Pertamina Submits Oilfield Development Plan

A limited number of leading international companies will be invited for bidding in a tender to develop Azadegan Oilfield in southwest Khuzestan Province by the end of the current fiscal year in March, Oil Minister Bijan Namdar Zanganeh said, stressing that work has begun to put the giant field out to tender.

Zanganeh made the statement on the sidelines of a meeting with Darmin Nasution, Indonesia's coordinating minister for economic affairs, in Tehran on Monday, Shana reported.

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

A 25-strong delegation of Indonesian officials including Arcandra Tahar, the deputy minister of energy and mineral resources and Syamsu Alam, upstream director at Indonesia's state-owned oil and natural gas company Pertamina, explored grounds for cooperation in oil and gas sectors in meetings with senior Tehran officials.

Pointing to NIOC's priority to enhance the oil recovery rates in oilfields, Zanganeh said Iran can draw on Pertamina's experience in this field.

"Pertamina signed a nondisclosure agreement in August to conduct studies on the onshore Abteymour and Mansouri oilfields. Today they submitted their master development plan for the oilfields," Zanganeh said. The offer will be evaluated and if approved, financial issues will be discussed in the near future.

The two fields are also being studied by other firms, namely Lukoil, Russia’s second-largest oil company as well as international oil and gas consortium Pergas.

On the likelihood of forming a consortium of oil companies, namely Lukoil, Pertamina and Pergas, for the upstream exploration/production projects, Zanganeh said, "NIOC is making efforts to bring together these companies to get the best of their capability. However, their technical approach to developing the fields has fundamental differences that is why we want them to compete and not cooperate."

On exporting oil to Indonesia, Zanganeh said Pertamina received a 1-million-barrel cargo from NIOC in September and "in case it is compatible with their refinery standards, we can become a new crude supplier to Indonesia"

Pertamina's Alam said that collaboration with NIOC is aimed at transferring expertise to tap into Iran's massive hydrocarbon reserves.

Iran is one of Pertamina's priorities for cooperation "and we are serious about investing in Iran's upstream oil and gas industry".

Iran is pushing for major deals with multinationals to raise crude production despite a global oversupply and persistently low prices. It is now pumping close to 4 million barrels a day, a level last seen before the tightening of sanctions in 2011.

------- Compliance With Oil Cuts

OPEC's level of compliance with production cuts in January has been acceptable, Iran's oil minister said on Monday, expressing hope for further cooperation from non-OPEC members in the near future.

The Organization of Petroleum Exporting Countries agreed on Nov. 30 to cut output by 1.2 million barrels per day to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed upon by producers such as Russia, Oman and Mexico.

"OPEC members' level of compliance to cut oil production in January has been acceptable and we predict more cooperation from the non-OPEC members in the near future," Zanganeh was quoted as saying by Mehr News Agency.

Iran's crude oil production has reached 3.9 million barrels per day. Under the deal, Iran is allowed to produce an average of 3.8 million barrels a day in the first half of this year. OPEC's de facto leader, Saudi Arabia, has shouldered more than 40% of the cuts.

Zanganeh dismissed reports that US President Donald Trump's tough stance against Tehran has made foreign firms more cautious to invest in the energy sector.

"No company has slowed its negotiations with Iran," Zanganeh was quoted as saying by IRNA.

OPEC's third-biggest oil producer hopes its new petroleum contracts will draw foreign companies and boost output after years of under-investment. But foreign firms have so far made little inroads into the country despite the lifting of sanctions.