NISOC Set to Finalize First IPC-Based Deal by March
NISOC Set to Finalize First IPC-Based Deal by March

NISOC Set to Finalize First IPC-Based Deal by March

NISOC Set to Finalize First IPC-Based Deal by March

The National Iranian South Oil Company is appraising the proposals of foreign and domestic oil firms for developing four oilfields in the southern oil-rich province of Khuzestan, the company's chief executive officer said, hoping that the first deal will be signed by the yearend.

Bijan Alipour also said on Sunday that the state-owned company is scrutinizing proposals to develop four major oilfields, namely the onshore Shadegan, Rag Sefid, Karanj and Parsi fields, Shana reported.

"Plans are in place to finalize a deal within the framework of Iran Petroleum Contract, the country's new model of contracts for oil and gas projects, sometime in March next year," the official news portal of the Oil Ministry.  

NISOC's contractual model conforms to the outlines of IPC, such as terms of 20-25 years and higher rewards for riskier projects, but differs in specifics.

According to the official, Pasargad Energy Company, Persia Oil and Gas Industry Development Company, Tenco and MAPNA Group are among domestic companies that signed agreements with NISOC and agreed to submit the result of their technical studies within six months.

"International energy groups, namely Schlumberger Ltd, the world's leading oilfield services provider, Pergas Consortium, Russia's oil company Tatneft and Zarubezhneft, a Moscow-based oil enterprise, are also studying the oilfields," Alipour said, noting that different committees are analyzing and comparing some of the master plans economically, technically and executively.

Asked about finalizing a deal, Alipour said the first IPC-based contract to develop one of NISOC's oilfields, most probably Shadegan, will be signed in two months.

With regard to the benefits of drawing on the experience of foreign firms, the NISOC chief noted that negotiations have been held with 33 international enterprises to cooperate in joint ventures and several memoranda of understanding have been signed and NISOC is revising the result of technical studies.

"We need to raise more than $10 billion to develop the four oilfields," Ahmad Mohammadi, a deputy director at NISOC, said, adding that the development of each field is estimated to cost approximately $3 billion.

NISOC, the largest subsidiary of Iran's state oil company, is assigned with the development of oilfields in Khuzestan with a total of nine reservoirs, based on the company's customized IPC framework.

  Boosting Recovery

Referring to plans to increase the recovery rate of the fields operated by NISOC by as much as 20%, Alipour said, "The company operates 66 oil reservoirs, with 230 billion barrels of in-place crude and gas injection to boost recovery is being carried out on almost 50% of them."

The official added that of the 66 reservoirs, which account for two-thirds of Iran’s in-place oil reserves, 18 are in the second half of their life cycle.

"Injecting gas into underground reservoirs has been exercised for over four decades in Iran," the official said, underlining the method as one of the most efficient oil recovery techniques in Iranian oilfields that has resulted into an overall 8% increase in recovery factor.

“We can increase the rate of recovery by 15% and 20%, if gas injection is implemented across all NISOC reservoirs," Alipour said. According to reports, NISOC has opened talks with BP Plc to enhance the rate of recovery from its fields. The company also signed agreements with Shiraz University, Islamic Azad University and state-owned Oil Industry Research Institute to help enhance the recovery rate in Abteymour, Bibi Hakimeh and Mansouri oilfields in the south.


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