Azadegan Oil Output Hits 100,000 b/d
Oil production from South Azadegan oil field has exceeded 100,000 b/d. Shared by Iran and Iraq, South Azadegan underwent development in 2014 by Iranian contractors.
North Azadegan and South Azadegan are expected to be awarded for development under the newly developed "Iran Petroleum Contract" model.
National Iranian Oil Company (NIOC) divided Azadegan in two in order to accelerate its development. South Azadegan is the larger section.
South Azadegan is located in the hydrocarbon-rich West Karoun area near the border with Iraq.
NIOC signed a buyback deal in 2009 with China's CNPCI to develop the field. Due to modifications in the master development plan (MDP), operations started in September 2012 and finally no result was achieved. In 2014, Iran officially terminated the deal due to the Chinese party's feet-dragging in respecting its commitments. After that, Iranian contractors were put in charge to develop the field.
When client- Iran's Petroleum Engineering and Development Company (PEDEC) - decided to award the project to Iranian contractors, everyone thought that Iranian companies could not enhance output from this field under sanctions. But later on it was proved that Iranians managed to increase oil output from South Azadegan and reduce drilling costs in the field.
50,000 b/d to 80,000 b/d
Oil production from South Azadegan is expected to increase in two phases. In Phase 1 and Phase 2 oil output reaches 320,000 b/d 6,000 b/d, respectively. But since the oil field is jointly owned by Iran and Iraq, early production was envisaged so that Iran would not lag behind Iraq in oil extraction from South Azadegan.
Iran's production from South Azadegan was below 50,000 b/d, which has been raised to 80,000 b/d with the drilling of 30 new wells by Iranian contractors.
Output at 100,000 b/d
Although NIOC has decided to develop Azadegan completely, output enhancement plans continue in parallel with technical studies by international companies. PEDEC has announced that oil production from South Azadegan would keep rising as long as no tender bid has been launched. After 13 new wells become operational in South Azadegan, the output from this field would soar to 100,000 b/d. PEDEC has said it still plans to increase production from South Azadegan.
North Azadegan, which has been developed by CNPCI and is currently producing 75,000 b/d, came on-stream in November 2016 by Iranian President Hassan Rouhani.
35bn Barrels of Reserves
Azadegan holds more than 35 billion barrels of oil in place. That, along with sophisticated drilling, has led NIOC to study demands by potential bidders with more sensitivity. Preservation of output and boosting the rate of recovery from this field are of high significance. Under the new model of oil contracts, NIOC lays emphasis on applying modern technologies to boost recovery rate and transfer technology into Iran.
Last September, representatives of 14 international companies bidding for the development of Azadegan oil field visited the existing infrastructure in West Karoun area, and gathered information about the status of the field.
NIOC signed agreements with some of bidders to study the oil field. So far, Malaysia's Petronas, Royal Dutch Shell, Japan's Inpex and France's Total have submitted the results of their studies to NIOC.
The memorandums of understanding signed with these companies would not be considered an advantage for them in bidding for the field. Azadegan will be put out to tender to be finally awarded to a qualified company.