Iran to start production of crude in South Pars oil layer by March

Iran will start crude production in one of the oil layers of the South Pars Gas Field by the end of this Iranian year (March 20, 2013), an oil official announced, Fars reported.

Managing Director of the Pars Oil and Gas Company (POGC) said on Sunday that drilling of the necessary wells for oil recovery from the massive gas field, shared with Qatar, will be fully completed by March next year.

He went on to say that the drilling of the appraisal wells in the oil layer of South Pars was granted to Iranian contractors in January. Based on a 180-million-dollar contract, Global Petrotech Kish (GPT Kish) was tasked with drilling two appraisal wells within 470 days in order to measure the amount of crude oil in the field and draw up a master development plan (MDP) for the oil layer, known as A2.

The development of A2 was commissioned to Petro Iran Company in March 2005 and so far roughly $ 500 mln has been invested in this project, Souri added.

The official pointed out that the crude oil produced from A2 is estimated to reach 25,000 barrels per day (bpd). The layer has approximately 7.5 billion barrels of oil in place, 10 percent of which is recoverable.

South Pars Gas Field as one of the biggest gas reserves in the world is located in the Persian Gulf waters shared by Iran and Qatar.

The Iranian part of the field covers an area approximately 3.700 square kilometers with in place gas reserves more than 14 trillion cubic meters which is equal to 8 percent of total gas reserves of the world and half of the country's discovered gas reserves.

The gas field has been divided into 24 phases of which development of the first 10 phases have been completed.

Also a contract was signed with a domestic consortium in June 2010 for the development of 8 other phases, including phases 13, 14, 19, 20, 21 and 22 to 24 in a 35-month period while development of phases 15, 16, 17, 18, 12 and 11 are also underway.

In the same time, oil reserves in Iran rank third largest in the world at approximately 150 billion barrels as of 2007, although it ranks second if Canadian reserves of unconventional oil are excluded.

This is roughly 10 percent of the world's total proven petroleum reserves. Iran is the world's fourth largest oil producer and is OPEC's second-largest producer after Saudi Arabia.