TEHRAN — Iranian companies will start construction operations of the project to develop Azadegan Oilfield, southern Iran, by the end of the current Iranian year, falling on March 20, 2007, Naji Saduni, Azadegan project commissioner said on Friday.

Contractors of the Azadegan project will launch drilling, road-building, and other preliminary operations in the coming months, Saduni told Mehr News Agency in Ahvaz, the capital city of the southwestern province of Khuzestan. “Investment worth $2 billion is required to implement the two phases of the Azadegan development project,” he said, adding, “Two subsidiaries of the National Iranian Oil Company (NIOC) hold 90 percent of stocks and will finance the project.”

Being one of the world’s untapped oil reserves, Azadegan field is expected to produce 150,000 barrels of per day (bpd) of crude for the first phase and 110,000 bpd for the second phase. The in-situ reserves of the field are estimated at 32 billion barrels.

NIOC signed an over $2 billion contract with Japan’s Inpex in February 2004 to develop Azadegan field. However, delays occurred in part due to mine-sweeping operations until last month, when new agreement was inked to reduce Inpex’s previous share of 75 percent to 10 percent. Presently, NIOC’s subsidiaries Naftiran Intertrade Company (NICO) and Petroiran Development Company (PEDCO) hold 90 percent share of the whole stakes in the project.

Also according to Russian News and Information Agency RIA Novosti, Russia’s largest oil company LUKoil is interested in developing Iran’s Azadegan Oilfield.

The company is eyeing Azadegan Oilfield, the agency reported Ravil Maganov, LUKoil's first executive vice president as saying on Thursday.

Moreover, the Russian news agency reported that LUKoil planned to prospect for oil in Iran.

In Tehran on Wednesday, Andrei Kuzyaev, the president of LUKoil Overseas Holding Ltd. discussed perspectives for cooperation with the NIOC management.

"We concluded an agreement on the exploration of various fields,” he said, adding that he would name them only after contracts were signed.

He noted that LUKoil is also cooperating with Norway's Norsk Hydro on three oil prospecting sites at the Anaran Oilfield in Iran, under an agreement signed in February 2003.