Iran and Brazil reach agreement on Caspian Sea oil drilling

Jan 08, 2007 01:00 AM

Iran and Brazil have finalized an agreement according to which the latter will carry out drilling operations in the Caspian Sea.
Managing Director of National Iranian Oil Company (NIOC) Gholam Hossein Nozari announced this on the sideline of a ceremony where Iran and Malaysia signed a $ 16-bn agreement on development of two gasfields of Golshan and Ferdows as well as establishment of LNG production units. The agreement was signed between the state-owned National Iranian Oil Company and Malaysia's SKS.

He said at the ceremony that the new method of signing buyback contracts and participation of both sides is welcomed by foreign companies. Minister of Petroleum Kazem Vaziri-Hamaneh announced last December that Iran's Economy Council has agreed to excavation project in the Caspian Sea with the Petrobras Company of Brazil.
Also, member of the Majlis Economy Commission Elyas Naderan said last December that since the legal regime of the Caspian Sea was still unclear, Iran preferred to extract oil from the middle parts of the sea that are deeper and jointly owned with other littoral states. However, he said, Brazil is keen on drilling operation from less deep areas which are near the coast.

Naderan said “Iran’s national interests have been violated in this contract, because it is failed to determine the exact area for drilling operations.”
Nozari said that once developed, Golshan gasfield will produce more than 70 mm cm of gas daily. Meanwhile, he put the expected daily gas production from Ferdows gasfield at 25 mm cm.

Iran's estimated gas reserves, the world's second largest after Russia, amount to 971.150 tcf (more than 26 tcm).
He added that the two countries are currently implementing construction of a joint refinery in Malaysia. Nozari predicted that between 20-30 % of the joint refinery's shares would go to Iran.

Source: PIN
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