NIOC to Sign IPC Deal With Domestic Firm

In line with policies to help expand domestic companies' scope of exploration and production operations, the National Iranian Oil Company will finalize an agreement with Pasargad Energy Development Company to develop two oilfields, namely Jofeir and Sepehr in Khuzestan Province, within the framework of Iran Petroleum Contracts, the country's new model of contracts for oil and gas projects.

According to NIOC's news portal, the signing ceremony is expected to be held in Tehran on Sunday in the presence of the two companies' chiefs, including NIOC’s CEO Ali Kardor and PEDC's CEO Mehdi Mir-Moezzi.

The 20-year contract will be the first IPC-based deal signed between NIOC and a domestic firm and marks Iran's third deal within the newly-developed framework.

The first IPC deal was concluded with the French energy giant Total S.A. in July 2017 to develop Phase 11 of the South Pars Gas Field in the Persian Gulf. The second accord was clinched last week with Russia's state-owned oil company Zarubezhneft for the development of Aban and West Paydar oilfields near the Iran-Iraq border.

Direct and indirect costs of the plan are projected to amount to $413 million and $242.7 million respectively.

The project entails expanding the fields' current output at 2,000 barrels per day to 110,000 bpd during the period. The plan envisages extracting some 512 million within a 20-year period.

As per the agreement, PEDC will be commissioned not only to drill 126 wells and laying pipelines, but also to equip wells with submersible pumps, oil separators and enhanced oil recovery methods to raise output.

Pasargad signed a memorandum of understanding and a non-disclosure agreement last year with the National Iranian South Oil Company, a subsidiary of NIOC, to conduct studies on Sousangerd, Jofeir and Sepehr oilfields and submit a master plan.

The proposed plan by the enterprise was approved by NIOC's technical committees and they are poised to finalize the deal.

PEDC, a subsidiary of Bank Pasargad, is active in offshore drilling (jackup rig ownership and operation), general contracting (oil and gas exploration and production) and pipe manufacturing.

The company is also carrying out studies on Rag Sefid, Parsi and Shadegan reservoirs in Khuzestan Province, where other companies like Schlumberger, the world's leading oilfield services provider, as well as Pergas Consortium, a group of 11 international oil and gas companies, are doing their best to win NIOC's trust to develop the fields.

Sepehr Oilfield is a reservoir in the West Karoun oil block in Khuzestan. According to estimates, Iran needs to spend $500-600 million to tap into the field's 300 million barrels of proven reserves. Jofeyr field is 50 kilometers west of the city of Ahvaz and also contains some gas deposits.

West Karoun includes several large oilfields straddling the Iran-Iraq border, namely Azadegan, Yaran, Yadavaran and Darkhoein, with the first three divided into north and south projects. The block holds an estimated 67 billion barrels of oil in place.

source: Financial Tribune