The development of joint Azadegan Oilfield in Khuzestan Province will be completed with an investment of $7 billion, Oil Minister Javad Owji said.
"The integrated development plan of Azadegan Oilfield, shared between Iran and Iraq, will be carried out by public and private banks, economic holding companies and the National Development Fund of Iran, with the aim of increasing the field’s production to 570,000 barrels per day,” Owji was also quoted as saying by the Oil Ministry’s news agency Shana.
The vast Azadegan field has been divided into North Azadegan and South Azadegan. The two fields had been developed separately, but a master plan has been studied for the integrated development of the entire field.
South Azadegan is estimated to hold 25.34 billion barrels of oil in place, while North Azadegan is estimated to hold 5.6 billion barrels.
Located 100 km west of Ahvaz near the Iraqi border, South Azadegan is estimated to hold 27 billion barrels of oil in place, of which 1.7 billion barrels are extractable. It is part of the West Karun oil block in Khuzestan.
West Karun, Iran's top priority for raising crude production to restore the market share it lost to international sanctions, includes Mansouri, Yaran and Yadavaran, as well as North and South Azadegan joint fields. The block holds an estimated 67 billion barrels of oil in place.
In 2004, Japan's Inpex signed a $2-billion deal to develop South Azadegan field but it fell apart only two years later over US sanctions fear, which again broke a $2.5-billion deal with China's CNPC.
CNPC's five-year delay in implementing the project led to the Oil Ministry’s decision to expel the Chinese in 2014.
Developed by Iranian Companies
Subsequently, the Petroleum Engineering and Development Company of Iran teamed up with local contractors to develop the field.
Recovery from the first well drilled in South Azadegan occurred in 2007. Accumulated oil production from the field reached 250 million barrels in March.
So far, 160 wells have been drilled and completed in this field with 36 more wells planned to be spudded until March 2023. A total of 11 drilling rigs are operating in South Azadegan, which would increase to 13 in the coming months.
North Azadegan first started oil supply in 2016. Accumulated output has since reached 150 million barrels. Of the total 58 wells drilled in the field, 51 are producing oil.
Production from North Azadegan is based on natural recovery and gas artificial lifting. The recovery rate of this field is about 7%, which is acceptable for ultra- heavy crude oil.
Using domestically manufactured commodities is among the objectives of developing North and South Azadegan oilfields. In North Azadegan, Iran has a 51% share in commodities and services. In South Azadegan, all contractors involved in the project are Iranian.
Despite the US sanctions, Iran has continued development projects in oil, gas and petrochemical industries.
The previous US administration unilaterally withdrew from the 2015 nuclear deal, signed between Iran and six world powers, in 2018. It reimposed sanctions on Iran, targeting its key economic sectors, namely oil, banking and shipping industries.
Based on the latest reports, Iran’s current crude output is over 2.5 million bpd. With indirect talks continuing between Iranian and American officials regarding the revival of the nuclear deal and removal of sanctions, Iran is expected to boost its output to levels before the sanctions hit the country.
