Page 5 - MEOG Week 28

MEOG Commentary MEOG
Politics aside,
this was a
massive missed
opportunity both
for Iran and for
the companies
vying for eld
development
deals.
Ian Simm
Principal Advisor IGM Energy
However, finance and new approaches to eld development are required with elds in the south-west of the country. Oil eld developments in West Karoun have struggled to realise their massive potential because of low recovery rates. Together, the group are estimated to contain at least 67bn barrels of OIP, but the average recov- ery rate across West Karoun is just 5-6%.
Output at Yadavaran is now around 120,000 bpd. e second phase entails the drilling of 105 wells to achieve 180,000 bpd, with Phase 3 tar- geting output of 300,000 bpd.
e average crude recovery rate across Ira- nian elds is 24%, compared with a global rate of 35%.
Under the operatorship of PeDeC, South Azadegan is currently producing 110,000 bpd, which will be expanded to 320,000 bpd once infrastructure improvements are complete.
hopes and dreams
‘Missed potential’ is perhaps the phrase that best sums up Iran’s oil and gas sector over the past decade. Blessed with world-class assets and some of the world’s most plentiful reserves, the Islamic Republic has more than enough resources to compete with regional nemesis Saudi Ara- bia as well as Russia and the US in terms of oil production.
However, politics and competing interests have served to derail Iran’s plans to fulfil its potential, despite the best e orts of the so-called P5+1 to end sanctions. e ascension to power of US President Donald Trump ended those
dreams, leading talks with IOCs to collapse as further strictures were imposed.
Speaking exclusively to Middle East Oil & Gas (MEOG), Ian Simm, Principal Advisor at IGM energy said: “A wide range of IOCs were ready to go, having long been tempted by Iran’s incredible hydrocarbon wealth, which had been kept just out of reach. Many of europe’s largest oil and gas rms were quietly advancing talks on deals to develop major deposits, including those in West Karoun. Others were more public, most notably Total’s agreement to develop Phase 11 of the South Pars gas eld.”
He added: “Financiers were in place, deals were all but done, only for it to all fall apart at the eleventh hour. Politics aside, this was a mas- sive missed opportunity both for Iran and for the companies vying for eld development deals.”
Over the past four years, Iran’s oil and gas sec- tor has had little to celebrate, save for the 53bn barrel Namavaran oilfield and 538bn cubic metre eram gas eld, neither of which are likely to be developed in the short term anyway.
For the time being, Zanganeh’s comments appear to be the only indication of the end of sanctions. MEOG understands that it is the intention of Trump to force regime change in Iran; however, given that Rouhani was the most pro-West candidate during his presidential bid, the US is unlikely to nd a more amenable part- ner in Tehran.
At present, the most likely stimulant for change in the current status quo is Trump being unsuccessful in his bid for a second term.™
Map showing oil elds in the West Karoun oil cluster.
Source: Nikkei
Week 28 15•July•2020 w w w . N E W S B A S E . c o m
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