Austria's OMV to Develop Band-e-Karkheh

EghtesadOnline: West Karoun covers a quite large area of land in the western bank of Karoun River as far away as the Iran-Iraq border. West Karoun is part of oil-rich Khuzestan Province, but in the 1980s and the following two decades it was impossible to operate oil exploration and production projects due to the imposed war and landmines that had not been cleared.​

News ID: ۷۷۸۰۳۵

30 July 2017

This area contains significant oil deposits, including the heavy crude oil in Band-e-Karkheh field.

Most oil fields in the West Karoun area are shared with neighboring Iraq. But Band-e-Karkheh is an independent one. Several years ago, National Iranian Oil Company (NIOC) devised strategic plans to invest more than $20 billion in the West Karoun fields in a bid to recover 1 mb/d of crude oil from them, according to Shana.

Band-e-Karkheh was among projects introduced to foreign firms for development under the new format of oil contracts, known as the Iran Petroleum Contract (IPC).

Band-e-Karkheh is located 20 kilometers northwest of Ahvaz, the provincial capital of Khuzestan. The field is 50 kilometers long and 5 kilometers wide, and is estimated to hold more than 4.5 billion barrels of crude oil in place with an API gravity of 24 in Sarvak and Ilam formations.

Band-e-Karkheh is administered by Arvandan Oil and Gas Production Company, but its development has been assigned to Petroleum Engineering and Development Company (PEDEC).

Band-e-Karkheh is forecast to have a production capacity of 7,500 b/d of crude oil. It has an anticline structure, one-sixth of which is extended to the northeastern boundary of Mehr Block.

Oil exploration operations in Band-e-Karkheh date back to the 1960s when 2D seismic testing and drilling of first well (BKH1) were conducted with the objective of identifying the hydrocarbon potential of Asmari formation. BKH1 was assessed as empty and exploration operations were halted. In 2007, another well (BKH4) was drilled in the northern part of the field to appraise Ilam formation. It was proven that at least 1,000 b/d of oil could be extracted. Sarvak Formation in Band-e-Karkheh is also estimated to hold 2.5 billion barrels of oil in place.

In 2012, an agreement for the development of Band-e-Karkheh was signed between PEDEC and the Armed Forces Social Security Organization Investment Company. But two years later the agreement was declared null and void.

The manager of development of this field recently announced that Austria's OMV had started work in Band-e-Karkheh, saying the field would be soon put out to tender under an IPC deal. Ali-Reza Zamani said OMV had already declared Band-e-Karkheh commercial.

"These operations were carried out within the framework of an exploration and development agreement between NIOC and OMV of Austria," he said.

OMV left Iran as international sanctions were tightened against the Islamic Republic. As a result, all development activities that it had to carry out on Band-e-Karkheh were halted. After OMV pulled out of Iran, PEDEC and the Armed Forces Social Security Organization Investment Company signed an agreement for the early production of 7,500 b/d of oil from Band-e-Karkheh, which would reach 20,000 b/d in Phase 1.

Now OMV has signed an MOU with NIOC to study Band-e-Karkheh and is seriously following up on relevant negotiations. Technical working group committees are to soon start work. According to 2D seismic data, Ilam and Sarvak formations are the target reservoirs in Band-e-Karkheh which has three humps.

Two appraisal-extension wells are to be drilled in the central and northern humping of the field to gather data about the second phase development of Band-e-Karkheh in parallel with drilling development fields in the southern humping. It is likely to enhance early production from Band-e-Karkheh by more than 7,500 b/d; however, this issue will be made clear after seismic data is processed and interpreted. 2D seismic data has estimated that Ilam formation contains 2.2 billion barrels of oil in place. But 3D seismic test shows that the amount of oil in Ilam formation is much higher. Add to this significant oil deposits in Sarvak formation.

OMV plans to transfer oil from Band-e-Karkheh to West Karoun pumping station by using multiphase pumps. In case the adjacent production units are at their full capacity mobile processing installations will be used.