Balal Oil Field Gas Layer Seeks Investment
Over recent decades Balal oil field has managed to account for a good share in Iran’s oil production. But the discovery of gas layers in this field, which are geologically related to South Pars gas field, has provided a new propriety in offshore sector for Iran’s petroleum industry. Development of the gas layer of Balal oil field was introduced at this year’s Tehran conference on new oil contracts.
Due to its gas layers, Balal oil field can produce both oil and gas. Balal is located in Hormuzgan province, more precisely in Lavan area off Persian Gulf. It has two proven reservoirs of Arab and Khatia.
Development of Balal oil field under a buyback deal with foreign companies started in 1999. The field came on line three years after. Balal oil field started production at the rate of 20 tb/d. The oil supplied by Balal is of very high quality and is even better than North Sea’s Brent. Balal has cut its production in recent decades. In order to make up for this loss in production drilling rigs have been ordered to be installed.
Currently, around 12,000 b/d of water is being injected into Balal oil field with a view to enhanced recovery. Development of Khatia oil layer in Balal field is one of the important projects operated by Iranian Offshore Oil Company (IOOC).
Currently, five wells in this oil layer are producing 5 tb/d of oil. Another well is to be completed soon. France’s energy giant Total developed this field in 2001 and 2002 but it could not recover oil from Khatia. According to Total’s forecast, Balal oil production must have been 5 tb/d now. But with the development of Khatia, Balal output is double of Total’s forecast.
The oil recovered from this field is delivered to Lavan Island through a 100-kilometer pipeline of 14 inch. After being blended with oil from Salman, it will be processed and prepared for exports.
The gas layers in Balal oil field can produce 500 mcf/d of gas. According to initial estimates, Balal is proven to hold 6 tcf of gas. According to IOOC officials, the H2S content of Balal gas is below 100 ppm.
Iran’s nuclear deal with West was one of the most influential events in the oil sector in recent years. Iran has managed to raise its output to the pre-sanctions level in recent months.
Iran is also seeking investment for the development of mature oil fields in Iran and renovation of decrepit infrastructure with the help of Western specialists.
Iran is determined to regain its standing as the fourth producer of oil behind Saudi Arabia, the United States and Russia.
The objective sought by NIOC is a 50% increase in output over five years to bring production to 5 mb/d. Iran is currently able to produce nearly 4 mb/d of oil and 700 mcm of gas.
Thanks to political overtures and renewed opportunities for investment in Iran’s petroleum industry, foreign companies are picking fields for development. South Korea is eying the gas layer of Balal oil field.
A South Korean delegation that recently visited Tehran submitted a great deal of proposals and plans for oil and gas industry, ranging from liquefied natural gas (LNG) to increased oil imports from Iran. South Korea has not been unaware of future tender bids and like other major oil and gas companies it is eying a field for its future development plans.
Saeed Hafezi, managing director of IOOC, said leading foreign companies have entered talks with Iran for investment mainly in offshore reservoirs which require cutting edge technology. He said that this inclination by foreign companies was due to the implementation of Joint Comprehensive Plan of Action (JCPOA) and the ensuing relaxation of banking sanctions and creation of safe environment for investment and economic activities in Iran.
Hafezi said companies from France, India, the Netherlands, Norway, Australia, Singapore and China have so far held talks with IOOC.
These negotiations are still under way and foreign companies have expressed hope that they would be able to cooperate with Iran in investment, development and providing technical services.
The technical sections of these companies started assessing bottlenecks and complied with technical and investment packages in recent years.