Local companies seal deals to develop two Iranian oil fields
The Iranian Oil Ministry on Sunday handed over two underdeveloped oil fields to local companies to help crank up crude production by 78,000 barrels per day (bpd).
The shared Changuleh oil field near the border with Iraq will be developed under a 20-year-long deal between the National Iranian Oil Co. (NIOC), which is owned by the Iranian Oil Ministry, and the Oil Industries Engineering and Construction (OIEC).
Located five kilometers north of the Iran-Iraq border in the western Ilam province, the Changuleh oil field is estimated to have 4.8 billion barrels of crude oil in place, according to Shana News Agency.
The project, which will see the OIEC financing $1.251 billion in direct investment, is part of a broader program aimed at maximizing extraction from shared oil fields by employing private Iranian exploration and production firms.
It includes the drilling of 25 new oil wells to churn out 60,000 dpd and the construction of surface installations, such as a central oil and gas processing facility, oil and gas pipelines, and wellhead equipment.
The oil field is expected to yield 228 million barrels of crude oil during the timespan and bring in some $13 billion in revenue. It will also ensure a constant supply of feedstock to a nearby gas and liquid gas processing plant. This is the second oil field in Ilam that the NIOC has turned over this year to a local firm for development. In March, the state-owned company signed “the biggest deals in a decade” to develop six oil fields, including Azar in Ilam which is shared with Iraq. Speaking on the sidelines of the ceremony to ink the deals on Sunday, June 16, Oil Minister Javad Owji said his ministry had launched 300 oil projects worth $130 billion, out of which 153 ventures valued at $34 billion had already been completed.
The NIOC also finalized a deal with the Mapna Oil & Gas Development to further develop the Band-e-Karkheh oil field in the southwestern Khuzestan province to add 18,000 bpd to Iran’s daily crude oil production.
Just 20 kilometers away from the provincial capital of Ahvaz, Band-e-Karkheh holds nearly 1 billion barrels of in-situ crude in its reservoir. The company in charge, which is a subsidiary of Iran’s industrial giant Mapna group, will invest $435 million to drill 14 wells in the Band-e-Karkheh oil field.
As per the contract, 56.6 million barrels of crude are estimated to be produced during a 15-year timeframe, earning the government nearly $3.5 billion.