Iran Keen to Seize Caspian Sea Oil, Gas Opportunities

EghtesadOnline: Iran hopes the recent openings in economic and energy relations with foreign investors will put it on course to tap into its huge oil and gas reserves in the Caspian Sea, where the country has largely underperformed over the last four decades.

News ID: ۷۷۸۴۵۰

16 August 2017

Ramin Khodafarin, director of international affairs at Khazar Exploration and Production Company (KEPCO), says the state-run enterprise is working on plans to attract foreign companies to help fulfill Iran's energy aspirations in the world's largest landlocked body of water.

"Taking stock of underlying hydrocarbons in the Caspian region as well as increasing know-how and experience of KEPCO in deepwater projects, we aim to open negotiations with credible international companies and use their finance and technology for technical studies, exploration and production in the Caspian Sea," Khodafarin was quoted as saying by Mehr News Agency.

He pointed to a committee recently set up at KEPCO to accelerate negotiations with foreign majors, according to Financial Tribune.

The committee, made up of members of KEPCO's legal, E&P, engineering and construction, financial and international departments, is working on a contractual model that could be used as a framework to develop upstream projects in Caspian Sea.

"We have contacted some of the companies who have shown interest in Iran's oil projects and asked them to step up negotiations," Khodafarin said.

Iran's energy map shows investments in oil and gas fields have been mostly concentrated in southern regions, where it shares the giant South Pars Gas Field with Qatar in the Persian Gulf and several oilfields with Iraq.

Iran last month signed a $5-billion deal with French energy giant Total to develop Phase 11 of South Pars and now hopes to make similar inroads in its protracted Caspian projects.

--- Development Prospect

Azerbaijan oil officials have reportedly expressed interest in collaborating with KEPCO to develop Sardar-e-Jangal Gas Field off Gilan Province.

Sardar-e-Jangal field contains an estimated 1.4 trillion cubic meters of natural gas in-place and some 500 million barrels of recoverable crude. Experts believe it could become Iran's first major oil/gas field development project in the Caspian Sea, as the country has already made progress in studying the field's geological structures and its reserves.

KEPCO's CEO Mohsen Delaviz recently bolstered the idea.

"It is likely that the Sardar-e-Jangal field will be developed under the Iran Petroleum Contract," he said, referring to Tehran's new contractual framework to develop oil and gas fields.

According to Delaviz, Azeri, British, Dutch and Norwegian oil companies have submitted proposals for joint ventures with KEPCO in the Caspian region.

According to the US Energy Information Association, between 2000 and 2012, Turkmenistan produced more than 70 billion cubic meters of natural gas from the Caspian basin, followed by Russia, Kazakhstan and Azerbaijan. Iran's production has been zero.

The Caspian region is one of the oldest oil-producing areas in the world and is an increasingly important source of global energy production. It holds an estimated 48 billion barrels of oil and more than 8 trillion cubic meters of natural gas in proven and probable reserves.