Page 8 - MEOG Week 11 2022

MEOG POLICY & SECURITY MEOG

Iran discusses development of

joint Caspian fields with Azerbaijan

CASPIAN AZERBAIJAN’S ambassador to Iran said this Chalous structure in 2,260-square km Caspian
week that the two countries are engaged in dia- Sea Block 29 had identified major gas resources,
logue about the joint development of oilfields in equivalent to a quarter of the supergiant South
the Caspian Sea. Pars gas field, which holds 14.2 trillion cubic
Media outlet Trend this week quoted Ali metres of gas reserves in place plus 18bn barrels
Alizada as saying that authorities in Baku are of gas condensate. KEPCO CEO Ali Osuli said
evaluating Iranian proposals for offshore oil- that the structure could contain 30% of all recov-
field development, noting that these would be erable gas reserves in the Caspian.
updated and discussed at the next meeting of Iranian success in the Caspian had previously
the Azerbaijan-Iran Intergovernmental Joint been limited to the Sardar-e Jangal field, which
Economic Commission, which will be held in was discovered in 2002 at a time when Iran’s total
the Azeri capital. share of the Caspian gas take was assumed to be
The comments follow the disclosure by Ira- around 11 tcf (312 bcm).
nian Oil Minister Javad Owji in November In 2012, a routine exploration at Sardar-e
that preliminary agreements had been signed Jangal led to the discovery of an oil layer – at
between the parties for a gas swap and fuel sup- 728 metres – that is now estimated to hold 2bn
ply deal to Azerbaijan’s Nakhchivan exclave, barrels of quality crude, of which at least 500mn
adding that he hoped a deal could be extended barrels is thought to be recoverable.
for the development of two offshore fields. Following the 2015 nuclear deal, Iran had
The Azeri ambassador said that talks have hoped to license Caspian exploration blocks
also been held regarding the establishment of under its Iran Petroleum Contract (IPC) frame-
the “Persian Gulf-Black Sea route” and said that work and pursue development of Sardar-e Jan-
the two countries are working together with gal, but this came to nought.
Russia for the establishment of the North-South Chalous is located around 50-60 km south of
energy corridor following a meeting in Doha last Sardar-e Jangal and around 135 km north of the
month. port of Noshahr.
The Caspian accounts for the majority of In February, KEPCO and PetroIran Devel-
Azerbaijan’s 570,000 barrels per day of oil pro- opment Co. signed a memorandum of under-
duction, but none of the 2.5mn bpd produced standing (MoU) for exploration and production
by Iran, which mainly comprises output from efforts in the Caspian, with Sardar-e Jangal to be
fields along the Iraqi border, southern coast and given priority.
offshore in the Persian Gulf. Iran’s sole Caspian export terminal at Neka
In August 2021, the Khazar Exploration and has a capacity of 150,000 bpd, with this capacity
Production Co. (KEPCO), a National Iranian Oil already mostly taken up by exports to other Cas-
Co. (NIOC) subsidiary, said that appraisal of the pian littoral states.™

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