Iran's South Azadegan Output to Hit 80,000 bpd by March

Iran's South Azadegan Output to Hit 80,000 bpd by MarchIran's South Azadegan Output to Hit 80,000 bpd by March

South Azadegan Oilfield output will exceed 80,000 barrels per day by the end of the current fiscal year in March, deputy director of Iran’s Petroleum Engineering and Development Company (PEDEC) said.

“Plans called for increasing production to 110,000 bpd by March. However, having been deprived of  modern machinery for enhanced oil recovery (EOR) as well as improved oil recovery (IOR) techniques, the target had to be postponed," Touraj Dehqani was quoted as saying by Mehr News Agency on Wednesday.

According to Dehqani, the oilfield's recovery rate is 6%, which is not acceptable for a field with an estimated 6 billion barrels of recoverable reserves. The average oil recovery factor worldwide is between 20% and 40%.

"We are committed to increasing the recovery rate by as much as 15% in South Azadegan with the help of international oil firms," the official said, noting that focusing on improving the recovery factor is crucial because operations to explore and discover new reservoirs is costly.

Dehqani said the field's current output is around 50,000 barrels per day, but long-term plans call for boosting output to 300,000 bpd and doubling this volume in the long-term.

Pointing to the field's drilling plans, he said that a total of 180 well are set to be drilled, of which 70 have been completed.

Azadegan is located in southwest Khuzestan. The field's in-place oil is estimated at 33.2 billion barrels, of which 6 billion barrels are recoverable. It is the biggest oilfield discovered in Iran over three decades.

--- International Tender

Iran is expected to hold the first international tender for oil and gas projects in the coming weeks, said Noureddin Shahnazizadeh, managing director of PEDEC.

"South Azadegan will be the first on offer this year," Shahnazizadeh said. "Several firms have held talks related to South Azadegan and it may be developed by a consortium."

According to Shahnazizadeh, Total has submitted a development proposal for the project, with Japan's Inpex and China National Petroleum Corporation also expected to present separate proposals.

The West Karun oil block, which includes the giant Azadegan and Yadavaran oil fields, has a contract value of $25 billion, with a 67-billion-barrel deposit of crude oil. About $9 billion has already been invested in West Karun.

After the lifting of sanctions in January 2016, the pace of Iran’s oil production surprised many analysts as output reached 3.5 million barrels per day within nine months of the sanctions removal.

Reportedly, crude and condensate exports for February will be just over 2.20 million barrels per day, up from 2.16 million bpd last month, which was the lowest rate since July. Exports rose to as high as nearly 2.6 million bpd in September, according to ship-tracking data.

While crude and condensate exports have slipped, Iran is planning to significantly boost the export of oil byproducts this year as it refurbishes refineries, according to Abbas Kazemi, a deputy oil minister and head of the National Oil Refining and Distribution Company.

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