Has the volume of required water been determined?
A: If we intend to inject water into all West Karoun fields, we will need 1 mb/d of water. In fact, our planning is based on maximum water supply to West Karoun in an integrated manner. Method of water supply and its source are up to us. But the flow of water and technical specifications of water injection would rest with contractors.
Q: Is Iraq also injecting water for enhancing recovery from its fields?
A: As far as I know, no.
Q: What was the agenda of the Tehran briefing for the Azadegan bidders?
A: After the 11 international oil companies visited the West Karoun area for two days and became familiar with the facilities and conditions there, a briefing was held in Tehran with senior managers from the Ministry of Petroleum and National Iranian Oil Company in attendance. But this time, there were 13 companies present. Once more, full information was presented about the tender for Azadegan oil field, Iran's expectation from the development of the field, modalities of transfer of technology, participation of Iranian companies in the project, enhanced recovery, schedule for the start of project and other related issues. The companies also asked their questions and received answers. For instance, for Iran it was important to see when the companies were to start the project and how much time they needed to complete the project. Of course, NIOC has reiterated that contractors have to start work in the field as quickly as possible so that we would save time.
Q: Which companies were present in the briefing?
A: Sinopec and CNPC of China, Eni of Italy, Inpex of Japan, Maersk of Denmark, OMV of Austria, ONGC of India, Pertamina of Indonesia, Petronas of Malaysia, Rosneft of Russia, Royal Dutch Shell, Wintershall of Germany and PTTEP of Thailand.
Q: Was Total absent?
A: We invited all companies to Iran, but Total announced that it had enough information about the field. Such absence does not mean their lack of willingness to bid for the project. Like other absentees, Total said it would like to take part in this tender bid.
Q: When will the tender documents be submitted to companies?
A: As I mentioned, 17 international oil companies can bid for the Azadegan oil field project. The tender documents were distributed in Tehran on August 24 when the workshop was under way. They were also sent to companies that were absent. Less than a month later, they will receive remaining documents for the tender and then a non-disclosure agreement would be signed between them and NIOC before entering talks for agreement. Foreign companies will have two months to review these documents and present their technical, engineering and financial proposals to us. After that, they must introduce their consortium and Iranian partner to us. Once they have submitted the documents to us, NIOC will enter one-on-one talks with foreign companies in order to sketch out details and aspects of project.
Q: Will the tender be held in Tehran?
A: Yes, it will.
Q: When do you think the Azadegan oil field tender will be held?
A: As Minister mentioned, I think it will be held in seven to eight months. Of course, NIOC would do its utmost to hold this tender sooner than planned.
Q: How long will the process last?
A: This process will take roughly eight months before the winner is known.
Q: But the 320,000-barrel processing unit of South Azadegan is not ready yet.
A: Yes, but the tender for this unit has been held and an Iranian-European consortium has been chosen as winner. This unit will take 24 to 30 months to be built. In order to save time for the South Azadegan oil processing, we will use mobile processing units in order to use money from oil sales in the development of the field and as soon as the processing unit has been completed we will let go the mobile processing units that we rent.
Q: What would be the modus operandi for the Iranian and foreign share of the project?
A: The contract for building this unit will be a joint venture. Designing and providing items which are not manufactured in Iran are up to the foreign contractor. The rest will be handled by the Iranian contractor.
Q: How much investment is envisaged?
A: Construction of this unit will need around €300 million in investment which will be provided by the National Development Fund of Iran (NDFI).
Q: Once a tender bid has been held for the Azadegan field, what will happen to the processing unit contractor?
A: At any stage the tender has been held and the winner has been known the contract for construction will be awarded to the winner who would be responsible for remunerating the contractor.
Q: What if the winner of the bid decides not to clear the contractor?
A: In the tender bid for this unit, technically qualified companies were cleared and our work complies with international standards. Therefore, there is nothing to worry about.
Q: The first HOA under IPC format was signed with Tadbir Energy for the development of North Yaran field. Which stage are the talks in and when is the agreement to be signed?
A: Due to the signature of HOA with Persia Oil and Gas Industries Development Company, known as Tadbir Energy, development of Yaran will no longer be put out to tender. Meantime, it has been decided that Yaran field (North Yaran and South Yaran) be thoroughly developed by this company. Therefore, we are finalizing the provisions of agreement and I think that the agreement for the development of this field for a targeted output of 70,000 b/d would be signed very soon.
Q: Has Tadbir Energy chosen its foreign partner?
A: Yes, it has.
Q: Will Yadavaran field be put out to tender, too?
A: Yes, this field is less complicated than Azadegan and we expect more bidders.
Q: Will Azar field be developed under IPC format?
A: Yes, this field is among the hardest oil fields in Iran and even in the world in terms of geological structure. It came online in March 2017 with an early output of 15,000 b/d, which reached 30,000 b/d in May. The contractor for the development of Azar was Sarvak Azar, a subsidiary of Oil Industries Pension Fund. This field is also planned to be developed under IPC. OIEC (Oil Industries Engineering and Construction), as the contractor for the development of phase 1 of Azar, has begun talks with foreign contractors for the development of this field.
Q: How much is Iran currently recovering from West Karoun?
A: Last year by this time Iran was recovering around 40,000 b/d of oil from oil fields in West Karoun, but today, except for Darquain oil field, we are recovering nearly 320,000 b/d of oil from the fields of West Karoun. Iran is currently recovering 75,000 b/d of crude oil from North Azadegan under a buy-back deal with China's CNPC. Of course, the production capacity of oil in this field has reached 85,000 b/d.
In Phase 1 of Yadavaran field, which Sinopec of China developed under a buy-back deal, we are recovering 115,000 b/d of oil, which we plan to bring to 135,000 b/d this year.
North Yaran field, which Tadbir Energy developed under a buy-back deal, has the production capacity of 30,000 b/d and we are currently producing a little bit less. In South Azadegan, we used to produce 40,000 b/d, which we currently recover 65,000 b/d now. Since the Chinese contractor was expelled, Iran proceeded with the development of South Azadegan without waiting for the implementation of new oil deal format. Oil production from South Azadegan is gradually rising. A total of 120 wells have been drilled in South Azadegan, 60 of which are operational. If surface facilities were ready, we would operate the remaining 60 wells.
Q: Will oil production from South Azadegan keep rising this year?
A: Yes, of course. First the production capacity will go from 65,000 b/d to 110,000 b/d. By October, 28,000 b/d will have been added to this output and we will raise our production again 25,000 b/d one month later. Therefore, before a tender bid has been held for Azadegan field, our production from South Azadegan would reach 140,000 b/d.