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Iran awards nearly $2bn worth of oil contracts to domestic companies

Photo published by the Iranian Oil Ministry’s news service SHANA shows officials exchanging documents during a ceremony to award four new oil contracts to domestic companies with a total investment value of nearly $2 billion.

The Iranian Oil Ministry has awarded four new contracts to domestic companies with a total investment value of nearly $2 billion.

The official IRNA news agency said in a report on Sunday that the four contracts awarded in a ceremony earlier in the day had covered development works at two major oilfields in west and south of Iran as well as two mobile oil treatment projects.

Under a first contract worth $1.251 billion, the Oil Industries Engineering and Construction (OIEC) was commissioned to develop Changuleh oilfield which is located in Iran’s Ilam province near the border with Iraq with an estimated oil reserve of 4.8 billion barrels.

The OIEC will reach a production of 60,000 barrels per day (bpd) or 228 million barrels over the course of 20 years in Changuleh. It will drill 25 new wells in the field besides building treatment facilities and pipelines for transferring oil and gas.

The Oil Ministry said the oil recovered from Changuleh will be worth $13 billion and will be supplied mostly to the nearby NGL 3100 Refinery.

Also on Sunday, the MAPNA Oil and Gas Development Company won a $435-million contract for development of Band-e Karkheh oilfield which is located near the southwestern city of Ahvaz in Iran’s oil-rich Khuzestan province with a proven oil reserve of 980 million barrels.

MAPNA has committed to reach 10,000 bpd of production, or a total of 56.6 million barrels, under the 15-year contract in Band-e Karkheh.

The Oil Ministry also awarded two mobile oil treatment contracts to MAPNA and to the Moham Shargh Group.

The contracts, worth $100 million and $140 million, respectively, will run until 2034 and will focus on oil treatment works several oilfields in Khuzestan.

The two companies winning the oil contracts in Changuleh and Band-e Karkheh have been obliged to spend more than $15 million in areas they work as part of their corporate social responsibility commitments.

Iran has increasingly relied on domestic companies to develop its oil and gas fields since 2019 when its petroleum industry came under US sanctions.

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