Iran signs deal with international consortium for Karanj oil field development

Business Materials 19 May 2018 13:06 (UTC +04:00)

Baku, Azerbaijan, May 19


Iran has signed a HoA (heads of agreement) with international consortium Pergas for development of its Karanj oil field.

The deal was signed by the National Iranian South Oil Company (NISOC) head, Bijan Alipour and Pergas managing director Colin Rowley, in a ceremony attended by Iran’s Oil Minister Bijan Namdar Zanganeh and British Ambassador to Tehran Robert Macaire, Ali Kardor, managing director of National Iranian Oil Company(NIOC) in Tehran, the official website of NIOC reported.

If the final agreement is reached, the consortium will develop the oil field under Iran's recently designed oil and gas contract model, called Iran Petroleum Contract (IPC), in order to produce 200,000 barrels of oil per day.

The contract would bring the field’s total oil output to 655 million barrels within 10 years.

Approximately $1.16 billion of direct investment and $187 million of indirect investment will be needed for the field’s development.

The agreement envisages increasing the pressure of the oil field’s reservoirs by three times, construction of gas compressors for injection of 800 million cubic feet per day of gas, construction of gas collection and transportation facilities with the capacity of 280 million cubic feet per day, construction of a desalination plant with a capacity of 110,000 barrels per day, drilling 35 wells in Asmari and Pabdeh reservoirs as well as drilling two delineation wells and repairing 15 existing wells.

Also, a pilot EOR (enhanced oil recovery) plan will be implemented in the field for five years, in order to increase the oil extraction rate. The pilot project results would became operational if the sides reach an agreement as well.

The UK based Pergas International Consortium (PIC), comprising European, Asian and Canadian firms, established in 2001, has carried out many projects in the Middle East, South East Asia and Africa over these years of operation.

NISOC signed a non-disclosure agreement (NDA) with Pergas consortium in December 2016 to study two oil fields and submit the study results and development proposals to NISOC within six months.

Under the agreement, the consortium undertook studies in Iran’s Karanj (including Asmari, Pabdeh and Khami reserves) and Shadegan (including Asmari and Bangestan reserves) oil fields.

The Karanj oil field, located in Iran’s southern Khuzestan Province, was discovered in 1963 and holds an estimated 11 billion barrels of in-place oil. It was yielding 200,000 bpd of nearly 34 degrees API crude at its peak, but its reserves were seriously depleted. So far, 40 wells have been drilled in the field in total.

The field’s current output stands at 110,000 barrels per day. The field is owned by the state-owned National Iranian Oil Company and is operated by the National Iranian South Oil Company.