Japan's Marubeni Interested in S. Azadegan Project

Japan's Marubeni Interested in S. Azadegan ProjectJapan's Marubeni Interested in S. Azadegan Project

Japan’s Marubeni Corporation has expressed readiness to cooperate with Iran in South Azadegan Oilfield, one of the largest Iranian oilfields, managing director of Petroleum Engineering and Development Company said on Monday.

“The Japanese company intends to work in the processing units of South Azadegan and in Kish Island’s oilfields,” Abdolreza Haji-Hossein-Nejad was quoted as saying by IRNA.

Founded in 1858, Marubeni Corporation is involved in supplying products and services in a wide range of sectors, including energy, metals and chemicals. South Azadegan Oilfield is located 80 km west of Ahvaz in Khuzestan Province along the Iran-Iraq border and shared by the two states. The development project aims to produce 600,000 barrels of crude oil per day (320,000 barrels in the first phase, which will be increased by 280,000 barrels in the second phase counting early production).

Under a $2.1 billion contract, South Azadegan's project has made 20% progress and is expected to be fully exploited by March 2017.

The development contract of South Azadegan oilfield was signed first in 2004 with a Japanese company in the form of a buyback contract, but the Japanese partner, Inpex, refused to go ahead with the plan after two years, mainly due to western sanctions imposed on Iran over its nuclear energy program.

Oil Minister Bijan Namdar Zanganeh has recently confirmed news of Total’s prospective partnership in the field. Haji-Hossein-Nejad noted that Marubeni has not announced the amount of investment it wants to make in the oilfields, but it is predicted to be about $500 million.

“The company has said that it aims to sell its equipment and commodities to Iran for the projects. However, we told them that we agree to buy the equipment only if theyare not available in Iran,” he added.

Iranian contractors are currently drilling wells in South Azadegan and in case negotiations with Japan yield fruit, Marubeni will undertake the construction of the field’s processing units.

Iran’s Oil Ministry intends to raise crude production and regain its lost ground in the global oil market in the post-sanctions period by developing its joint oilfields.

An official at Sepehr Investment Bank told Financial Tribune on Saturday that Oil Pension Fund Investment Company, a subsidiary of the Oil Ministry, is slated to issue around $55 million worth of Salaf bonds next week through the privately-run bank to develop Azar Oilfield,

In addition, $800 million have been allocated from the National Development Fund of Iran to start production at Azar, director of the field said in a statement.