Iran Evaluating Maersk Proposal for South Pars Oil Layer

The National Iranian Oil Company is studying Maersk Oil's proposal for developing the oil layer of the giant South Pars Gas Field in the Persian Gulf.

The state oil company is assessing the details of Maersk's proposal for the second development phase of South Pars oil layer, including technical aspects of the plan and the implementation of enhanced oil recovery methods, according to a statement published on NIOC's news portal on Tuesday.

Established in 1962, Maersk Oil is a Danish oil and gas company owned by the A. P. Moller-Maersk Group.

Following the presentation of the foreign company’s proposal and negotiations over its terms, NIOC's experts have proposed revisions to enhance the reliability of the proposal and minimize ambiguities.

Maersk has drilled more than 300 wells and extracted more than 1 billion barrels of oil from the Qatari section of South Pars, which is known as the North Dome. According to reports, French energy major Total S.A. took over drilling and production operations in the North Dome from Maersk last year.

Iran began to draw crude oil from South Pars in March using a floating production storage and offloading vessel. The oil layer is located 130 kilometers off Iran's coast in the Persian Gulf with an estimated 7 billion barrels of oil in place.

Iran aims to stabilize production from the SP layer at 25,000 barrels per day and gradually boost output to 55,000-60,000 bpd. Cumulative production from the oil layer exceeded 1.6 million barrels by the end of last month.

Tehran plans to develop the South Pars oil layer under the framework of Iran Petroleum Contract, the new model of contracts geared to attracting international oil and gas majors.

Iranian officials say due to the layer's complicated geological structure, advanced horizontal drilling technology is required to tap into the resources, which necessitates cooperation with Maersk.

Maersk produces oil from the Danish and UK sections of the North Sea, Qatar, Algeria and Kazakhstan. It supports global oil and gas production by providing modern drilling services to oil companies across the world.