Page 4 - MEOG Week 45

MEOG COMMENTARY MEOG

Energy sector updates as

Iran hopeful on Biden win

The Islamic Republic is hopeful that the new US President-elect will bring Washington back to

the negotiating table, while updates have been provided on the country’s energy sector.

IRAN AS Iran continues to utilise domestic companies drilling programme. Rezaei said that the “drill-
to develop the country’s oil and gas projects, ing [of] 12 appraisal/development wells has
President Hassan Rouhani has spoken optimis- started to achieve a daily production capacity of
WHAT: tically about the election of Joe Biden in the US. 1bn cubic feet [28mn cubic metres] of sour gas
Iran’s relationship with In May 2018, incumbent President Donald from the phase.”
the US was as strained Trump pulled the US out of the Joint Compre- He added that the SPD11B wells will be
as ever under the rule hensive Plan of Action (JCPOA), also referred to drilled in two stages. The first phase will com-
of Trump, and Biden’s as the Iran nuclear deal, and there are hopes that prise the drilling and completion of five appraisal
victory may present an his Democrat successor will take a more prag- or development wells and installation of the
opportunity to improve matic stance towards Tehran. SPD11B platform, targeting an initial produc-
relations. Following the implementation of the JCPOA tion level of 500mn cubic feet (14 mcm) per day.
in 2015, numerous IOCs signed memoranda of Thereafter, a further seven development wells
WHY: understanding (MoUs) for oil and gas fields, but will be drilled and completed to increase gas
Trump pulled the US out talks broke down in the wake of Trump’s decision recovery from the platform to 28 mcm per day.
of the JCPOA, reinforcing to walk away from the deal. POGC’s main contractor for work on SP11
sanctions on the country While Iran has made notable progress on is Petropars, which is carrying out jobs on the
and leaving domestic fields that had been lined up under the terms of surface and subsurface.
Iranian companies to the integrated petroleum contract (IPC) model, The overall SP11 phase is expected to achieve
develop major oil and gas the expertise of international partners is seen as production of 2 bcf (56 mcm) per day, with out-
assets. key to addressing low recovery rates, particularly put sent directly to dedicated gas refineries at the
at oilfields in the West Karoun oil region. Asalouyeh hub onshore southern Iran.
WHAT NEXT: Speaking during a cabinet meeting, Rouhani Petropars was left as the only remaining part-
If tensions are eased, said: “Now, a chance has turned up for the future ner in the $4.879bn project, for which stakes
there may be an US government to compensate past mistakes of 50.1% and 30% were awarded to French
opportunity for IOCs and return to the path of commitment to inter- super-major Total and China National Petro-
to resume talks for national obligations by respecting global norms.” leum Corp. (CNPC) respectively in July 2017.
some of Iran’s largest He added: “Iran has been always committed to The award was made for an integrated petroleum
hydrocarbon projects. its obligations as long as all other involved sides contract (IPC) model, setting SP11’s production
comply responsibly.” target at the time to 20.8bn cubic metres per year.
Meanwhile, Foreign Javad Zarif wrote on The Chinese firm became the lead investor in
November 8: “The world is watching whether SP11 after Total withdrew in August 2018 citing
the new leaders will abandon disastrous lawless the threat of incurring US sanctions should it go
bullying of outgoing regime and accept multilat- ahead with plans.
eralism, co-operation and respect for law.” The French firm had planned to invest an ini-
tial $1bn, focusing on a section of the field near
Rig installed at SP11 the South Pars Oil Layer, adjacent to areas of the
The high-profile project to develop phase 11 field under Qatar’s control.
of the supergiant offshore South Pars gas field The company’s stake was handed over to
is illustrative of the efforts of domestic compa- CNPC, with Petropars retaining the remaining
nies to ramp up capabilities across oil and gas 19.9%.
assets. Last week, Pars Oil and Gas Co. (POGC) In August last year, discussions between
announced that the MD-1 drilling rig had been CNPC and Tehran were reported by state media
installed at the phase. to still be ongoing regarding SP11, following
The company’s project leader Mohsen Rezaei efforts a month earlier by Zanganeh to clarify the
told the official Shana state energy sector media Chinese firm’s intentions for the project.
outlet that the 2,200-tonne unit owned by Phase 11 will be the final phase of the field
MAPNA Drilling Co. had been moved to the to come into operation, although efforts are still
SPD11B location ahead of beginning a 12-well ongoing on other phases to ramp up production.

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