European firms negotiating to boost Iran's oil production in Persian Gulf

September 20, 2015

TEHRAN- Iran is negotiating with companies from France, Norway, Italy, and Ukraine to boost production of oil from its Persian Gulf’s oilfields, according to an Iranian oil official.

Iranian Offshore Oil Company (IOOC)’s Managing Director Saeid Hafezi said the oilfields’ output is planned to be raised to 32,000 barrels per day (bpd), 130,000 bpd and 400,000 bpd in three short, mid and long-term periods, respectively, the Shana News Agency reported on Saturday.

He said IOOC has signed a preliminary agreement with a Norwegian-Austrian company for development of Esfandiar Oilfield.

The master development plan (MDP) of the oilfield has been prepared and its implementation is waiting for finalizing Iran’s new model of oil contracts, known as the Integrated Petroleum Contract (IPC), the official added.

Esfandiar is an extension of the Lulu field shared with Saudi Arabia.

In May 2002, Iran’s Ministry of Petroleum signed a $585 million buyback deal with PetroIran to produce 4,000 bpd of oil from the oilfield.

The project was halted after IOOC proposed to raise production from Esfandiar to 10,000 bpd and subsequently to 20,000 bpd.

IOOC then awarded the project to Malaysia’s Petronas, with Qatar's National Bank due to finance its €400 million development but the agreement was cancelled after QNB refused to make the investment.

IOOC has also signed an agreement with a Ukrainian company for increasing oil production in Doroud Oilfield (which is located off the Persian Gulf island of Kharg), Hafezi stated.

Iranian Oil Minister Bijan Namdar Zanganeh has recently said that Iran will regain its share of oil market when sanctions are removed against the country. 

The minister said Iran produced 3.9 million bpd of oil before the sanctions, while the figure dropped to 2.7 million bpd, of which one million bpd is exported. 

With holding 157.5 billion barrels of recoverable crude oil reserves, Iran possesses the world’s fourth largest crude oil reserves.