Russian gas producer Gazprom is devising a comprehensive plan to develop six oilfields and two gas fields in Iran, and expects to sign contracts by the end of the current Iranian year (March 2023), deputy oil minister for international affairs and trade said.
“Negotiations were conducted on the issue during the visit of Iranian oil minister and his delegation at the weekend to Moscow where he participated in the Caspian Economic Conference,” the Oil Ministry’s news agency Shana also quoted Ahmad Asadzadeh as saying.
“In this trip, Javad Owji met Alexander Novak, the deputy prime minister of Russia and the head of the Russian side of the Joint Economic Commission, and discussed holding a joint commission in Russia from Oct. 30 to Nov. 1. In the meeting, it was decided that the two sides finalize and prepare the road map for bilateral cooperation as soon as possible,” he added.
The National Iranian Oil Company and Gazprom had signed an MoU in June, based on which the Russian company would help NIOC in the development of Kish and North Pars gas fields as well as six oilfields.
Collaboration with Gazprom is part of a plan to invest about $160 billion in the upstream sector, of which $90 billion will go to the oil industry and $70 billion to the gas industry.
The long-term plan will help raise crude output from the current 2.5 million barrels a day to 5.7 mbd in 2030. Natural gas production is expected to increase by 500 million cubic meters to reach 1.5 billion cubic meters in eight years.
Of the total investment of $40 billion, $10 billion will be allocated for the expansion of North Pars field, located 120 kilometers southeast of the southern Bushehr Province, and the development of Kish Gas Field, the second largest field in the Persian Gulf after South Pars, located 30 km east of Lavan Island.
The development of the two fields will raise NIOC’s natural gas production by at least 100 mcm per day.
North Pars is one of the biggest independent gas fields of the country. A brief review of North Pars shows that 17 wells have so far been drilled and 26 offshore platforms have been installed there.
North Pars has the capacity to produce 100 million cubic meters of gas per day. Such a recovery would require the drilling of 46 wells. The rate of recovery envisaged for North Pars stands at 61%. Its gas will be used in processing plants for the annual production of 20 million tons of liquefied natural gas.
The Kish Gas Field's development plan includes three phases. In the first phase, 14 wells have been drilled but production has not begun.
A 200-km pipeline is planned to be laid to connect the field to refineries in South Pars Gas Field and Fajr Jam Gas Refinery in Bushehr.
Gazprom will also invest $15 billion to increase pressure in gas wells in 24 phases of South Pars Gas Field.
Iran needs to make up for pressure reduction in its gas fields and prevent a decline in gas output.
Estimates show that pressure reduction in the South Pars Gas Field, which Iran shares with Qatar, will start from 2025 and reduce gas production to as low as 400 mcm in 2032, down 100% compared to the current levels.
To address the issue, new wells are expected to be drilled in the field. However, the installation of offshore compressor stations in the field is the only long-term viable option to control pressure reduction.
Almost 350 wells in SP are acidized and perforated regularly to keep output as high as possible, but this cannot continue for long and drilling new wells is inevitable.
Transfer of Knowhow
On the sidelines of the Caspian Economic Conference, meetings were also held with Gazpromneft and Zarubzhneft companies, and the two sides exchanged views on ways of forging collaboration, Asadzadeh said.
“The Iranian delegation also made a visit to two technology parks in Moscow, including Technopolis and Skolkova, which consist of knowledge-based companies with advanced technology in oil and gas fields. After a session with its officials, it was decided that a draft memorandum of understating for cooperation with Technopolis would be prepared to be signed by the two parties,” he said.
“In another session on energy projects with Caspian countries, which was held on the sidelines of the conference, Iran presented several proposals, including the development of oil and gas fields in the Caspian Sea, the establishment of transportation corridors and energy connections between the countries bordering the Caspian Sea, and the formation of the Caspian Joint Investment Fund in order to develop energy projects.”
Asadzadeh noted that Iran is planning to hold a conference of petroleum industrialists and private companies of Iran and Russia in the oil industry in the near future.
While in Moscow, Owji attended a meeting with 100 economic activists of the Russian Federation, and discussed agreements worth $40 billion between the two countries.
He announced Iran’s readiness to attract Russian investment in the oil and gas sector, participation in field development plans, swap of petroleum products and export of petrochemicals.
Iran sits on the world’s second-largest gas reserves after Russia, but US sanctions have hindered access to technology and slowed development of gas exports.
