Page 4 - MEOG Week 06 2021

MEOG COMMENTARY MEOG

Completion nears at remaining

phases of South Pars

Tehran is nearing completion of the 24-phase upstream development of
South Pars, with work on the last of its 14 onshore refineries not far behind.

IRAN WORK is nearing completion on the remain- 2 and 3 in 2002, with nine phases entering
ing development phases of Iran’s South Pars gas production during the presidency of Hassan
field, according to the company responsible for Rouhani.
WHAT: the project. Future output levels will be dictated by the
Iran has completed all Last week, Mohammad Meshkinfam, man- extent to which Iran is able to counter pressure
but one of its 24-phase aging director of Pars Oil and Gas Co. (POGC), decline, and there are plans to install 20 heavy
South Pars development told local media outlet IRIB that by the end of compression platforms to maintain production
project, with work the current Iranian calendar year, which ends levels at a cost of around $1bn each.
ongoing to achieve full on March 20, “the development … will be nearly Work is ongoing at the remaining phase 11,
production from the completed and we will not have any work left which has been perhaps the highest profile of all
much-discussed phase except for phase 11 in the offshore sector and the Iranian oil and gas projects following the signing
11. refinery of phase 14 in the onshore sector, which of an integrated petroleum contract (IPC) with
will be operational early next year.” French super-major Total and China National
WHY: South Pars is split into 24 offshore develop- Petroleum Corp. (CNPC) in 2017 targeting pro-
South Pars is the ment phases and 14 onshore gas refineries which duction to 20.8 bcm per year.
country’s most important process the gas produced offshore. POGC, a sub- The Chinese firm became the lead investor
strategic project and sidiary of the National Iranian Oil Co. (NIOC), in SP11 after Total withdrew in August 2018
President Hassan holds ultimate responsibility for the projects, citing the threat of it incurring US sanctions
Rouhani has overseen with fellow NIOC subsidiary Petropars carrying should it go ahead with plans. The French firm
nine phases entering out jobs on the surface and subsurface. had planned to invest an initial $1bn, focusing
production. The country is home to around 34 trillion on a section of the field near the South Pars Oil
cubic metres of proven natural gas reserves, with Layer, adjacent to areas of the field under Qatar’s
WHAT NEXT: the supergiant South Pars accounting for around control.
Questions over the 14 tcm as well as 18bn barrels of gas condensates. The company’s 50.1% stake was handed over
future of production The Islamic Republic holds a 3,700-square to CNPC, giving it 80.1%, with Petropars retain-
remain, with Iran km portion of the 9,700-square km deposit that ing the remaining 19.9%.
facing a significant bill is shared with Qatar, where it is known as the Petropars was left as the only remaining part-
to implement efforts North Dome field. Around 80% of the field’s ini- ner in the $4.879bn project when CNPC pulled
to maintain reservoir tial gas reserves are believed to remain in place. out in 2019.
pressure to avoid major A week earlier, Meshkinfam denied reports of The Iranian firm kicked off drilling work in
decline. a pressure drop across the field, noting that since December using Mapna Drilling Co.’s MD-1
March 2020, output had increased by 65mn drilling rig, which was installed at the SPD11B
cubic metres per day of gas following the com- location in early November. The 2,200-tonne
pletion of the phase 16 gas pipeline. “The drop unit is carrying out a programme of drilling 12
in gas pressure in South Pars has not occurred to appraisal and development wells as Petropars
date and forecasts indicate that in the next three seeks to achieve a daily production capacity of
or four years, the drop in gas pressure will begin 1bn cubic feet (28 mcm) per day of sour gas from
gradually,” he said. the project.
Production from the 23 operational offshore The SPD11B wells will be drilled in two
phases was reported by Oil Minister Bijan Zan- stages. The first phase will comprise the drilling
ganeh in September to have reached 700 mcm and completion of five appraisal or development
per day, up from 280 mcm per day in 2013. wells and installation of the SPD11B platform,
The minister noted that during this period, 26 targeting an initial production level of 500mn
offshore platforms, 228 wells, 2,160 km of sea cubic feet (14 mcm) per day.
pipelines and 30 refining trains had been com- Thereafter, a further seven development wells
missioned at the field. Meanwhile, over the will be drilled and completed to increase gas
weekend, the oil minister said that the country’s recovery from the platform to 28 mcm per day.
total production had reached a record level of Tehran intends to expand total South Pars
1.04bn cubic metres per day. production to 1 bcm per day as soon as possible.
Production from South Pars began at phases Onshore, Meshkinfam said that the first train

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