KEPCO Steps Up Efforts to Exploit Caspian Deposits

In line with efforts to attract much-needed foreign funds to develop untapped hydrocarbon deposits in the Caspian Sea, Khazar Exploration and Production Company (KEPCO) has established an investment committee, the managing director of the company said.

"The committee was formed with the aim of pursuing negotiations with potential investors not only to reach out to international companies for financing and partnership, but also to transfer cutting-edge drilling and exploration know-how," Mohsen Delaviz was quoted as saying by Shana on Wednesday.

Pointing to ongoing talks with international energy majors from Norway, Russia and China, Delaviz said, "Although talks to expand the Caspian Sea oil and gas reserves have not come to fruition yet, the committee will continue talks and meetings with multinationals until a final deal is clinched."

According to the official, Azerbaijan oil officials have recently expressed interest in collaborating with KEPCO to develop Sardar-e-Jangal Gas Field in the Caspian Sea off Gilan Province.

"In addition to Azerbaijan, British, Dutch and Norwegian oil majors have also submitted proposals for joint ventures with KEPCO to tap into the rich oil and gas resources of the region," Delaviz said, adding that a decision will be made soon.

"It is likely that the Sardar-e-Jangal field, discovered in 2012, will be developed by Russia's Lukoil under the new Iran Petroleum Contract model."

In late 2015, Iran introduced three exploratory blocks in the Caspian region, known as 24, 26 and 29 as well as Sardar-e-Jangal, as part of its new oil and gas projects to attract foreign investment.

The official said drilling in this site at a depth of 1,000 meters will not be viable due to high operational costs, unless foreign companies and private companies step in.

Highlighting the importance of hydrocarbon deposits in the region, he noted that KEPCO—a subsidiary of the National Iranian Oil Company—fully complies with NIOC's policies and attracting foreign investment tops the firm's priority list as it is eager to develop oil and gas fields in collaboration with foreign majors.

According to Delaviz, in the last five years, investment in offshore oil and gas fields will exceed $260 billion, because of which KEPCO has been given new impetus to hold investment talks with international oil and gas majors.

The Caspian region, which includes Iran, Russia, Azerbaijan, Kazakhstan and Turkmenistan, is one of the world's oldest oil-producing areas and an increasingly important source of global energy production.

Despite making significant headways in exploiting oil and gas resources in the south, energy developments in Iran's northern regions have made few headlines in the past several years.

  Modern Methods

According to Gholamreza Manouchehri, the deputy head of NIOC, Danish conglomerate Maersk Group has presented a proposal to undertake the second phase of the South Pars Gas Field's oil layer development project by employing novel methods.

"NIOC is assessing the details of Maersk's proposal for the oil layer, including technical aspects of the plan and the implementation of enhanced oil recovery method," he said, noting that due to the layer's complicated geological structure, advanced horizontal drilling technology is required to tap into the resources, which necessitates cooperation with Maersk.

Recalling that Iran is lagging in terms of extraction from the South Pars in the Persian Gulf, which field is shared with Qatar, Manouchehri noted that the small Arab neighbor has already drilled more than 300 wells with the help of international oil giants.