The development of Azar Oilfield in Ilam Province is underway and the project will be handed over to the West Oil and Gas Production Company in the near future, the managing director of the Iranian Central Oil Fields Company said.
“The project seeks to add more than 33,000 barrels per day, or 80% to the field’s output,” Mehdi Heydari was also reported as saying by the Oil Ministry’s news service.
The total production of the joint field, which Iran shares with Iraq, currently stands at 42,000 barrels per day.
The development of Azar Oilfield is technically complicated, as it is one of the most complex oilfields in the Middle East. However, the project has been progressing with the help of Iranian contractors.
Iranian experts and engineers have carried out all the processes to develop the field while the Iraqi side of the field is being developed by companies from Russia, USA and South Korea.
The Oil Ministry has invested around $10 billion on the field’s development to increase its output and plans to invest $4 billion in the next five years to further develop the field, along with other oilfields and energy projects in the western province.
When all the development projects related to the oilfields are complete, the crude oil output capacity of the province is expected to reach 330,000 barrels per day.
Ilam accounts for about 3% of the country's oil and gas reserves and the Oil Ministry plans to invest $2 billion in the province’s upstream oil sector.
Oil extraction from Azar Oilfield started in 2017 with a daily production of 15,000 barrels that reached 30,000 barrels a year later.
Stretching over 400 square kilometers, the field is shared with Iraq, where it is known as Badra. It is one of the six fields owned jointly with Iraq, along with Dehloran, West Paydar, Naft-Shahr, Azadegan and Yadavaran.
Located 20 kilometers from the city of Mehran in Ilam in the Anaran exploration block, the field holds 2.5 billion barrels of in-place oil, of which 400 million barrels can be extracted.
Although Iran’s oil industry has been hit by US sanctions since mid-2018, which reduced Iran’s oil exports to record lows, the country has continued to increase production in the hope that the siege will be lifted sooner or later.
The former US government imposed economic sanctions in August 2018, targeting Iran’s industrial, oil, banking and insurance sectors. In the May of that year, the US quit the landmark 2015 nuclear deal Iran had signed with six world powers.
In November 2018, Washington imposed the so-called “maximum pressure” policy to intensify economic pressure.
However, Iran has not stopped oil exploration, development and capacity building under the economic war. Following efforts made last year, oil output has reached 3 million barrels per day and plans are underway to bring the production to 4 million bpd.
