Iran’s Oil Industries' Engineering and Construction (OIEC) has signed an agreement with Russia’s Gazprom for the development of Azar and Changuleh oilfields.
Officials from OIEC and Gazprom signed the agreement on Thursday in St. Petersburg, Russia following months of negotiations, Mehr News reported.
The parties have agreed to hold joint consultations with NIOC on the evaluation, exploration and development of assets offered to investors, and to consider additional opportunities for cooperation in Iran.
The two entities signed a non-disclosure agreement signed last year, and the current agreement will need another contract signing before the developments of the two Iranian fields can take place under the Iran’s new model called Iranian Petroleum Contracts.
"The agreement does not grant Gazprom Neft and OIEC drilling rights and does not restrict the company from negotiating and entering into agreements with third parties," first deputy CEO of Gazprom Neft, Vadim Yakovlev said.
According to Yakovlev, the company currently seeks the development of only two Iranian oil fields, but it is open to explore other areas of cooperation.
Changuleh Oilfield is estimated to hold more than 4 billion barrels of heavy crude in place. Iran hopes to start production from the oilfield at a rate of 15,000 barrels per day and boost output to 65,000 bpd under a five-year development plan.
According to OIEC managing director Behzad Mohammadi, the first phase of production from Azar oilfield in the west, with a capacity of 15,000 barrels per day, commenced in March after a long delay due to international sanctions, when IOCs pulled out of projects.
The field holds 2.5 billion barrels of crude oil and is expected to produce up to 65,000 bpd as soon as the second phase is completed in 2018.
The Azar oilfield, which Iran shares with Iraq, is located in the Anaran exploration block located at the nose of Zagros Mountains.
Gazprom is among the international companies approved by the National Iranian Oil Company (NIOC) to participate in the implementation of projects for the development of hydrocarbon fields of Iran, and IEC had begun negotiations with the Russian company to develop Azar field.