Iranian oil ministry to complete development of south Pars gas field

Iranian Oil Minister Bijan Namdar Zanganeh announced on Monday that his ministry will develop the remaining phases of the giant South Pars oil and gas filed, dismissing the speculations that Tehran plans to entrust the job on foreign firms. Namdar Zanganeh made the remarks at a meeting with parliament members in Tehran today, and in response to the question if the development of the South Pars will be entrusted to the private sector or the foreigners. "It will neither be entrusted to the private sector nor the foreigners; we will accomplish the project ourselves," he said. "The top priority in the South Pars is accomplishment of the first phase, and God willing, a part of it will be completed this year and another part next year," the minister said, and added, "All the (remaining) development phases will go on stream by the (Iranian) year of 1396 (which will start in March 2017)." Elsewhere, he said foreign firms and companies are strongly willing to invest in Iran's oil projects, but they have, so far, been stopped by the western sanctions. The minister said there is no Chinese company operating in the South Pars any more. The South Pars gas field, divided into 28 phases, is located in the Persian Gulf on the common border between Iran and Qatar. The field is estimated to hold 14 trillion cubic meters of gas as well as 18 billion barrels of condensates. The field covers an area of 9,700 square kilometers, 3,700 square kilometers of which lie in Iran's territorial waters in the Persian Gulf. The remaining 6,000 square kilometers, better known as the North Dome, are located in Qatar's territorial waters. On April 30, Iranian President Hassan Rouhani announced that all phases of the development of the giant South Pars gas field will be accomplished by the end of his tenure in 2017. "This year, four phases of the South Pars will be launched and 100mln cubic meters of gas output will be added to the country's capacity," President Rouhani said in a live televised interview. Noting that four phases of the South Pars will go on stream next year, he said, "We plan to launch all South Pars phases during my administration." In relevant remarks also last month, Namdar Zanganeh announced that three more phases of the South Pars project will go on stream in the current Iranian year (started March 21, 2014). Speaking to FNA in the Southern city of Assalouyeh and during a visit to phases 12, 17 and 18 phases, the oil minister said, "Phase 12 is one of the important and big phases of the South Pars and its completion is important." The Iranian oil minister, who was touring the various parts of the South Pars development phases along with First Vice-President Eshaq Jahangiri, pointed to the phases 17, 18 of the giant gas field, and said, "Construction of Phases 17, 18 of the South Pars has had more than 82 percent of progress." He underlined that the Iranian government is determined to complete the pending phases of the South Pars and will achieve part of this goal this year. The Iranian oil minister noted that the government has invested over $6.9 billion in Phase 12 and over $5.6 billion in Phases 17 and 18. Iran’s natural gas output currently stands at 500-550mln cubic meters per day, he said, and added phase 12 of the South Pars, when fully completed, will see domestic gas production rise by 15 percent (80mln cubic meters). Last week, the China National Petroleum Corporation International (CNPCI) was expelled from Iran after it failed to comply with its undertakings for raising the production of Azadegan gas field. A decree expelling the CNPCI came into force on Tuesday evening by Oil Minister Bijan Namdar Zanganeh after the firm was repeatedly warned to face a prospect of expropriation for procrastination in meeting its promises in the South Azadegan gas field which the country shares with Iraq. Managing Director of the National Iranian Oil Company (NIOC) Roknoddin Javadi announced on Tuesday Iran's firm decision to expel the Chinese firm, adding Iran had repeatedly warned the CNPCI officially of expulsion. Zanganeh had in February voiced his ministry?s dissatisfaction over CNPCI?s performance in the field and gave it three months to meet its obligations regarding South Azadegan oil field or face expulsion from the project. “The performance of the Chinese company is not assessed as favorable and the necessary warnings for expropriation have been given to the contractor,” Zanganeh said. In 2008, CNPCI signed a contract worth $2.5 billion with the NIOC to develop the Yadavaran field, which Iran shares with neighboring Iraq. The Chinese company was also supposed to raise production from Yadavaran oil field from 25,000 barrels per day to 180,000 bpd and 300,000 bpd in two phases, but the field is currently producing only 26,000 bpd. Also in April, CNPCI was given three months to meet its obligations regarding South Azadegan oil field or face expulsion from the project. Iran’s production from this joint field is still standing at around 50,000 bpd, while Iraq is currently recovering 175,000 bpd of oil from the field and plans to raise its output to 400,000 bpd.