Eni, NIOC Ink Deal on Studying Iran Oil, Gas Fields (Update 2)

Italian energy giant Eni on Tuesday signed a memorandum of understanding with the National Iranian Oil Company to conduct technical surveys on Kish gas field and the third phase of Darkhoveyn Oilfield.

"Eni's performance and pace of work has been outstanding in Cairo (Egypt) and the Mediterranean region. They are in a good position to study the Kish and Darkhoveyn fields," Gholamreza Manouchehri, NIOC's deputy for development and engineering, was quoted as saying by the company's official news portal on Tuesday.

Eni will have six months to study the fields and submit its development proposals.

Royal Dutch Shell and Russia's Gazprom have signed similar agreements to study the Kish field. Philippines’ state oil company, PNOC, and Ghadir Investment Company, a subsidiary of Bank Saderat Iran, are separately surveying the Darkhoveyn deposit.

"The Kish gas field is a suitable project for Eni because the company's expertise fits the bill," Eni's Chief Upstream Officer, Antonio Vella, was cited as saying on Tuesday.

Eni was involved in the development of several oil and gas projects in Iran before a series of US-led sanctions barred international oil corporations from investing in the country.

The projects that the Italian energy giant was involved in Iran included the development of Phases 4 and 5 of the country’s South Pars oil field as well as the Darkhoveyn, Doroud and Balal oilfields.

Eni is also active in exploration and production sector as well as downstream projects, including refining and marketing of petroleum products.

It is one of the world's major oil and gas contractors in engineering, construction and drilling projects both offshore and onshore.

Groundbreaking Deals

Tehran is all set to finalize groundbreaking deals with global energy giants after years of protracted negotiations with multinationals and setbacks in its key petroleum industry, said Ali Kardor, chief executive officer of the NIOC on Tuesday.

Regarding an agreement with French oil and gas company Total S.A. to develop Phase 11 of the South Pars Gas Field, Kardor said, "The contract has been finalized and will likely be signed in two weeks. We only need time to coordinate a date (between all involved parties) for signing the contract."

He made the statement on the sidelines of the deal signing ceremony with Eni.

In November, Total signed a preliminary agreement, worth $4.8 billion, to develop South Pars Phase 11 in collaboration with China's state-owned company CNPC and Petropars, a subsidiary of the NIOC.

A meeting was held between the NIOC and executives of Total in Tehran on Thursday over the South Pars deal, he noted, adding that "the two sides are working to obtain necessary licenses before putting pen to paper."

Kardor added that the tender for the giant Azadegan oilfield in the southern Khuzestan Province is in the making, albeit it will require more time than the gas deal with Total.

"The first phase of the tender for Azadegan field has been completed. We have solicited bids from foreign firms and have received some proposals, but several companies have asked for more time," Kardor said, playing down the prospect of finalizing the Azadegan contract by the end of President Hassan Rouhani's first term in office in August.

Azadegan oilfield is divided into northern and southern sections. It is unclear if the NIOC wants to sign a single contract to develop both sections or award the northern and southern Azadegan reservoirs separately.

Total and Japan's Inpex Corporation have already submitted development proposals for the Azadegan project near the Iran-Iraq border. Royal Dutch Shell is also reportedly in the race for the field that contains an estimated at 33.2 billion barrels of crude oil in place.

Related:  Eni to Sign Deal to Survey 2 Iran Oil, Gas Fields (June 19, 2017)