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Europeans to Develop Doroud, Esfandiar Fields
Energy

Europeans to Develop Doroud, Esfandiar Fields

Agreements have been reached with two European firms on developing Esfandiar and Doroud fields, two major oil and gas fields in the Persian Gulf, managing director of the Iranian Offshore Oil Company said.

"Preliminary negotiations have been made with Italian heavyweights Eni and Saipem and France's Total," Saeed Hafezi was quoted by Mehr News Agency as saying. He did not elaborate.

"An initial agreement has been reached with a Norwegian-Austrian company to develop the Esfandiar Oilfield," he said.

"Developing the Esfandiar Oilfield is a priority … An initial agreement has been signed and the field's master development plan is ready … We are now waiting for the new Iran Petroleum Contracts to be unveiled," to finalize the deal.

Discovered in 1966, the joint field with Saudi Arabia has been one of the country's least developed oilfields. It is 95 kilometers southwest of Kharg Island in the Persian Gulf and holds an estimated 532 million barrels of crude oil.

Moreover, a Ukrainian company is expected to pick up where French giant Total left off on the development of Doroud Oilfield, another underdeveloped hydrocarbon resource located off the Kharg Island.

Production from the oilfield started 40 years ago and Iran draws roughly 15,000 barrels of crude per day from the offshore field.

The Eastern European firm, whose name has not been disclosed, is slated to start working on the field in two months and raise production to 30,000-35,000 barrels of crude per day.

The field has undergone two development operations and the third stage of development was underway in collaboration with Total, but the French company halted operations in the field following the sanctions and ultimately failed to reach the 83,000-bpd target it had committed to realize.

Despite extensive talks with Europeans, the head of Iranian Offshore Oil Company ruled out any negotiations with American oil and gas companies seeking a fortune in Iran's rich energy sector following the lifting of sanctions against the Islamic Republic.

Iran and six world powers reached a historic deal on July 14 in Vienna, which would limit the Persian Gulf country’s nuclear program in return for removing sanctions on its energy and financial industries.

Hafezi also disproved rumors that Iran is planning to allocate the development of the southern Mahshahr Oilfield to North Korea in exchange for Pyongyang's oil debts to Tehran.

  Deal With Arab Neighbors

"Tehran and Muscat are holding talks to reach a framework for joint development of oilfields in the Persian Gulf. Negotiation with the United Arab Emirates is also on the agenda," Hafezi said.

"We have held three rounds of talks with Omani officials … Cooperation with neighboring countries in developing oil and gas fields would certainly boost extraction from hydrocarbon reserves."

Hafezi stressed that the National Iranian Oil Company "prefers cooperation over competition," but any bilateral agreement would depend on the determination of those on the other side of the negotiating table.

Iran and Oman are mulling the joint development of Hengam oil and gas field. The field, 80% of which lie in the Iranian territory, is estimated to contain 700 million barrels of oil and 56 billion cubic meters of gas.

Production started in late 2010, with Iran currently drawing 15,000 bpd from the field, down from 28,000 bpd, while Oman's crude production has halved overtime to 5,000 bpd.

IOOC's crude production is close to 500,000 barrels per day, but the company aims to increase the output by 32,000 barrels in the short run, and by 130,000 and 400,000 barrels in medium- and long-term respectively.

The oilfields under development by IOOC hold an estimated 100 billion barrels of crude, comprising roughly 15% of the country's total oil reserves.

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