The board of directors of the National Iranian Oil Company (NIOC) has decided to remove Phase 11 of the South Pars gas field from its list of prioritized projects due to a lack of financial resources, which has ultimately resulted in the closure of its offices at the Pars Oil and Gas Company (POGC), Tasnim news agency reported.
Phase 11, which is projected to yield 2 billion cubic feet of sour gas and 80,000 barrels of gas condensate per day, is the only Phase of the South Pars gas field that has stalled. The development of the field was granted to several companies, none of whom could complete the long-drawn-out project. following a decade-long delay in recovering the field's biggest gas layer France's Total was dismissed from Phase 11, in 2009.
Then a $4.7 billion contract with China National Petroleum Corporation (CNPC) was signed in 2009 to help develop Phase 11, replacing France's Total. In July 2012, CNPC also pulled out of Phase 11. According to reports, CNPC had delayed the project by more than 1,130 days and had not even laid down the project foundations such as leveling the land and putting up fencing.
Eventually in August 2013, NIOC signed a five billion dollar buy-back deal with the Iranian company Petropars Ltd. (PPL) to replace CNPC whose contract was terminated due to its foot-dragging in developing the project.
However, the current government dismissed the previous contracts, stating that any contract signed prior to the new cabinet being sworn in would be overturned.
Oil Minister Bijan Namdar Zanganeh, in his assessment of the PPL contract said: "The signing a contract is not of itself of material value. A contract must be implemented," and added that the contract with PPL was not viable in the first place, since the company "does not have the means to develop such a project."
Javadi said the development of Phase 11 is subject to the introduction of Iran's new upstream development contracts, which are due to be unveiled February next year.
"In case the sanctions are annulled, a new model of oil contracts will be unveiled in London," from February 23 to 25, Shana cited Mehdi Hosseini, the head of the Petroleum Ministry Oil Contracts Revision Committee, as saying. 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.
