DNO ASA, the Norwegian oil and gas operator, has announced the signing of a memorandum of understanding (MoU) with the National Iranian Oil Company (NIOC) to conduct a study concerning the development of the Changuleh oilfield in western Iran
Changuleh, discovered in 1999 but never developed, is estimated to hold more than two billion bbl of oil-in-place.
"Iran presents an obvious and exciting next step in expanding DNO's footprint in the region," said DNO's managing director Bjørn Dale. "Our low-cost, fast-track development strategy and our fractured carbonate reservoir experience in the Kurdistan region of Iraq can be easily applied and leveraged in Iran," he added.
The company has established a wholly owned subsidiary, DNO Iran AS, amid preparations to increase its presence in Iran.
The news follows the announcement of France’s Total on 8 November that it has signed a Heads of Agreement to develop phase 11 of the giant South Pars gas field, the world’s largest gas field. Total will operate the field with a stake of 50.1 per cent, along with China’s CNPC (30 per cent) and Iran’s Petropars (19.1 per cent). The South Pars 11 project (SP11) will have a production capacity of 1.8bn cubic feet per day, or 370,000 barrels of oil equivalent per day.The first phase will consist of 30 wells and two platforms connected to existing onshore treatment facilities by two pipelines, at a cost of around US$2bn. Total previously played a key role in Iran’s energy sector, having been involved in the development of phases two and three of South Pars in the 2000s.
The Total agreement represents the first major energy deal with an international company since the easing of sanctions in January and can be seen as a significant breakthrough tor Tehran’s efforts to attract investment into its energy sector, which is in urgent need of rehabitation. Iran is looking to attract investment of US$200bn in the next five years to boost oil production to 4.8mn bpd by 2021. However, in the wake of the election win of Donald Trump, who has threatened to scrap or renegotiate the international nuclear deal with Iran, many international companies are likely to adopt a ‘wait and see’ attitude until the USA’s position becomes clearer.