Infrastructure Development to Boost Azadegan Crude Output

According to IRNA, once the vital infrastructures, including crude processing units, wellhead installations and oil transfer pipelines, are in place, the field's current production of 110,000 barrels per day will reach 320,000 bpd.

PEDEC started the development venture in 2017 and is projected to complete it by the end of 2020, the news agency added.

Discovered in 1978, Azadegan Oilfield is the third largest hydrocarbon reserve in the world after Ghawar Oilfield in Saudi Arabia and Burgan Oilfield in Kuwait. The field is composed of four layers, namely Sarvak, Kazhdomi, Godvan and Fahilan, according to Financial Tribune.

Azadegan is estimated to hold 35 billion barrels of oil in place, of which 90% are in Sarvak layer. The field, which is divided into the north and south sections, was first developed in 2003 with the help of Japan's Inpex Corporation. The firm terminated its contract with the National Iranian Oil Company due to the international sanctions imposed on Iran.

In 2010, China National Petroleum Corporation was assigned to undertake the rest of the project, but NIOC terminated its deal with CNPC in 2014 due to the Chinese company's procrastination. Having ousted foreign contractors, NIOC assigned domestic enterprises like National Iranian South Oil Company and PEDEC to develop the field. 

Between 2003 and 2014, the Chinese firm had raised the field's production from 10,000 to 50,000 bpd by drilling 25 wells, while local firms doubled the output in just three years by drilling 100 wells.

PEDEC has also installed skid-mounted modular mini refining units in South Azadegan Oilfield.

A modular refinery is a unit whose parts are constructed in modules with capacities ranging from 500 to 50,000 bpd. Modular mini refineries, ranging from simple diesel production units to more sophisticated cracking refineries, are becoming a flexible and cost-effective supply option for crude producers in remote regions.

The company, which is a subsidiary of NIOC, also plans to install submersible pumps in the wells of North Yaran Oilfield, continue developmental activities at Azar Oilfield in the western Ilam Province and complete the first phase of West Karun Block’s power plant in the current fiscal year (started March 21).

West Karun is the name of an oil-rich region in Khuzestan, which includes several large oilfields, including Azadegan, Yaran and Yadavaran, with the first two divided into north and south projects. 

According to published reports, Iran is currently drawing crude from the block at an unacceptable extraction rate of 5-6%.

The average rate of recovery from Iran's oilfields is around 25%, but it should reach 40%. In-place oil reserves are estimated at 800 billion barrels.

Officials say raising the recovery rate by merely 1% is equivalent to producing an additional 8 billion barrels, which would generate $400 billion at the current crude prices.

Noureddine Shahnazi-Zadeh, PEDEC’s chief executive officer, told ISNA in 2018 that Iran produces 350,000 barrels of oil per day from West Karun, outpacing Iraq's output that stands at 320,000 barrels per day.