Results of Iran’s major oil projects in July
Baku, Azerbaijan, Aug.14
By Dalga Khatinoglu – Trend:
Iran has prioritized seven major oil fields for development - in West Karoon Block and South Pars gas field’s oil layer.
During the first seven months of 2017, Iran launched Azar field and South Pars’ oil layer, while the statistics, prepared by Iran’s Oil Ministry and seen by Trend, indicate, that the other five fields, placed in West Kroob Block were also in development.
Currently, Iran produces 20-25 thousand barrels per day from the oil layer of South Pars, while the production level at Azar field reached 15,000 b/d. Iran plans to double the oil output of South Pars and increase the Azar’s output to 65,000 b/d.
Azar field, whith 2.5 billion barrels of in-situ oil reserves, and 16 percent recovery rate has been completed by 69.92 percent in July, compared to 68.52 percent in June.
One of the major projects in Iran’s upstream oil sector includes the first phase of five fields (West Karoon Block) in Iranian western regions with 66.7 billion barrels of in-situ oil reserves, joint with Iraq, sharing 9.5 percent of the country’s total in-situ oil and gas condensate reserves.
Iran says the production capacity of these fields, including the Azar field, has reached 320,000 b/d, compared to 280,000 b/d in January 2017. However, the actual output is half of this volume, because Iran has allowed an increase in its output by only 90,000 b/d to 3.79 mb/d, compared to October 2016, according to OPEC’s oil cut deal.
According to a document, prepared by Iran’s Oil Ministry and seen by Trend, the actual output of all these fields, including the Azar field in 1H17, reached around 200,000 b/d in July, less than June.
Iran has signed buy-back agreements with Chinese and domestic companies to develop these fields, but it is preparing to sign further deals with foreign companies based on the newly-designed agreement, called the Iran Petroleum Contract (IPC), to complete the development of these fields, especially to increase the recovery rate, which stands at below 10 percent on the average.
Iran has signed a buy-back contract with China’s Sinopec to develop the first phase of Yadavaran field, which contains 34 billion barrels of in-situ oil reserves. The project has been divided into 3 phases.
With completion of the first phase the output would reach 85,000 b/d, and in second and third phases the output would reach 180,000 b/d and 300,000 b/d, respectively.
According to the mentioned official document, the first phase of Yadavaran was developed by 0.19 percent to 99.34 percent, but the production level decreased by 6,000 b/d to 101, 174 in July month-to-month. The first phase of the field is semi-operational since 2012.
Iran has a buy-back contract with China’s CNPCI to develop the North Azadegan field. The first phase of the project was developed by 99.95 percent in July, about 0.94 percent more than June and its output stood at 73,160 b/d in July, about 2,169 b/d less than June.
North Azadegan contains 5.6 billion barrels of in-situ oil reserves. In the second phase of this project, the output level would double to hit 150,000 b/d.
Iran also had an agreement with CNPCI to develop South Azadegan, but the country cancelled the deal with the Chinese company in 2014 because of long-delayed development process.
According to the official document, the project’s first phase was developed by 38.92 percent in July, about 0.93 percent more than June. The first phase is aimed to produce 320,000 b/d of oil. The second phase would add 280,000 b/d to this volume.
The field contains 25.34 billion barrels of in-situ oil and its recovery rate is very low at 6.6 percent. Currently five foreign companies, including France’s Total and Japan’s Inpex are studying the Azadegan field and the ways of increasing the recovery rate, based on confidentiality agreements.
Iran is developing the North Yaran field with local companies – led by Persia Oil and Gas Industry Company – which have 73 percent share based on a buy-back contracts. The rest of shares belong to foreign companies.
North Yaran has been developed by 95.08 percent in July, about 0.07 percent more than June.
Iran produced 16,786 b/d in July, about 12,056 b/d less than June. The final capacity of the project is 30,000 b/d.
Like North Yaran, the South Yaran field is also being developed by local companies to produce 50,000 b/d of oil by July 2017. However the project has been developed by 81.82 percent, 0.28 percent more than June and 1.78 percent more than January 2017.
Overall reserves of North and South Yaran are estimated at about 1 billion barrels.
After completion of all the phases of the mentioned oil fields, their production capacity would reach 1.04 million b/d by 2021. Iran needs more than $15 billion to complete West Karoon projects.
Dalga Khatinoglu is the head of Trend Agency’s Iran news service, follow him on Twitter: @dalgakhatinoglu