Changuleh, Iran’s Oil Investment Priority
One of the oil fields which Iran shares with neighboring Iraq is Changuleh. This untapped field has won the hearts of foreign companies on many occasions. Three major Russian companies and a Croatian firm offered to develop this field located in western Iran, but due to the US’s withdrawal from the 2015 Iran nuclear deal and the ensuing re-imposition of sanctions against the Islamic Republic, development of this field was exposed to changes. Now, Iranian E&P companies have been added to the list of candidates willing to develop this field.
According to the Petroleum Ministry data, Iran has more than 102 oil fields, sharing 28 of them with neighboring states. Jointly-owned onshore fields are located along the border with Iran, while offshore reservoirs are located in the Persian Gulf and the Sea of Oman. However, the problem with these jointly-owned fields is the conclusion of development operations in neighboring countries and incomplete development operations in Iran’s part. Neighboring countries will not wait for Iran to finish development of its own sector before starting recovery. Every day, the reserves in place of jointly-owned reservoirs decline without Iran having made any extraction.
In light of the limited lifecycle of jointly-owned reservoirs, Iran has reconsidered its development plans to concentrate on development of the jointly-owned fields in order to increase Iran’s share of production from the current 7%.
In parallel with the policy of accelerating jointly-owned fields, Iran’s Minister of Petroleum Bijan Zangeneh has ordered the transfer of drilling equipment from the independent oil fields to the joint fields, indicating the realizing of industrial objectives.
As far as the Changuleh field is concerned, until recently it was assumed that in the Anaran block, the only shared field was Azar. Changuleh was long considered as an independent field. Therefore, National Iranian Oil Company (NIOC) decided to remove the priority of the Changuleh field. The results of seismic testing in 2015 by NIOC Directorate of Exploration showed that Changuleh was structurally connected with Iran’s Azar field, and Iraq’s al-Badra field. That was when development of the Changuleh field was put once more on the agenda.
In July 2016, Changuleh was agreed to be offered for development through Iranian-foreign partnership. Several European and Asian companies expressed readiness to develop it and offered the findings of their studies to NIOC.
The Reservoir Consultants Committee, citing studies conducted by various companies, has taken action to determine the priority of reservoirs.
Changuleh is set to undergo development through drilling 19 wells. To that end, two development phases are envisaged. The first phase, which would last 36 months, would be carried out with an investment of $200 million to $250 million for an output of 15,000 b/d of oil from six wells. This phase would also include a 130-km pipeline to carry 15,000 b/d of oil to Dehloran.
Full development of Changuleh would last 44 months. Under this plan, 13 new wells would be drilled while infrastructure facilities, a production unit and pipelines would be built to add another 35,000 b/d to the field’s output. That would bring output from this field to 50,000 b/d.
Changuleh is estimated to hold 1.5 billion barrels of oil in place with an API gravity of 22.
Three wells have so far been spudded in Changuleh. The first one dates from 1974, the second one was drilled in 1997 while the latest one was spudded in 2006.
According to a report from the Oil Engineering and Development Company, early development of the Changuleh field and assessing its hydrocarbon potential would allow for the recovery of 65,000 b/d of crude oil.