Iran’s oil exports up 40% as US tanker seizure campaign fails

Gazprom to develop Changuleh

SHANA – Iran holds 102 oil and gas fields, 28 of which are jointly owned with neighboring countries. The joint onshore fields are shared with Iraq, while the offshore ones are located in the Persian Gulf and the Sea of Oman.

Due to the limited lifecycle of shared fields, the Iranian government has made significant efforts on the development of the jointly owned reservoirs in a bid to enhance their 7% share in national oil output. Meanwhile, the government economic plans require the oil sector to bring the country’s crude oil production capacity to more than 5.7 mb/d over four years. Therefore, it may be argued that a tough mission has been sketched out for the petroleum industry. Changuleh is one of the important oil fields which Iran shares with Iraq. This untapped oil field has attracted foreign companies. Three big Russian firms and a Croatian company have offered to develop it.

Changuleh was among oil fields which Iran offered for development under the new framework of oil contracts, known as the Iran Petroleum Contract (IPC), several years ago in Tehran.

Changuleh is estimated to need $2.2 billion in investment to undergo development. Such related activities as 3D seismic test, location of wells and infrastructure activities like cleanup and construction of access roads have been carried out. The Changuleh development will start as soon as new investor has been determined.

According to studies, 19 wells need to be drilled in this field for recovery. The field is to be developed in two phases. Phase 1, which involves early production, will lead to the output of 15,000 b/d. Phase 2 will bring the output to 50,000 b/d.

Changuleh was primarily considered to be independent, but analysis of 3D seismic data proved its shared status.

Phase 1 development of Changuleh, which is forecast to last 40 months, will involve the drilling of four wells and workover on two existing exploration wells. In parallel with Phase 1 development, a 100km pipeline as well as oil and gas separation facilities will be built.

Phase 2 development, which is set to last 60 months, will involve the drilling of 13 new wells plus infrastructure installations, production unit and pipelines.

Located near the Azar oil field in the Anaran block, Changuleh is shared with Iraq’s Badra oil field.

The Anaran oil block was discovered in 2005 by Norway’s Statoil Hydro and Russia’s Lukoil. Located 20 kilometers southeast of the city of Mehran in Ilam Province, Anaran was estimated to hold recoverable reserves of 400 million to 650 million barrels of crude oil.

Changuleh holds about 3.4 billion barrels of oil in place with an API gravity of 22. For the early production phase, two production wells will be drilled while two existing wells will be worked over.

A separator, transmission pumps, diesel-fueled generator for power supply, evaporation pool, flare, stream pipes and wellhead equipment are among requirements for early production.

A non-disclosure agreement was signed last year between Iran’s OIEC and Russia’s Gazprom Neft for the development of the Azar and Changuleh oil fields. The agreement was endorsed by the National Iranian Oil Company (NIOC).

Meetings are to be held to discuss technical, financial, legal and contractual aspects as well as modalities of participation in the consortium set up for the development of the field. Initial commercial assessments will be done in order to remove ambiguities.

In order to carry oil from Changuleh in the early production phase at the rate of 15,000 b/d, a 130-km pipeline with 8 inches  in diameter has been used.

According to the Petroleum Engineering and Development Company (PEDEC), early production from Changuleh and assessment of hydrocarbon potential of this field would allow the final recovery of 65,000 b/d.