Foreign Interest Increasing in Azadegan Oil Project

Iran says Azadegan Oilfield could be developed by a consortium of British, Japanese and French firms
foreign enterprises should choose an Iranian partner before they can embark on developing Iran's oil and gas projects.foreign enterprises should choose an Iranian partner before they can embark on developing Iran's oil and gas projects.

Major foreign oil and gas companies are keen on development rights for Azadegan Oilfield, one of Iran's most-prized oil projects to be tendered in 2017.

"Not only French energy major Total S.A. but also Anglo-Dutch multinational oil and gas company Royal Dutch Shell and Japan's Inpex have shown interest in developing the giant Azadegan field near the border with Iraq," Noureddin Shahnazizadeh, chief executive of Iran's Petroleum Engineering and Development Company (PEDEC), was quoted as saying by Mehr News Agency.

Inpex is Japan's largest oil and gas exploration/production company.

According to Shahnazizadeh, foreign enterprises should choose an Iranian partner before they can embark on developing Iran's oil and gas projects.

"Internationals who are able and willing to develop the Azadegan Oilfield should forge partnership with an Iranian firm," the official said.

Azadegan Oilfield in the southern oil-rich province of Khuzestan is one of Iran's largest oilfields that it shares with Iraq. The field, which is divided into the north and south sections, holds an estimated 33 billion barrels of in-place oil. It was discovered two decades ago but has since experienced underwhelming development by foreign contractors.

Underscoring the National Iranian Oil Company's agreement with Total and Inpex in March to study the oilfield, Shahnazizadeh noted that the French and Japanese majors are expected to present their findings to the NIOC soon.

"As soon as the outcome of their technical survey is sent to the NIOC, Azadegan Oilfield will be put out to tender," he added, saying that plans are in place to hold a tender for the coveted upstream project in early 2017.

Asked about financial assessments of the mega project, he noted that as long as studies have not been analyzed, no estimate can be made.

On awarding the project to an international consortium, Shahnazizadeh said, "Forming a consortium of British, Japanese and French firms is highly likely, but Iranian companies must be part of the plan."

  Oil and Gas Projects

According to Ali Kardor, the NIOC chief, South Azadegan will likely be the first of dozens of projects to be tendered to multinationals as Tehran gradually opens up its key energy sector to the outside world following the lifting of sanctions in mid-January.

Early collaboration with several foreign companies, including with France's Total, Russia's Lukoil and Malaysia's state oil company Pertamina has fueled speculation that certain companies are given a head start in the oil/gas projects.

But Tehran has strongly ruled out bias or favoritism, insisting that all foreign companies will compete for the energy projects on an equal footing.

Last month, NIOC signed a preliminary agreement, worth $4.8 billion, with Total S.A. and China National Petroleum Corporation to develop Phase 11 of South Pars Gas Field, the world's largest gas field shared between Iran and Qatar in the Persian Gulf.

Weeks later, a memorandum of understanding was signed with Pergas Consortium, a group of 11 international oil and gas companies, to study two oilfields in the southern oil province of Khuzestan.

According to reports, NISOC has also opened talks with BP Plc to enhance the rate of recovery from Shadegan, Rag Sefid, Karanj and Parsi fields.

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