Iran Starts Pumping Oil from Its Biggest Onshore Field

Azadegan Oil Field
(Click to Enlarge)

Iran has started pumping oil from its biggest onshore oilfield of Azadegan in the southwest of the country, a much delayed project that was originally to be developed with a Japanese partner.

"As of now, 20,000 barrels of light and heavy crude oil are being produced daily," Seyfollah Jashn-Saz, director of Iran's southern oil operations, told state television.

Azadegan, which has some 42 billion barrels of oil, was initially to have been developed with Japanese firm Inpex Holding Inc (1605.TO) but the company effectively pulled out at the end of 2006 amid pressure to cut business with Iran.

The development of the field was then offered to Petroiran, a company controlled by the oil ministry. The coming on stream of the field had been expected but it was not clear exactly when it opened.

Iran is the world's fourth largest oil producer but its ambitious oil development plans are held back by a lack of investment in the face of U.S. pressure on firms not to deal with Tehran amid the standoff over its nuclear program.

Pressure falls in oil wells have also prevented Iran from increasing production to its medium-term target of 5 million barrels per day.

Oil Minister Gholam Hossein Nozari has said Iran is seeking to produce 4.2 million barrels per day by the end of the current Iranian year on March 19.

The deal with Inpex was signed in February 2004 and work had been due to start on the oil field by March 2005.

Copyright (c) 2008 Dow Jones & Company, Inc.


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