“Iran’s 40% share in the Arash joint field cannot be ignored and this right of Iran cannot be hidden,” Beiginejad told Fars News.

He was responding to recent statements by Kuwaiti and Saudi officials saying that Iran has no share in the field and it should start talks over demarcating the border between Iran and Kuwait.

The lawmaker rejected this allegation, underlining that the Arash joint gas field is located next to Esfandiar, Forozan and Soroush fields on a border line and Iran has a share in all these fields.

The Saudi Press Agency (SPA) has recently quoted a Saudi official as saying that the natural resources of the Arash field, which is known as Al Durra in Kuwait and Saudi Arabia, solely belong to the two Arab countries and that Iran should accept the demarcation of the borderline without any claims to the disputed field.

Beiginejad called on the Saudis to respect the rights of their neighbors. “Instead of these comments, the Saudi authorities should observe the principle of good neighborliness in their relations with their neighbors and respect the rights of their neighbors,” he suggested.

He added, “If we haven’t started investing in the Arash field yet, it is because this field has a quarter of a phase of the South Pars oil and gas field and it is expected that 20 thousand barrels of oil and 7 million cubic meters of gas to be extracted from the Arash field every day.”

He asked the Supreme National Security Council and the Presidential Legal Office to follow up on the Arash field issue from a legal point of view and not to allow this issue to turn into a bigger dispute between the two countries, and to pursue the rights of the Iranian nation from a legal point of view.

Earlier, Iranian MP Mostafa Nakhaei had said the Islamic Republic will not back down from its rights in the Arash gas field, underlining that Iran doubts that Saudi Arabia has a share in the field.

Nakhaei, the spokesman for the Iranian parliament’s Energy Committee, has criticized the Iranian authorities for not taking measures to exploit the gas field.

“We have many joint fields with neighboring countries, and in all development programs, attention and focus on joint fields have been emphasized. Our lack of planning and focus on the joint Arash gas field in all past years have caused competing countries to take action to develop it, but unfortunately, we have not done anything special about it,” he told parliamentary news agency ICANA.

He added, “About 60 years have passed since the discovery of this common field and there are very valuable gas resources, to some extent gas condensates and a little oil in it.”

Nakhaei pointed out, “In the past years, we should have resolved the disputes with competing countries in the joint Arash gas field and planned for its development, but unfortunately, we have not taken any action for this.”

“Despite all the mentioned conditions, it is clear that Iran will not neglect its interests in the Arash field in any way, and no official of the Islamic Republic of Iran has the right to turn a blind eye on or neglect the country’s interests in this gas field and its development,” he said.

He also called for the diplomatic resolution of the disputes over the Arash gas field.

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Thus specific project-by-project ‘contract-only’ mode of working has been employed by China at scale in Iran ever since it – officially at least – China National Petroleum Corporation (CNPC) withdrew from the flagship Phase 11 development of South Pars in October last year. “It was obvious to anyone who knows how China works in such situations, including in neighboring Iraq, that it was not going to walk away from its investment either in Phase 11 or in Iran as a whole, especially as it was in the process of widening out the 25-year deal with the country,” said the Iran source. Indeed, quite aside from the massive geopolitical importance of Iran (and close ally Iraq) to China, the 25-year deal means that in exchange for at least US$400 billion from China, Chinese companies will be given the first option to bid on any new – or stalled or uncompleted – oil, gas, and petrochemicals projects in Iran. China will also be able to buy any and all oil, gas, and petrochemicals products at a minimum guaranteed discount of 12 per cent to the six-month rolling mean average price of comparable benchmark products, plus another 6 to 8 per cent of that metric for risk-adjusted compensation. Additionally, China will be able to pay in soft currencies accrued from doing business in Africa and the Former Soviet Union states and, this, given the exchange rates involved, means that China is looking at another 8 to 12 per cent discount, which means a total discount of around 32 per cent for China on all oil gas, and petrochemicals purchases.

“At the time China officially withdrew from Phase 11 it was at a delicate point in the trade war negotiations with the U.S. so had to show willing but it just changed it way of doing the same work with these project by project contracts,” the source added. This switch from Chinese companies working as wholesale developers to working as ‘mere’ contractors was seen very early on after the ‘withdrawal’ of CNPC from Phase 11 when Iran’s Petroleum Ministry announced that it had awarded a US$1.3 billion development plan to more than double oil production at the supergiant South Azadegan oilfield, the second such oil project signed this month, the other being Yaran. The obvious question connected to this was how it was possible, given that Iran was technically bankrupt, and the answer was that Chinese companies were going to do develop (and finance) South Azadegan, and a number of other huge oil fields in the oil-rich West Karoun reservoir (including Yaran, north and south) through ‘contract-only’ projects given out by the official Iranian developers of the sites. In South Azadegan’s case, the US$1.3 billion contract was awarded to Iran’s Petropars, and in Yaran’s case the US$300 million contract was given to Iran’s Persia Oil and Gas Industry Development Co. “Most of these have been done through seemingly smaller firms that are less well-known than the big state players and attract little or no publicity but, as all companies in China are part of the state and are legally bound to work towards what they are told to do by the Communist Party, it doesn’t make any difference to the eventual outcome,” said the Iran source. Neatly closing the circle on this South Azadegan deal – and further underlining what is really behind it – is that Petropars is the company that was also the partner to CNPC in Phase 11 of South Pars.

