Foreign Firms Visit Azadegan
17 Foreign Companies Bidding for Azadegan Development
A four-day workshop was held in Tehran and the oil-rich city of Ahvaz to discuss bidding for the giant Azadegan oil field which Iran plans to develop under the newly-developed model of oil contracts (IPC). Thirteen of seventeen international companies cleared by Iran to bid for the project sent delegates to Tehran to visit installations at the field and attend a technical session on bidding.
Iran expects to put Azadegan out to tender over the coming eight months. Iran Petroleum has conducted an interview with Nouroddin Shahnazizadeh, CEO of Petroleum Engineering and Development Company (PEDEC), about the visit by foreign companies and oil production at the West Karoun area.
Q: It is the first time that 13 international oil companies are traveling to Tehran to visit oil installations in the West Karoun area ahead of a planned bidding for the development of Azadegan. What was the philosophy behind this visit?
A: Since Azadegan field is to be developed through a tender bid, we have been in the process of getting permissions and drafting description over the past 18 months. A total of 50 international companies expressed their willingness to bid for the Azadegan project. In the end, National Iranian Oil Company selected 17 companies to bid for the project. Over this time, NIOC signed memorandums for studying the field with some of these companies. However, some of them had questions about Azadegan and Iran's installations in West Karoun. We decided to invite them to Iran before they submit their technical documents for the development of Azadegan to visit Iran's data-room and installations in the field. We also decided to hold a briefing session about financial and technical proposals to respond to their questions which were very similar. That would help provide a harmonious description of the project.
As I mentioned some of these companies had signed memorandums to study Azadegan oil field. They had certainly good knowledge about the field, but there were companies that did not have as much information as them and we maintained that all these companies needed to have identical information.
During four days, these companies visited our data-rooms and datacenters and then they acquired full information about West Karoun and the planned development of Azadegan in a meeting attended by PEDEC experts. After that the companies were divided into two groups of five or six companies and visited our installations in Azadegan oil field and West Karoun.
Q: So 11 companies came to Iran.
A: We announced that all 17 companies could come to Tehran. Some of them said they did not need to visit the field. Eleven companies visited Iran's installations in West Karoun, but at the workshop in Tehran, 13 companies were represented. Both sides expressed their demands and expectations from the development of Azadegan field, which I think we managed to reach a common understanding.
Q: What did the questions concentrate on?
A: Among the most important questions I can highlight their concerns about water and power supply in Azadegan oil field. Regarding power supply we said that we were in the process of building a 500MW power plant. They visited the location of the power plant and were kept abreast of the level of progress of the project. They were assured that in case investment is made for the development of the field and development is finished in three years, there would be no problem with regard to power supply there. Other questions included how to consume gas produced in West Karoun. We said that associated petroleum gas would be consumed in the NGL 3200 facility. Construction of this unit was assigned to the Persian Gulf holding in 2016 and after the foreign firms visited NGL 3200 they were assured that after development of Azadegan the associated gas would be consumed and there would be no threat to the environment.
Transfer of oil to consumer spots was another issue highlighted by the companies. We told them a pumping station was planned to be built in West Karoun. Phase 1 of this unit is becoming operational and a tender bid has been held for Phase 2. This pumping station would be able to deliver up to 1 mb/d of oil to consumers. The foreign companies visited this pumping station and its installations. Since we are in a period of drought, water supply was another cause of concern for the companies willing to develop Azadegan. They were asking how water would be provided for industrial consumption and injection into the field to enhance recovery. We said that we have hired a consultant to examine supply water and pointed out that studies had started for that purpose. We have also hired a consultant for gas injection. We responded to their questions on this issue, as well.
Q: Where will the West Karoun water be supplied from?
A: We decided to consider integrated water supply for West Karoun. As far as water supply is concerned we have to deal with the two issues of distance and water source. In any case, West Karoun fields are scattered and we have to locate the central one in order to distribute water among the fields. Another issue is the source of water. For instance, because of drought and water shortage, we do not plan to use drinking water and dam waters. Persian Gulf is a potential source of water. Our consultant is currently studying options on how to use the Persian Gulf water and transfer it to West Karoun and prepare the grounds to use water for injection into wells and for industrial purposes.