billion barrels of oil in place.
Placing the field at the top of the list of oil and gas tenders comes as little surprise because Tehran has often said developing the joint oil and gas fields is and will be a top priority.
Production from South Azadegan currently stands at 60,000 barrels per day, but plans call for raising output to 320,000 barrels a day within two years.
The government of President Hassan Rouhani is racing against time to finalize the terms and conditions of the new contracts and open up the lucrative oil and gas industries to foreign firms. Outlines of the IPC along with 50 other oil and gas projects were revealed at a conference in Tehran last year.
International Suitors
Among the country's lucrative energy projects, South Azadegan has attracted high-profile suitors.
According to reports, French oil and gas firm Total S.A. signed a non-disclosure agreement in March to conduct technical surveys on South Azadegan.
Iranian officials said in February that Marubeni Corporation had shown interest in South Azadegan, suggesting that the Japanese trading firm could invest half a billion dollars in the oilfield.
In 2004, Iran signed a contract with Japan's state-backed Impex to develop South Azadegan, but it abandoned the project after the United Nations Security Council imposed sanctions on Iran on claims that its nuclear program was a cover for building an atomic bomb.
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.
Iran is planning to regain the share it lost in the global oil market under the international sanctions that targeted its industrial and energy sectors.
The country aims to boost its combined crude oil and gas condensates production to 5.8 million bpd in five years. According to official data, it is now pumping 3.8 million bpd.
