Eni Agrees to Study Two Iran H/C Fields
Italy's Eni has signed a provisional agreement with Iran's state-run energy group to carry out feasibility studies on the development of oil and gas fields in Iran.
Italy’s largest oil and gas group signed a memorandum of understanding on Tuesday with the National Iranian Oil Company (NIOC) to explore a potential investment in Kish gas field in the Persian Gulf and the third phase of development of the Darquain oilfield in southwest Iran within the next six months.
Iran had signed provisional agreements at the end of last year on the two fields with Royal Dutch Shell, Russia’s Gazprom, The Philippines’ PNOC and an Iran’s Ghadir Investment Company.
The agreement on June 20 was signed by Gholam-Reza Manouchehri, NIOC deputy managing director of for engineering and development and Seger Willem Arie Hoijtink, Eni's vice-president for international upstream projects. Other officials present at the ceremony were Ali Kardor, CEO of NIOC, and Nouroddin Shahnazi, CEO of Petroleum Engineering and Development Company (PEDEC).
Eni is no stranger to Iran's petroleum industry. The Italian energy company first came to Iran in 2000 and completed phase one and two of Darquain oilfield but quitted development of the third phase in 2011 due to international sanctions imposed on Iran over its nuclear program.
Eni has already led oil projects in Egypt and the Mediterranean with Manouchehri saying that the company has registered significant records in rapidity and quality in these countries.
Now Iran hopes to enhance oil production from Darquain from 160,000 b/d to 220,000 b/d, which would require an estimated $1.5 billion in investment. In the third phase of development of the oil field, Ilam, Sarvak and Fahlyan layers will be developed.
6 Months for Feasibility Studies
Manouchehri said Eni would have six months to complete its technical surveys on Kish and Darquain fields and submit its conclusion to NIOC.
"We hope to be able to achieve an acceptable basic development plan based on the findings of studies we receive from companies," he said.
"Based on these MOUs, domestic and foreign companies will conduct their studies on the development of oil and gas fields free of any charge," he added.
Manouchehri said an advantage of signing MOUs with a variety of domestic and foreign companies to study oil and gas fields was the compilation of various plans. "That would help us compare the results of studies with each other. Furthermore, valuable projects have so far been submitted to NIOC," he added.
Manouchehri said NIOC had conducted its own independent studies separately in order to have a more realistic view of oil and gas fields, rate of recovery from them and their lifecycle.
Cutting Edge Technologies a Must
Under Iran's new model of oil contracts, IPC, NIOC insists on improved oil recovery and enhanced oil recovery (IOR/EOR) and expects IPC to bring about oil and gas recovery enhancement.
Manouchehri said NIOC wants the use of modern technologies in studying the field in order to "have maximum efficiency in recovery from the fields."
"We expect the use of conventional technologies which are available in the world in order to stabilize Iran's oil and gas reserves because these deposits are Iran's accumulated wealth and should we fail to recover them through IOR/EOR we will lose these resources in coming years," he added.
Manouchehri said under IPC deals, Iranian E&P companies would join foreign companies in developing oil and gas fields.
"In case we reach a final conclusion in IOR/EOR, Iranian companies that are now serving as partners to foreign companies in oil and gas projects will themselves become developer of projects," he added.
Eni Seeks Comeback to Iran
Arie Hoijtink referred to Eni's cooperation with Iran in the past in developing Siri and Darquain fields, saying the Italian company had accomplished all its projects