Iranian firm to develop south pars oil layer under IPC
National Iranian Oil Company is set to grant the development project of the South Pars oil layer, in the Persian Gulf, to a domestic company, a senior official said.
“The cooperation will be under Iran’s new model of oil contracts, known as Iran Petroleum Contract [IPC],” NIOC director of integrated planning, said on Thursday 22 August. “Negotiations are also underway with domestic companies for the development of other fields such as Yaran and Sohrab,” he added.
Noting that NIOC has already signed IPC-based contracts with domestic contractors for developing and increase the recovery factor of various oil fields such as Cheshmeh-Khosh, West and East Paydar, Sepehr, and Jofair, he said, “with these contracts going operational the production capacity of the country's oil fields will increase significantly.”
Iran introduced its “Iran Petroleum Contract” in 2016 and replaced it with old buyback models in order to attract more foreign investors into the country’s oil and gas sectors.
In early January, the managing director of Pars Oil and Gas Company (POGC), which is in charge of developing Iran’s South Pars gas field in the Persian Gulf, had said that this company is in talks with a number of Iranian companies on the development of the oil layer of the field.
South Pars is the world’s largest gas field, but it also has significant oil reserves which Iran shares with Qatar across from the Persian Gulf.
Iran started pumping oil from the oil layer in March 2017 with the initial production of 5,000 barrels per day (bpd) which currently stands at 25,000 bpd according to Meshkinfam.
The development of South Pars oil layer is still at the pilot phase, but the country sees positive prospects for 150,000 bpd of recovery in the currently producing reservoir.
Officials have said the development of the layer is a complex process requiring integrated development.
“We are looking for a competent contractor who can make a commitment to production. Iranian companies are interested in getting money and digging wells. We are looking for cumulative production,” former deputy head of the National Iranian Oil Company (NIOC) stated.
NIOC was in talks with Denmark’s Maersk Group for the second phase development of the South Pars oil layer, then negotiations with the Danish company was stopped after Maersk sold its oil and gas division to French oil major Total in August 2017.