Azadegan development project on schedule

The director of the Azadegan development project, Naji Sa'douni, said the preliminary stage of implementation of the project is on schedule. Sa'douni was quoted as saying that because of the importance of Azadegan oil field and its political implications, the project is on track notwithstanding talks to the contrary and US objections.
He highlighted the important role of Japanese companies in the materialization of the project since the contract was concluded, saying major activities such as preliminary clearing of mines on the operation field have already been carried out by them.
"The work of clearing the field of mines will be delegated to an Iranian company after the required tender is held," he added.

He said the deadline for choosing a contractor to undertake mine sweeping for the Azadegan oil field will be announced in May or June and that the international firm which would supervise the mine sweeping operations would be announced before the middle of June.
"Mine sweeping operations will take about 9-12 months," Sa'douni said.

The official further stated that preliminary engineering operations (FEED) on the field have been awarded to a British company after the conclusion of a contract with the Japanese side.
"The Japanese side has made a preliminary assessment on a contractor for the Azadegan project and (Iran's) Oil Engineering and Development Company will supervise the process," he said. "Surface operations including engineering, logistics and commissioning as well as the preliminary assessment for hiring an engineering contractor and implementation of civil activities (construction and reconstruction of roads, preparation of sites for new roads and installations) are among the preliminary activities that have been undertaken to materialize the Azadegan oil field project," the official added.

Sa'douni noted that some capable Iranian contractors had been invited to carry out engineering, logistics and surface operations. The director of the Azadegan development project further said that a consortium of two to three Iranian companies and a foreign firm will carry out the underground EPCC operations.
"The contract for development of the Azadegan oil field stipulates a 51 % share for Iranians. Therefore, the opportunity is open for Iranian contractors and suppliers to participate. The work of evaluating interested contractors before the tender who will undertake drilling operations, preliminary assessment of engineering affairs, logistics and civil operations as well as the preliminary evaluation of foreign and domestic companies who are to receive major orders will be carried out within the next six to seven months," Sa'douni said.

Azadegan is the world's largest oil field with about 26 bn barrels of crude oil reserves.
NIOC, INPEX and Naftiran Intertrade Co (NICO) in January signed a contract to undertake the combined appraisal and development operations for the oil field. The field, which was discovered in 1999, is situated some 80 km west of Ahvaz, south-western Iran.
Negotiations for the development of the Azadegan oil field started when President Mohammad Khatami paid his first visit to Japan in November 2000.

The contract for development of the Azadegan oil field stipulates a two-stage process. Full production for stage one is expected to reach 150,000 bpd while stage two contemplates 260,000 bpd. Full production for stage one is planned to be achieved in 52 months while that for stage two in eight years.
Hopefully, and in accordance with the plan, the field is expected to produce its first oil in 40 months at 50,000 bpd. Total capital expenditure for the project is estimated at about $ 2 bn, an amount recoverable in 1.5 years of production at 260,000 bpd.