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Why Iran Oil Is Attractive

(Sunday, December 3, 2017) 14:48

TEHRAN, (Shana) -- The second panel on the second day of the third annual Congress of the Iran Petroleum and Energy Club (IPEC) was again focused on Iran's upstream oil sector.


Behzad Mohammadi, CEO of Oil Industries Engineering and Construction Company (OIEC), highlighted two upstream projects which have recently become operational; phases 20&21 of South Pars gas field and Azar oil field. South Pars is shared by Iran and Qatar, while Azar is jointly owned by Iran and Iraq.

Mohammadi said production from Azar field totaled 4.6 million barrels, adding that its output had reached 35,000 b/d.

Azar started producing 15,000 b/d of oil in March before reaching 30,000 b/d in May and its production rate is 35,000 b/d now.

Azar is estimated to hold 2.5 billion barrels of oil in place, said Mohammadi, adding that new studies put the oil content at 4 billion barrels.

He said that Azar's output was planned to reach 65,000 b/d in the primary recovery.

"Talks are under way with international companies within the framework of new model of oil contracts for the second phase development of this field," said Mohammadi.

"After development of 2nd phase of this field under IPC, we expect oil recovery from Azar field to reach 100,000 b/d," he added.

Mohammadi said oil recovery risks in Azar field included its tough geological structure which had increased the average time needed for drilling. He added that international sanctions had prevented the supply of necessary commodities.

EOR a Must

Representatives of foreign oil companies also expressed their views about Iran's upstream oil sector.

China's CNPC International president Lyu Gongxun referred to the high attractiveness of Iran's petroleum industry for foreign firms, saying this attraction ows to IPC.

He expressed China's readiness for broader cooperation with Iran in the petroleum industry, saying cooperation between Iran and China should be based on securing mutual interests of the two parties.

Alessandro Tiani, Vice President for EOR and Advanced Reservoir Modelling at Italy's Eni SpA, briefed the audience about different methods of enhanced oil recovery, saying it was pretty necessary for Iran to raise its output due to the high level of reserves.

"In case a good method is not applied for enhanced recovery the result will not be acceptable and the reservoir may even be damaged," he said.

Then, the Royal Dutch Shell delegate at the congress said any increase in oil production, as predicted by the International Energy Agency (IEA) to meet growing demand, must take into consideration environmental concerns.

He also spoke about a variety of EOR methods, mainly water, gas and steam injection.

He said that choosing a method for enhanced recovery would depend on the certain

 conditions of the field in question.

Ildar Shaykhutdinov, project director at Russia's Rosneft, said 49% of the activities of this company is done by software.

"We plan to increase this percentage over the coming five years," he said.

Marquis Ennio H.A.R. Senese, vice president of ILF Consultants and Engineers, said international sanctions posed challenges to the development of oil fields in Iran.

"Iran is the largest owner of oil and gas reserves in the world and it has big potential for development," he said.

Senese said the high level of knowledge of Iranian university graduates, economic diversity and Persian rich civilization were among outstanding features of the country.

He referred to financial shortages as the biggest challenge to oil and gas industry development, saying Iran could become one of the largest producers of gas in the world in case of facilitation of financing for gas fields.

Senese criticized administrative red tape in Iran as a challenge to foreign investment. He expressed hope that streamlining bureaucracy would help clear the way for investment in Iran's oil and gas sector.


Courtesy of Iran Petroleum