Doroud Up for Investment
Iran's nuclear deal with six world powers was one of significant events in the oil sector in recent years. The historic agreement, known as the Joint Comprehensive Plan of Action (JCPOA), capped ten years of intensive diplomatic talks and opened the way for the return of Iran's oil to global markets.
Iran is taking advantage of post-JCPOA opportunities to enhance recovery from its ageing oil and gas fields and upgrade its petroleum industry infrastructure by attracting foreign investment.
Iran plans to raise its oil production to around 5 mb/d by the end of its 20-Year Vision Plan. Ageing offshore and onshore fields would be instrumental in helping Iran reach that objective.
Doroud oil field, located in Kharg Island in the Persian Gulf, is among developed oil fields which Iranian Offshore Oil Company (IOOC) recently offered to foreign investors for development under new-style oil contracts.
According to a National Iranian Oil Company (NIOC) office in charge of reviewing the economic feasibility of projects, the investment needed for the development of Doroud oil field during a four-year period has been specified. This amount of investment will be provided through financing contracts, EPCF and EPFF depending on the operation of the project. Regarding remuneration, 50 percent of the value of enhanced oil output would be paid over a six-year period.
Doroud oil field is run by the IOOC. This company was the first in Iran to carry out water injection, using ESP in wells and gas lifting. The IOOC is a leading company in enhanced recovery projects and is serious about improved recovery from the fields it has offered for investment.
Doroud oil field is located on a region measuring five kilometers wide and 25 kilometers long. It is one of the largest oil fields in Iran. It has been developed twice over the past 40 years and its third phase of development is nearing its end.
Doroud is estimated to hold around 7.6 billion barrels of oil. Due to 33 years of production (from 1964 to 1997) and untimely injection of water and gas, only 1.5 billion barrels of Doroud's reserves were recoverable. But after development, it has had 2.5 billion barrels of recoverable oil.
At present, Doroud is currently producing on average 15,431 b/d of oil from its offshore wells and 36,500 b/d from its onshore wells. In 1997, 42 wells were drilled in this oil reservoir, including 18 offshore wells.
Crude oil processing facilities in Kharg Island, under the names of Doroud Facility I and Doroud Facility II have been designed and become operational with a capacity of 100,000 b/d and 110,000 b/d, respectively.
Around 1.6 billion barrels of crude oil has been extracted from Doroud over a 40-year period. Production was halted during eight years of imposed war (1980-1988).
The first step for enhancing production from Doroud was taken in April 2002 when the field's output stood at 15,000 to 16,000 b/d. In the following years, new wells were spudded in the field. Now, production from Doroud 1, Doroud 2 and Doroud 3 fields has reached 43,000, 52,000 and 57,000 b/d.
When a contract was being signed with France's Total in 1999 for the development of Doroud, oil was at $20 a barrel. Total purchased the shares of France's Elf and teamed up with Italy's Agip to develop Doroud field. That was a significant step in attracting foreign investment by that time. Total failed to honor its part of the contract for gas production and pulled out mid-way. However, the IOOC has extracted a high amount of oil from this field over recent years. This project has proven profitable for Iran as its initial investment returned during the first years of enhanced production.
Before the gas injection section of Doroud field was launched many Iranian petroleum industry experts held out the possibility that due to the lack of experience in high-pressure gas injection (6,000 psi) into this field and unknown consequences the gas injection section would become ready later than the water and oil injection sections.
Furthermore, the existence of a sophisticated geological structure at Doroud field and the location of this oil field beneath Kharg Island slowed down the development of this field in the first years because it was difficult to do onshore and offshore work at the same time.
At Doroud field, there are 12 water injection wells, two gas injection wells, and 15 oil injection wells to be developed.
There are a total of 40 wells at Doroud, including 25 offshore ones.