Total, NIOC Sign South Pars Development Deal
Total and the National Iranian Oil Company (NIOC) have signed a contract for the development and production of phase 11 of South Pars (SP11), the world's largest gas field.
The project will have a production capacity of 2 billion cubic feet per day or 400,000 barrels of oil equivalent per day including condensate. The produced gas will supply the Iranian domestic market starting in 2021.
“This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country,” said Patrick Pouyanné, chairman and CEO of Total.
“We are proud and honored to be the first international company to sign an IPC, which offers an attractive commercial framework, following the 2015 international nuclear accord (JCPOA) and to therefore contribute to the development of relations between Europe and Iran,” he added.
SP11 will be developed in two phases. The first phase, with an estimated cost of around $2 billion equivalent, will consist of 30 wells and two wellhead platforms connected to existing onshore treatment facilities by two subsea pipelines. At a later stage, once required by reservoir conditions, a second phase will be launched involving the construction of offshore compression facilities, a first on the South Pars field.
“The South Pars Phase 11 deal will, Iran hopes, prompt other IOCs to re-enter the country’s upstream sector,” Homayoun Falakshahi, senior research analyst, Middle East and North Africa upstream, at Wood Mackenzie, said in a statement sent to Rigzone.
“Reopening the Iranian upstream to foreign investors could very well become one of President Hassan Rouhani's main economic achievements,” he added.
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