Page 5 - MEOG Week 34 2022

MEOG COMMENTARY MEOG

awarded an exclusive contract for the devel-
opment of Esfandiar. Having sought to benefit
from ‘first mover’ status, the company opened
a Tehran branch in 2014, and agreed a heads
of agreement (HoA) with Sarwak Azar for the
development of the Azar oilfield later that year.
EnergyOne later said that this deal had been sub-
sequently “dishonoured … and terminated” by
the Iranian firm.
It then carried out a full-field development
plan and delivered it to the IOOC, whose then
managing director Saeed Hafezi said: “The ini-
tial confidentiality agreement has been signed,
the master development plan prepared and suf-
ficient data exchanged. We are only waiting for
the new Iranian contract model to be finalised
and introduced in order to begin work.”
However, in 2017, sources close to the Nor-
wegian firm told NewsBase that a letter had been
sent to then Iranian Oil Minister Bijan Zanganeh
to express frustrations over its field development
efforts. It said that despite NIOC’s conclusion in
2016 that plans for the Northern Part of Esfan-
diar could “be executed and commercial nego-
tiations can start” – and had been concluded
– there had still not been any material progress,
and a draft HoA remained pending.
The letter went on to say: “Meetings have
been cancelled at the last minute and responses
to calls and letters have been dissatisfactory”.
The source told NewsBase that the situation
was particularly surprising given the involve-
ment and support of the Norwegian Ministry of
Petroleum and Energy and Export Credit Nor- of oil, has been stalled since 2013. As with the
way in the effort. development of the PNZ’s oil assets – Al-Khafji
When contacted for comment by NewsBase, (offshore) and Wafra (onshore) – gas output will
Øystein Roti, EnergyOne’s managing director, be divided evenly between KGOC and AGOC.
said: “I can confirm that EnergyOne is yet to The offshore portion of the zone also includes
finalise agreements for work in Iran; however, the minor Hout oilfield, where US services firm
the company remains optimistic that these will McDermott previously carried out pipeline and
soon be in place, allowing EnergyOne and our commissioning work for the partners’ Khafji
Iranian partners to proceed with development.” Joint Operations (KJO) entity. Previous efforts
to develop Dorra had been designed to yield
Arash plans 600 mmcf (17 mcm) per day of gas. Iran’s for-
In March, Iran announced it was preparing to eign ministry claimed the agreement was illegal,
develop its part of the offshore Arash natural given that part of Arash is within Iran’s borders.
gas field a week after Saudi Arabia and Kuwait “The oil ministry has seen necessary prepara-
agreed plans for the field’s joint development. tions and carried out studies to develop and use
The Saudis and Kuwaitis, who call the field the shared field of Arash,” said Ahmad Asadza-
Dorra, signed an agreement for the development deh, Deputy Oil Minister for International and
plan for the resource. Part of it lies in the Par- Commercial Affairs, according to Shana. “The
titioned Neutral Zone (PNZ) shared by Saudi reason to have delayed using this shared field
Arabia and Kuwait. was pending [a] decision in demarcation dis-
State-owned Kuwait Petroleum Corp. (KPC) putes with Kuwait. But given that the other side,
announced that an agreement had been signed regardless of the previous talks and unilaterally,
by the country’s energy minister, Dr. Moham- moves to develop the field, there is no reason for
mad Al Fares, and his Saudi counterpart, Prince delay,” Asadzadeh said.
Abdulaziz bin Salman Al Saud, during a visit by Even without a demarcation of the field’s bor-
the latter to Kuwait. ders, it would be feasible for all three countries to
According to KPC, subsidiary Kuwait Gulf work together on development, he was also cited
Oil Co. (KGOC) and Saudi Aramco affiliate Ara- as saying, adding: “The oil ministry expresses its
mco Gulf Oil Co. (AGOC) will leverage modern readiness for talks in this regard.”
technologies to increase gas production from the Iran started talks with Kuwait in 2000 to
asset to 1bn cubic feet (28mn cubic metres) per develop the field but no agreements were
day alongside 84,000 bpd of condensate. reached. Arash was discovered in 1962. It is esti-
Work on the field, which holds 280-310bn mated to hold around 13 trillion cubic feet (368
cubic metres of gas and around 300mn barrels bcm) of natural gas.™

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