Zarubezhneft in Talks for Developing Iran's Joint Oilfields With Iraq

Zarubezhneft in Talks for Developing Iran's Joint Oilfields With IraqZarubezhneft in Talks for Developing Iran's Joint Oilfields With Iraq

The National Iranian Oil Company and state-controlled Russian oil and gas firm Zarubezhneft are in negotiations over boosting extraction from two Iranian oilfields shared with Iraq.  

“Based on the talks, Zarubezhneft is due to determine ways for raising production from Aban and West Paydar oilfields,” Gholamreza Manouchehri, NIOC deputy head, was quoted as saying on Wednesday by Mehr News Agency.

Founded in 1967, Zarubezhneft specializes in exploration, development and operation of oil and gas fields outside Russia.

Its other activities include design, construction and operation of oil refineries as well as testing and export of knowhow for oil recovery enhancement.

Manouchehri added that the Russian firm is expected to prepare a roadmap to develop the two fields and draft a master development plan in four to six months.

Referring to Russia’s crude output of over 10 million barrel a day, fuelled by advanced oil recovery techniques, he said, “Iran not only intends to cooperate with Zarubezhneft for the financing of the two projects, but also aims to employ the company's cutting-edge technologies.”

IRNA also quoted an unnamed Zarubezhneft official as saying that the company has held “constructive” talks NIOC.

“Zarubezhneft will do its best to use modern enhanced oil recovery techniques to develop the two fields,” the official reportedly said.

On July 12, NIOC and Zarubezhneft signed a nondisclosure agreement, based on which the Russian company will carry out studies on Aban and West Paydar joint oilfields.

  Focus on 5 Joint Fields

The Iranian government has prioritized the development of joint oilfields with Iraq. The Arab neighbor has shored up crude production from around 2.5 million barrels a day in 2011 to more than 4 million bpd, overtaking sanction-hit Iran as the second-largest producer of the Organization of Petroleum Exporting Countries.

According to Abdolreza Haji-Hosseinnejad, the chief executive of Petroleum Engineering and Development Company, Iran is planning to raise production from five oilfields it shares with the western neighbor in the current Iranian year that ends in March 2017.

"The rise in production capacity from North Azadegan, South Azadegan, Yadavaran and North Yaran, all joint fields with Iraq, will take place by the end of the year," he said. Iran is also expected to start extraction from the Azar Oilfield. According to reports, $800 million has been allocated from the National Development Fund of Iran to develop the field.

Iran is recovering from years of sanctions that undermined its economy and trade with the world. The international restrictions were eased in January allowing Tehran to raise crude output and decide whom to sell.