Iran will hold its first tender of an oil field for development under a new contract model on Oct. 21.
South Azadegan field is up for the first tender under the Iran Petroleum Contract (IPC), National Iranian Oil Co. Managing Director Ali Kardor said this week. “Next week, we will be sending invitations to foreign companies and ask them to announce if they are interested,” he told reporters at a press conference in Tehran.
Iran has been developing the IPC over the past 2 years in an effort to lure investment to its oil and gas sector. Its ministry of petroleum has modified the contract several times amid criticism that it might pave the way for renewed squandering of national wealth similar to oil concessions to the UK under the 1901 D’Arcy Agreement.
Domestic companies will be offered small and medium-size fields with the goal of developing fields with a recovery rate of less than 20%. Confidentiality agreements signed with oil companies will be sent to the Supreme National Security Council.
Kardor said the final version maintains a 20-year contract period and includes a fee per barrel that is paid as profit to the company.
Unlike Iran’s previous buyback deals, there will be no ceiling on capital expenditure. Oil companies would have a chance in the annual work program and budget to revise the scope of work and the cost according to changes.
About 50 projects, a combination of brown and green fields as well as exploration blocks, are being considered for development, but the current priority is to develop oil and gas fields owned jointly with neighboring countries.
Minister of Petroleum Bijan Zangeneh said this week that oil and gas fields shared with Iraq, including Yaran, Azadegan, and Yadavaran, will be the primary targets for tendering.
South and North Azadegan is the world’s third-largest oil field with in-place reserves of 33.2 billion bbl and recoverable resources of 6 billion bbl, NIOC says.
Iran first awarded development of South Azadegan to Japan’s Inpex Corp. in 2001, but later withdrew from the country (OGJ Online, Oct. 15, 2010). Iran also terminated a contract with China National Petroleum Corp. amid dissatisfaction with its development pace for the field.
