The expansion of Changouleh Oilfield near the Iraqi border in Ilam Province has started and drilling operations will end in October, the head of Exploration Department at the National Iranian Oil Company said.
“Operations to drill the first exploratory well has registered a work-in-progress rate of 40% and is expected to become operational in two months,” Mehdi Fakour was also quoted as saying by the Oil Ministry’s news portal.
The development project, estimated to cost $300 million, was approved by the government’s Economic Council in June as part of a long-term plan to raise Iran’s crude output capacity. The project entails drilling at least 10 development and exploratory wells to increase the field’s output to 15,000 barrels a day, he added.
A 150-km pipeline will also be laid to transfer the field’s natural gas to Dehloran Gas Refinery and Azar Oilfield, both in Ilam Province.
The council has approved $4.4 billion worth of investment in oil and gas development projects in border areas.
Fakour said investment in the key sectors is vital and will help NIOC meet rising domestic demand for oil derivatives and natural gas in the years to come without having to import them at exorbitant prices.
The development of oil and gas fields will secure energy supply in the future, he added.
Oil experts believe that the economy will struggle if the oil industry, the engine of economic growth, does not get the long-awaited impetus after years of underinvestment.
"The oil industry is gearing up for a big leap forward," he said, adding that local contractors' capacity is incomparable with the past, which will help them play a key role alongside multinationals in oil and gas projects.
Lack of investment is taking a heavy toll on the beleaguered oil industry and has severely impaired NIOC’s ability to process crude, he added.
The failure to capitalize the private sector’s experience, absence of rehabilitation plans and the focus on selling low value-added products have reduced oil processing capacity by 231,000 barrels per day since 2013.
South Pars Gas Field
Referring to the giant South Pars Gas Field, Mohsen Khojastehmehr, the head of NIOC, noted that despite peak production in the field off the Persian Gulf, pressure reduction is occurring gradually.
“The installation of offshore compressor stations in the field is the only long-term option to control gas pressure reduction and this calls for the investment of $80 billion in the massive field,” he said.
Contrary to popular belief, the field will not be able to produce 700 million cubic meters of gas per day (the current output) forever and this clean resource should be used as prudently as possible.
He noted that by 2024, pressure is expected to decline by 28 mcm per year unless special platforms and compressors are installed, for which each phase will need approximately $1 billion.
“Pressure reduction will anyway take place. However, other gas fields in the Persian Gulf, including Kish, Ferdowsi and Golshan, might help compensate for the output reduction [but not for long]," he said.
South Pars is the world’s largest gas field, shared between Iran and Qatar, covering an area of 3,700 square kilometers of Iran’s territorial waters in the Persian Gulf. It adjoins Qatar’s North Field that measures 6,000 square kilometers.
