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August 2011, No. 61


Exclusive 16th International Oil Show

$20 bn to Be Invested in Oil, Gas Fields


Kuwait has been one of the parties with which we have been conducting negotiations on development of Arash field.


Managing director of National Iranian Offshore Oil Company took part in a press conference on the sidelines of the 16th International Oil, Gas, and Petrochemicals Exhibition. During the conference, Mahmoud Zirakchianzadeh noted that Iran should produce as much gas from the Persian Gulf fields as equivalent of 10 phases of Assaluyeh. He added that negotiations are underway for investing 20 billion dollars on oil and gas fields.

Zirakchianzadeh stated that good infrastructures have been created by the company in 2010 both in terms of drilling fleet and offshore fleet.

"The company can produce 84 trillion cu. m. gas from six phases of Assaluyeh and 774 billion barrels of oil from the existing fields in the Persian Gulf, which will be equivalent to daily production of 133,000 barrels of oil."

He stated that there are 14 shared fields that are controlled by National Iranian Offshore Oil Company with the highest production attributed to Salman oil fields. The field's recovery factor has stood at 48 percent after water injection, he noted.

Managing director of National Iranian Offshore Oil Company noted that there are plans for investing 8 billion dollars on shared fields.

"Negotiations are underway with foreign companies for investing 20 billion dollars in these fields. We aim to develop gas fields and increase output to 10 billion cu. ft.," he said.

The official added that negotiations have been carried out with Saderat Bank for construction of petrochemical plants and another project for generating power from gas has been underway in cooperation with MAPNA Company.

Zirakchianzadeh stated that petrochemical plants will be established in Lavan and the power generated from gas will be used in the country and also exported.

Referring to the company's developed infrastructures for drilling export terminals and increased share of domestic manufacture in procurement of needed equipment, he said that share of Iranian companies in procurement of equipment has increased by 20 percent in 2010 compared to 2009.

Zirakchianzadeh noted that when the third well of Hengam field becomes operational, oil production from the field will increase from 16,000 to 20,000-25,000 barrels per day and when the second and third jackets are installed in the second half of the current Iranian calendar year (started March 21, 2011), the figure will further rise to 30,000 barrels per day.

He added that a major issue regarding shared fields is rivalry to produce the highest amount of products at the lowest cost.

Managing director of National Iranian Offshore Oil Company further noted that during the past 2-3 years "we have raised this point."

"Kuwait has been one of the parties with which we have been conducting negotiations on development of Arash field. In addition to those negotiations and in parallel to them, we have been building jackets for the field which will be installed during the current year and drilling four wells will begin," he said.

Zirakchianzadeh stated that good investment has been made to prevent burning flare gas and the United Nations has approved investments in this project for Soroush and Norouz fields.

"Since both fields are producing sweet gas, their gas is taken to Abuzar oil field en route to Kharg in order to both replace gas from Abuzar field and increase production of methanol in Kharg. About 10 million cubic meters of gas will be taken to Kharg in this way," he added.

Managing director of National Iranian Offshore Oil Company also stated that the first CDM from contractor company amounting to 6.5 million dollars will be received this year. He added that Sirri gas project was another underway project. "About 80 percent of NGL (Natural Gas Liquid) project in Sirri has been commissioned and when it becomes fully operational no more flare gas will be burnt in the island."

Asked by Fars news agency about why the company's oil output has fallen compared to previous projections in the last year's Budget Act, Zirakchianzadeh said that the company has produced 30,000 barrels more oil compared to what it promised to produce in 2010.

The managing director noted that the company's output in 2010 had fallen by about 20,000 barrels per day compared to 2009. He added that output has increased compared to 2004, but during 2010, it fell by 20,000 barrels per day compared to 2009.

"During the first phase of gas to power conversion project, 3,000 MW of power will be generated. We will need 15 million cu. m. of gas per day for the first phase and 30 million cu. m. of gas per day for the second phase," he said.

Zirakchianzadeh also stated that the electricity produced in the project will be consumed in the country and will be also set aside for exports to the Persian Gulf littoral countries, Pakistan and Turkey.

"We need 5 billion dollars in investment and four years for the first phase, which will yield 3,000 MW of power."

As for development of Esfandiyar field, the official said there is a master development plan (MDP) for the field and both domestic and foreign companies have applied to do that. "At present, there are three serious options for investment and development of the field. Negotiations are going on and development will most probably start in the second half of the current year," he added.

Zirakchianzadeh noted that in-place oil reserves of Iran in the Persian Gulf have been estimated at 94 billion barrels of which, 7.1 billion barrels have been produced and the rest is counted among national reserves.

"Given the existing fields and continued development of Reshadat, Hengam, Resalat, Alpa, Golshan and Ferdows, we are sure to achieve the production level projected by the Fifth Economic Development Plan," he said.

Zirakchianzadeh also stated that MATN Company and its contractor, Petroiran, are working on Salman oil field, but according to policies of National Iranian Oil Company, gas reserves of the field, like its oil reserves are being delivered to National Iranian Offshore Oil Company.

"There are two routes to transfer the fields' gas. One goes to Assaluyeh and the other one has been considered for exports. Gas from this field will enter consumption network during the current year," he added.

Managing director of National Iranian Offshore Oil Company stated that early production in Lavan started in 2009.

"As a firs step, we introduced gas into Lavan turbines and also used it for process systems. Based on an agreement with National Iranian Oil Refining and Distribution Company, the gas will replace 60,000 liters of fuel previously used by Lavan refinery," he said.

The official noted that production in Lavan matches local consumption, that is 30 million cu. ft., but the field is capable of yielding 700 million cu. ft. gas per day.

 

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