Progress in S. Azadegan After Chinese Departure

Progress in S. Azadegan After Chinese DepartureProgress in S. Azadegan After Chinese Departure

Development of South Azadegan oil field has been accelerated with the help of Iranian drilling companies, six months after the dismissal of Chinese contractors from the field, said the managing director of Petroleum Engineering & Development Company (PEDEC).

Six percent progress has been made over the past five months with barely 16 drilling rigs working concurrently. This is while Chinese contractors made "a nine percent progress in 19 months," Abdolreza Haji Hosseini-Nejad was quoted by Mehr news agency as saying.

A contract was signed with a consortium of Iranian and foreign companies to drill 50 wells in the first instance. A total of 150 wells are scheduled to be drilled over the next two years.

It is projected that by the end of the next Iranian year (March 2016) production from the field will reach 80,000 barrels per day (bpd), from the current 50,000 bpd.

Development plans for South Azadegan are carried out in two phases. By drilling 185 wells in the first phase, the production yield will be 320,000 barrels of oil and 197 million cubic feet of gas per day, and 600,000 barrels per day in the second phase.

Azadegan oilfield, 80 km west of Ahvaz, is jointly owned by Iran and Iraq. It contains 6 to 7 billion barrels of recoverable crude oil, but its geologic complexity makes extraction difficult. The field is divided into two portions: North and South Azadegan. Iraq is currently producing 210,000 bpd from the field, with the help of major international oil companies.

During the incumbency of the previous oil minister a controversial buy-back contract with the China National Petroleum Corporation (CNPC) was signed to jointly develop the oil field. After five years, however, the project had not made any progress. Out of a target 185 wells in the first phase, only 7 were drilled.

On April 29, Iran's Oil Ministry formally revoked the $ 2.5 billion development contract from CNPC due to a five-year delay and the company's pattern of procrastination.

"The Chinese were charging $6 billion for the project, but Iranians will charge much less," Hossein-Nejad said in September.

In November, the Majlis passed a law requiring the government to increase extraction of oil, gas and gas condensates from the joint fields "at least on a par" with neighboring countries. As per law, the volume of extraction from joint fields must reach a minimum of 100 million tons per year in ten years. The oil ministry is also planning to increase extraction from the six Iran-Iraq joint fields. Dehloran, West Paydar, Naft Shahr, Azadegan, Yadavaran, and Azar are the joint oilfields between Iran and Iraq.