Iran Wants $10b p.a. for Offshore Fields

Exploration and production of offshore oil and gas fields demand advanced technology and substantial investment, a deputy at the National Iranian Oil Company says.

"We need to invest between $8 billion and $10 billion a year only in offshore oil and gas reservoirs," Gholamreza Manouchehri, deputy for engineering and development at the NIOC, was quoted as saying by ISNA on Tuesday.

Developing offshore fields is costlier and more complex than onshore reservoirs. Offshore drilling requires advanced machinery and large crews, and sometimes hundreds of meters need to be drilled under the seabed to tap into deepwater oil and gas fields.

"NIOC is looking to reconstruct or renovate aging offshore platforms, including in Salman, Foruzan and Reshadat fields, and install new rigs to boost extraction from existing fields," the official said.

"A major new oil/gas discovery, similar to the giant South Pars Gas Field, is unlikely to take place. But we have a number of untapped fields that need to be developed as well as brownfields long way through their life cycle requiring enhanced recovery methods."

The coveted Farzad B Gas Field in the Persian Gulf as well as its northern section, known as Farzad A, top the NIOC's priority list for development. Manoucheri also placed the undeveloped Golshan and Ferdowsi gas fields southeast of Bushehr Province in the Persian Gulf among Iran's attractive offshore projects.

Tehran, which shook off international economic sanctions over a year ago, is struggling with a cash crunch and aims to raise funds for its energy projects from multinationals. But it is a tall order, according to Manouchehri.

"Collaboration with foreign companies requires new model of contracts with attractive technical, economic and financial terms. But there is little experience at home in drawing up investment contracts," said the NIOC deputy.

The Oil Ministry has devised a new model of contracts, known as Iran Petroleum Contract, to attract foreign oil and gas majors. The first tender under the IPC model is expected to be held in the near future for the giant South Azadegan Oil Field that straddles the Iran-Iraq border.