Iran to Open Second Stage of Azadegan Field

Iran is preparing to open the second stage of the Azadegan oilfield to foreign investment. Iranian industry sources said on Monday they were confident talks with Japan will wrap up soon and pave the way for the start of development of Azadegan.

"Northern Azadegan will be up for tender once negotiations with the Japanese are finished," said an Iranian oil source, adding that talks are expected to conclude within weeks.

Tokyo has said a Japanese consortium of Tomen Corp, Japan Petroleum Exploration and INPEX Corp is unlikely to sign a $2 billion contract unless concerns over Iran's nuclear program are addressed.

But Iran, which ranks as one of Japan's top suppliers, says the $2 billion deal to get a chunk of the field pumping 300,000 barrels per day (bpd) is on track. "Negotiations with the Japanese are continuing and are still on a positive trend," said the Iranian source.

Shell and Total are eager to take an interest in Azadegan, which lies near the border with Iraq and is vital for Iranian plans to boost production capacity. Both companies already have modest investments in Iran via the country's buy-back deals which compensate foreign investors with output.

Azadegan is expected to produce 600,000 barrels a day from estimated recoverable reserves of about eight billion barrels.