Expansion of West Karoun Oil Block Gains Impetus

In line with plans to raise crude output by developing shared reservoirs with Iraq, plans are underway to commence the second phase of West Karoun oil block development, the deputy head of the National Iranian Oil Company said.

"The country's crude production stands at 3.9 million barrels per day and will reach close to the 4-million-bpd mark by the end of the fiscal year on March 20, as West Karoun output rises," Gholamreza Manouchehri was also quoted as saying by NIOC's news portal on Saturday. West Karoun includes several large oilfields straddling the Iran-Iraq border, namely Azadegan, Yaran, Yadavaran and Darkhoein, with the first three divided into north and south projects. The block holds an estimated 67 billion barrels of oil in place.

Pointing to a new round of development in West Karoun oilfields, Manouchehri said, "The NIOC is all set to conclude new contracts with domestic and international developers under the Iran Petroleum Contract—the new model of Iran's oil and gas contracts."

According to the official, NIOC and Persia Oil and Gas Industry Development Company have finalized the deal to develop North and South Yaran Oilfield. Meanwhile, China's Petroleum and Chemical Corporation, known as Sinopec, is in talks with Iran's Petroleum Engineering and Development Company on developing the second phase of Yadavaran Oilfield in the southern oil-rich Khuzestan Province. "As soon as new agreements take effect, West Karoun expansion will gather momentum," Manouchehri said, adding that the region has a great potential to help the country fulfill its ambitious dream of producing 4 million barrels of oil per day by the yearend.

  Azadegan Output

The official said South Azadegan output has exceeded 100,000 bpd, yet concerted efforts should be made to increase it to the prospective level of 320,000 bpd. Asked about South Yaran production, he added that upon the completion of drilling operations, 20,000 barrels of crude will be extracted daily from Yaran's southern flank. Referring to other contracts, the official noted that a deal to construct crude processing units with a refining capacity of 300,000 bpd in South Azadegan field has been signed.

An agreement to install skid mounted modular mini refining crude units to process 50,000 barrels per day has also been concluded. A modular refinery is a unit whose parts are constructed in modules designed to be transported quickly and easily anywhere in the world and comes in a variety of sizes with capacities that range from 500 to 50,000 barrels per day.

Officials say Iran is currently drawing crude from West Karoun block at an unacceptable extraction rate of 5-6%, but plans call for raising the recovery rate to 25% by implementing advanced recovery methods. "The tender for Azadegan Oilfield is going according to schedule," he said, adding that plans have been devised to drill 100,000 wells in West Karoun during the next few years after financial constraints are removed. Tehran has prioritized the development of its joint oil deposits to expand its footprint in the global crude market. The No. 3 producer of the Organization of Petroleum Exporting Countries has increased output to almost 4 million barrels per day.