The National Iranian Oil Company (NIOC) says it is in talks with Denmark’s Maersk Group to extract oil from the world’s largest gas field known as South Pars in Iran.
Negotiations have been held for the second phase development of the South Pars oil layer, NIOC Deputy Managing Director Gholam-Reza Manuchehri told reporters in Tehran Wednesday.
“Using modern technologies and horizontal drilling in view of the heaviness of the oil at the South Pars layer are the most important development scenarios for this oil field which is shared with Qatar,” he said.
NIOC plans to drill 300 wells at the South Pars oil layer, which requires improved recovery (IOR) and enhanced recovery (EOR) technologies to reach crude oil.
Only a few international companies are in possession of such technologies, with the Danish company considered to be a “powerful” candidate for the development of the South Pars oil layer, Manuchehri said.
“Negotiations with the Danish company are underway but nothing is final yet,” he said.
As in gas extraction, Qatar is ahead of Iran in developing the oil layer, having already completed the drilling of 300 wells which started production in 1991, according to Manuchehri.
“Iran would need at least two-thirds of this amount of drilling to increase production from the oil layer to 200,000 barrels per day over a period of 20 years,” he said.
Maersk Group is cooperating with Qatar in the shared field which the tiny Persian Gulf country calls North Dome.
Manuchehri said the development of the South Pars oil layer is among the Iranian Ministry of Petroleum’s priorities, to be offered under the new oil contract model.
Iranian companies are working on the first phase of the project and expect to pump 35,000 barrels of oil a day before the end of the current Persian year in March 2017.
South Pars is the world's biggest gas field with 30 trillion cubic meters of reserves, divided to 24 phases on the Iranian side for development. Iranian companies are currently carrying out the gas phases but they look for a foreign partner to bring the oil layer to operation.
Maersk is also interested in developing Iran's deepwater hydrocarbon reserves in the Caspian Sea, Minister of Petroleum Bijan Zangeneh said in January during a visit to Tehran by Denmark’s Foreign Minister Kristian Jensen.
The Danish company has already been involved in deepwater oil drilling the Caspian Sea for Azerbaijan. Maersk has also experience in building world-class FPSO vessels for floating oil and gas production, storage and offloading oil and gas, which Iran needs at the South Pars oil layer.
Iran has offered four projects in the Caspian Sea, blocks 24, 26 and 29, as well as the Sardar-e Jangal oil field to foreigners for exploration and development.