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Iran signed on Monday a US$1.3-billion deal with domestic companies to double the production capacity at the massive Azadegan oilfield, expecting the rise in production to boost its oil revenues by US$1 trillion, Iranian officials said at the signing ceremony.
Iran’s Petroleum Engineering and Development Company (PEDEC) has signed a contract with the local Petropars Group for the completion of the development of the South Azadegan oilfield, which the Islamic Republic shares with Iraq.
At the Iranian field, production capacity is expected to more than double in 30 months, to 320,000 barrels per day (bpd) from 140,000 bpd currently and from just 45,000 bpd back in 2013, the oil ministry’s news service Shana reported on Monday.
The Iranian companies also signed a deal to build a 320,000-bpd central treatment export plant (CTEP) at Azadegan, the largest oil and gas processing unit in Iran, which is scheduled to be built within 30 months.
According to Iranian Oil Minister Bijan Zanganeh, improving the Azadegan oilfield’s recovery factor by 10 percent would boost the total production of the field by 2.7 billion barrels, which means Iran could get US$1 trillion in additional oil revenues in the future, Tehran Times reported.
The deal for developing Azadegan is the second major oilfield contract for Iran and its domestic companies this month, after an agreement to boost production capacity at the Yaran field, another oilfield along the border between Iran and Iraq.
The Yaran field, which is divided into a North and South part for its development, has estimated reserves of some 550 million barrels of crude.
Iran has been hit hard by U.S. sanctions imposed on the country after President Donald Trump took office and pulled the U.S. out of the so-called Iranian nuclear deal. Iran’s oil exports, which had risen to more than 2.5 million bpd by April 2018, had since fallen to about 100,000 to 200,000 bpd, according to Reuters.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com