By John Lee.
Iran has reportly told China National Petroleum Company International (CNPCI) that it will have to offer much lower costs to reflect Iran’s improved post-sanctions position, if it is to win the job of doubling output at the North Azadegan oilfield.
According to the report from UpstreamOnline, CNPCI completed phase one of the development at the turn of the year under a buy-back contract signed at a time when no other international players were willing to brave US-led sanctions against Tehran. This brings production at the field to 75,000 barrels per day.
Project manager Keramat Behbahani (pictured) said “conditions for co-operation in the second phase will be different.”
CNPCI said this week it has received the first shipment of 2 million barrels of crude oil from the field, with a second shipment of 1 million barrels due later this month.
Iranian officials have confirmed that the company is lined up for phase two of North Azadegan, which may also have a phase three development taking production up to to 300,000 bpd over the next decade. However, officials have pinpointed cost as the main obstacle in the way awarding a contract, estimated at between $2 billion and $3 billion.
There are also technical issues related to recoverable reserves and delineation of the reservoir boundaries.
North and South Azadegan’s reservoirs border Iraq, and extend well into the neighbouring country as the Majnoon field, now being developed by Shell.