News Code : 44866

 

Petrotahlil :Iran's state-owned NIOC is targeting more than doubling production from the giant South Azadegan oil field, to above 300,000 b/d by early 2023.

It awarded two contracts, worth a combined $1.26bn, to state-owned upstream contractor Petropars, NIOC's second deal in as many weeks to domestic contractors aimed at boosting production capacity at the fields Iran shares with its Mideast Gulf neighbors.

The contracts, signed today between NIOC's upstream development arm Pedec and Petropars, cover completion of the project's long-delayed first phase development, which will raise capacity to 320,000 b/d within 30 months from around 140,000 b/d today. Petropars will also be responsible for construction of an associated central processing unit, again within 30 months.

South Azadegan is the southern segment of the Azadegan field, one of several fields that make up the West Karun cluster that straddles the Iran-Iraq border. Development of these and other fields and reservoirs that Iran shares with its neighbors have long been a priority for Tehran in its efforts to boost crude output capacity beyond 3.85mn b/d.

Pedec has overseen South Azadegan since the project was pulled from China's state-owned CNPC in 2014, when output was 45,000 b/d. Production there has risen from close to 100,000 b/d in late 2018.

Iran's oil minister Bijan Namdar Zanganeh said South Azadegan holds around 27bn bl in place, but at present only around 6pc, or 1.7bn bl, is recoverable. He said Petropars will aim to raise the recovery factor to at least 16pc.

Iran had put the Azadegan field on offer to foreign companies, along with other projects, shortly after the nuclear-related US and EU sanctions on Iran were lifted in late 2015. Japan's Inpex, Shell, Total and Malaysia's state-owned Petronas were among companies to show an interest. But the US' exit from the nuclear deal, or JCPOA, in May 2018 and the subsequent reimposition of sanctions on Iran's energy and banking sectors prompted the majority of these firms to end their interest.

Argus

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