Project Profile
Value: US$1,900 million
Location: 80 kilometres from the southeastern oil hub of Ahwaz, Iran
Area: 900 sq km
Production: 320 thousand barrels per day
Reserves: 5.7 billion barrels of crude
Start-up Year: March 2017
The first phase of development plan of South Azadegan oil field will come online in 2017. The oil production from the oil field will reach 320 thousand barrels per day in the first phase. South Azadegan, located 80 kilometres from the southeastern oil hub of Ahwaz, is the largest of the “shared” oil fields that Zanganeh has prioritized in his ambitious plan to increase oil production capacity by more than 1 million barrels per day to 5 million b/d within the next four years. Part of the same structure that embraces Iraq’s Majnoon oil field, currently operated by Shell and producing around 200,000 b/d, South Azadegan represents a big prize, with in-place reserves of some 26 billion barrels and targeted peak production of 600,000 b/d. But so far the field has vastly under-performed, largely due to sanctions that have made it impossible for Iran to find a suitable lead partner. Production is still below 50,000 b/d, against an expected 150,000 b/d.
Stating that drilling operations are underway by deploying 16 drilling rigs, it is expected that 185 wells to be drilled for development of the first phase. South Azadegan oil field has already started early production after drilling 21 wells producing 50 thousand barrels per day. Development contract of South Azadegan oil field was signed for the first time in 2004 with a Japanese company in the form of a buyback contract but the Japanese partner refused to go ahead with the plan after two years mainly due to sanctions. After that CNPC from China took charge but it made very little progress in development of the oil field after 19 month presence in the project. When Rouhani took office in 2013, the government set a 90 day deadline for CNPC to accelerate development of the project and finally decided to annul the contract due to lack of progress. At present the project faces no problem with regard to meeting necessary funds for development of the oil field and it is projected the first phase come online in 2017 with production of 320 thousand barrels of oil per day. The project is currently operated and shared by PEDEC and Total.
Operators:
Total
Petroleum Engineering and Development Company (PEDEC)
Contractor:
ITOK GmbH
National Iranian Drilling Company (NIDC): Drilling contract