Plans Call for Effective Interaction With Oil Majors

EghtesadOnline: Iran will announce an international tender for the second development phase of South Azadegan Oilfield in the Persian Gulf, Oil Minister Bijan Namdar Zanganeh said, alluding that Tehran seeks to cooperate with foreign companies in its oil and gas industry despite early agreements with companies at home and abroad.

News ID: ۷۷۱۲۳۳

12 November 2016

"South Azadegan will be put out to tender," Zanganeh told ISNA without providing details such as the possible date for the tender.

Tehran has said that South Azadegan will likely be the first of dozens of projects to be tendered to multinationals as gradually opens up its key energy sector to the outside world following the lifting of sanctions in mid-January. The remarks by Zanganeh come as collaboration with several foreign companies, including France's Total, Russia's Lukoil and Malaysia's state oil company Pertamina, as well as deals with domestic corporations, have fueled speculation that certain companies are given a head start in the oil/gas projects.

In March, the state-owned National Iranian Oil Company signed an agreement with Total S.A. for the South Azadegan Oilfield. Government officials say the agreement allows Total only to study the field and does not grant the French company drilling rights.

Tehran has also reached an understanding with Khatam-al-Anbiya Construction Headquarters, an affiliate of the Islamic Revolution's Guard Corps, based on which the latter is to submit a master plan within three months for developing the joint Azadegan oilfield near the border with Iraq.

Zanganeh has not drawn a clear line between the role of potential domestic corporations and foreign majors in developing the giant Azadegan oilfield.

Azadegan oilfield in the southern oil-rich province of Khuzestan is one of Iran's largest oilfields that it shares with Iraq. The field, which is divided into the north and south sections, was discovered two decades ago but has since experienced underwhelming development at the hands of foreign contractors.

Oil Agreements

Besides Total, Pertamina signed a nondisclosure agreement in August to survey Iran's onshore Abteymour and Mansouri oilfields within six months.

Meanwhile, Lukoil hopes to secure the development rights for Abteymour and Mansouri fields by the fall of 2017 as it is also reportedly studying the two oilfields in Khuzestan, according to Financial Tribune.

The Oil Ministry also awarded the first oil contract under Tehran's revised contractual framework, known as Iran Petroleum Contract, to an Iranian company last month in a move that surprised foreign investors and market watchers after months of waiting for the first international Iranian oil tender.

Zanganeh said this week that Iran needs to invest $130 billion in its petroleum industry by 2021 and asserted that the funding in large part should come from foreign companies.

According to Ali Kardor, NIOC's chief executive officer, Iran will sign two or three oil deals by next March expected to attract an estimated $10 billion in foreign investment.