Iran plans US$2.2bn oilfield development

oilfield iraq-indigoprime flickrIran hopes to boost crude production to 5.7mn bpd. (Image source: Indigoprime/Flickr)Iran has outlined a US$2.2bn plan to develop a field shared with Iraq to produce 50,000 bpd, an official source said, marking the first introduction of major energy projects under a new contract

The Changuleh oilfield, part of the Anaran onshore block, will be developed in two phases to produce 15,000 bpd in the initial stage before raising output to 50,000 bpd, project executor Ali Abbasi Laraki told the Shana news agency.

The field will be introduced when Iran unveils new oil and gas contracts at a London conference planned for December this year, he added.

According to Laraki, three-dimensional seismic and infrastructural operations have been completed, pending the investor to be named to start development. The field is linked to Iran’s Azar field, which the country shares with Iraq’s Badra oilfield.

Energy officials have said that Iran has identified nearly 50 oil and gas projects worth US$185bn for development.

New contracts would be signed under the Iran Petroleum Contract (IPC) model, which would be more attractive to foreign investors, Iran’s minister of petroleum Bijan Zangeneh said earlier. Under the new formula, Iran will cede exploration, development and production operations on an oilfield exclusively to a foreign contractor. Foreign companies will be required to commit to optimal and sustainable production from the field and transfer of technology.

Mehdi Hosseini, head of Iranian Ministry of Petroleum’s Oil Contracts Revision Committee, revealed that the country will adopt ‘risk service contract’ models. They will offer investors payback in the form of cash or oil allocation but they won’t be allowed to claim ownership of the country’s energy reserves, Bloomberg quoted him as saying.

Hosseini said, “They would resemble production sharing but with different characteristics.

“The international oil company, or the investing company, would be accepting certain risks in view of which it would be entitled to a portion of the oil thus produced. Or the reward of that risk is a share/portion of the oil.”

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