PEDEC Targets 25% Recovery Rate From West Karun Oilfields

Iran is planning to draw significantly more crude oil from its West Karun oil block that it shares with Iraq by implementing advanced recovery methods, Noureddin Shahnazizadeh, the chief executive of Iran's Petroleum Engineering and Development Company (PEDEC) said.

"We can push up the extraction rate in West Karun oilfields to up to 25%. This will be feasible with the help of modern technology and equipment," said Shahnazizadeh, whose company signed preliminary agreements this week with France's Total S.A. to study three oilfields in southern and western Iran, ISNA reported.

West Karun is the name of an oil-rich region in the southern Khuzestan Province that includes several large oilfields, including Azadegan, Yaran and Yadavaran, with the first two divided into north and south projects.

According to published reports, Iran is currently drawing crude from the block at an unacceptable extraction rate of 5-6%. 

In an effort to ramp up the rate of recovery, Tehran is planning international tenders for West Karun oilfield in what could attract major oil and gas companies such as Royal Dutch Shell, Total, Eni and CNPC.

Last month, President Hassan Rouhani officially launched three oil development projects near the border with Iraq, namely the first development phases of Yadavaran, North Azadegan and North Yaran projects.

Iran has set a production target of 85,000 barrel-per-day for Yadavaran's first development phase, but output from the shared field beat the target to reach 115,000 bpd. The North Azadegan and North Yaran oilfields have met their respective output targets of 75,000 bpd and 30,000 barrels a day.

In an overtly optimistic statement, Rouhani said that crude production in West Karun to 600,000 barrels and 1 million barrels a day is feasible, asserting that the leap demands opening up the key petroleum sector to foreign investment and technology. Raising the rate of recovery from West Karun oilfields by 1% would increase recoverable reserves by 670 million barrels, or some $33 billion in revenues with oil at $50 a barrel, according to officials.

Shahnazizadeh added that Iraq is also taking measures to implement enhanced oil recovery techniques to add more barrels to its daily output of around 4.6 million barrels per day which has placed Iraq as the second-largest OPEC producer ahead of Iran which pumps close to 4 million barrels a day.

In late October, Iraq's Oil Ministry launched a new round of bidding to develop 12 small to medium-sized oil fields.