Balal Up for Investment
Balal oil field is one of Iranian hydrocarbon fields ready to attract foreign investment. Development of the field started in 1999. The field became operational in 2002 and started producing 20,000 b/d of oil.
The oil produced at Balal is of high quality and is even better than North Sea Brent.
Over recent decades, Balal field has had a significant share in Iran’s oil production. But with the discovery of gas layers in this field, which are geologically connected to the giant South Pars gas field, development of its gas layer has been considered a priority of Iran’s petroleum industry in the offshore sector.
Due to its gas layers, Balal oil field is able to recover gas in addition to oil. Balal is located in Hormuzgan Province and more specifically in the Lavan area.
Balal is also located near Qatar’s waters. Its two known reservoirs are Arab and Khatya.
Recently, by establishing a system for optimal injection of water into the Balal oil field, about 12,000 b/d of water is fed into this field for maximum efficient recovery.
Development of Khatya oil layer in Balal field is one of the main projects by the Iranian Offshore Oil Company (IOOC). Balal is currently producing oil. France’s Total developed this field in 2001 and 2002, but it failed to extract oil from the Khatya layer.
The oil extracted from this field is delivered to Lavan Island through a 100-km-long pipeline. After being blended with oil from the Salman oil field and processing, it will be ready for export.
Meanwhile, the contract for the development of the Balal field in 1999 had been signed under a buyback deal between National Iranian Oil Company (NIOC) and Elf.
The gas layers of Balal field are able to produce 500 mcf/d of gas. Initial estimates are indicative of 6 tcf of gas in place in this field.
The main reservoirs of the Balal field, which is located east of the South Pars gas field, are Kangan and Dalan.
IOOC officials say the H2S content of the gas produced from the field is lower than 100 ppm.
Iran hopes to revive its mature oil and gas fields and renew its oil infrastructure using Western expertise in order to regain its status as the world’s fourth largest oil producer, just behind Saudi Arabia, the United States and Russia.
NIOC’s objective is to lift output by 50% over five years and reach an output of 5 mb/d of oil and 1.4 bcm/d of gas.
Before the US reinstated its sanctions on Iran, South Korean companies have singled out Balal field as their favorite for development.
French, Indian, Dutch, Norwegian, Australian, Singaporean and Chinese companies are among a host of foreign firms bidding for the development of Iranian oil and gas fields, particularly offshore ones which need cutting edge technologies.
These talks are going on at a slow pace due to renewed US sanctions. However, foreign companies have expressed hope to cooperate with IOOC in investment and development, as well as technical services.
The technical divisions of IOOC have assessed bottlenecks to investment and prepared technical and investment packages.