Page 10 - MEOG Week 07 2023

MEOG PROJECTS & COMPANIES MEOG

NIOC and Sinopec continue

talks for Yadavaran phase 2

IRAN AN official from the National Iranian Oil Co. Tehran was wary of losing out in the exploitation
(NIOC) said this week that the company remains of resources in the fields it shares with neigh-
in regular communication with a Chinese part- bouring Iraq, which includes Yadavaran, known
ner for the development of a key oilfield. How- on the Iraqi side as Sinbad.
ever, he was keen to stress that while terms have Tehran’s insistence in 2015 on China upping
not yet been reached, the Chinese firm has not its game came from the confidence of knowing
expressed any intention not to participate. that it would have official access to a worldwide
In comments carried by the Ministry of range of IOCs and technology and equipment
Petroleum’s (MoP) Shana news outlet, Ferey- suppliers, given the ratification that year of the
doun Kurd Zanganeh, NIOC’s director of invest- nuclear deal that would roll back sanctions on
ment said that talks have been held regarding the Iran.
second phase of development of the Yadavaran The subsequent phases of the field develop-
oilfield on a regular basis with Sinopec, which ment project are seen increasing production to
completed phase one in 2015. 300,000 bpd then 400,000 bpd, though the lat-
“Despite the sanctions, NIOC, in line with the ter target is not included in Sinopec’s contract.
strategic document of long-term cooperation Yadavaran’s project director Motjaba Moradi was
between Iran and China, continues to negoti- quoted as saying that a $400mn credit line has
ate with the private and state companies of this been established for work to increase production
country for the development of the Yadavaran by 42,000 bpd.
field and other joint fields in Iran,” he said. Meanwhile the Rouydad 24 outlet reported:
Yadavaran, which is comprised of two for- “When the Raisi administration took power,
mer fields, Koushk (discovered in 2000) and they were optimistic that the Chinese would
Hosseinieh (discovered in 2002), is estimated invest in this field, but Beijing, for the time being,
by local companies to hold 34bn barrels of oil, has no intention of investing there,” highlighting
making it one of the largest under-developed oil efforts by Iranian firms to proceed with devel-
fields in the world. opment instead.
Phase one has achieved a production capacity Zanganeh stressed the importance of Yadav-
of 110,000 barrels per day (bpd), however, “the aran’s development, noting that the project could
second phase of the development of this joint be combined with efforts that are making more
field was also planned to be handed over to [Sin- rapid progress to develop the broader Azadegan
opec], but unfortunately, at that time, the former asset.
oil minister stopped the negotiations,” Zanganeh Five local E&P companies and a group of six
said. banks formed a consortium in mid-2022 that
“The officials negotiating with this company envisages the investment of $7bn to increase
at NIOC are looking for new ways to use the production capacity there from a combined
[Yadavaran phase one] investment opportunity,” 215,000 bpd across the north and south devel-
he added. opment concessions to 600,000 bpd.
Sinopec took the lead developer role at According to the Petroleum Engineering and
Yadavaran in 2008, and based on just the initial Development Co. (PEDEC), which is in charge
studies, it committed to a $2bn investment in of developing the West Karoun oilfields, the
the field to increase production from the initial drilling of 36 wells has seen Azadegan’s capacity
25,000 bpd to 120,000 bpd. increase by 45,000 bpd in the last year.
Progress, though, has not been linear, with “Due to the identification of the sharehold-
Sinopec receiving a warning from the NIOC at ers of the consortium developing [Azadegan],
the end of 2013 that its rate of progress had been NIOC, as the employer, has requested in our
too slow. negotiations with this Chinese company to be
NIOC said that if Sinopec did not engineer present as an investor in this field,” Zanganeh
a rapid increase in production then it would be noted, adding that Sinopec, which was involved
removed from the development, just as China in the first stage of North Azadegan, had offered
National Petroleum Corp. (CNPC) had been last year to collaborate on the expansion.
from Phase 11 of the South Pars gas field and in Yadavaran, is a supergiant asset, home to
2014 from the contract for the South Azadegan around 25bn barrels of reserves across the Sar-
oilfield. vak, Kazhdomi, Godvan and Fahilan layers. The
Part of the reason for Iran’s initially aggres- reservoir is shared with Iraq, where it is known
sive approach (in 2013) to the Chinese was that Majnoon (Insane) on account of its size.™

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