The National Iranian Oil Company has assigned Iran Marine Industrial Company (SADRA) the task of completing the third development phase of the South Pars Gas Field's oil layer, managing director of NIOC said on Wednesday.
“SADRA will be assisted by an international company whose name cannot be disclosed yet due to US sanctions," Mohsen Khojastehmehr was also quoted as saying by the Oil Ministry’s news agency Shana.
The 20-year contract between SADRA and NIOC is worth $500 million and entails horizontal drilling in the oilfield, he added.
According to the official, due to the layer's complicated geological structure, qualified companies need to implement enhanced oil recovery techniques from the beginning of their operation as the field’s heavy crude has an API of 22 degrees, while light oil’s API stands at 40.
API gravity is a commonly used index of the density of crude oil or refined products. It stands for the American Petroleum Institute, which is the industry organization that created this measure.
A crude oil will typically have an API of between 15 and 45 degrees. Higher API indicates a lighter (low density) crude while lower API indicates a heavier (denser) crude. Generally, lighter (high API) crudes are more valuable because they yield more high-value light products when run through a refinery.
The official noted that the foreign firm has agreed to transfer its modern drilling technology to Iran.
“It has already drilled wells and extracted oil for Qatar from the Qatari section of South Pars,” he added.
NIOC drew close to 5 million barrels of crude from South Pars via an advanced $300-million floating production, storage and offloading vessel, named FPSO Cyrus, between 2017 and 2018.
An FPSOs is a ship-shaped vessel, with processing equipment aboard the vessel's deck as well as hydrocarbon storage units. After processing, the offshore facility will store oil or gas before offloading periodically to shuttle tankers, or transmitting processed petroleum via pipelines.
"Iran can draw around 25,000 barrels per day from the South Pars crude oil layers via the FPSO," he said, adding that the third development phase of South Pars oil layer is a top priority of NIOC.
The oil layer is located 130 kilometers off Iran's Persian Gulf coast with an estimated 7 billion barrels of oil in place.
Recoverable Reserves
According to Khojastehmehr, Iran's recoverable oil reserves are estimated to be 100 billion barrels, of which 30% can be extracted.
“As long as we do not take advantage of improved oil recovery technologies, the average rate of recovery from oilfields will not exceed the current 30%.”
Iran's in-place oil reserves are estimated at 1,200 billion barrels.
"There are 184 hydrocarbon fields in the country, consisting of 400 reserves, 171 of which are either developed or undergoing development with 230 deposits yet to be tapped into," he said.
"The recovery rate in Iran is 10% lower than the global average and as long as it does not reach the optimum level, the neighboring states will grab the lion's share of the revenue from the fields, especially the joint ones."
The NIOC chief said it is highly likely that the country's oil recovery rate can increase by 5-15% with the help of modern enhanced oil recovery and domestic researchers can play a major role in this regard.
Khojastehmehr noted that 60 years ago, 90% of Iran’s oil were extracted from seven reservoirs and it was possible to pump 30,000 barrels of crude oil from one well per day, whereas to extract the same amount of oil at present, more than 15 wells should be drilled.
According to Karim Zobeidi, the head of NIOC’s department that oversees reservoirs, the Asmari formation, a major oil reservoir in Iran mainly composed of carbonate entities, produces almost 50% of total Iranian crude oil.
The reserve contains 300 billion barrels of crude, 50 billion of which are recoverable. The average recovery rate from this layer is 37%.
Referring to Bangestan reservoirs whose average recovery rate is as low as 15%, the 9official noted that although the layer accounts for 280 billion barrels of the country's in-place oil reserves, only 33 billion can be extracted.
He added that Khami hydrocarbon layer contains 126.5 billion barrels and its recovery rate amounts to 17.15%.
Energy experts, including Zobeidi, believe that raising the recovery rate by merely 1% is equivalent to increasing production by 7 billion barrels, which would generate $315 billion at a rate of $45 for each barrel of oil.
