NIOC to Finalize South Pars Gas Deal With Total

Oil Minister Bijan Namdar Zanganeh says the contract between the National Iranian Oil Company and French energy giant Total S.A. to develop Phase 11 of the South Pars Gas Field is expected to be finalized before the beginning of Hassan Rouhani's second and last term as president in August.

"The two sides are poring over the technical and commercial details of the agreement and it is expected to be finalized by August," Zanganeh was quoted as saying by Shana, the Oil Ministry news agency, on Saturday.

Based on a preliminary agreement, worth $4.8 billion, signed late last year, Total is expected to produce 56 million cubic meters of gas per day from Phase 11 in cooperation with China's CNPC and Petropars, a subsidiary of the NIOC.

Pointing to the final round of talks, Zanganeh noted, "NIOC hopes to wrap up the negotiations in less than two months and sign a deal with Total."

---- Oilfield Development

South Pars also has a major oilfield located in the center of the Persian Gulf, about 130 kilometers off the Iranian coast, and adjacent to Qatar's territorial waters, holding an estimated 7 billion barrels of oil in place. The field is the northeastern extension of Al-Shaheen oilfield in Qatar.

NIOC is in negotiations with Austria's OMW, Russia's Gazprom and Royal Dutch Shell to develop hydrocarbon reserves.

According to Zanganeh, securing deals to develop shared oil and gas fields tops the NIOC priority list.

Tehran has selected the South Azadegan Oilfield in southern Khuzestan Province as the first upstream oil project to be tendered under its new Iran Petroleum Contract (IPC). According to some reports, NIOC may decide to sign a single contract to develop both South and North Azadegan.

"The tender for the Azadegan project is ready," Zanganeh said earlier, hoping that the state-owned company will hold the tender in two months.

According to Zanganeh, Tehran expects to sign 10 oil and gas deals based on the IPC framework in the short term.

---- Boosting Capacity

Energy experts, including Reza Khayyamian, the head of the Society of Iranian Petroleum Industries Equipment Manufacturers, believe that collaboration with Total will boost the pace and quality of domestic drilling operations and manufacturing of equipment.

"The company's officials have agreed to use Iranian manufacturers' capacity to develop  Phase 11 of the South Pars Gas Field," he noted.

Referring to Total's agreement to make maximum use of Iranian manufacturers' capacity, Khayyamian noted that whatever equipment that can be manufactured by domestic companies will not be imported.