Total, Chinese firms mulling over West Karun projects

A senior oil official said on Saturday that talks with the French oil and gas major Total on taking over South Azadegan Oilfield’s development plan are underway, elaborating on a rise in West Karun Oilfields’ output.

On an undisclosed agreement between National Iranian Oil Company and the French giant, Abdolreza Hossein-Nejad, managing director of Petroleum Engineering & Development Company (PEDEC), said, “The nondisclosure contract with Total translates into a procedure that the company receives primary information about South Azadegan, which it must not reveal to any other third party. It is due to present its preliminary report and plan on the oilfield in a month.”

The field’s second development phase is estimated to require around $5 billion in investment, with some big names in negotiations for its drilling and production rights, including Entrepose Contracting and VINCI Construction Grands Projets, South Korean conglomerate Hyundai and Japan’s Marubeni, Mehr News Agency reported.

West Karun, Iran’s top priority for raising crude production in the fight for winning back market share, is located in the oil-rich Khuzestan Province and  includes Yaran and Mansouri fields as well as Yadavaran, North and South Azadegan joint fields with Iraq.

Hossein-Nejad also referred to interests in other West Karun fields, namely the second phases of Yadavaran and North Azadegan, and said the Chinese have yet to offer a financial proposal for the latter.

The project could also end up being part of Iran’s oil and gas projects that will be offered to international firms for bidding later this year, should negotiations with the Chinese hit a stalemate.

“Handing over West Karun oilfields to foreign companies under IPC terms does not imply Iranian contractors’ inability to develop the fields, but it is about financial resources, which domestic companies lack,” he said.

Output of West Karun Oilfields

The PEDEC chief also said that with the exploitation of three new wells in South Azadegan, the field’s output has increased by 7,500 barrels of oil a day, noting that 60,000 barrels are expected to be added to the field’s previous output, which was 50,000 barrels, by the end of summer.

“North Azadegan and Yadavaran oilfields have started production since March 20 with a total of 80,000 barrels per day at present,” he said.

Pointing to the present 160,000-barrel output of West Karun, which boasts a whopping 64 billion barrels of in-place oil reserve, and Iran’s plan to raise the field’s production capacity by 300,000 barrels a day until the end of the current year, Hossein-Nejad said North Azadegan and Yadavaran’s production will gradually show a rising trend.

North Yaran’s development plan has so far made 80% progress and the field’s envisaged production of 30,000 bpd is expected to materialize in four months.

Fallen behind the scheduled plan, Azar Oilfield is keeping up with its 30,000 barrels production plan that is due to realize in the second half of the current Iranian year, as its financial problems have recently been alleviated, according to the official.

By Financial Tribune