Baku, Azerbaijan, Aug.4
By Fatih Karimov - Trend: Chinese oil firms can still continue working in Iran despite their weak performance in recent years.
Ali Majedi, Iran's deputy oil minister for international affairs, said performance of Chinese companies in the development of Iranian oilfields was weak compared with European companies, Iran's IRNA news agency reported on Aug. 4.
However, they can still be present in Iran's oil market if they meet two demands. First, they should be bound to duration of the projects and implement them according to the schedule. Second, they should improve quality of their works.
In 2009, China National Petroleum Corporation (CNPC) signed a memorandum of understanding with NIOC, promising to pay 90 percent of development costs for the South Azadegan oilfield while taking ownership of a 70 percent stake. An Iranian official said the project needed investment of up to $2.5 billion, Reuters reported.
On February 18, Iran issued an ultimatum to CNPC over its continuous delays in developing the oilfield.
At the time, Iranian Oil Minister Bijan Namdar Zanganeh said "If this trend continues, we will expel CNPC from the project."
Iraq, which owns the other half the South Azadegan joint oilfield, started producing 175,000 barrels of oil per day at the field in September 2013.
While Iran's production rate stands at 50,000 barrel per day, Baghdad plans to increase its production at the field up to 400,000 barrels per day in the near future.
Iran will commission three new drilling rigs at its South Azadegan oilfield.
Drilling operations manager Manouchehr Asadi said that 50 wells will be drilled across the field, the Moj news agency reported on July 26.
On July 21, the managing director of Iran's Petroleum Engineering and Development Company (PEDEC), Abdolreza Haji Hosseinnejad, said that although the oilfield is planned to be developed using internal resources of the National Iranian Oil Company (NIOC), but capable and committed foreign companies are welcomed to participate in the project.
Some $500 million should be invested in the first phase of the project, he said, adding that the oilfield is projected to produce 320,000 barrels of oil per day.