Page 9 - MEOG Week 25 2022

MEOG PROJECTS & COMPANIES MEOG

Iran, Azerbaijan agree on

joint Caspian gas projects

IRAN THE Azerbaijani Oil Ministry announced on and offshore in the Persian Gulf.
June 19 that Baku and Tehran have agreed to In August 2021, the Khazar Exploration and
establish a joint committee for the development Production Co. (KEPCO), a National Iranian Oil
of oil and gas fields in the Caspian Sea. Co. (NIOC) subsidiary, said that appraisal of the
Iran and Azerbaijan have been in intense dis- Chalous structure in 2,260-square km Caspian
cussions for several months on progressing long Sea Block 29 had identified major gas resources,
delayed projects between the two neighbours in equivalent to a quarter of the supergiant South
recent years, including oil and gas projects in the Pars gas field, which holds 14.2 trillion cubic
region and trade links to Russia. metres (tcm) of gas reserves in place plus 18bn
In a statement, the Oil Ministry said that “the barrels of gas condensate. KEPCO CEO Ali
agreement could help secure joint development, Osuli said that the structure could contain 30%
production and export of energy resources to of all recoverable gas reserves in the Caspian.
benefit the two neighbouring countries.” Iranian success in the Caspian had previously
On June 3, Azerbaijani Economy Minister been limited to the Sardar-e Jangal field, which
Mikael Jabarov and Iranian Oil Minister Javad was discovered in 2002 at a time when Iran’s total
Owji signed a memorandum of understanding share of the Caspian gas take was assumed to be
(MoU) in Baku to strengthen bilateral co-opera- around 11 tcf (312 bcm).
tion in the gas sector in Tehran. In 2012, a routine exploration at Sardar-e
During recent visits by the Iranian minister, Jangal led to the discovery of an oil layer – at
both countries exchanged views on the current 728 metres – that is now estimated to hold 2bn
state of trade between the two countries, as well barrels of quality crude, of which at least 500mn
as possibilities for expanding co-operation in a barrels is thought to be recoverable.
variety of fields, including oil and gas. Following the 2015 nuclear deal, Iran had
In March, Azerbaijan’s ambassador to Iran hoped to license Caspian exploration blocks
Ali Alizada said that authorities in Baku were under its Iran Petroleum Contract (IPC) frame-
evaluating Iranian proposals for offshore oilfield work and pursue development of Sardar-e Jan-
development. These comments followed the gal, but this came to nought.
disclosure by Iranian Oil Minister Javad Owji Chalous is located around 50-60km south of
in November that preliminary agreements had Sardar-e Jangal and around 135km north of the
been signed between the parties for a gas swap port of Noshahr.
and fuel supply to Azerbaijan’s Nakhchivan In February, KEPCO and PetroIran Devel-
exclave, adding that he hoped a deal could be opment Co. signed a memorandum of under-
extended for the development of two offshore standing (MoU) for exploration and production
fields. efforts in the Caspian, with Sardar-e Jangal to be
The Caspian accounts for the majority of given priority.
Azerbaijan’s 570,000 barrels per day (bpd) of Iran’s sole Caspian export terminal at Neka
oil production, but none of the 2.5mn bpd pro- has a capacity of 150,000 bpd, with this capacity
duced by Iran, which mainly comprises output already mostly taken up by exports to other Cas-
from fields along the Iraqi border, southern coast pian littoral states.™

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