Iran signed an agreement to develop six oil fields in the south and west, a week after signing $20 billion worth of contracts to boost pressure in the colossal South Pars gas field, according to bne IntelliNews.
The oil deals with local private companies worth more than $13 billion in investments are aimed at boosting Iran’s 3.45 million barrels per day (bpd) crude production. They were signed in Tehran during a ceremony attended by First Vice President Mohammad Mokhber and Oil Minister Javad Owji.
The oil fields include Azadegan and Masjed Soleyman in southern Khuzestan province, Azar in western Ilam province, as well as Sumar, Saman, and Delavaran in western Kermanshah province. Owji stated that the contracts would add another 400,000 barrels to Iran’s daily oil production. The project includes drilling 357 new oil wells. It is expected to create 60,000 direct and indirect jobs in the oil-rich province.
Azadegan, the tenth largest oil field in the world, is estimated to contain about 32 billion barrels of crude oil worth $2.6 trillion. Under normal circumstances, only 6% of its oil reserves can be extracted there.
Without advanced technology, 94% of the giant oil field’s reserves will forever remain unexploited deep underground. China’s leading oil company China National Petroleum Corp (CNPC) initially took over to increase pressure on the inefficient field, but abandoned the project.
The Azar oil field is estimated to contain 4.4 billion barrels of crude, mainly heavy, oil in two reservoirs located 4,500 metres underground. Iran had earlier struck a deal with Russia’s Gazprom to develop the Azar oil field. However, the Russian energy giant stalled the development of the field for several years, which eventually led to the cancellation of the contract last year.
Iran also inked an agreement between NOIC and two Iranian firms under which Well Services of Iran and Petroranian Arvand took Sumar and two nearby oil fields of Saman and Delavaran for development. Under the terms of the 20-year agreement, the two companies will drill 10 new oil wells in the fields to produce 404 million barrels of oil.
The project aims to provide feedstock for the Kermanshah refinery. It is expected to generate $1.6 billion for the government.
Iran had previously entered into a memorandum of understanding (MoU) with Polish oil and gas company PGNiG to develop the Sumar oil field, but the state-owned company suspended operations in 2018, fearing US sanctions.
