Iran Open to Azadegan Oilfield Development by Consortium

The National Iranian Oil Company would welcome the formation of an international consortium of British, Japanese and French firms to develop Azadegan Oilfield in southwest of Khuzestan  Province, but says Iranian companies must be part of the joint venture, deputy director of Iran’s Petroleum Engineering and Development Company (PEDEC) said.

“French energy major Total S.A., Anglo-Dutch major Royal Dutch Shell and Japan's Inpex are in the race for developing the Azadegan Oilfield and have conducted technical studies on the field," Touraj Dehqani was quoted as saying by Mehr News Agency.

The official pointed to the "enormous potential" of the three companies and added that the NIOC is making efforts to bring together the three majors to take maximum advantage of their capability. According to Dehqani, such a consortium will be authorized to carry out exploration and production activities only if it works in tandem with a domestic company.

Moreover, Iran expects the members of the consortium to transfer their knowhow in exploration, drilling and boosting the rate of recovery from oil and gas reservoirs.

Azadegan is located in southwest Khuzestan. The field's in-place oil is estimated at 33.2 billion barrels, of which 6 billion barrels are recoverable. It is the biggest oilfield discovered in Iran over three decades.

Pointing to the number of drilled wells in the field, he noted that in line with plans to increase the field's output, 28 wells have already been drilled and 25 more will be drilled by the end of the current fiscal year in March.

Asked about the field's production, Dehqani said current output stands at 50,000 barrels per day, but there are plans for doubling the extraction rate by the middle of the year. Long-term plans call for boosting the field's output to 300,000 bpd and doubling this volume later.

Tehran will hold the first international tender for its oil and gas projects in the coming weeks,said Noureddin Shahbazizadeh, managing director of PEDEC.

"South Azadegan will be the first that will be put out to tender this year," Shahnazizadeh said. "Several firms have held talks over South Azadegan and it may be developed by a consortium."

According to Shahnazizadeh, Total has submitted a development proposal for the project, with Inpex and China National Petroleum Corporation also expected to hand in separate development plans.

The West Karun oil block, which includes the Azadegan and Yadavaran oil fields, has a contract value of $25 billion, with a 67-billion-barrel deposit of crude oil.

About $9 billion has already been invested in West Karun, but Shahnazizadeh stopped short of specifying how much the Azadegan contract would be worth.

After the lifting of sanctions, the speed of Iran’s oil production increased incredibly and reached 3.5 million barrels per day within nine months.