Gov’t Awards $7b Oilfield Contract to Domestic Consortium
Gov’t Awards $7b Oilfield Contract to Domestic Consortium
The government awarded a major oilfield development contract to a consortium of local banks and petroleum companies.

TEHRAN (Iran News) –  The government awarded a major oilfield development contract to a consortium of local banks and petroleum companies.

President Ebrahim Raisi on Tuesday oversaw the signing of the contract to develop Azadegan oilfield with a total investment value of $7 billion, said a report by the office of the Iranian Presidency.

Raisi described the project as a manifestation of Iran’s ability to mobilize domestic resources to develop large-scale infrastructure projects.

“We did not wait for the foreigners and people would soon witness the promising and proud achievements of these investments,” said the Iranian president.

Azadegan is the name of the Iranian part of a giant oil reserve that straddles the border with Iraq in southwestern Iran. Iraq has committed to a huge investment to develop its side of the field, known as Majnoon, while similar plans in Iran have faced problems in recent years because of sanctions that ban access to foreign investment and technology.

Reports in the local media said the new development project will increase crude oil output from Azadegan by nearly three times in seven years to nearly 570,000 barrels per day.

Six Iranian banks, including largest lender Bank Melli, as well as six local energy companies have formed a consortium to provide investment and technical expertise to the project.

Iranian Oil Ministry’s Shana news service said the development project for Azadegan, a field with an estimated 32 billion barrels of proven oil reserves, will include drilling 420 wells in the field, with 187 of those wells used for injection of water that will be supplied via a 150-kilometer pipeline from the Persian Gulf.

Addressing the contract signing ceremony, the CEO of the National Iranian Oil Company (NIOC) said the memorandum of understanding (MoU) for the integrated development of the Azadegan join oilfield would be signed in the presence of senior officials of the country by the NIOC, Iranian banks and exploration and production companies.

According to NIOC, Mohsen Khojastehmehr said in this regard in the meeting to review and brainstorm implementation mechanism of banks’ participation in the mega project of the integrated development of Azadegan Field, the technical, financial and legal dimensions of this plan were outlined, and the bank managers also discussed issues about the project.

Referring to the presence of the Minister of Petroleum in the meeting, he added: “By attending this meeting, the Minister of Petroleum emphasized the full support of the Ministry of Petroleum for the presence and investment of banks in development projects and emphasized the facilitation of the fields for increasing the participation of Iranian banks and companies.”


The NIOC CEO further said: “This joint field covers an area of ​​1,500 square kilometers and is located 80 kilometers west of Ahvaz city, southwestern Iran, and amount of its in-place oil is estimated to be around 32 billion barrels. Also, the current production capacity of this field is 190,000 barrels per day.

The official further said that an investment of 7 billion dollars is planned to be made in the field to bring its output to 570,000 barrels per day.