The National Iranian Oil Company and China National Petroleum Corporation (CNPC) are set to make amendments to an agreement on developing the Masjed Soleyman Oilfield by the state-owned Chinese firm, managing director of NIOC said on Wednesday.
“As soon as the Chinese make the amendments, a final contract will be signed and development operations will begin,” Ali Kardor was quoted as saying by Mehr News Agency.
Underscoring CNPC officials' recent visit to Iran and the fruitful negotiations, the official added, “The two sides have reached an understanding and the new agreement mainly calls for technical modifications that NIOC had asked for.”
According to Kardor, the two sides have also agreed to embark on a joint venture to boost the field's capacity with the help of advanced enhanced oil recovery (EOR) techniques.
EOR is the application of various techniques for increasing the amount of crude that can be extracted from an oilfield.
Stressing that Masjed Soleyman Oilfield in Khuzestan used to produce 40,000 barrels of crude per day, Gholamreza Manouchehri, executive director of Iranian Offshore Engineering and Construction Company, noted that the field's output has declined to 5,000 bpd, which can be restored after gas injection.
The first oil wells in the Middle East were discovered and drilled in 1908 in Masjed Soleyman County, north of Khuzestan Province. Masjed Soleyman Oilfield, initially discovered and drilled by a British company in 1908, is Iran's oldest oilfield, and the first oil discovery in the Middle East.
The field's maximum production dates back to 1933, when it used to produce 112,000 barrels per day.
In 2007, development of the field was handed over to CNPC which was operating under a buyback contract whereby foreign contractors are paid a fixed fee from the proceeds of the finished project.
The company was awarded the contract after Canada's Sheer Energy Company withdrew because of the international sanctions. CNPC is a Chinese state-owned oil and gas corporation and the largest integrated energy company in China.
Petrochem Talks With South Korea
According to Ali Seifian, member of the board of Masjed Soleyman Petrochemical Industries Co. (MIS), a consortium of South Korean companies are negotiating to invest in a petrochemical project in the city of Masjed Soleyman.
"We are planning to turn the rural district of Zilaei (in Masjed Soleyman) into a major petrochemical hub in Khuzestan," he said, noting that MIS has finalized a memorandum of understanding with the South Korean consortium on building a petroleum refinery and its affiliated units for marketing and distribution of petrochemicals.
The project is estimated to cost $1.5 billion, but financing can be raised to $5 billion. The new unit is planned to be established near the site of a major petrochemical complex which is under construction in the oil city, Seifian added.
