TEHRAN- Iran has made no negotiations with foreign companies including French oil and gas major Total on development of the South Azadegan oilfield, according to Mahmoud Mar’ashi, the oilfield’s development project manager.

While dismissing reports by some media about Iran’s talks with some foreign firms over development of the oilfield, Mar’ashi said the second phase of development will be conducted in the framework of Integrated Petroleum Contract (IPC), the IRNA news agency reported.

IPC is the new model of Iran’s oil contracts, which the country introduced in a Tehran conference on November 28. It will replace buy-back contracts and is expected to offer more flexible terms on oil price fluctuations and investment risks to make the sector more financially attractive. 

South Azadegan is one of the five oilfields, dubbed the West Karoun oilfields, Iran shares with Iraq at the western part of Iran’s southwestern region of Karoun.

Abdolreza Haji Hossein-Nejad, the managing director of Iran’s Petroleum Engineering and Development Company (PEDEC), on Saturday put the progress of the oilfield development project at over 20 percent and the worth of project at $2.1 billion.

He expressed hope that the oilfield’s production will reach 60,000 barrels per day (bpd) in the next year.

While mentioning South Azadegan the largest oilfield among the other four oilfields of West Karoun, the official highlighted that Iranian companies account for the whole development of the oil field.

He said development of the oilfield is aimed at boosting its output to 320,000 bpd in the first phase and to 600,000 bpd in the second phase.

Iran discovered Azadegan oil field in 1999 in what was the country’s biggest oil find in decades.  The country accordingly teamed up with Inpex to push the project toward development.  However, the Japanese company quit the project in what appeared to be a result of the U.S. sanctions against Iran, according to Press TV.

The National Iranian Oil Company (NIOC) later divided the project into South Azadegan and North Azadegan and both were awarded to China’s CNPC when Iran’s former president Mahmoud Ahmadinejad (2005-2013) was in office. 
 
The media reported in 2014 that Iranian Oil Minister Bijan Namdar Zangeneh had sidelined CNPC from South Azadegan due to its protracted delays in developing the field.
 
South Azadegan is believed to hold an in-place oil reserve of about 33.2 billion barrels and its recoverable resources estimated at about 5.2 billion barrels.

Development of joint oil and gas fields is a priority of the Iranian government.  

Western sanctions have cut Iran’s oil output to 2.7 million bpd from 3.9 million bpd, according to Zanganeh.   

In last April, Zanganeh said it would take just a few months for the country to increase its oil production to pre-sanction levels.  

With holding 157 billion barrels of recoverable crude oil reserves, Iran possesses the world’s fourth largest crude oil reserves.  

MA/