As it now stands in South Pars, then, most of the Phases are either 100 per cent complete or within one or two per cent of that figure, with the entire field producing a average of 725-775 million cubic metres per day (mcm/d) of gas. With an estimated 14.2 trillion cubic metres (tcm) of gas reserves in place plus 18 billion barrels of gas condensate, South Pars already accounts for around 40 per cent of Iran’s total estimated 33.8 tcm of gas reserves and about 60 per cent of its gas production and this is set to increase as the remainder of the sub-100 per cent-completed Phases are finished within the next six to nine months, according to the Iran source. This compares to an official target date for completion of the end of the Iranian calendar year in 2022 (on 20 March). This ambition received a recent boost with the very recent installation – thanks to the involvement of Chinese firms on a contract-only basis – of a new US$25 million platform jacket (11B) in Phase 11 that will make it possible to drill 12 more wells on top of the five currently being drilled. “With the installation of this jacket and the drilling of five wells, it will be possible to recover an extra 14 million cubic metres per day from this Phase within in the next 14 months,” highlighted Iran’s Petroleum Minister, Bijan Zanganeh recently. A similar boost came with the recent commissioning of four new platforms (two main and two satellites) for Phases 22 to 24, with the first stage (involving the main platform of Phase 22 and the satellite platform 24A, each with a capacity of 14.2 mcm/d, having come on line late in 2018. The second stage, involving the main platform of Phase 23 and the satellite platform 24B, will come online within weeks, with the same capacity. As a result, Phases 22 to 24 will increase gas production from the current 42 mcm/d to 56 mcm/d.

South Pars’ valuation increase in recent months has also come by dint of an increase in the maximum recovery capacity across the site, with the maximum recovery figure in 2013 standing at 280 mcm/d (with 17 phases in a semi-finished state) compared to today’s output of well over 2.5 times higher, as 17 phases (and 12 associated refinery operations) have become fully operational. In addition, of the 37 active offshore platforms in South Pars, 26 have been installed over the past eight years, covering 70 per cent of offshore platform development and installation, with many of these having become operational in just the past few months. Within just the past few months, Phase 13 of South Pars completed the standard stages of commissioning and the start of rich gas recovery from its third platform (‘13C’), which has since been connected to the ‌13A main platform through an 18-inch pipeline. That, in turn, has sent gas to the Phase 13 refinery in Kangan through a 32-inch pipeline that extends for over 100 kilometers. Given this, the current capacity of rich gas recovery from the offshore Phase 13 platforms alone is 43 mcm/d, with 28.5 mcm/d of this coming from Platforms B and D of the first phase of the project.

In conjunction with this, plans are being devised to bring the Phase 14’s onshore refinery to full production by next June, with the engineering, procurement and construction section of the Phase 14 refinery having reached more than 87 per cent completion, and the first train of the refinery likely to come on-stream by the end of the current Iranian calendar year on 20 March 2021. This refinery will be the last onshore processing facility of the huge gas reservoir that Iran shares with Qatar (in which it is the North Dome). As it stands, the offshore section of Phase 14 is now fully operational with 56.8 mcm/d of production capacity, following the last platform coming online in March, with 14.2 mcm/d of gas production capacity. This augmented the other 3 platforms (2 satellite and two main), each with 14.2 mcm/d of gas production capacity. Overall, then, in addition to this natural gas production, Phase 14 is also fully set to produce 75,000 barrels per day (bpd) of gas condensate and 400 tons per day of sulphur, 1 million tons per year (mtpy) of liquefied petroleum gas (LPG), and 1 mtpy of ethane to be fed to petrochemical plants.

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IRAN NEWS NATIONAL DESK

President Rouhani, who has travelled to Bushehr province, attended the opening ceremony of Phases 13 22, 23, and 24 of South Pars in the port city of Kangan.

In his speech, Rouhani praised Iranian engineers for completing the construction of the new phases in the giant gas field despite the US sanctions, and once again slammed Washington for its “very unfair” bans.

“This is a crime against humanity. It has affected the quality of our public services, making it difficult to protect our environment and public health. However, God is with us. Together, we can and we will defeat U.S. sanctions.”

During the ceremony, the Minister of Oil and the managers and experts of these phases, explained the process of building this huge complex.

Earlier, Iran’s Oil Minister Bijan Zanganeh said the $10-billion projects can produce 112 million cubic meters of gas per day, overtaking Qatar, with which Iran shares the offshore field.

Iran has divided the development of South Pars to 24 onshore phases, all of which are now operational except for phases 11 and 14.

Meanwhile earlier yesterday, Rouhani said  Iran is ready to establish good relations with all its neighboring countries with an objective of advancing the region’s interests.

“We are keen to have a good relationship with all our neighbors,” President Rouhani said in an address to a large crowd of people in the southwestern city of Bushehr.

He said that even if there were strains in the ties between the Islamic Republic and some of its neighbors, they had been initiated by the opposite side.

“We have a good relationship with our neighbors, including Qatar, Oman, Turkey, Azerbaijan, Turkmenistan, Afghanistan, and Pakistan, and we want such a relationship to exist between us and all of our neighbors,” he added.

Rouhani said it didn’t matter for Iran whether countries were Shia-majority or Sunni-majority or whether they were located north of the Persian Gulf or to its south. “Our goal must be the development of the entire region.”

He said that in spite of attempts by the US, Israel and “some reactionary regional countries” to exert pressure on the Iranian nation, Iran would continue on its path and develop better relations with its neighbors day by day.

The Iranian president further referred to his recent visit to Iraq and hailed Tehran-Baghdad ties as “exemplary.”

He added that good bilateral agreements had been reached during his trip to Iraq.

Elsewhere in his address, Rouhani said that although enemies could create problems for the Iranians people, they could not bring the “brave and resistant” nation to its knees.

“We all know that our enemies have over the past year employed all their capabilities to exert pressure on the Iranian people, hoping to drive a wedge between the people of Iran and the establishment…, but the people have endured the difficulties and have responded to the enemies of their land with a resounding ‘no,’” President Rouhani said.

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