Page 76 - IRANRptSep22

9.2 Major corporate news 9.2.1 Oil & gas corporate news
NIOC and Gazprom sign MoU for $40bn deal
The National Iranian Oil Co. (NIOC) and Russia’s Gazprom this week signed a memorandum of understanding (MoU) covering investment worth around $40bn.
During a virtual ceremony on July 19, a deal was signed by NIOC CEO Mohsen Khojastehmehr and Gazprom deputy chairman Vitaly Markelov that will include field development, product swaps and the completion of midstream projects, including LNG facilities and pipelines.
Khojastehmehr described the deal as one of the biggest foreign direct investment (FDI) deals in the history of Iran’s oil industry and said: “The National Iranian Oil Company does not ignore any investment opportunity.” Meanwhile, Markelov said: “In accordance with the order of Vladimir Putin, the President of Russia, the senior Gazprom executives attended Tehran last week and we had constructive talks.”
The Ministry of Petroleum’s (MoP) Shana news agency reported that the MoU covers the development of the Kish and North Pars gas fields, pressure enhancement at the supergiant South Pars gas field and the development of six undisclosed oilfields. The parties will also engage on gas and product swaps, while Gazprom will work to complete LNG projects abandoned when sanctions were imposed on Iran in 2012 and construct gas export pipelines. The deal also covers scientific and technological co-operation.
In this form, the deal appears to cover several of the key areas of focus outlined in a 2018 agreement between the same parties. At that time, Moscow was reported to have signed deals covering 17 fields, while the Russian firms had public deals in place for studies at another 10. Kish and North Pars are seen as the key fields for supplying the incomplete Iran LNG facility at Tombak Port.
Gas push
North Pars was discovered in 1963 and is located 120 km south-east of Bushehr Province at a water depth of 3,500 metres. It is estimated to have at least 57 trillion cubic feet (1.6 trillion cubic metres) of gas in place, around 70% of which is located in its upper reservoir.
At the time of the 2018 deal, 17 wells have been drilled and 26 offshore platforms installed in the field but production has yet to commence. According to NIOC, 46 operating wells are required for the field to reach the 3.6bn cubic feet (102mn cubic metres) per day output that it is anticipated to produce for at least 25 years. Some production will continue for 35 years, though, based on a recovery rate of 60%.
Meanwhile, Kish was discovered in 2006. It lies under Iran’s Kish Island and is estimated to hold 66 tcf (1.9 tcm) of gas and at least 1bn barrels of condensate. Of this, around 50 tcf (1.4 tcm) and 331 million barrels, respectively, is deemed recoverable.
Development of the field was kick-started in late March 2007 with a $2.2bn allocation of funds from the NIOC for the first phase, which will be conducted by Iran’s own Petroleum Engineering and Development Co. (PEDEC).
This was bolstered in 2010 with a further $10bn loan agreement with an Iranian consortium headed by Bank Mellat. However, owing to inadequate equipment and expertise, it was not until April 2014 that tangible parameters for first phase development (which has now begun) were agreed.
76 IRAN Country Report September 2022 www.intellinews.com