TEHRAN (Shana) -- National Iranian Oil Company (NIOC) and Iranian banks and E&P companies have signed a $7 billion memorandum of understanding (MoU) to develop the giant Azadegan oil field.
President Ebrahim Raisi, overseeing the signing ceremony, said investing in production, benefiting from local technical capacity and investment would contribute to economic growth and national progress. Minister of Petroleum Javad Owji also said that development of the Azadegan field, which Iran shares with Iraq, would earn the country more than $115 billion in revenue. He said Azadegan’s output would reach 570,000 b/d over seven years.
The Azadegan oil field lies in Abadan Plain, about 80 km west of the city of Ahvaz and along the Iran-Iraq border, covering a total area of 1,500 square km. It is known to be Iran’s largest joint oil field with about 32 billion barrels of oil in place. Azadegan is also ranked the 10th largest oil field in the world. It is Iran’s most important greenfield with high capacity for oil output hike. The Iraqi side of this giant field is named Majnoon.
The MOU for Azadegan’s development was signed with six Iranian and as many E&P companies. Bank Melli Iran, Bank Mellat, Bank Tejarat, Bank Parsian, Bank Pasargad and Bank Shahr are to provide necessary investment for the project that would be developed by the “Khatam al-Anbia Construction Headquarters”, Persia Oil and Gas Industry Development Company, MAPNA Oil and Gas Development Company, Sina Energy Development Company, Petropars and Oil Industries and Engineering Construction Company (OIEC).
Owji said Azadegan, divided into North Azadegan and South Azadegan, is currently supplying 190,000 b/d.
One of the reasons that led the Petroleum Ministry to sign this MOU with a consortium consisting of banks and Iranian E&P companies was the issue of financing because due to sanctions Iran is facing restrictions in attracting international capital. It has been decided to finance the project by Iranian banks and major economic holdings.
With an investment of nearly $7 billion, the production capacity of this field will reach 220,000 b/d in the second year of its development, thereby bringing output to 570,000 b/d in the next seven years. That would also strengthen Iran’s position within the Organization of the Petroleum Exporting Countries (OPEC). Iran’s oil production capacity is now nearly 4 mb/d.
Owji has said that with an oil barrel at $80, Azadegan would yield Iran over $115 billion in revenue over a 20-year period, let alone create 24,000 job opportunities.
The integrated development of the Azadegan field would require drilling more than 420 production and injection wells, building five manifolds and laying 315,000 to 320,000 km of pipeline, which would be entirely handled by local contractors and manufacturers.
Raisi said achieving an 8% economic growth rate required attracting investment in the production sector. He said the MOU signed for the development of the Azadegan field would mean that top companies would team up for a big project.
He said implementation of the Azadegan development project would mean mobilizing internal capacity and enhancing private sector investors’ confidence to contribute to such big projects.
Minister Owji said investment was the main element in the development of the petroleum industry.
“One of the first measures taken by the Petroleum Ministry was drawing up an investment plan which showed that we would need at least $160 billion in investment in the petroleum industry over eight years,” he said.