TEHRAN - Iranian Offshore Engineering and Construction Company (IOEC) has inked a deal with a renowned foreign company to cooperate in implementing the second phase of the South Pars Oil Layer’s development project, Shana reported.

The $500-million deal, prepared based on the Oil Ministry’s new model of upstream contracts, was signed on Tuesday in a ceremony attended by senior officials including Oil Minister Javad Oji and Head of National Iranian Oil Company (NIOC) Mohsen Khojasteh-Mehr.

The Oil Ministry has not revealed any details about the foreign contractor.

Under the framework of the development contract, which has been finalized for a 20-year period, the contractor is obliged to provide all the necessary financial resources to implement the project, including direct capital costs, indirect costs, and operating costs.

Based on the deal, the project description includes upgrading and modifying the existing processing vessel and platform, overhauling existing wells, digging new wells including production and water injection and assessment wells, construction of oil discharge and loading system, and strengthening the existing water injection system.

During the implementation of this contract, while updating the reservoir models using new data analysis, new wells will be drilled using horizontal drilling technology and also, a new unloading and loading system will replace the existing one.

According to Khojasteh-Mehr, due to the special situation of the oil layer, ordinary vertical drilling methods cannot be used for drilling wells at this field so using the new horizontal drilling technology by the foreign contractor will also be a step toward transferring this technology into the country.

South Pars Oil Layer, which holds about 900 million barrels of oil, is located in southern Iran in the Persian Gulf waters, where the Islamic Republic shares giant South Pars gas field with Qatar.

The field is the northeastern extension of Al-Shaheen oil field in Qatar. The Iranian portion of the field is located at 67 meters of water depth.

The huge South Pars gas field covers an area of 9,700 square kilometers, 3,700 square kilometers of which are in Iran’s territorial waters. The remaining 6,000 square kilometers, called North Dome, are situated in Qatar’s territorial waters.

The field is estimated to contain a significant amount of natural gas, accounting for about eight percent of the world’s reserves, and approximately 18 billion barrels of condensate.

The development of the South Pars field started in 1998 and 29 different phases were defined for the project along with a separate oil block. The field, however, is currently divided into 24 standard offshore phases, the output of which is processed by 14 gas refineries on land.

EF/MA