South Pars Crude for East Asian Countries

Four crude oil cargoes from South Pars Gas Field’s oil layer have recently been shipped to East Asian countries, the traditional market of Iranian crude.

The shipments to East Asia are estimated at 2 million barrels collectively, Shana, the official news agency of the Oil Ministry, reported without naming the countries.

Over the past five months, more than 2.5 million barrels of oil were exported from the oil layer of South Pars, the world's largest gas field, to terminals in East Asia.

South Pars oil layer is located 130 kilometers off Iran's coast in the Persian Gulf with an estimated 7 billion barrels of oil in place, but it is hard to put an accurate estimate on the volume unless more exploratory wells are drilled.

Extraction from the layer currently stands at 25,000 barrels per day on average, but estimates show that production can reach 80,000 barrels and 150,000 barrels per day in the second and third development phases of the oil layer respectively, according to the field’s officials.

The Copenhagen-based oil giant Maersk Group, which contributed to developing the first phase of the South Pars oil layer, is touted as the main candidate to undertake the next phase of the project.

The Danish conglomerate’s operational capacity and know-how to drill horizontal oil wells as deep as 10,000 meters is what makes Iran to be in negotiations with Maersk

Iran is pushing for higher crude output from the joint field with Qatar.

China, South Korea, India and Japan are Iran’s major crude customers in Asia. Iran's oil exports to China may rise to the highest in 11 months this month, Reuters reported.

Loadings to India will drop by 25% from July to 310,000 bpd in August, the lowest since February 2016, in a possible retaliation for Tehran not awarding a gas field development to Indian companies.

This month, South Korea is expected to pass India as the second-biggest lifter of Iranian crude for the first time since January 2016, taking nearly 380,000 bpd, two sources with knowledge of the matter said. Other Asian lifters include Japan at 157,000 bpd, up 6% from July.