TEHRAN – National Iranian Oil Company (NIOC) has signed a memorandum of understanding (MOU) with the country’s major exploration and production companies, public and private banks, and financial institutions for the development of Azadegan oil field, Oil Minister Javad Oji announced.

Based on the MOU which was signed on Tuesday by NIOC Head Mohsen Khojasteh-Mehr and managers of the banks and domestic exploration and production companies, seven billion dollars will be invested in the field’s development project to increase its production capacity to 570,000 barrels per day, Shana reported.

“With an investment of nearly seven billion dollars, the production capacity of this field will reach 220,000 barrels per day in the second year of its development, and will reach 570,000 barrels of oil per day in the next seven years,” Oji told the national TV on Tuesday evening.

Based on the MOU, all the signatories of the document will be shareholders in the project and a part of the shares of the project will also be offered at the stock market.

As announced by NIOC, the development plan of the joint field includes the drilling of more than 420 production and injection wells, the construction of five manifolds, and the installation of 315,000 to 320,000 kilometers of pipelines which all will be carried out by domestic companies and contractors.

According to Oji, the field is currently producing 190,000 barrels of oil per day.

“During the 20-year operation period of Azadegan field, considering the base price of oil to be $80 per barrel on average, the field will generate more than $115 billion in revenue for the country and create employment for 24,000 people,” the minister said.

Azadegan is one of the five major oilfields Iran shares with Iraq in the western part of Iran’s southwestern region of Karoun, known as the West Karoun fields.

The field’s reservoir is estimated to contain 32 billion barrels of oil, and its development has so far been pursued in two sections, the Southern Azadegan and the Northern Azadegan.

Back in May, Khojasteh-Mehr had announced that his company was going to award the development of Azadegan oil field, including the South and North blocks, to a consortium of domestic companies.

“Following the NIOC’s comprehensive programs for the development of joint fields and maximum use of the capabilities of Iranian companies, the second phase of North Azadegan field’s development project and the ongoing project of South Azadegan will be awarded to a consortium comprised of exploration and production companies under a $7.5 billion contract,” the NIOC head said on May 15.

Speaking in a press conference on the sidelines of the 26th International Oil, Gas, Refining and Petrochemical Exhibition of Iran (Iran Oil Show 2022), Khojasteh-Mehr said: “The above-mentioned companies will form a single firm to develop the field and all of them will have equal shares under the mother company.”

“So, the final contract is not an exclusive deal and we do not intend to award the field to just one or two companies, but it will be awarded to all of them,” he added.

EF/MA